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FILED JULY 12, 2022 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
SUSAN DANKIEVITCH, ) No. 38465-9-III ) Appellant, ) ) v. ) PUBLISHED OPINION ) ADRIAN LAWRENCE and ESTHER ) LAWRENCE, a marital community; ) SHEILA MARTI, and PATRICIA ) LAWRENCE, ) ) Respondents. )
LAWRENCE-BERREY, J. — Susan Dankievitch appeals after the trial court granted
partial summary judgment dismissing her request for specific performance of an oral
agreement to sell real property and limiting her remedy to damages.
We confirm the sometimes overlooked rule that a trial court has equitable authority
to order the sale of real property under an oral agreement that lacks otherwise material
terms (1) if part performance takes the agreement outside the statute of frauds, and
(2) if the agreement permits the balance to be paid in full rather than in installments. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 38465-9-III Dankievitch v. Lawrence
Here, considering the facts in the light most favorable to Dankievitch: (1) Sheila
Marti sold the subject property to Dankievitch for $110,000; (2) under an agreement for
Dankievitch to pay her $1,000 or more per month; (3) no interest would accrue on the
balance; (4) Dankievitch entered into possession of the property and made permanent,
substantial, and valuable improvements; and (5) Marti agreed to transfer title after she
completed her bankruptcy, at which time Marti would execute a quitclaim deed and the
sale would be finalized. We reverse the trial court’s grant of partial summary judgment
and remand for proceedings consistent with this opinion.
FACTS
We present the facts in the light most favorable to Susan Dankievitch, given that
our review is of a partial summary judgment order adverse to her.
Agreement, payments, and moving onto property
Sheila1 Marti filed for chapter 13 bankruptcy in 2013. In August 2014, she spoke
with Susan Dankievitch at Dankievitch’s antique store. Marti told Dankievitch about her
bankruptcy and said she owed back taxes on a piece of property she owned and she could
not afford to keep it. Dankievitch told Marti she had been looking at some property
1 In their briefs and pleadings, the parties spell Ms. Marti’s first name “Sheila.” But in a handwritten deed and in her bankruptcy records, her first name is spelled “Shiela.” We elect to spell her name consistent with the pleadings.
2 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
nearby and Marti asked Dankievitch if she wanted to buy Marti’s property instead. The
property, referred to by some county employees as “Hillbilly Farms,” was 10 acres and
included a dilapidated house and property littered with useless junk. Clerk’s Papers (CP)
at 69. The parties agreed that the purchase price would be $110,000 and Dankievitch
would take ownership in October 2014. They agreed to a monthly payment of $1,000 or
more. Marti opened a new bank account for Dankievitch to make the monthly payments.
Marti did not want the bankruptcy court to know about the sale so she told Dankievitch
not to pay the property taxes until her bankruptcy was completed, at which time the sale
could be finalized and the property would be quitclaimed to her.2 Nothing was discussed
about liability for interest.3
On October 15, 2014, Dankievitch deposited $4,000 into Marti’s account. Marti’s
stepfather, Eldon Orr, was living on the property and Marti gave him notice to vacate.
After Orr left around the end of October, Dankievitch and her children moved onto the
property. Marti moved to Spokane to finish school. Dankievitch made semi-monthly
payments of $1,000 through the end of the year to help Marti get established in Spokane.
2 We infer that Dankievitch would pay the balance owing contemporaneous with receiving the quitclaim deed. 3 The record is unclear whether this means that no interest would accrue on the balance or that the parties would agree to a rate later. For purposes of this appeal, we construe this uncertainty as meaning that no interest would accrue.
3 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
Beginning in 2015, Dankievitch made $1,000 payments to Marti at the beginning of every
month.
Marti’s in-court admission that she sold the property to Dankievitch
In 2015, Orr sued Marti in small claims court for conversion of possessions he had
left on the property. At the hearing, Orr testified that Marti “sold [the property] to Sue
Dankievitch after her mother passed away.” CP at 169. When the court asked for a
ballpark date of the sale, Marti told the court it was “October of 2014.” CP at 171. Marti
further testified: “I left the house in October of 2014. . . . I left the month I sold it.”
