Rorvig v. Douglas
| Decision Date | 19 May 1994 |
| Docket Number | No. 60183-6,60183-6 |
| Citation | 873 P.2d 492,123 Wn.2d 854 |
| Court | Washington Supreme Court |
| Parties | Michael RORVIG and Pam Rorvig, husband and wife, Petitioners, v. Joel DOUGLAS and Barbara Douglas, husband and wife, Respondents. |
Philip E. Rosellini, Bellingham, Jeffrey D. Thomas, Edmonds, for petitioners.
Reed, McClure, William R. Hickman, Marilee C. Erickson, Seattle, for respondents.
Petitioners were denied recovery of the legal expenses incurred in the quiet title portion of their successful slander of title action. Legal expenses, including attorney fees, incurred in clearing the slandered title have not been recoverable as damages in accordance with the rule set out in McGuinness v. Hargiss, 56 Wash. 162, 105 P. 233 (1909). Petitioners request this court to overrule McGuinness and hold such fees are recoverable as special damages. Respondents have cross-petitioned the ruling of the Court of Appeals affirming the trial court's findings that the parties did not have an enforceable contract and the elements of slander of title had been met, and the trial court's method of calculating damages. We hold in a successful slander of title action, recoverable damages include attorney fees. Further, we affirm the Court of Appeals on the issues raised in the cross petition.
Petitioners Pam and Michael Rorvig purchased three unimproved lots located adjacent to a subdivision owned and developed by the Respondents, Barbara and Joel Douglas. The Douglases had bid on the unimproved lots, hoping to include them within their development. However, the Rorvigs submitted the winning bid and signed a purchase and sale agreement for the property on August 8, 1989.
Shortly thereafter, the Douglases began pressuring the Rorvigs to abandon the purchase. The Douglases suggested the situation be resolved by the parties entering into a joint development agreement for the property. The Rorvigs began negotiations with the Douglases.
The Douglases submitted several drafts of agreements to the Rorvigs. After rejecting these, the Rorvigs prepared their own agreement. The agreement provided for cooperation in the vacation of an unimproved city street, for performance by the Douglases of site development, and for payment by the Rorvigs to the Douglases of development costs on a per-lot basis. The agreement also stated that a memorandum of the contract would be recorded with the county auditor.
On September 25, 1989, Pam Rorvig signed the agreement. Michael Rorvig then took the agreement to the Douglases' office. After Joel Douglas reviewed the agreement, he and Michael Rorvig agreed to two changes, which they inserted into the agreement and initialed. They both signed the agreement. Rorvig then presented the agreement to Barbara Douglas. She requested some time to review the document before signing it. Michael Rorvig left the agreement with Mrs. Douglas.
Sometime after Michael Rorvig left the office, the Douglases made three material changes to the agreement. The changes would have increased the Rorvigs' obligation under the contract by $15,000, and would have allowed the Douglases to opt out of providing various improvements if they could not agree to terms with the Rorvigs. Barbara Douglas signed the agreement, and both Douglases initialed the changes. Beside their own initials, the Douglases marked spaces for the Rorvigs to insert their initials.
The Rorvigs received the contract back the next day. They found the Douglases' changes unacceptable. When a Douglas employee contacted Rorvig a week later to find out the Rorvigs' response, Michael Rorvig said he and his wife were rejecting the Douglases' counteroffer.
During a series of telephone calls between the parties, Michael Rorvig repeatedly denied they had an agreement. Mr. Douglas asserted an agreement existed. At the same time, he continued to propose a variety of new agreements and to remind the Rorvigs that litigation was expensive. The Douglases prepared and recorded a memorandum of agreement on the property despite the Rorvigs' contention no finalized agreement existed.
Not long after the Douglases recorded the memorandum, David Edelstein, a local contractor, submitted an earnest money agreement to the Rorvigs offering to purchase the three lots. Rorvig informed Edelstein of the Douglas memorandum. After verifying with the title company that the Rorvigs could not provide clear title, Edelstein withdrew his offer.
On December 26, 1989, the Rorvigs filed suit. They requested the court quiet title in the Rorvigs, and award damages for slander of title. The Douglases counterclaimed for enforcement of the memorandum.
At trial, Judge Moynihan held the memorandum was not an enforceable contract. He further held the Douglases were liable for slander of title, and awarded damages of $7,406.26. The trial court denied the Rorvigs' request for attorney fees, other than statutory fees of $125.
