Spokane Airport Bd. v. Experimental Aircraft Ass'n
| Decision Date | 30 September 2021 |
| Docket Number | No. 99180-4,99180-4 |
| Parties | sooner terminated or canceled as herein providedSPOKANE AIRPORT BOARD, Petitioner, v. EXPERIMENTAL AIRCRAFT ASSOCIATION, CHAPTER 79, Respondent. |
| Court | Washington Supreme Court |
Lawrence W. Garvin, Deanna Marie Willman, James McPhee, Witherspoon Brajcich McPhee, PLLC, 601 W. Main Ave., Ste. 714, Spokane, WA, 99201-0677, for Petitioner(s).
Milton G. Rowland, Law Office of Milton G. Rowland, 1517 W. Broadway Ave., Spokane, WA, 99201-1903, for Respondent(s).
Brian Michael Werst, Thaddeus O'Sullivan, Witherspoon Brajcich McPhee, PLLC, 601 W. Main Ave., Ste. 714, Spokane, WA, 99201-0677, for Amicus Curiae on behalf of Washington Airport Management Association.
¶ 1 Under RCW 59.12.030(1), a tenant who leases premises for a specified term or period becomes a holdover tenant liable for unlawful detainer when they remain in possession of the premises "after the expiration of the term for which it is let to him or her." The question before the court is whether a tenant in a fixed-term commercial lease can become a holdover tenant when the tenancy ends pursuant to an early termination provision. The tenant argues that this unlawful detainer provision applies only when the tenant remains after the end of the original term specified in the lease. We disagree. We hold that in this case, exercising the no-fault early termination provision in the lease revised the term of the lease, and the term expired on the revised termination date. Therefore, the tenant became a holdover tenant under RCW 59.12.030(1) when they continued in possession of the leased premises after that date. Accordingly, we reverse.
¶ 2 In 2011, Experimental Aircraft Association, Chapter 79 (EAA), entered into a lease agreement with the Spokane Airport Board (Airport) to rent an aircraft hangar at Felts Field airport in Spokane. EAA leased Building 7 "to offer facilities and training for aircraft construction, restoration, and flight training." 2 Clerk's Papers (CP) at 417.
¶ 3 Article 1 of the original lease agreement specified a term of 5 years, from March 1, 2011, to February 28, 2016, "unless sooner terminated or canceled as herein provided." Id. at 34. The next sentence of that clause also stated, "Either party may cancel this Agreement upon one hundred eighty (180) days advance written notice." Id.
¶ 4 Other provisions of the lease addressed the circumstances under which the parties could terminate the lease for cause; some delineated specific notice requirements and cure periods, while others were silent as to notice. For example, Article 5 entitled the landlord to reenter and take possession of the premises when a tenant failed to pay rent, and it specified a 10-day notice and cure period. Article 23 addressed the landlord's rights of cancellation if the tenant breached any of its covenants in the lease, and it specified a 30-day notice and cure period. It also permitted the landlord to terminate the lease under various circumstances involving the tenant's bankruptcy, which did not require any form of notice from the landlord. These termination rights were "[i]n addition to any conditions as specified herein and all other remedies available to the Airport." Id. at 46. Article 24 addressed the tenant's rights of cancellation. Similar to the provisions addressing the landlord's rights, some of the tenant provisions required written notice and/or the passage of a specified time period (60 days for the Airport's breach of any lease covenants, 90 days for actions by the federal government that restrict use of the premises), while others would apparently be automatic (e.g., abandonment or force majeure).
¶ 5 The lease also included an option to renew for an additional 5-year term. In February 2016, the parties executed an amendment to the lease agreement, amending the term to "five (5) years commencing March 1, 2016 and ending February 28, 2021 unless sooner terminated or canceled as herein provided." Id. at 56. The term provision in the lease amendment reiterated the language, "Either party may cancel this Agreement upon one hundred eighty (180) days advance written notice." Id. The amendment adjusted the amount of rent due but otherwise stated that "[a]ll other terms and conditions [of the original lease agreement] ... shall remain in full force and effect." Id. at 57.