CP at 172. She explained: “I moved to Spokane to finish school. I couldn’t maintain the
property, so I sold it to Sue. . . . I never came back to the property.” CP at 173.
Dankievitch was also present at the hearing and testified she had been cleaning up the
property for over one year.
Based on this testimony, the small claims court found Marti was not liable for
conversion because she had no control over the property after she sold it to Dankievitch.
Because Marti testified in court about selling the property to Dankievitch, Dankievitch
did not feel she needed to get their agreement in writing.
4 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
Substantial, permanent, and valuable improvements
In January 2015, Dankievitch replaced two water heaters on the property at a cost
of $850.00. In September 2015, she bought a new well pump for $300.00. In April 2017,
she remodeled one bathroom, began remodeling a second, and installed two new toilets at
a cost of $430.00. In August 2017, she repaired the water lines running from the well to
the house at a cost of $830.77. In March 2018, she had the septic tank pumped for
$425.00 and replaced the tank. Dankievitch did not consult Marti for permission on any
of these improvements.
Marti’s post-bankruptcy quitclaim to others and Dankievitch’s quiet title action
On June 11, 2018, Marti completed her bankruptcy. On June 22, Marti
quitclaimed the property to Harry Marti and Arley Lawrence.4 The deed recited the
consideration as “Gift, No Money exchange.” CP at 98. Dankievitch learned that the
bankruptcy was over when Bill Lawrence handed her a paper, perhaps the quitclaim deed,
saying, “This is called payback, bitch.”5 CP at 72. Soon after, Dankievitch paid the
property taxes for 2016, 2017, and 2018.
4 The record does not answer whether the transferees are related to Sheila Marti. 5 The record does not answer whether Bill Lawrence is related to Arley Lawrence.
5 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
On August 2, 2018, Dankievitch filed a petition for quiet title, seeking specific
performance of the agreement, naming Sheila Marti, Harry Marti, and Arley Lawrence as
defendants. The next month, Dankievitch tried to deposit $1,000 into Marti’s account.
The bank teller advised her the account had been closed.
Marti denied that she had sold the property to Dankievitch and raised the defense
of the statute of frauds. She testified in a deposition that Dankievitch moved onto the
property and rented it for a payment of $1,000 per month “or more, if she could.”
CP at 79.
Dankievitch similarly testified in a deposition about the circumstances and terms
of the sale and the parties’ reasons for not putting their agreement in writing or
transferring the deed. Marti’s attorney asked, “[W]hen did you assert that the sale be in
writing?” CP at 72. Dankievitch responded, “We were going to do that when her
bankruptcy was done. We were going to go up and do the deed, transfer, and, you know,
whatever we needed to do at that point . . . .” CP at 72.
Marti’s motion for summary judgment, entry of judgment, and appeal
Marti moved for summary judgment and requested that the court quiet title in favor
of Harry Marti. Dankievitch responded that partial performance removed the oral
6 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
agreement from the statute of frauds and that she was not required to prove all of the
requisites for the future sale of real estate because the sale had occurred.
Viewing the evidence in the light most favorable to Dankievitch, the trial court
determined that part performance removed the oral agreement from the statute of frauds,
but that the agreement could not be specifically enforced because the parties had not
agreed on several material terms. The court granted Marti’s summary judgment motion,
permitted Dankievitch to sue for damages and later granted Harry Marti’s motion to eject
Dankievitch from the property.
After Dankievitch’s unsuccessful motion for reconsideration, the parties agreed to
entry of a judgment with CR 54(b) language. The CR 54(b) findings explain that the
court had determined substantial issues in the case and, although claims for potential
damages remained, there was “no reason to delay judgment at this time.” CP at 387. In
support of their request to have judgment entered, the parties stipulated, “Trying the
remaining issues will take extensive time and the parties do not wish to risk incurring
legal fees potentially for no reason, prior to the main issue being decided [on appeal].”
