Weiss-Jenkins IV LLC v. Utrecht Manufacturing Corp.

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 20, 2018
• Docket: 16-35552
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 20 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

WEISS-JENKINS IV LLC, a Washington No. 16-35552 limited liability company, D.C. No. 2:14-cv-00954-RSL Plaintiff-Appellee,

v. MEMORANDUM*

UTRECHT MANUFACTURING CORPORATION, a Delaware corporation and DICK BLICK HOLDINGS, INC.,

Defendants-Appellants.

Appeal from the United States District Court for the Western District of Washington Robert S. Lasnik, District Judge, Presiding

Argued and Submitted May 18, 2018 Seattle, Washington

Before: BERZON and HURWITZ, Circuit Judges, and DEARIE,** District Judge.

Utrecht Manufacturing Corp. (“Utrecht”) appeals an order granting summary

judgment to its former landlord, Weiss-Jenkins IV LLC (“Weiss-Jenkins”),

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Raymond J. Dearie, United States District Judge for the Eastern District of New York, sitting by designation. awarding Weiss-Jenkins damages upon Utrecht’s breach of its commercial lease (the

“Lease”) at the Pike & Minor Building (the “Building”) in Seattle. We affirm.

1. The district court correctly concluded that Utrecht’s breach and Weiss-

Jenkins’ subsequent termination of the Lease resulted in a qualified forfeiture. See

Hargis v. Mel-Mad Corp., 730 P.2d 76, 79-80 (Wash. Ct. App. 1986) (citing Heuss

v. Olson, 264 P.2d 875, 878 (Wash. 1953); Metro. Nat’l Bank of Seattle v.

Hutchinson Realty Co., 289 P. 56, 58-59 (Wash. 1930)). A forfeiture is qualified

when the lease “expressly saves the lessor’s right to [] recover damages based on

unaccrued rent,” or when “the notice of forfeiture communicates to the lessee the

lessor’s intention to hold the lessee for such damages, notwithstanding the

forfeiture.” Hargis, 730 P.2d at 80 (internal quotation marks and citations omitted).

Here, both the requisite lease language and notice language are present.

2. For the same reasons, the district court also properly determined that

the appropriate measure of damages was the rent deficiency that accrued through

the end of the Lease term. See Metro. Nat’l Bank of Seattle, 289 P. at 58-59;

Pollock v. Ives Theatres, Inc., 24 P.2d 396, 398-99 (Wash. 1933). Weiss-Jenkins

was entitled to recover lost rents between July 2013 (when the breach occurred)

and the time the premises were relet, plus any shortfall in the amount of rent

received from the date of the reletting to the end of the Lease term. The property

value-based measure of damages advanced by Utrecht was properly rejected by the

2 16-35552 district court. Cf. Family Med. Bldg., Inc. v. State, Dep’t of Soc. & Health Servs.,

702 P.2d 459, 464 (Wash. 1985) (en banc).

The district court also appropriately rejected Utrecht’s claim that speculative,

post-breach improvements made to the property by the new tenant effect a windfall

to Weiss-Jenkins, and that Utrecht is therefore entitled to an offset against the

damages it owes under the Lease. See Lacey Mktplace Assocs. II, LLC v. United

Farmers of Alb. Coop. Ltd., No. C13-0383JLR, 2015 WL 403165, at * 17-18 (W.D.

Wash. Jan. 28, 2015), aff’d in part, 720 F. App’x 828 (9th Cir. Dec. 21, 2017);

Hargis, 730 P.2d at 81. The base rent comparison formula employed by the district

court to calculate the rent deficiency was set forth in the Lease. In any event, as the

nonbreaching party, Weiss-Jenkins should receive any benefit stemming from

Utrecht’s breach. See Hargis, 730 P.2d at 81.

3. Finally, the district court’s award of attorney’s fees to Weiss-Jenkins

was proper, as the Lease provided that attorney’s fees would be awarded to the

prevailing party. See Lacey, 2015 WL 403165, at *18 (quoting Wash. Rev. Code §

4.84.330); King Cty. v. Vinci Constr. Grands Projets/Parsons RCI/Frontier-

Kemper, JV, 398 P.3d 1093, 1098 (Wash. 2017).

AFFIRMED.

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