Western Plaza, LLC v. Tison

364 P.3d 76, 184 Wash. 2d 702

• Court: Washington Supreme Court
• Decided: November 25, 2015
• Docket: No. 90179-1
• Status: Published

Opinions

Wiggins, J.

¶1 — This is an unlawful detainer action subject to the Manufactured/Mobile Home Landlord-Tenant Act (MHLTA), chapter 59.20 RCW. At issue is whether a provision in a mobile home lot lease that purports to limit the landlord’s ability to increase the rent when the lease renews conflicts with the MHLTA and whether the lease violates the statute of frauds. We hold that the provision is permissible under the MHLTA and that the writing and signatures on the lease satisfy the statute of frauds applicable to rental agreements for mobile home lots.¹ We affirm the Court of Appeals.

FACTS²

¶2 Norma Tison entered into a lease for a mobile home lot in October 2001. The lease was executed on a preprinted form prepared by Manufactured Housing Communities of Washington. It was a one-year lease with several handwritten provisions that Tison specifically negotiated. Relevant to this case, the lease called for a monthly rent of $345 and contained a negotiated provision (hereafter rent cap provision) that stated, “Every other year, rent will be raised no more than $10.00 for remaining tenancy.”

¶3 Petitioner Western Plaza LLC purchased the mobile home park in February 2008. At that time, Tison’s monthly rent was $375.³ In March 2009, Western Plaza sent Tison a notice that her rent would be increased to $405 starting in July 2009. Tison began paying $385 per month, consistent with the rent cap provision; the parties dispute how these payments were considered by Western Plaza, and there is nothing in the record that indicates whether Western Plaza contemporaneously rejected any of Tison’s $385 payments or indicated to her that it considered those payments partial. Regardless, this dispute does not affect the outcome of this appeal.⁴

¶4 In June 2011, Western Plaza informed Tison that her rent would increase to $495 starting in October 2011. Relying on the rent cap provision, Tison attempted to pay the $395 she believed was due.⁵ Western Plaza rejected her payments and initiated this unlawful detainer action.

¶5 Tison moved for summary judgment, arguing that Western Plaza was bound by the rent cap provision. Western Plaza argued that the rent cap provision was not enforceable because it conflicted with the MHLTA and violated the statute of frauds. The trial court denied Tison’s motion for summary judgment and resolved the unlawful detainer action in Western Plaza’s favor. The Court of Appeals reversed. W. Plaza, LLC v. Tison, 180 Wn. App. 17, 322 P.3d 1, review granted, 181 Wn.2d 1022, 336 P.3d 1165 (2014). We granted Western Plaza’s petition for review and now affirm.

ANALYSIS

¶6 The issue before us is whether the rent cap provision in Tison’s lease is prohibited by the MHLTA, chapter 59.20 RCW. We are also asked to determine whether the rent cap provision violates the statute of frauds. To answer these questions, we apply well-established principles of statutory interpretation to chapter 59.20 RCW. These principles lead us to conclude that the MHLTA does not prohibit the rent cap provision and that Tison’s lease does not violate the statute of frauds applicable to her mobile home lot lease. Further, we award Tison reasonable costs and attorney fees pursuant to RCW 59.20.110.

I. Standard of Review

¶7 We review questions of statutory interpretation de novo. Ass’n of Wash. Spirits & Wine Distribs. v. Wash. State Liquor Control Bd., 182 Wn.2d 342, 350, 340 P.3d 849 (2015). The court discerns legislative intent from the plain language enacted by the legislature, considering the text of the provision in question, the context of the statute in which the provision is found, related provisions, amendments to the provision, and the statutory scheme as a whole. Id. (citing Dep’t of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9-10, 43 P.3d 4 (2002)).

II. The MHLTA Does Not Prohibit the Rent Cap Provision

¶8 The MHLTA controls the legal rights, remedies, and obligations arising from a rental agreement between a landlord and tenant regarding a mobile home lot. Western Plaza argues that the MHLTA does not allow the rent cap provision in Tison’s lease to be enforced. We disagree because the MHLTA does not prohibit a properly executed agreement that limits the frequency of such rent increases.

