Sungrown Farms, Llc, V. Tokeland Growing, Llc

CourtCourt of Appeals of Washington
DecidedApril 4, 2023
Docket56758-0
StatusUnpublished

This text of Sungrown Farms, Llc, V. Tokeland Growing, Llc (Sungrown Farms, Llc, V. Tokeland Growing, Llc) 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
Sungrown Farms, Llc, V. Tokeland Growing, Llc, (Wash. Ct. App. 2023).

Opinion

Filed Washington State Court of Appeals Division Two

April 4, 2023

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DIVISION II SUNGROWN FARMS LLC, a Washington No. 56758-0-II State limited liability company,

Respondent,

v.

TOKELAND GROWING LLC, a Washington UNPUBLISHED OPINION limited liability company, and ALL SUB- TENANTS,

Appellant.

SEAN KIRBY; CRAIG TROTTER; JAMES VANHOUTE; GARY FEARS; and JOHN DOES 1-20,

Third Party Defendants Below.

VELJACIC, J. — Tokeland Growing LLC appeals the trial court’s orders granting Sungrown

Farms LLC’s motion for summary judgment and denying its motion for reconsideration.

Tokeland argues that the trial court erred in granting Sungrown’s motion for summary judgment

because genuine issues of material fact remain regarding its counterclaims for breach of contract,

breach of the covenant of quiet enjoyment, and negligent misrepresentation. Tokeland also argues

that the trial court abused its discretion in denying its motion for reconsideration because

substantial justice has not been done due to its trial counsel’s incompetence and because

Sungrown’s motion for summary judgment should have been denied. Sungrown requests attorney

fees on appeal under the lease agreement at issue. 56758-0-II

We hold the trial court did not err in granting Sungrown’s motion for summary judgment

because Tokeland fails to provide evidence establishing an issue of material fact. We hold that

the trial court did not abuse its discretion in denying Tokeland’s motion for reconsideration. We

grant Sungrown’s request for attorney fees on appeal. Accordingly, we affirm.

FACTS

I. FACTUAL BACKGROUND

A. The Parties and the Lease Agreement

Tokeland is in the business of growing recreational marijuana for commercial sale. Vicki

Larson is its managing member. On July 1, 2019, Tokeland’s then-current lease was set to expire

and it needed to acquire a new lease in order to continue its business operations.

Sungrown owns real property in Shelton. Sean Kirby is Sungrown’s managing member.

In January 2019, Sungrown placed an advertisement on Craigslist seeking to lease a portion of its

Shelton property. Tokeland expressed interest in leasing the property for its marijuana business.

On January 16, 2019, Sungrown prepared a letter of intent as an offer to lease the advertised

property. Sungrown transmitted the letter of intent to Tokeland the following day. The terms of

the letter of intent provided in relevant part that:

The Leased space is defined as 40,000 square feet of raw land, commonly known as 160 West Westfield Court, Unit 3, Shelton WA 98584. The raw land will be fully fenced with 8-foot-tall chain link with sight obscuring fabric attached to the fence. Power, water and septic will be brought to Unit 3. A closed-circuit camera system will be installed on the perimeter of the fence and a burglar alarm will be installed on two access points on the fence, (one man gate and one vehicle gate). Any further security will be the responsibility of the tenant. A 2500 SF building to be constructed on the 40,000 SF leased space at a later date.

Clerk’s Papers (CP) at 291.

2 56758-0-II

Tokeland did not sign the letter of intent within the required period of time because its

grower refused to relocate to Shelton. However, in April 2019, Tokeland expressed a renewed

interest in leasing Sungrown’s property after it failed to secure a lease in Ferndale.

On May 15, 2019, Tokeland and Sungrown entered into a lease agreement. Section 2 of

the lease agreement concerns the commencement date and possession date, which provided that:

2. Term. The term of this lease is 24 months and commences on the 1st day of the month that Tenant receives approval from the Washington State Liquor and Cannabis Board (“WSLCB”) to do business at the Premises (“Commencement Date”) and ends two years from the date possession is given to Tenant unless sooner terminated pursuant to any provision set forth below. All rents will start three months from the date Landlord delivers possession of the premises. It is the responsibility of the Tenant to have his/her pre-submission conference early and to apply for the build out permits in a timely manner. This will minimize the time it will take to receive a State License which permits Tenant the ability to begin production.

CP at 152-53. Section 7 of the lease agreement concerns Sungrown’s responsibilities in

developing the property for Tokeland’s use:

7. Landlord Responsibilities. . . . .... Landlord will fence leased premises with an 8-foot cyclone fence and install 16 security cameras on premises perimeter providing a 4x4 square foot security shed with a security system intrusion alarm.

CP at 154-55. Section 9 of the lease agreement imposes a covenant on Sungrown to ensure

Tokeland’s right to quietly enjoy its possession of the property:

9. Quiet Enjoyment. The Landlord covenants that on paying the Rent and performing the covenants contained in this Lease, the Tenant will peacefully and quietly have, hold, and enjoy the Premises for the agreed term.

CP at 155. Section 10(b) directs Tokeland to serve a written notice of default in the event

Sungrown fails to meet its duties and obligations:

3 56758-0-II

10. Default: Additional Rights on Reentry. .... (b) Default by Landlord. Landlord shall be in default under the terms of this Lease if Landlord fails to observe or perform any of its obligations, representations, warranties, conditions, covenants or provisions herein. In the event of default by Landlord, Tenant shall serve upon Landlord written notice of default. If Landlord shall be in default for more than thirty (30) days after receipt of Tenant’s notice specifying such default, Tenant may incur any expense necessary to perform any obligation of Landlord specified in such notice and deduct such expense from any sums payable by Tenant under this Lease thereafter to become due or pursue any other remedy available at law, equity or by statute, including, but not limited to, damages and/or the right to terminate said lease.

CP at 156. Section 11 of the lease agreement concerns the payment of utilities charges:

11. Utilities and Other Costs. Landlord shall pay promptly when due all charges for sewage and water, Tenants shall pay promptly when due all charges for garbage disposal, telephone, electricity, cable, heat, gas, power, and any other utilities or services and like charges, including any fire protection charge, furnished to or consumed upon the leased Premises, whether separately metered or prorated by Landlord.[1]

CP at 156.

Section 14 provides the prevailing party the right to attorney fees in a lawsuit related to

this lease agreement:

14. Attorney Fees. In the event that any action is filed in relation to this Lease, the unsuccessful party in the action will pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party’s attorney fees.

CP at 157.

B. Tokeland Takes Possession of the Shelton Property on July 3, 2019

The marijuana industry is highly regulated and there are strict requirements in relocating

plants and equipment from one site to another. In order to obtain approval to relocate, the leased

1 Paragraph 11 is the only provision in the lease having to do with landlord Sungrown’s obligation regarding utilities. As is plain, the obligation is to pay all charges for sewage and water.

4 56758-0-II

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