Traverso v. Snyder

• Decision Date: 15 August 2022
• Docket Number: 83033-3-I
• Parties: TERENCE TRAVERSO, Appellant, v. SANDRA SNYDER, VICKI LAZOR, and TEACHERS CHILDCARE CENTER, INC., a Washington corporation,
• Court: Washington Court of Appeals

TERENCE TRAVERSO, Appellant,
v.
SANDRA SNYDER, VICKI LAZOR, and TEACHERS CHILDCARE CENTER, INC., a Washington corporation,

No. 83033-3-I

Court of Appeals of Washington, Division 1

August 15, 2022

UNPUBLISHED OPINION

DWYER, J.

Terence Traverso appeals from the trial court's orders granting summary judgment to Sandra Snyder and Vicki Lazor (the Sellers), denying his motion for summary judgment, and awarding the Sellers attorney fees and costs. Traverso asserts that the trial court erred by granting the Sellers' motion because genuine issues of material fact exist as to whether the Sellers breached the business opportunity purchase and sale agreement (BOPSA) by terminating the BOPSA and refusing to sell him the real property and the day care business operating thereon. Additionally, Traverso asserts that the trial court erred in awarding the Sellers attorney fees and costs. Because Traverso fails to establish an entitlement to relief on any of his claims, we affirm.

I

In 1997, the Sellers decided to expand their day care business and purchased a property located at 26047 116th Avenue SE, Kent, Washington.

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The Sellers established the day care operation and the underlying real property as a new legal entity, Teachers Childcare Center, Inc. (Teachers Childcare).

In 2018, the Sellers decided to sell Teachers Childcare and the real property. Robert Carper, a real estate broker, assisted the Sellers with the transaction.

On April 18, 2019, Traverso, an attorney, through his real estate broker, Steve Thompson, offered to purchase Teachers Childcare and the property for $1,200,000, with $50,000 in earnest money, and a 60-day closing date of June 20, 2019.

The next day, Traverso and the Sellers executed the BOPSA. The BOPSA contained a feasibility condition and a financing condition. The feasibility condition provided:

Buyer's obligations under this Agreement are conditioned upon Buyer's satisfaction in Buyer's sole discretion concerning all aspects of the Business, including physical and financial condition; the presence of or absence of any hazardous substances on the real property; the contracts and leases affecting the Business; the potential financial performance of the Business; the availability of government permits and approvals; and the feasibility of the Business for Buyer's intended purpose. This Agreement shall terminate and Buyer shall receive a refund of the earnest money unless Buyer gives written notice to Seller within [30 days] of Mutual Acceptance stating that this condition is satisfied. If such notice is timely given, the feasibility contingency stated in this Section shall be deemed to be satisfied

The financing condition provided:

Buyer's obligations under the Agreement are contingent on Buyer obtaining new financing. Buyer shall submit a complete written application for financing for the Property within five (5) business days after waiver or satisfaction of the Feasibility Period in Section 5 of the Agreement, pay required costs and make a good faith effort to procure such financing. Buyer shall not reject those terms of a

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commitment which provide for a loan amount of at least $ ___or 80% of the purchase price, interest not to exceed 5% per annum, a payment schedule calling for monthly payments amortized over not less than 15 years, and total placement fees and points of not more than 3% of the loan amount. The Agreement shall terminate and Buyer shall receive a refund of the earnest money unless Buyer gives notice that this condition is satisfied or waived on or before ___days (60 days, if not completed) following mutual acceptance of the Agreement.

Soon after executing the BOPSA, Traverso submitted a loan application to Celtic Bank for a small business association (SBA) loan. The bank informed Traverso that he must secure all necessary licenses to operate the business before the bank would underwrite his SBA loan. The Washington State Department of Children, Youth, and Families (Department) told Traverso that the Sellers' current day care license was not transferable and that he must obtain a new day care license in order to operate the business.