¶9 RCW 59.20.090(2) provides, “A landlord seeking to increase the rent upon expiration of the term of a rental agreement of any duration shall notify the tenant in writing three months prior to the effective date of any increase in rent.” By its plain language, RCW 59.20.090(2) does not give a landlord an immutable right to increase rent; it is a “limitation” on rent increases. McGahuey v. Hwang, 104 Wn. App. 176, 182, 15 P.3d 672 (2001). The parties to an individual lease are free to set further limits. Cf. Little-Mountain Estates Tenants Ass’n v. Little Mountain Estates MHC, LLC, 169 Wn.2d 265, 269 n.2, 236 P.3d 193 (2010). Furthermore, RCW 59.20.060, which sets out the required and prohibited provisions in MHLTA leases, specifically discusses rent increases and does not prohibit rent cap limitations like the one in Tison’s lease. See RCW 59.20-.060(2)(c). The Court of Appeals correctly determined that the MHLTA does not prohibit the rent cap provision.

III. The Rent Cap Provision Does Not Violate the Statute of Frauds

¶10 Washington’s statute of frauds is purely statutory. Labor Hall Ass’n v. Danielsen, 24 Wn.2d 75, 87, 163 P.2d 167 (1945). This issue, therefore, is one of statutory interpretation. “Our fundamental purpose in construing statutes is to ascertain and carry out the intent of the legislature.” In re Marriage of Schneider, 173 Wn.2d 353, 363, 268 P.3d 215 (2011). We determine legislative intent from the plain language enacted by the legislature, considering the text of the provision in question, the context of the statute in which the provision is found, related provisions, amendments to the provision, and the statutory scheme as a whole. Campbell & Gwinn, LLC, 146 Wn.2d at 9-12.

A. Summary of Analysis

¶11 There are two statutes of frauds that are potentially applicable to the Tison lease: RCW 59.04.010, titled “Tenancies[⁶] from year to year abolished except under written contract”; and RCW 59.20.060, titled “Rental agreements—Required contents—Prohibited provisions.”⁷ Though neither is called a statute of frauds, these statutes govern the formal requirements for creating a valid lease. In deciding which of these statutes of frauds to apply to the MHLTA, we conclude that a lease under the MHLTA should be governed by the statute of frauds in the MHLTA.

¶12 RCW 59.20.060 requires that a lease be in writing and be signed by the parties. It provides in relevant part:

(1) Any mobile home space tenancy regardless of the term, shall be based upon a written rental agreement, signed by the parties, which shall contain:

(a) The terms for the payment of rent, including time and place, and any additional charges to be paid by the tenant. Additional charges that occur less frequently than monthly shall be itemized in a billing to the tenant;

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(j) A written description, picture, plan, or map of the boundaries of a mobile home space sufficient to inform the tenant of the exact location of the tenant’s space in relation to other tenants’ spaces.

RCW 59.20.060 is clearly a statute of frauds because it includes the same formal elements required by the common law statute of frauds. Compare RCW 59.20.060, with Restatement (Second) of Property § 2.2 (Am. Law Inst. 1977). Neither this statute nor chapter 59.20 RCW mentions the necessity of an acknowledgement, and we have never interpreted the MHLTA to require acknowledgement.

¶13 RCW 59.04.010 is the general tenancies statute of frauds (chapter 59.04 RCW is titled “Tenancies”). RCW 59.04.010 refers expressly to tenancies and leases; it is a special statute of frauds that creates an exception to, and takes the place of, the general real estate statute of frauds, RCW 64.04.010,⁸ for tenancies. Danielsen, 24 Wn.2d at 87 (concluding that legislature must have intended to modify the deed requirements of RCW 64.04.010 when it enacted RCW 59.04.010). It provides:

Tenancies from year to year[⁹] are hereby abolished except when the same are created by express written contract. Leases may be in writing or print, or partly in writing and partly in print, and shall be legal and valid for any term or period not exceeding one year, without acknowledgment, witnesses or seals.

¶14 RCW 59.04.010 requires a lease to be in writing; leases over one year are legal if they are in writing and acknowledged. As discussed below, the MHLTA presumes that a lease is for one year and that any lease automatically renews. See RCW 59.20.090(1). Under Washington law, any automatic lease renewal must be added to the term of the lease for determining compliance with the statute of frauds. Danielsen, 24 Wn.2d at 85. Thus, if RCW 59.04.010 applied to MHLTA leases, the presumption would be that every manufactured home lot lease would need to be acknowledged. Tison’s lease satisfies the requirements of only the MHLTA statute of frauds.