¶ 6 On November 28, 2017, the Airport provided written notice to EAA that it was canceling the lease with 180 days’ notice, effective May 29, 2018. The Airport informed EAA that it was terminating the lease for Building 7 because the hangar was going to be demolished to allow construction of a new building. The Airport indicated that it hoped to work with EAA to lease a portion of a different hangar and that, since the Airport planned to move forward with the construction project as soon as possible, EAA may need to move into the other building before the lease ended.1 The written notice stated that the Airport was canceling the lease "[p]ursuant to Article 1 – Term, either party may cancel this agreement upon providing 180 days written notice." Id. at 60.
¶ 7 Over the next nine months, EAA and the Airport tried to determine whether another hangar, Building 17, would provide a suitable space for EAA to lease. Meanwhile, since the construction project did not move forward as quickly as the Airport had anticipated, the Airport sent EAA several notices extending its occupancy in Building 7, eventually extending the termination of the lease to August 17, 2018.2
¶ 8 As the final deadline for EAA's occupancy of Building 7 approached, the Airport began preparing to coordinate EAA's move to Building 17. The Airport made arrangements to move EAA to Building 17 the week of August 13, 2018, and obtained EAA's consent to an indemnification agreement for the move—but it had to cancel the reservation with the moving company when EAA failed to find a member who could be present to oversee the move. The parties also negotiated over a new lease for Building 17 to begin September 1, 2018, but EAA never signed the new lease agreement. August 17, 2018, passed, and EAA remained in Building 7.
¶ 9 On August 20, 2018, the Airport filed a complaint for unlawful detainer under RCW 59.12.030(1). The superior court issued an order authorizing a writ of restitution and issued the writ the same day. EAA filed a motion to stay the writ, but the court fixed the bond at an amount much higher than what EAA proposed, and EAA did not post the bond. See RCW 59.12.100. The writ of restitution was executed on August 27, 2018.3
¶ 10 The parties filed cross motions for summary judgment. EAA argued that the unlawful detainer action should be dismissed because the lease term would not expire until February 28, 2021, the end date specified in the lease amendment. EAA maintained that Articles 23 and 24 of the lease identified the sole grounds for cancellation of the lease and that the Airport could not cancel the lease agreement absent any default or breach. In contrast, the Airport argued that it properly terminated the lease agreement pursuant to Article 1 and that EAA was liable for unlawful detainer under RCW 59.12.030(1). The Airport further argued that it should recover double damages under RCW 59.12.170, as well as reasonable attorney fees and costs.
¶ 11 The court granted the Airport's motion for summary judgment as to unlawful detainer, reserved the matters of the Airport's damages and attorney fees, and denied EAA's motion. It concluded that the cancellation provision in Article 1 of the lease permitted the Airport to terminate the lease at will with proper notice. Therefore, it reasoned, the lease term expired after the 180-day written notice to cancel and EAA was liable for unlawful detainer when it held over after that time.
¶ 12 The Court of Appeals reversed in an unpublished decision. Spokane Airport Bd. v. Experimental Aircraft Ass'n Chapter 79 , No. 36612-0-III, slip op., 2020 WL 4462163 (Wash. Ct. App. Aug. 4, 2020) (unpublished), https://www.courts.wa.gov/opinions/pdf/366120_unp.pdf. It concluded that under FPA Crescent Associates v. Jamie's LLC , 190 Wash. App. 666, 360 P.3d 934 (2015), RCW 59.12.030(1) applies "only to lessees who hold over following the expiration of a fixed term, not to lessees who hold over after a term that has not expired but has been lawfully shortened by the exercise of a right of cancellation or termination." Id. at 9. We granted the Airport's petition for review. 196 Wash.2d 1037, 479 P.3d 700 (2021). The Washington Airport Management Association filed a brief of amicus curiae.
¶ 13 We review an order granting summary judgment de novo. Grundy v. Thurston County , 155 Wash.2d 1, 6, 117 P.3d 1089 (2005). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). We also review the meaning of a statute de novo. Dep't of Ecology v. Campbell & Gwinn, LLC , 146 Wash.2d 1, 9, 43 P.3d 4 (2002). In interpreting statutes, our "objective is to ascertain and carry out the Legislature's intent." Id. We discern the plain meaning by considering the language of the statute and related statutes. Id. at 11, 43 P.3d 4. If the statute is ambiguous, we then refer to legislative history and other aids to construction. Id. at 12, 43 P.3d 4. Washington's unlawful detainer statute is in derogation to the common law and must be strictly construed in favor of the tenant. Hous. Auth. v. Terry , 114 Wash.2d 558, 563, 789 P.2d 745 (1990).4
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