Wall Street Apartments, LLC v. All Star Prop. Mgmt., LLC

Court of Appeals of Washington·Decided April 19, 2022·No. 37512-9·Unpublished

Opinion

FILED

JUNE 7, 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

WALL STREET APARTMENTS, LLC, ) a Washington limited liability company; ) No. 37512-9-III and ALAA ELKHARWILY, M.D. )

) ORDER: (1) DENYING MOTION Appellants. ) FOR RECONSIDERATION, ) AND (2) AMENDING OPINION v. )

)

ALL STAR PROPERTY ) MANAGEMENT, LLC, a Washington ) limited liability company; GIEVE ) PARKER, individually and on behalf of ) her marital community, )

)

Respondents, )

)

JOHN DOES and JANE DOES I ) through X, )

)

Defendants. )

THE COURT has considered appellants Wall Street Apartments, LLC and Alaa Elkharwily, M.D.,’s motion for reconsideration of our April 19, 2022, opinion; and the record and file herein.

IT IS ORDERED that the appellants’ motion for reconsideration is denied.

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

IT IS FURTHER ORDERED that the court’s April 19, 2022, opinion is amended as follows:

The second sentence in the first paragraph on page eight, including footnote two, is stricken from the opinion and replaced with the following:

The trial court denied Wall Street’s motions for reconsideration, a new trial, and relief from judgment, but granted in part the motion for amended findings of fact and conclusions of law.

See CP 1382-1407.

PANEL: Judges Pennell, Fearing and Lawrence-Berrey FOR THE COURT:

LAUREL H. SIDDOWAY

Chief Judge

FILED

APRIL 19, 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

WALL STREET APARTMENTS, LLC, ) No. 37512-9-III a Washington limited liability company, ) and ALAA ELKHARWILY, M.D., )

)

Appellants. )

)

v. )

)

ALL STAR PROPERTY ) MANAGEMENT, LLC, a Washington ) UNPUBLISHED OPINION limited liability company; GIEVE ) PARKER, individually and on behalf of ) her marital community, )

)

Respondents, )

)

JOHN DOES and JANE DOES I ) through X, )

)

Defendants. )

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

PENNELL, J. — Wall Street Apartments, LLC and Dr. Alaa Elkharwily (collectively Wall Street) appeal an adverse judgment in favor of All Star Property Management, LLC and Gieve Parker (collectively All Star). We affirm and award All Star attorney fees on appeal.

FACTS

Dr. Alaa Elkharwily was the CEO of Wall Street Apartments. Through Wall Street, Dr. Elkharwily owned an apartment building at 225 South Wall Street (the Wall Street building) in Spokane. On September 2, 2012, Wall Street entered into an agreement with All Star to manage units in the Wall Street building. All Star was owned by Ronald and Gieve Parker.

The management agreement tasked All Star with duties:

1. To use due diligence in the management of the premises . . . and agrees to furnish services for the renting, leasing, operating, and managing of the above mentioned premises.

2. To render monthly statement of receipts, expenses, and charges and to remit the same to the Owner together with receipts less disbursement. In the event the disbursements are in excess of the rents collected by All Star Property Management, the Owner hereby agrees to pay such excess promptly upon demand . . . .

3. To deposit all receipts collected for the Owner (less any sums properly deducted or as otherwise provided for herein) in a pooled Trust account . . . .

4. To advertise the availability for rental of the above-referenced premises . . . to sign, renew and/or cancel or terminate leases for the

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

premises or any part thereof; to collect rents due or to become due and give receipts therefore; to terminate tenancies and to sign documents in the Owner’s name.

....

6. To make or cause to be made and to supervise repairs, expenses, and charges and to remit to Owner receipts less disbursement. In the event the disbursements shall exceed of [sic] the amount of rents collected by All Star Property Management, the Owner hereby agrees to pay such excess promptly upon demand . . . .

7. To make or cause to be made and to supervise any alterations, and to do maintenance on the above-referenced premises; to purchase supplies and pay all bills thereof. All Star Property Management agrees to secure the prior approval of the Owner on all expenditures in excess of $1.00 for any one item . . . .

....

9. To hire, discharge, and supervise all labor and employees required for the operation and maintenance of the premises. . . .

Ex. P1, at 1-2. In consideration for All Star’s work, Wall Street agreed to pay six percent of the monthly rental rate, $100.00 for each new signed lease, all rental income in excess of $533.00, and $0.55 per mile to pick up and deliver materials to any job site.

In meetings with the Parkers around the time the management agreement was signed, Dr. Elkharwily expressed his intent to renovate the interior of the Wall Street building. All Star did not agree to perform the remodeling.

On September 12 and 13, 2012, All Star secured tenants for apartment 19 of the Wall Street building. Ms. Parker collected $685.00 from the new tenants and placed the funds in trust accounts. Ms. Parker also collected $300.00 in rent from apartment 18 on

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

September 22. A receipt dated September 22 noted the apartment as “# 5 Was 18.” Ex. D133. In the month of September, All Star incurred $1,517.39 in expenses for travel and materials at the direction of Wall Street.

On September 26, demolition began on an interior wall in the lobby of the Wall Street building. At 4:00 p.m. that day Ms. Parker sent a text message to Dr. Elkharwily containing a photo of Christopher Godwin, a handyman for Dr. Elkharwily who lived at the Wall Street building, demolishing the lobby wall. On the wall were two components of the building’s fire alarm system—a fire panel, and a fire box (i.e., the electric box supplying the fire alarm system with power).

At 10:25 a.m. on September 27, Ms. Parker sent Dr. Elkharwily a text message informing him she quit after the two had a heated dispute over garbage bags. Dr. Elkharwily accepted the resignation. After she quit, Mr. Godwin helped Ms. Parker load her truck with various supplies from the Wall Street building, which had been purchased by All Star. Ms. Parker returned some of these supplies to the stores where they were purchased. Ms. Parker made multiple trips to the Wall Street building to collect items from the building’s hall and the office after she quit. Mr. Godwin ultimately departed the Wall Street building with Ms. Parker after the last trip.

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

Around 7:00 p.m. on September 27, Dr. Elkharwily became aware that the lobby wall had been demolished and the fire alarm system disconnected. The fire department had called Dr. Elkharwily and informed him the Wall Street building was without a working fire alarm system, and would be condemned unless he established a fire watch program. Dr. Elkharwily proceeded to hire individuals to perform a constant fire watch until the fire alarm system could be replaced several days later.

Over the ensuing days, Dr. Elkharwily accused Ms. Parker of dismantling the lobby wall and removing the fire alarm system. Ms. Parker denied the accusations, directed him to call the phone number on the fire box, and demanded payment for All Star’s unpaid $1,517.39 in expenses.

On October 12, Ms. Parker sent Dr. Elkharwily two envelopes via certified mail.

One envelope contained all the apartment and office keys. The other contained invoices for All Star’s outstanding expenses, account statements, leases, and a check for funds in tenant trust accounts.

In 2015, Wall Street sued All Star. The complaint contained nine causes of action, including breach of contract, breach of implied covenant of good faith and fair dealing, and violation of Washington’s Consumer Protection Act (CPA), chapter 19.86 RCW.

Wall St. Apartments, LLC v. All Star Prop. Mgmt., LLC

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