State v. Brown
| Decision Date | 21 August 1998 |
| Docket Number | No. 21989-1-II,21989-1-II |
| Citation | 92 Wn.App. 586,965 P.2d 1102 |
| Court | Washington Court of Appeals |
| Parties | STATE of Washington, Brian Pederson, Sheriff, Cowlitz County, and State of Oregon, Respondents, v. James R. BROWN and Sandy Brown, Husband and wife, Appellants. |
John D. Ostrander, Portland, OR, for Appellants.
Ronald S. Marshall, Cowlitz County Deputy Pros. Atty, Kelso, Frederick John Caruso, Asst. Attorney General, Olympia, Christine A. Chute, Oregon Dept. of Justice, Salem, OR, for Respondents.
In this breach of contract action, the trial court granted summary judgment to the State of Washington, the Cowlitz County Sheriff, and the State of Oregon (the Government) against James and Sandra Brown. The trial court found the contract between the Government and the Browns to be enforceable and ordered the Browns to specifically perform the parties' agreement. We affirm.
The Browns sold Michael Mahoney a 20-acre parcel of land in Kalama, Washington, by real estate contract dated September 21, 1987. Mahoney, using the name Gary F. Reeder, agreed to pay $49,500 with $10,000 down and payments of $3,170 every six months beginning April 5, 1988.
Mahoney used the property for a large-scale marijuana growing operation that the police uncovered pursuant to a search warrant on June 16, 1990. The next day, police executed another search warrant against property Mahoney owned in Prineville, Oregon. There they discovered a second large-scale marijuana growing operation.
On July 6, 1990, the State of Oregon filed a civil RICO action (Racketeer Influenced and Corrupt Organizations Act, ORS 166.715-166.735) in Oregon, seeking in part a judgment against Mahoney and a forfeiture of his interest in the Kalama property. As part of that action, Oregon obtained a temporary restraining order on July 6, and a preliminary injunction on August 23, prohibiting Mahoney from "injuring, destroying, transferring, removing or otherwise disposing of" his real or personal property.
Subsequently, Mahoney failed to make his October 1990 payment of $3,170 to the Browns and, on November 19, 1990, the Browns recorded a notice of intent to forfeit the real estate contract. The notice stated that to cure the default, Mahoney would have to tender $4,429.57 by February 22, 1991. 1
Two days after the Browns filed their notice, the State of Washington filed a civil RICO action against Mahoney and placed a lien on his interest in the Kalama property under RCW 9A.82, the Criminal Profiteering Act. The State sought, in part, forfeiture of Mahoney's interest. On December 7, 1990, the State and the Cowlitz County sheriff filed an in rem drug forfeiture proceeding in which they sought forfeiture of Mahoney's interest in the property under RCW 69.50.505.
By letter dated November 30, 1990, the Browns' attorney acknowledged the Oregon and Washington actions and raised the possibility "that one or more of you might wish to reinstate the contract, take over Reeder's position in the contract and ultimately in that fashion gain control of the property." On February 19, 1991, the Browns offered to forfeit Mahoney's interest, sell the property, pay off their obligation and costs, and split the surplus with the Government. 2
Shortly before that offer was made, the Cowlitz County Prosecuting Attorney received a letter from Mahoney stating that because of the seizure of the Kalama property, he could not make the cure payment. Mahoney demanded that the State and Cowlitz County make the payment or release the seizure. The prosecuting attorney then sent the Browns' attorney a check for $4,429.57 to cure Mahoney's default. The Browns' attorney retained the check but wrote an acknowledgment of receipt stating "rejection of tender is reserved." He left blank the space provided for rejection of cure.
On February 22, 1991, Mahoney gave the Browns' attorney a cashier's check in the name of Bruce Hampton to cure the default. Mahoney also gave the attorney an unrecorded real estate contract for the Kalama property from Mahoney to Hampton backdated to June 1, 1990.
After this attempted cure, the Government accepted the Browns' offer and agreed to split the surplus following a nonjudicial forfeiture and sale by the Browns. The Browns' attorney prepared the agreement and sent it with a letter dated February 25, 1991, stating "I believe I have captured the intent of all the parties and the terms." The agreement acknowledges that the Government has commenced an action to "forfeit Reeder's/Mahoney's interest in the real property" and provides that "in consideration of the mutual benefits to be derived from this agreement," "resale ... proceeds shall be distributed in the following priority:" (1) closing costs; (2) the Brown's costs of forfeiture and other legal costs; (3) unpaid interest accruing against the real estate contract; (4) $32,896.87 of unpaid principal; (5) if the sale price exceeds $70,000, division of the remaining balance fifty-fifty between the Browns and the Government.