CP at 381. Dankievitch appealed.
7 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
ANALYSIS6
A. SUMMARY JUDGMENT STANDARD OF REVIEW
We review orders granting summary judgment de novo, “engag[ing] in the same
inquiry as the trial court.” Clements v. Travelers Indem. Co., 121 Wn.2d 243, 249, 850
P.2d 1298 (1993). A party moving for summary judgment must show there is no genuine
issue of material fact and that they are entitled to judgment as a matter of law. CR 56(c).
A material fact is one on which the outcome of the litigation depends. Clements, 121
Wn.2d at 249. In deciding a motion for summary judgment, the trial court views all facts
and reasonable inferences therefrom in the light most favorable to the nonmoving party.
Id.
A defendant moving for summary judgment may meet its initial burden by
showing there is an absence of evidence to support the plaintiff’s case. Friends of Moon
Creek v. Diamond Lake Improvement Ass’n, 2 Wn. App. 2d 484, 494, 409 P.3d 1084
6 The parties do not address whether the matter is properly before us on appeal. We doubt that the CR 54(b) findings are sufficient to permit review as of right. See Gull Indus., Inc. v. State Farm & Cas. Co., 181 Wn. App. 463, 480-82, 326 P.3d 782 (2014) (discussing the requirement for sufficient findings to support an appeal of a judgment that adjudicates less than all claims). Nevertheless, we accept discretionary review of this appeal under RAP 2.3(b)(4). That rule permits discretionary review if the superior court has certified, or the parties have stipulated, that the order involves a controlling question of unsettled law and immediate review may materially advance the ultimate termination of the litigation.
8 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
(2018). If the defendant meets this burden, the burden then shifts to the plaintiff to set
forth specific facts demonstrating a genuine issue for trial. Id. If the nonmoving party
fails to make a showing sufficient to establish an element essential to their claim and on
which that party bears the burden of proof at trial, then the trial court should grant the
defendant’s motion. Burton v. Twin Commander Aircraft, LLC, 171 Wn.2d 204, 223, 254
P.3d 778 (2011).
B. PART PERFORMANCE AND THE STATUTE OF FRAUDS
In Washington, conveyances of land must be made by written deed.
RCW 64.04.010, .020. This stems from the statute of frauds, which “was originally
enacted to prevent fraud and perjury by requiring that certain enumerated agreements and
conveyances be in writing.” Mobley v. Harkins, 14 Wn.2d 276, 283, 128 P.2d 289
(1942).
Unfortunately, the “indiscriminate application” of this rule often furthered the
perpetration of fraud. Id. In response, courts “developed the doctrine of equitable
estoppel by reason of part performance, declaring that certain acts referable to an oral
agreement would be regarded as taking that agreement out of the statute of frauds.” Id.
The doctrine “guards against the utilization of the statute as a means for defrauding
9 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
innocent parties who have been induced or permitted to change their position, in reliance
upon oral agreements within its operation.” Id. at 284.
Courts examine three factors when determining whether there has been part
performance of an oral agreement such that it removes the agreement from the statute of
frauds:
(1) delivery and assumption of actual and exclusive possession; (2) payment or tender of consideration; and (3) the making of permanent, substantial and valuable improvements, referable to the contract.
Berg v. Ting, 125 Wn.2d 544, 556, 886 P.2d 564 (1995) (quoting Kruse v. Hemp, 121
Wn.2d 715, 724-25, 853 P.2d 1373 (1993)). The law is unsettled whether part
performance can be established by the presence of only two of the three factors. In Berg,
the court stated that prior dictum and observations of its prior holdings suggest that two
factors are sufficient. Id. at 557-58.
Nevertheless, all three factors are present here. Dankievitch assumed actual and
exclusive possession of the property, paid $56,0007 over a period of years toward the
purchase price, and made permanent, substantial and valuable improvements. Viewing
the evidence in her favor, we conclude that Dankievitch has demonstrated all three part
7 Although Marti does not dispute the total amount of Dankievitch’s payments, the deposit slips in the record total only $52,000.