B. Structure, Language, and Purposes of the MHLTA

1. Plain language of the statute

¶15 The plain language of chapter 59.20 RCW, supported by the structure of Title 59 RCW, the context in which the statute appears, and the purpose of the MHLTA all support our conclusion that the MHLTA statute of frauds is the only statute of frauds that applies to manufactured home lot leases. First, the plain language of RCW 59.20.040 supports this conclusion:

This chapter shall regulate and determine legal rights, remedies, and obligations arising from any rental agreement between a landlord and a tenant regarding a mobile home lot and including specified amenities within the mobile home park, mobile home park cooperative, or mobile home park subdivision, where the tenant has no ownership interest in the property or in the association which owns the property, whose uses are referred to as a part of the rent structure paid by the tenant. . . . Rentals of mobile homes, manufactured homes, or park models themselves are governed by the residential landlord-tenant act, chapter 59.18 RCW.

This action was brought to enforce or determine “legal rights, remedies, and obligations arising from [a] rental agreement between a landlord and a tenant regarding a mobile home lot.” RCW 59.20.040 tells us that “[t]his chapter”—the MHLTA—regulates and determines these rights. The conclusion is inescapable that the statute of frauds established by RCW 59.20.060, requiring a writing but not an acknowledgement, regulates and determines this case.

2. The specific language of RCW 59.20.060 controls

¶16 Principles of statutory interpretation also support the conclusion that we apply the MHLTA statute of frauds to the MHLTA, instead of the earlier enacted and more general tenancy statute of frauds. A general statutory provision normally yields to a more specific statutory provision. Waste Mgmt. of Seattle, Inc. v. Utils. & Transp. Comm’n, 123 Wn.2d 621, 629-30, 869 P.2d 1034 (1994). “To resolve apparent conflicts between statutes, courts generally give preference to the more specific and more recently enacted statute.” Tunstall v. Bergeson, 141 Wn.2d 201, 211, 5 P.3d 691 (2000).

¶17 RCW 59.04.010 modifies RCW 64.04.010 and is the general statute of frauds governing tenancies. These statutes, read together, require tenancies for more than a year to be in writing and to be acknowledged. They have been in effect since the territorial days. Neither statute expressly incorporates mobile homes nor any other specific type of tenancy.

¶18 In contrast, RCW 59.20.060 is a statute of frauds that relates specifically to rental agreements for mobile home lots. Mobile home space tenancies “shall be based upon a written rental agreement [that is] signed by the parties.” RCW 59.20.060(1). This is the requirement, regardless of the duration of the tenancy. Id. Additionally, as discussed in Section III.B.l of this opinion, supra, RCW 59.20.040 of the MHLTA explicitly distinguishes between the rules governing the rental of mobile home lots from the rules governing other tenancies, such as the rental of mobile homes themselves. It would be illogical to apply two different statutes of frauds with different requirements to the same transaction, here a MHLTA rental agreement. Both statutes require a writing, but only one, the general tenancy statute of frauds, requires acknowledgement.

¶19 These statutes can be harmonized only by applying each statute to the specific transactions they regulate. RCW 64.04.010 applies to the transfer of title and requires that all conveyances of real estate be in writing and acknowledged, regardless of the duration of the conveyance. RCW 59.04.010 applies to tenancies generally and requires that leases over one year be in writing and acknowledged. RCW 59.20.060 applies specifically to mobile home lots and provides that leases over one year are valid if they are in writing; it does not require acknowledgement. It is otherwise impossible to reconcile the statutes: a MHLTA lease lasting over a year is either governed by RCW 59.04.010 and requires acknowledgement or it is governed by RCW 59.20.060 and it does not.