Both parties appealed. In an unpublished opinion, the Court of Appeals affirmed the judgment in all respects. On the issue of awarding attorney fees for the quiet title portion of the action, both the trial court and the Court of Appeals felt bound by McGuinness v. Hargiss, 56 Wash. 162, 105 P. 233 (1909), which held attorney fees are not recoverable as costs or as damages in a slander of title action.
Initially, we consider the issues raised in the Douglases' cross petition. The Douglases make three arguments: (1) the trial court erred in holding no contract was formed between the parties; (2) the trial court erred in holding petitioners had established all the elements of slander of title; and (3) the trial court erred in the calculation of damages. First we consider whether the trial court erred in concluding no contract was formed between the parties.
It is a basic rule of contract formation that "[a]n expression of assent that changes the terms of the offer in any material respect may be operative as a counteroffer; but it is not an acceptance and consummates no contract". Blue Mt. Constr. Co. v. Grant Cy. Sch. Dist. 150-204, 49 Wash.2d 685, 688, 306 P.2d 209 (1957). On the other hand, an acceptance that requests modification of terms may consummate a contract unless the additional terms are conditions of acceptance. Such an acceptance must be unequivocal. Restatement (Second) of Contracts § 61 comment a (1981).
The trial court found a contract had not been formed between the Douglases and the Rorvigs because the handwritten modifications made by the Douglases constituted a counteroffer which the Rorvigs rejected. The Douglases disagree, asserting they accepted the Rorvig contract as modified on September 25, 1989, they returned it the next day with proposed changes, and the additional terms were not conditions of acceptance.
The evidence, however, does not support the Douglases' contentions. Although the Douglases returned the contract with a cover letter stating, "we suggest a minimum of four tracts", that change and other changes were actually written into the contract and initialed by the Douglases. Therefore, the "suggested" changes were actually incorporated into the proposed contract. These changes constituted a counteroffer and not an unequivocal acceptance of the Rorvigs' offer. The Douglases' conduct confirmed that no agreement had been reached. After learning the Rorvigs had rejected their proposal, the Douglases proposed other agreements. In addition, during a telephone conversation with Michael Rorvig, Mr. Douglas stated, "I suppose we don't have an agreement, unless you--unless you and Pam agree to it, but that could take $20,000 and two years for the Court to decide". Report of Proceedings, at 74.
Even if the Douglases' changes are viewed as requests for changes to the contract rather than conditions of acceptance, no contract was formed because there was no unequivocal acceptance of the original terms. When Michael Rorvig left the Douglases' office on September 25, 1989, Barbara Douglas had not signed the contract and Michael Rorvig had no clear indication that she would assent to it. It is clear from the facts that her approval was necessary before any offer could be accepted and, when the proposed contract was left with her, she indicated she needed some time to review it. The next day when the Douglases returned the contract with additional changes, no clear statement indicated the Rorvigs were accepting its original terms. Therefore, the trial court was correct in holding no contract was formed because there was never unequivocal, mutual assent to any one contract proposal.
Next, the Douglases assert the court erred in concluding the Rorvigs established all the elements of slander of title. Slander of title is defined as: (1) false words; (2) maliciously published; (3) with reference to some pending sale or purchase of property; (4) which go to defeat plaintiff's title; and (5) result in plaintiff's pecuniary loss. Pay 'N Save Corp. v. Eads, 53 Wash.App. 443, 448, 767 P.2d 592 (1989) (citing Brown v. Safeway Stores, Inc., 94 Wash.2d 359, 375, 617 P.2d 704 (1980)).
The Douglases contend the evidence did not establish the element of falsity. The Douglases cite several cases from other jurisdictions which hold the good faith recording of an unenforceable agreement does not render an agreement false for purposes of slander of title. However, the cases cited by Respondents involved honestly held assertions made in good faith. In this case, the record supports the trial court's finding that the Douglases recorded the memorandum of agreement, which falsely declared a valid contract existed, even though the Douglases knew no agreement had been reached. The element of falsity was sufficiently established.
The Respondents also contend the Rorvigs failed to establish the element of "pending sale". They rely primarily on Clarkston Comm'ty Corp. v. Asotin Cy. Port Dist., 3 Wash.App. 1, 472 P.2d 558 (1970). In Clarkston, no negotiations...
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