10 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
performance factors so as to remove the oral agreement from the statute of frauds.
C. SPECIFIC PERFORMANCE
The trial court granted summary judgment to Marti because Dankievitch failed to
produce evidence that the parties agreed to the 13 material terms identified in Hubbell v.
Ward, 40 Wn.2d 779, 782-83, 246 P.2d 468 (1952). Dankievitch contends that Hubbell
enumerates terms necessary to specifically enforce a future real estate contract and that
those terms are not necessary for her and Marti’s agreement. We agree.
In Hubbell, the parties executed an earnest money agreement for an apartment
building. Id. at 780. The agreement provided that Hubbell would pay $9,000 down and
sign a contract for the balance of $20,000, payable at $200 or more per month, including
interest of five percent on deferred balances. Id. After Ward refused to honor the
agreement, Hubbell sued for specific performance. Id. The trial court ordered Ward “‘to
enter into a real estate contract according to the terms of said earnest money receipt and
agreement.’” Id. at 780-81.
The Hubbell court determined that the earnest money agreement was too vague to
enforce. It explained that there were 13 important and material terms that the earnest
money agreement had not covered: “(a) time and manner for transferring title;
(b) procedure for declaring forfeiture; (c) allocation of risk with respect to damage or
11 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
destruction; (d) insurance provisions; (e) responsibility for: (i) taxes, (ii) repairs, and
(iii) water and utilities; (f) restrictions, if any, on (i) capital improvements, (ii) liens,
(iii) removal or replacement of personal property, and (iv) types of use; (g) time and place
for monthly payments; and (h) indemnification provisions.” Kruse, 121 Wn.2d at 722
(citing Hubbell, 40 Wn.2d at 782-83). The Hubbell court discussed prior decisions and
concluded that “the agreement here, in so far as it looks to the preparation and execution
of a future real estate purchase contract upon which the minds of the parties have not met,
is not sufficiently definite and certain and cannot be specifically enforced.” Hubbell, 40
Wn.2d at 787 (emphasis added).
But the Hubbell court provided Hubbell relief. It reasoned, “The agreement
contains within itself the essential elements of a binding contract . . . .” Id. The plaintiffs
“are given an option to pay the entire consideration at any time.” Id. The parties agreed
to “pay and accept $9,000 down and the balance ($20,000) in installments of $200 or
more per month, including interest.” Id. at 788. “Thus [Hubbell was] given an option to
pay the balance of the consideration in cash at any time.” Id. The Hubbell court
concluded, “[W]e are of the opinion that [Hubbell was] entitled to a decree of specific
performance directing [Ward] to execute and deliver a deed and bill of sale conditioned
upon [Hubbell] tendering payment of the balance of the full contract price of $29,000
12 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
within a reasonable period of time.” Id. at 787-88. We note the internal consistency of
Hubbell: If the parties’ agreement permits the buyer to pay the balance at any time, and
the buyer pays the balance within a reasonable time after the court’s decree, the court is
not required to insert one or more Hubbell terms to create an agreement for the parties.
In Kruse, the parties executed a five-year lease agreement that included an option
allowing Kruse, the lessee, to purchase the property. The agreement provided that the
option price would be $255,000, described how the interest rate would be calculated,
required payments to be amortized over 25 years, but limited the monthly payment to
$3,500. 121 Wn.2d at 717. When Kruse tendered the real estate contract, Hemp refused
to execute it because it failed to recognize an easement over the property in favor of an
adjacent lot he owned. Id.
