Hanson Industries, Inc. v. Kutschkau

158 Wash. App. 278
CourtCourt of Appeals of Washington
DecidedSeptember 16, 2010
DocketNos. 27315-6-III; 27600-7-III; 27718-6-III; 27723-2-III
StatusPublished
Cited by9 cases

This text of 158 Wash. App. 278 (Hanson Industries, Inc. v. Kutschkau) 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
Hanson Industries, Inc. v. Kutschkau, 158 Wash. App. 278 (Wash. Ct. App. 2010).

Opinion

Rulik, C.J.

f 1 The central controversy here is a dispute between private parties over the ownership of a water permit application. In 1995, property owners Orvis and Elaine Kutschkau sold their property, known as the U&I Sugar Plant, to Hanson Industries Inc. (Hanson).1 Prior to the sale, the Kutschkaus filed a permit application with the Department of Ecology (Department) to withdraw artificially stored ground water (ASGW) from the Quincy Groundwater subarea.

¶2 Numerous disputes relating to this business relationship arose between the Kutschkaus and Hanson. The parties agreed to resolve all issues in a negotiated agreement, the “1995 Settlement Agreement.” The permit application was not specifically identified in the agreement. At the time of this lawsuit, the property was owned by Central Terminals.

[283]*283¶3 We conclude that the plain language of the 1995 Settlement Agreement resolved the question of the ownership of the permit application in favor of Hanson. Accordingly, we affirm the trial court’s grant of summary judgment in favor of Hanson. We also affirm the trial court’s judgment on the pleadings against Central Terminals.

FACTS

¶4 In 1986, the Kutschkaus purchased the former U&I Sugar Company in Moses Lake, Washington. The property was contaminated and required an environmental cleanup. To finance this cleanup, the Kutschkaus borrowed money from various lenders, including Hanson Processing LLC.

¶5 In 1995, the Kutschkaus submitted an application for a permit to use ASGW to the Department. The permit application identified three existing wells from which the Kutschkaus sought to draw ASGW.

¶6 The application was signed by Mr. Kutschkau. When Mr. Kutschkau signed the application form, his name was the only name appearing as the applicant. At some point, the name “Hanson Processing LLC,” was added to the applicant box on the application form. Clerk’s Papers (CP) at 470. Mr. Kutschkau testified that he did not write this name on the application form and that he did not ask anyone else to do so. The parties agree that a water permit has never been issued based on this permit application.

¶7 In 1995, Hanson filed a lawsuit against the Kutschkaus related to their financial agreement. The parties, represented by counsel, then negotiated the 1995 Settlement Agreement. The Kutschkaus agreed to convey the U&I property and certain personal property to Hanson in exchange for $1,000,000. Before the 1995 Settlement Agreement was signed, Hanson Industries and Hanson Processing had invested approximately $6.3 million on behalf of the Kutschkaus in developing the property. Of that total, Hanson Processing had paid out nearly $222,000 for the Kutschkaus’ personal expenses.

[284]*284¶8 The 1995 Settlement Agreement required that the Kutschkaus and Hanson draft and execute all documentation reasonably necessary to clear title to the property and to give effect to the intent and purposes expressed in the agreement. The Kutschkaus executed a quitclaim deed to the U&I property and conveyed certain items of personal property. The Kutschkaus did not expressly assign the water permit application to Hanson. The Kutschkaus also did not file an assignment form with the Department seeking to transfer the permit application to Hanson. The Kutschkaus and Hanson never sought the Department’s consent to an assignment. Hanson and the Kutschkaus also negotiated and signed two addenda to the 1995 Settlement Agreement.

¶9 Almost immediately, Hanson conveyed the property to Columbia River Sugar Company. The real property changed hands several times until 2001 when Central Leasing of Washington LLC, now Central Terminals LLC, purchased the property.

¶10 In 1999 and 2001, the Kutschkaus filed breach of contract claims against Hanson Processing and Hanson. These cases were consolidated in Grant County Superior Court. In 2004, the parties mediated these cases and signed the “2004 Mediated Agreement.” As part of this agreement, the parties agreed to release all claims pertaining to either party’s breaches under the 1995 Settlement Agreement.

¶11 In 2006, the Kutschkaus sought to assign the permit application to the city of Quincy for $1.2 million. They designated themselves and Hanson as “holder of the application.” CP at 768. The Department rejected the proposed assignment based on the Department’s “uncertainty of the ownership of the original application.” CP at 772. The Kutschkaus timely appealed the Department’s refusal to take action on the assignment to the Pollution Control Hearings Board (PCHB). Later, the Kutschkaus and the city of Quincy terminated their assignment agreement.

¶12 In December, the Kutschkaus added Lamb Weston as a coapplicant to the permit application. The Kutschkaus [285]*285and Lamb Weston completed the Department’s assignment form and filed the form with the Department. The Department agreed to act on the assignment after a court determined ownership of the permit application. The PCHB dismissed the appeal based on this agreement between the Kutschkaus and the Department.

¶13 Hanson filed suit, seeking declaratory relief naming Hanson as the sole owner of the permit application. In response, the Kutschkaus and Central Terminals each sought declaratory relief naming themselves as the sole owner of the application. They also asserted counterclaims and cross claims. Lamb Weston moved to intervene as a defendant based on its interest as a potential assignee. The court granted the motion to intervene.

¶14 The Kutschkaus and Lamb Weston moved for summary judgment. The Kutschkaus asserted that they owned the permit application. Lamb Weston argued that (1) any alleged assignment from the Kutschkaus to Hanson was invalid; (2) the 1995 Settlement Agreement did not convey or require the conveyance of ownership of the permit application from the Kutschkaus to Hanson; and (3) even if conveyance was required, the 1995 Settlement Agreement was no longer enforceable. In response, Hanson filed a cross motion for summary judgment arguing that the 1995 Settlement Agreement conveyed all of the Kutschkaus’ interests in the property to Hanson, including the permit application.

¶15 The trial court denied the Kutschkaus’ motion for summary judgment and Lamb Weston’s motion for partial summary judgment, and granted Hanson’s cross motion for summary judgment. In its oral ruling, the court explained that even though the permit application was not mentioned in the 1995 Settlement Agreement, the agreement nevertheless served to transfer the permit application to Hanson. The court concluded that the Kutschkaus had no legal or equitable interest in the permit application and, consequently, had no right to assign the permit application to Lamb [286]*286Weston. All claims made by the Kutschkaus and Lamb Weston against Hanson were dismissed with prejudice.

¶16 Lamb Weston moved for judgment on the pleadings against Central Terminals pursuant to CR 12(c). The Kutschkaus joined in this motion. Lamb Weston argued that ownership of the points of withdrawal did not grant ownership of the permit application and that the permit application was never properly assigned to Central Terminals. Hanson asked the court to enter judgment on the pleadings holding that Hanson was the sole owner of the permit application.

¶17 Lamb Weston moved for revision of the court’s prior rulings on summary judgment pursuant to CR 54(b).

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Bluebook (online)
158 Wash. App. 278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanson-industries-inc-v-kutschkau-washctapp-2010.