H. Fredrick Peterson v. Mark H. Reiter & Chris A. Reiter

CourtCourt of Appeals of Washington
DecidedDecember 14, 2021
Docket37802-1
StatusUnpublished

This text of H. Fredrick Peterson v. Mark H. Reiter & Chris A. Reiter (H. Fredrick Peterson v. Mark H. Reiter & Chris A. Reiter) 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
H. Fredrick Peterson v. Mark H. Reiter & Chris A. Reiter, (Wash. Ct. App. 2021).

Opinion

FILED

DECEMBER 14, 2021 In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION THREE H. FREDRICK PETERSON, ) No. 37802-1-III Appellant, v. UNPUBLISHED OPINION MARK H. REITER and CHRIS A. REITER, husband and wife, ) Respondents.

LAWRENCE-BERREY, J. — Fredrick Peterson appeals the trial court’s summary judgment ruling that interpreted the word “Grantee” in a deed to include the original grantee’s successors. This interpretation permitted the Reiters, the original grantee’s successors, to rebuild their house on the deeded property.

We interpret the word “Grantee” not in isolation, but in the context of the entire deed to determine the intent of the original parties. The deed reflects multiple purposes the parties sought to achieve. These purposes are frustrated if “Grantee” does not include the original grantee’s successors. We conclude that the entirety of the agreement clearly

demonstrates that the original parties to the deed intended “Grantee” to include the No. 37802-1-II Peterson v. Reiter original grantee’s successors. We affirm the trial court. FACTS

Fredrick Peterson is an experienced and well-established real estate developer in the Yakima Valley. In 1982, Mr. Peterson—through his company Crescent Properties, Inc.—obtained title via foreclosure auction to approximately 120 acres of property in the Yakima Valley. He intended (and still intends) to develop the property into a wine- themed development featuring a winery, commercial, recreational, and retail areas, a resort, and residential options.

In 1986, local businessman Eldon Graves sought to purchase a house at 15 Hardy Road, which was situated on a portion of Mr. Peterson’s property. The 7.69 acre parcel was entirely surrounded by Mr. Peterson’s property. Mr. Peterson and Mr. Graves negotiated the sale for months and settled on a final price of $200,000. The deed! reads, in pertinent part:

The Grantor, H. Fredrick Peterson . . . conveys to Eldon Graves [15 Hardy Road]

TOGETHER WITH 30-foot nonexclusive easement for ingress and egress .... Grantor and Grantee shall share equally the cost of maintaining such easement.

! ‘We attach the deed as an appendix to this opinion.

2 No. 37802-1-HI Peterson vy. Reiter

SUBJECT TO present and future assessments due by way of inclusion of the property with the boundaries of Yakima County Road Improvement District No. 69. Grantee agrees to cooperate with and support Grantor in the prosecution of [a lawsuit brought by Grantor, which] challenges the validity of the assessments .. . .

SUBJECT TO use restrictions:'?! Grantor hereby reserves all future development rights for any “above-grade improvements” on the subject property, provided this restriction shall not preclude the Grantee from improving the property with one or more of the following type improvements, to-wit: landscaping; a three-car garage; residential-type swimming pool, either outdoor or enclosed within a compatible structure with pool decking and a bath house; and/or the repair or replacement of existing improvements in the event of damage or destruction of the same; and a fence which is mutually agreed upon by the Grantor and Grantee and is of a type architecturally consistent with other of Grantor’s property development within the general geographic area.

THIS RESERVATION OF RIGHTS"! shall be the property of Grantor, retained by Grantor for the benefits of Grantor’s heirs and/or assigns and shall constitute a property right transferrable, in whole or part, only by document of conveyance executed by Grantor, or Grantor’s successors or assigns. By virtue of the reservation of development rights by Grantor, Grantee understands that the property subject to this Deed may not be subdivided or improved contrary to the terms of this restriction, unless Grantor conveys, in whole or part, such development rights to Grantee or Grantee’s assigns, by appropriate document of conveyance.

? We refer to this paragraph as the “use restrictions” paragraph.

3 We refer to this paragraph as the “reservation of rights” paragraph.

3 No. 37802-1-HI Peterson vy. Reiter

SUBJECT TO Grantor’s retained right to maintain landscaping on the subject property. SUBJECT TO DEVELOPMENT OF ADJOINING PROPERTY: Grantor contemplates the possible development of adjoining property with a winery and resort condominium complex. Grantee acknowledges the value of such development to the subject property and agrees to cooperate and support all applications, hearings and proceedings with respect to the development of the property. Specifically, it is anticipated that the development will require an application for planned unit development and not register any objection to such development application.

Clerk’s Papers (CP) at 108-09 (emphasis added).

In 1997, Mr. Graves refinanced the property. The refinancing loan was for $368,000, secured by a deed of trust. The loan and security were subsequently assigned to The First National Bank of Chicago.

In 1998, Mr. Graves defaulted on the loan. The property was reconveyed to the bank. Mark and Chris Reiter purchased the property from the bank in November 1999 for $270,000. In 2007, they bought a nearby parcel—11 Hardy Road. Over several years, the Reiters spent more than $100,000 remodeling and upgrading their home, which included building a three-car garage.

In March 2017, the Reiters’ home was completely destroyed by a fire. The home

was insured and the Reiters received insurance proceeds. They began rebuilding,

utilizing the original footprint and design. They asked Mr. Peterson for copies of his

4 No. 37802-1-HI Peterson vy. Reiter

county-approved plans showing his proposed structures for the surrounding areas. Throughout the years, Mr. Peterson had acquired adjoining property and his original 120 acres had expanded to 317 acres.

In July 2017, Mr. Peterson’s representative met with Mr. Reiter and discussed the reservation of rights in the deed and Mr. Peterson’s proposed purchase of the Reiters’ two properties on Hardy Road. The following month, Mr. Peterson spoke with Mr. Reiter personally about the reservation of rights and again offered to purchase the two properties. He sent a letter the following day, which read in part:

Thank you for taking the time and meeting with Kim and I yesterday. We

believe the purchase offer we made reflected a fair price for your two

properties."

One item in our conversation, which I did not understand, was your

comment that the restrictions, in the original Deed (attached), “do not

impact the marketability” of your property. I don’t agree with your

observations with respect to “marketability” because the reservation of all

future development rights for any “above-grade improvements” was clearly

retained in a covenant which runs with the land.

By way of background, the deed restriction was specifically negotiated with

Eldon Graves prior to preparation of the deed and closing of the property

sale. The document is clear with respect to my future development plans

and the potential conflict the home and other improvements would create in executing those plans. Accordingly, we negotiated the specific use

+ The record does not reflect what Mr. Peterson offered the Reiters for the two properties. But in his complaint, he alleged that the value of 15 Hardy Road without the house was $69,200. No. 37802-1-HI Peterson vy. Reiter

restrictions with limited above-grade rights granted only to the “Grantee”— Eldon Graves... . CP at 173.

In 2019, Mr.

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H. Fredrick Peterson v. Mark H. Reiter & Chris A. Reiter, Counsel Stack Legal Research, https://law.counselstack.com/opinion/h-fredrick-peterson-v-mark-h-reiter-chris-a-reiter-washctapp-2021.