The Kruse court, citing Hubbell, explained, “A contract to enter into a future
contract . . . must specify all of the material and essential terms of the future contract
before a court may order specific performance.” Id. at 722. “When specific performance
is sought, rather than legal damages, a higher standard of proof must be met: ‘clear and
unequivocal’ evidence that ‘leaves no doubt as to the terms, character, and existence of
the contract.’” Id. (quoting Powers v. Hastings, 93 Wn.2d 709, 717, 713, 612 P.2d 371
(1980)). The Kruse court, noting that the parties did not refer to or include a real estate
13 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
contract form in the lease agreement that addressed the 13 Hubbell terms, concluded that
there was no meeting of the minds as to all the material and essential terms of the real
estate contract and denied specific performance. Id. at 723. The Kruse court
distinguished Hubbell, noting that the agreement “precluded the possibility of a cash sale
by establishing a limit on the amount of a monthly payment (i.e., $3,500) and making no
specific provision for a cash sale.” Id. at 722 n.1.
Here, the agreement contemplated monthly payments of $1,000 or more until Marti
completed her bankruptcy, at which time Marti would execute a quitclaim deed
transferring title and Dankievitch would pay the balance of the purchase price. When
Dankievitch sued for quiet title, she requested specific performance of that promise and
recognition that her title was paramount. Thus, the 13 Hubbell terms are immaterial to
the relief requested by Dankievitch. We conclude the trial court erred when it dismissed
Dankievitch’s request for specific performance.8
8 Marti asserts that Dankievitch’s deposition testimony “indicate[d] that an agreement still needed to be reached.” Br. of Resp’t at 11. We disagree. The excerpted portion of the deposition merely shows that the parties agreed to complete the deed transfer after the bankruptcy was over, not that they had further negotiations planned.
14 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
D. DENIAL OF AFFIRMATIVE RELIEF
Dankievitch requests that we order specific performance. There may be multiple
reasons to deny her request. The most obvious reason is that we do not generally review a
claim of error raised for the first time on appeal. RAP 2.5(a). Dankievitch did not move
for summary judgment below, so Marti did not have a full opportunity to oppose the
request for affirmative relief she makes on appeal.
Also, as noted previously, when specific performance is sought, the purchaser
must prove the contract by clear and unequivocal evidence that leaves no doubt as to the
terms, character, and existence of the contract. Kruse, 121 Wn.2d at 722. Here, the
parties did not discuss interest. This may be because the parties believed no interest
would accrue or it may be because the parties had not agreed on a rate. If the former,
specific performance might be appropriate; if the latter, it would not.
According to Dankievitch, Marti insisted that the sale not be formalized with a
deed because Marti wanted to hide the sale from the bankruptcy court. One might infer
that the parties tacitly agreed that no interest would be assessed on the balance because it
was Marti, not Dankievitch, who insisted on delaying the transfer and payment. Although
one might infer this, one need not. A genuine issue of material fact remains undecided.
15 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
E. ATTORNEY FEES
Dankievitch requests attorney fees on appeal based on Marti’s bad faith conduct.
We decline to award fees.
“‘Attorney fees may be awarded only if authorized by contract, statute or
recognized ground in equity.’” City of Sequim v. Malkasian, 157 Wn.2d 251, 271, 138
P.3d 943 (2006) (internal quotation marks omitted) (quoting Bowles v. Dep’t of Ret. Sys.,
121 Wn.2d 52, 70, 847 P.2d 440 (1993)). An award of attorney fees may be justified on
the equitable ground of bad faith. Rogerson Hiller Corp. v. Port of Port Angeles, 96 Wn.
App. 918, 927, 982 P.2d 131 (1999).
There are three types of bad faith: (1) prelitigation misconduct, (2) procedural bad
faith, and (3) substantive bad faith. Dave Johnson Ins., Inc. v. Wright, 167 Wn. App. 758,
784, 275 P.3d 339 (2012). Dankievitch appears to rely on the first type.
Prelitigation misconduct refers to obdurate or obstinate conduct that necessitates
legal action to enforce a clearly valid claim or right. Id. As we indicated above,
Dankievitch’s right to specific performance is not clear. But her claim for damages for
breach of the oral agreement may well be, given Marti’s judicial admission in the prior
litigation. Because this appeal relates to the former remedy, we deny Dankievitch’s
request for attorney fees on appeal.
16 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. I No. 38465-9-111 Dankievitch v. Lawrence
Reversed and remanded.
WE CONCUR:
Pennell, J.