Failes v. Lichten

37 P.3d 301, 109 Wash. App. 550
CourtCourt of Appeals of Washington
DecidedDecember 21, 2001
DocketNo. 27263-6-II
StatusPublished
Cited by3 cases

This text of 37 P.3d 301 (Failes v. Lichten) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Failes v. Lichten, 37 P.3d 301, 109 Wash. App. 550 (Wash. Ct. App. 2001).

Opinion

Morgan, J.

— Donald and Carol Lichten appeal the trial court’s denial of their motion for reasonable attorney fees. We reverse and remand.

On August 20, 1998, Donald Fades bought a house from Donald and Carol Lichten. The sale was evidenced by a written Real Estate Purchase and Sale Agreement (REPSA).

The REPSA included an attorney fee clause. It provided in paragraph 15 that if the buyer or seller “is involved in [553]*553any dispute relating to this transaction, any prevailing party shall recover reasonable attorney’s fees and costs (including those for appeals) which relate to the dispute.”1

The REPSA also included an antimerger clause. It provided in paragraph 20(h) that “all terms of this Agreement, which are not satisfied or waived prior to closing, shall survive closing. These terms shall include, but not be limited to, representations and warranties, attorney’s fees and costs, disclaimers, repairs, rents and utilities, etc.”2

On September 9, 1998, the Lichtens signed a Statutory Warranty Deed that did not repeat the REPSA’s attorney fee clause. On September 15, 1998, the sale closed.

After closing, Failes sued the Lichtens for “fraudulent concealment, misrepresentation, and/or mutual mistake of fact.”3 He alleged that the home was subject to various problems, including “very high levels of health endangering molds and yeasts (microbial growth).”4 He prayed for “rescission of the sale, either because of misrepresentation or mutual mistake of fact; for damages suffered by Plaintiff as a result of Defendants’ misrepresentation; [and] for reasonable attorney’s fees and legal costs as authorized by the Purchase and Sale Agreement.”5 6Interestingly, Failes supported his prayer for attorney fees by alleging in paragraph 3.11 of his amended complaint:

The Purchase and Sale Agreement provided for attorney’s fees and costs to the prevailing party of a suit for breach of contract. Plaintiff is entitled to reasonable attorney’s fees and costs against Defendants.[6]

In March 2000, all but one of Failes’ claims were dismissed on summary judgment. In March 2001, the remain[554]*554ing claim was dismissed after a bench trial. None of those decisions has been appealed.

In late March and again in mid-April 2001, the Lichtens moved for an award of reasonable attorney fees. Like Fades, they alleged that paragraph 15 of the REPSA applies in this case. They also alleged that they were the prevailing parties, because all of Fades’ claims had failed. When the trial court denied their motions, they filed this appeal.

We address two questions. (1) Did the dispute manifested by Fades’ lawsuit “relate to” the transaction manifested by the REPSA? (2) Did the REPSA’s attorney fee clause merge into the deed so that it was unenforceable after closing? It is undisputed that the Lichtens prevailed on Fades’ claims.

We answer the first question yes. Paragraph 15 of the REPSA states that if the buyer or seller “is involved in any dispute relating to this transaction, any prevailing party shall recover reasonable attorney’s fees and costs (including those for appeals) which relate to the dispute.”7 In his amended complaint, Fades expressly sought to rescind the transaction, or to alter its economic consequences by obtaining an award of damages. He also sought reasonable attorney fees based on the REPSA. The only available conclusion is that because of Fades’ lawsuit, he and the Lichtens were “involved in [a] dispute relating to this transaction” within the meaning of the REPSA’s paragraph 15.

We answer the second question no. Whether a REPSA merges into a deed depends on the parties’ intent.8 As the Washington Supreme Court said in Harris v. Ski Park Farms, Inc., 120 Wn.2d 727, 844 P.2d 1066 (1993), cert. denied, 510 U.S. 1047 (1994):

[555]*555Ski Park finally argues that, under the doctrine of merger, the purchase and sale agreement merged into the deed. . . . Both Ski Park and the Court of Appeals rely on Black v. Evergreen Land Developers[, Inc., 75 Wn.2d 241, 450 P.2d 470 (1969)]. However, that case recognized that there were exceptions to the merger doctrine. This court has held that where the intent of the parties is not clearly expressed in the deed, courts may consider parol evidence. In order to determine the intent of the parties, extrinsic evidence is admissible as to the entire circumstances under which a contract is made.[9]

And in Black v. Evergreen Land Developers, Inc.,75 Wn.2d 241, 450 P.2d 470 (1969), the Supreme Court quoted an earlier case as follows:

“In all cases then, where there are stipulations in a preliminary contract for the sale of land, of which the conveyance itself is not a performance, the true question must be whether the parties have intentionally surrendered those stipulations. The evidence of that intention may exist in or out of the deed. If plainly expressed in the very terms of the deed, the evidence will be decisive. If not so expressed, the question is open to other evidence, and I think in the absence of all proof there is no presumption that either party, in giving or accepting a conveyance, intends to give up the benefit of covenants of which the conveyance is not a performance or satisfaction.”[10]

In this case, the parties agreed to an antimerger clause. It provided, as already seen, that “all terms of this [REPSA], which are not satisfied or waived prior to closing, shall survive closing,” including “attorney’s fees and costs.” The term providing for attorney fees was neither waived nor satisfied prior to closing; it was not even mentioned in the deed. Additionally, there is no reason to think the parties intended to surrender their right to attorney fees upon closing, particularly where they included an anti-merger clause. Finally, it makes no sense that they would have intended to limit fees and costs to rescission suits brought before closing, given that such suits are often brought after closing. We hold that the REPSA’s attorney [556]*556fee provision did not merge into the deed, and that it continues to apply here.

Fades relies on Barber v. Peringer,11 but that case is readily distinguishable. The REPSA there did not contain an antimerger clause, whereas the REPSA here does.

Although we distinguish Barber, we also note our inability to follow its remarks about merger. Barber bought a house from Peringer. They executed a REPSA that “grant [ed] attorney fees to a party who must commence legal action to enforce any rights contained in the REPSA.”12 The REPSA must also have contained a legal description of the subject property.

At closing, as far as we can tell from the court’s opinion, Peringer gave Barber a deed with a legal description that matched the one in the REPSA.

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Cite This Page — Counsel Stack

Bluebook (online)
37 P.3d 301, 109 Wash. App. 550, Counsel Stack Legal Research, https://law.counselstack.com/opinion/failes-v-lichten-washctapp-2001.