Losh Family, LLC v. Kertsman

228 P.3d 793
Court of Appeals of Washington·Decided April 12, 2010·No. 62931-0-I·Published·Cited by 9 cases

Opinion

228 P.3d 793 (2010)

LOSH FAMILY, LLC, a Washington limited liability company, Respondent,
v.
Ilia KERTSMAN and Jane Doe Kertsman, husband and wife, and the marital community comprised thereof; Respondent,
Baza International, LLC, a Washington limited liability company; Grover International, LLC, d/b/a Baza International, a Washington limited liability company, Yuri Sushkin and Tatyana Rubtsova, husband and wife, and the marital community comprised thereof, Defendants, and
William Grover and Teresa Grover, husband and wife, and the marital community comprised thereof, Appellants.

No. 62931-0-I.

Court of Appeals of Washington, Division 1.

April 12, 2010.

*795 Matthew F. Davis, Seattle, WA, for Appellant.

Jeffrey Paul Downer, Michelle Anastasia Corsi, Stefanie Lynn Peppard, Lee Smart, Seattle, WA, for Respondent.

BECKER, J.

¶ 1 William Grover contends that only his limited liability company is bound by an assignment of lease Grover signed as a member of the company. We conclude the form of his signature does not alter the unambiguous language of the assignment referring to Grover's individual liability. We also conclude that the lease, though technically invalid, is removed from the statute of frauds because Grover acted upon it as a lease rather than as a month-to-month tenancy.

¶ 2 Respondent Losh Family, LLC, owned the warehouse property in question. J. Brian Losh leased the premises to Ilia Kertsman in November 2004 for $4,150 per month in rent. The five year term of the lease covered September 2003 to August 2008. The lease obligated Kertsman to pay a share of property taxes, insurance, and utilities: "Yearly summary costs will be provided as a base of payment for the sixty-eight percent (68%) triple net costs to be paid in monthly payments." Kertsman operated his international food business, Baza International, LLC, on the premises.

¶ 3 In November 2005 appellant William Grover and his wife Teresa Grover formed Grover International, LLC, a limited liability company. They bought Kertsman's business, Baza International, in December 2005. Kertsman assigned the lease of the business premises to "William and Teresa Grover as individuals, dba Grover International, LLC." Grover signed the assignment as, "Grover International, LLC by William Grover member." Losh also signed the assignment, consistent with a lease provision requiring his assent for Kertsman to assign the lease. Grover International, operated by Grover, continued the food business on the premises and made lease payments from Grover International's account.

¶ 4 In February 2006, Grover listed Grover International for sale, including the food business that was still known as Baza International. Grover hired a real estate agent to list the sale. The listing agreement stated that Baza International's premises were leased "by seller" and that seller would "assign the lease to buyer at closing." Both William and Teresa Grover signed the listing agreement and a listing input sheet that advertised Baza International's premises as a corner location with a "more than 5 years" lease, "assignable" to the purchaser.

¶ 5 In late March 2006, Grover sold Grover International and all its assets to Yuri Sushkin and his wife, Tatyana Rubtsova. Grover and Sushkin signed a separate agreement in which Sushkin assumed the lease.

¶ 6 Sushkin paid on the lease through October 2006. In late October, Sushkin vacated the premises. At the end of November, Losh served Kertsman, Grover, and Sushkin with a notice of default and a demand for payment. They did not respond. Losh reclaimed *796 the premises. He obtained a new tenant in October 2007.

¶ 7 Losh filed this suit in January 2008 to recover damages for breach of the lease from Kertsman, Grover, Sushkin, Baza International, and Grover International. Grover and Kertsman cross-claimed against each other. Sushkin defaulted. The trial court granted Losh's motion for summary judgment, holding the defendants jointly and severally liable on the lease. The court also granted Kertsman's motion for summary judgment against Grover. Losh was awarded attorney fees under a provision of the lease. Grover was ordered to indemnify Kertsman for any payment made on the $74,670 owed on the lease and for his share of Losh's attorney fees. Grover's claims against Kertsman were dismissed, and Kertsman was awarded attorney fees under a provision in the agreement between Grover and Kertsman.

¶ 8 Grover appeals the orders granting summary judgment to Losh and Kertsman. We review a grant of summary judgment de novo. Wilson Court Ltd. P'ship v. Tony Maroni's, Inc., 134 Wash.2d 692, 699, 952 P.2d 590 (1998).

GROVER'S PERSONAL LIABILITY

¶ 9 The assignment of the lease by Kertsman to Grover referred five different times to "William and Teresa Grover as individuals, dba Grover International, LLC" as party to the agreement. However, the signature for the assignee was "Grover International, LLC by William Grover member." Grover argues that by using an entity signature, he and his wife avoided personal liability. We disagree.

¶ 10 This is not a case like Union Machinery & Supply Co. v. Taylor-Morrison Logging Co., 143 Wash. 154, 254 P. 1094 (1927), relied on by Grover. In Union Machinery, the officers of a logging company had signed a promissory note in their official capacities. They had been assured that they would not be subjected to personal liability by signing the note in that way. Yet the supply company later attempted to impose personal liability on them, based on a provision in the body of the note stating, in fine print, that every party who signed as an officer or agent "`also binds himself individually as principal.'" Union Machinery, 143 Wash. at 161, 254 P. 1094. Under the circumstances, the court found that the note should be reformed to eliminate the provision purportedly creating personal liability. The circumstances here are not analogous.

¶ 11 More apt is Key v. Cascade Packing Co., 19 Wash.App. 579, 576 P.2d 929 (1978). Cascade Packing owed money to its financiers. The financiers asked Clyde Hovick, Cascade Packing's president, for a personal guaranty. He wrote them a letter unambiguously promising a personal guaranty, but he signed as president of Cascade Packing. The court held him personally liable:

In this case the defendant sent his letter in answer to a request from the plaintiffs for a personal guaranty, and they relied on it as such. He used the first person to state the guaranty. The cases do not support his contention that, because his corporate title was affixed, a completely clear document was rendered ambiguous. The cases require a finding of ambiguity only when reasonable inferences could support another interpretation.

Key, 19 Wash.App. at 582-83, 576 P.2d 929.

¶ 12 Key was an application of a long established principle that where an agreement contains language binding the individual signer, "additional descriptive language added to the signature does not alter the signer's personal obligation." Tony Maroni's, 134 Wash.2d at 700, 704,

Losh Family, LLC v. Kertsman, 228 P.3d 793 (Wash. Ct. App. 2010).

228 P.3d 793 (Losh Family, LLC v. Kertsman) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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