In May 2019, Traverso asked the Sellers for more time to obtain the day care license and close the sale. Traverso and the Sellers executed an addendum that extended the feasibility period to June 19, 2019, with closing to occur "within 60 days of waiver of feasibility by buyer." About a month later, Traverso again asked the Sellers for more time to obtain the day care license and close the sale. Traverso and the Sellers again executed an addendum, this time extending the feasibility period to July 5, 2019 and closing to August 15, 2019. The addendum also noted that the "[s]ale is subject to buyer obtaining all necessary licenses to run [the] business." On July 19, 2019, the bank conditionally approved Traverso's SBA loan, subject to Traverso actually obtaining the day care license.

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Soon thereafter, Traverso again requested additional time to obtain the day care license and close the sale. Traverso and the Sellers executed two more addenda: the first extended the financing period to July 31, 2019; the second gave Traverso until August 23, 2019 to close the sale.

On August 20, 2019, Traverso informed the Sellers that his lender had appraised the real property at $1,020,000 and the business at $49,000. Traverso told the Sellers that if they agreed to reduce the purchase price to $1,000,000, he would provide them with an all-expense paid trip to Hawaii. Traverso and the Sellers eventually executed two additional addenda reflecting a reduced purchase price of $1,025,000, details regarding the trip to Hawaii, and a new closing date of September 23, 2019.

In September, Traverso again requested additional time to obtain the day care license and close the sale. On September 24, 2019, the parties agreed to an addendum that provided, "Financing contingency extended to coincide with Washington State licensing approval of buyer for daycare business. Closing to be within 14 days of State and lender approval."

A month later, Traverso's conditional SBA loan approval expired. However, he at last completed his application with the Department for issuance of a day care license. Thereafter, the Department contacted Traverso stating that his license had been approved subject to the fire marshal's review of the property to ensure that it complied with the certificate of occupancy requirements to operate the day care.

In December, after the fire marshal's inspection, the Department informed

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Traverso that the city's certificate of occupancy issued for the property did not allow for its use as a childcare center and that the Sellers had been operating their business as a legal nonconforming use. The Department told Traverso that the property needed various building modifications to comply with the current city of Kent building code. This needed to be done before the fire marshal could approve the location for issuance of a new certificate of occupancy.

The Sellers advised Traverso that they were not willing to make any modifications to the structures on their property and that they would not allow Traverso to come onto their property and make physical alterations to the structures thereon. On January 7, 2020, the Sellers proposed an addendum that provided:

1. Closing to be on or before 02/28/2020.

2. In the event buyer needs an extension past 02/28/2020, the earnest money shall be forfeited by buyer and released to sellers.

3. Sale is "as is" and buyer will pay for any updates or repairs required by city, state, and licensing department for buyer to obtain Day Care operator['s] license.

Traverso rejected the Sellers offer. On February 3, 2020, Traverso withdrew his application with the Department.

In March, the Sellers asked Traverso to sign an addendum committing to close the sale of the property no later than April 30, 2020, and to commit that if he did not close by that date, he would forfeit his earnest money. Traverso refused. Soon after, Traverso withdrew his newest SBA loan application.

On March 5, 2020, the Sellers sent a notice to Traverso entitled "Failure to Close-Notice of Termination by Seller-Seller to Keep Earnest Money." That

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August, the Sellers relisted the property for sale at a price of $1,600,000.

On August 12, 2020, Traverso filed suit against the Sellers alleging breach of contract. Eventually, Traverso and the Sellers filed cross motions for summary judgment. The trial court granted the Sellers' summary judgment motion. The court ruled that Traverso's inability to obtain the day care license and financing constituted failures of the conditions precedent in the BOPSA. The court awarded the Sellers attorney fees and costs.

Traverso appeals.

II

Traverso first contends that there are genuine issues of material fact as to whether he satisfied the feasibility condition precedent in the BOPSA.

We review an order granting summary judgment de novo. Ebel v. Fairwood Park II Homeowners' Ass'n, 136 Wn.App. 787, 792, 150 P.3d 1163 (2007). Summary judgment is proper only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Ebel, 136 Wn.App. at 792 (citing Tri-City Constr. Council, Inc. v. Westfall, 127 Wn.App. 669, 674,...