On March 1, 1991, the Government responded. It requested changes in the distribution formula in the event it forfeited the property via judicial forfeiture. The letter stated "we believe that the agencies can cure Mahoney's default, forfeit Mahoney's interest, and retain all the net proceeds from a sale." It added, however, that the Government would split the proceeds with the Browns even if forced to proceed judicially.
On March 4, the Browns submitted a revised agreement providing that their forfeiture would clear the property of Mahoney's claims and those who claimed under him "other than the States." The Government responded by seeking a clarification that it was seeking only to "forfeit Reeder/Mahoney's interest in the property," not "forfeit[ure] of the property."
On March 7, 1991, the Browns sent the last revision, which included the requested change. The Browns signed the agreement on March 11, 1991, and returned the $4,429 "cure" check to the Government. Cowlitz County signed a copy of the final agreement on March 7 and the original on March 21; the State of Washington signed a copy on March 8 and the original on March 26.
The Browns' attorney recorded the Declaration of Forfeiture of Real Estate Contract on the same day that his clients signed the agreement. The parties subsequently defeated the Mahoney/Hampton claims, and the property was listed for sale.
A sale of the property failed after an adjoining landowner sued the Browns over easement rights. A court dismissed the easement suit on July 1, 1994, for failure to prosecute. On July 18, 1994, the Browns' attorney indicated to the Government that the property was being aggressively marketed.
On December 16, 1994, one of the investigating officers in the forfeiture action contacted the listing agency and learned that the property was no longer listed for sale "as per Mr. Brown's instructions." On January 24, 1995, Brown told the officer that he had taken the property off the market. "When I asked Mr. Brown specifically if he intended to honor the contract he stated 'No'."
In April 1996, Brown received a purchase offer for the property; he agreed to consider the offer if he were to put the property up for sale. The prospective buyer persisted and offered $240,000, which had been the property's listing price. 3
On August 26, 1996, the Government filed its complaint for breach of contract against the Browns in Cowlitz County Superior Court. The trial court granted the Government's motion for summary judgment after concluding that the agreement was supported by consideration and that the Browns were in breach. The court ordered the Browns to specifically perform the agreement by selling the property and sharing the proceeds as agreed.
The Browns then filed this appeal, claiming that (1) the agreement lacked adequate consideration, (2) that it is unenforceable due to a unilateral mistake, (3) that it is unconscionable, (4) that there is an issue of fact regarding breach, and (5) that the trial court erred in failing to dismiss Oregon's claims.
When reviewing a summary judgment order, this court engages in the same inquiry as the trial court and considers all facts submitted and reasonable inferences from them in the light most favorable to the nonmoving party. Timberlane Homeowners Ass'n v. Brame, 79 Wash.App. 303, 307, 901 P.2d 1074 (1995). Summary judgment is available only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Neff v. Allstate Ins. Co., 70 Wash.App. 796, 799, 855 P.2d 1223 (1993).
In construing a written contract, basic principles require that (1) the intent of the parties controls; (2) the court ascertains the intent from reading the contract as a whole; and (3) a court will not read an ambiguity into a contract that is otherwise clear and unambiguous. Mayer v. Pierce County Med. Bureau, Inc., 80 Wash.App. 416, 420, 909 P.2d 1323 (1995). Interpretation of an unambiguous contract is a matter of law. If a contract is unambiguous, summary judgment is proper even if the parties dispute the legal effect of a certain provision. Mayer, 80 Wash.App. at 420, 909 P.2d 1323 (citing Voorde Poorte v. Evans, 66 Wash.App. 358, 362, 832 P.2d 105 (1992)).
A promise is not binding unless it is supported by consideration. Huberdeau v. Desmarais, 79 Wash.2d 432, 439, 486 P.2d 1074 (1971). But forbearance to prosecute a valid claim or assert a legal right constitutes sufficient consideration for a contract. The claim need not be indisputable or legally certain; where the validity of the claim is doubtful, the existence of a possibility of recovery is sufficient if the claim is asserted in good faith. Huberdeau, 79 Wash.2d at 441, 486 P.2d 1074; Johnson v. S.L. Savidge, Inc., 43 Wash.2d 273, 276, 260 P.2d 1088 (1953).
The Government contends that it had a substantial, good...
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