¶20 There are other irreconcilable differences between the two statutory schemes. As mentioned earlier, RCW 59.04.010, titled “Tenancies from year to year abolished except under written contract,” abolishes tenancies from year to year except when those tenancies are in writing and acknowledged. (Boldface omitted.) In the absence of a written agreement, tenancies under chapter 59.04 RCW result in a month-to-month tenancy, terminable at the will of either party upon proper notice. RCW 59.04.020. In contrast, the default lease under the MHLTA is a tenancy from year to year. RCW 59.20.090(1). In the absence of a written agreement, an unwritten term is deemed to be for one year and is automatically renewed, at the option of the tenant, for one year on the anniversary of the tenancy. Gillette v. Zakarison, 68 Wn. App. 838, 842, 846 P.2d 574 (1993) (citing RCW 59.20.090(D).¹⁰

¶21 Any other reading ignores both the differences in the statutory provisions of Title 59 RCW and the legislature’s decision to include an MHLTA-specific statute of frauds in chapter 59.20 RCW. Chapter 59.18 RCW is the Residential Landlord-Tenant Act of 1973; RCW 59.18.210 continues to provide the formal requirements for residential leases. Similarly, RCW 59.04.010 governs leases generally. This statute continues to apply to commercial leases and other leases not specifically covered by a separate chapter in Title 59 RCW. The legislature specifically enacted the MHLTA separately from the Residential Landlord-Tenant Act because that act did not address the need, unique to mobile home owners, for stable, long-term tenancy. See 1977 Final Legislative Report, 45th Wash. Leg., at 168.

¶22 We hold that the specific language of the MHLTA statute of frauds trumps the general requirement that leases for over a year be acknowledged under RCW 59.04-.010, the general tenancy statute of frauds. RCW 59.20.060 specifically describes the requirements for complying with the statute of frauds under the MHLTA: all rental agreements must be based on a written rental agreement that is signed by the parties, regardless of the duration of the rental. RCW 59.20.060(1).

3. Purpose of the MHLTA

¶23 In addition to being supported by the plain language of RCW 59.20.040 and .060, this reading best gives effect to the very purposes for which the MHLTA was enacted. The legislature enacted the MHLTA, chapter 59.20 RCW, in 1977. The bill report echoes the findings of a 1975 staff report on landlord/tenant relationship problems in mobile home parks. See Office of Program Research, Wash. House of Representatives, Staff Report on Landlord-Tenant Relationship Problems in Mobile Home Parks (1975). The bill report specifically notes that the tenants of manufactured/mobile home parks have a unique problem: the expense of relocating their mobile homes if their tenancy is terminated:

The most difficult problem currently experienced by the mobile home plot tenant is eviction from a lot with insufficient notice and without cause. Eviction can often be more devastating for a mobile home plot tenant than for the traditional residential tenant because the tenant of. a mobile home plot must not only move all of his or her personal possessions, but must also expend in the vicinity of $1,000 - $2,000 to move his or her mobile home and, what is sometimes even more difficult, find a mover and a new lot.

1977 Final Legislative Report at 168; see also Holiday Resort Cmty. Ass’n v. Echo Lake Assocs., 134 Wn. App. 210, 224, 135 P.3d 499 (2006) (legislative purpose in enacting the MHLTA was to regulate and protect mobile home owners by providing stable, long-term tenancy for homeowners living in a mobile home park).

¶24 The MHLTA provides for stable, long-term tenancy by creating the presumption of a year-to-year periodic tenancy. Though it may seem counterintuitive to require a writing only for long-term leases of mobile home lots when other tenancies expressly require acknowledgement for leases over a year, MHLTA leases are fundamentally different from other tenancies. This difference is deliberate, due at least in part to the fact that “ ‘[t]he park resident is in the unique position of owning his home while renting the land on which it is placed.’ ” Office of Program Research, supra, at 1 (quoting Lyle F. Nyberg, Note, The Community and the Park Owner Versus the Mobile Home Park Resident: Reforming the Landlord-Tenant Relationship, 52 B.U. L. Rev. 810, 813 (1972)). This unique position results in unequal bargaining power between the park landlord and the mobile home tenant; these tenants require the security of a longer term. Id. at 4-5 (noting that short-term leases gave the park owner a near dictatorial authority because tenants are faced with the option of either abiding by the terms of a new lease, including rent increases or other odious provisions, or relocating their residence at significant cost).

¶25 The purpose of the real estate statute of frauds is to prevent fraud in contractual undertakings. Firth v. Lu, 146 , 49 P.3d 117 (2002) (citing Miller v. McCamish, 78 Wn.2d 821, 828, 479 P.2d 919 (1971)). The MHLTA specifically addresses concerns of fraud by requiring that all rental agreements under the MHLTA must be based on a written rental agreement that is signed by the parties, regardless of the duration of the rental. RCW 59-.20.060(1). In most tenancies, acknowledgement serves as an additional protection against fraud in agreements that would encumber land for over a year. But unlike most leases, the presumption under the MHLTA is for a longer-term lease; acknowledgement provides an additional burden but no additional protections from fraud than a writing provides.

¶26 The legislature created these protections for renters of mobile home lots in the MHLTA. “Unless otherwise agreed rental agreements shall be for a term of one year,” and landlords may not “offer a mobile home lot for rent to anyone without offering a written rental agreement for a term of one year or more.” RCW 59.20.090(1), .050(1). “Any rental agreement of whatever duration shall be automatically renewed for the term of the original rental agreement, unless a different specified term is agreed upon.” RCW 59-.20.090(1). In the absence of a written agreement, an unwritten term is deemed to be for one year and is automatically renewed, at the option of the tenant, for one year on the anniversary of the tenancy. Gillette, 68 Wn. App. at 842 (citing RCW 59.20.090(1)). In short, the MHLTA creates the presumption of a multiyear lease.

¶27 As these provisions show, the purpose of the MHLTA was to encourage long-term leases of at least a year or even longer. But Western Plaza ignores the differences between the two statutory schemes and simply urges us to apply the general statute of frauds to the MHLTA. Under this analysis, any lease running for more than one year would have to be acknowledged. Requiring acknowledgment does not advance the legislature’s intent to protect tenants through long-term leases—it is instead an additional burden that strips away the protections the legislature crafted for mobile home lot tenants.

¶28 Worse yet, applying the general tenancy statute of frauds, RCW 59.04.010, to the MHLTA leads to the conclusion that every MHLTA lease must be acknowledged unless the parties to the lease have agreed in writing to different terms. This result follows from RCW 59.20.090, which provides that every MHLTA lease is for one year unless otherwise specified and that every lease automatically renews unless a party exercises the right to terminate in terms consistent with the MHLTA. Under Washington law, any automatic lease renewal must be added to the term of the lease for determining compliance with the statute of frauds. Danielsen, 24 Wn.2d at 85. Thus, unless otherwise agreed between the parties, a-MHLTA lease is for one year and automatically renews, making the lease term longer than one year and triggering the acknowledgement requirement of RCW 59.04.010. This cannot have been the intent of the legislature.

¶29 Indeed, Western Plaza’s approach frustrates the legislature’s intent to protect tenants in long-term rental agreements by eviscerating the protections of the MHLTA. Such resolution would create uncertainty for mobile home tenants in Washington whose leases are similar to Tison’s lease. Tison’s lease is a standard form lease bearing the legend “prepared for use of paid members of MHCW [(the Manufactured Housing Communities of Washington)] by legal counsel - 1997.” Clerk’s Papers (CP) at 31-32 (formatting omitted). This standard form prepared by industry counsel includes signature blocks for landlord and tenant but not for acknowledgement. Id. Assuming that other landlords used this form or a similar one, Western Plaza’s position would enable those landlords to assert the statute of frauds as a defense and invalidate the lease to the detriment of tenants. We cannot reconcile this reading with the purpose of the MHLTA.

¶30 We hold that the MHLTA statute of frauds, RCW 59.20.060, is the only applicable statute of frauds for a manufactured/mobile home lot lease and that Tison’s lease satisfied these statutory requirements.¹¹

IV. The Rent Cap Provision Runs with the Land

¶31 Finally, Western Plaza argues that the rent cap provision in Tison’s lease is not enforceable against Western Plaza because it does not touch and concern the land and so is personal to the former park owner. See 1515-1519 Lakeview Blvd. Condo. Ass’n v. Apt. Sales Corp., 146 Wn.2d 194, 202, 43 P.3d 1233 (2002). A provision that burdens land use in a way that limits the rights normally associated with ownership touches and concerns the land. Id. at 203-04. The MHLTA applies only to the lease of mobile home lots rather than leases of mobile homes themselves. RCW 59.20.040. Thus, MHLTA leases relate to land use. The rent cap provision in Tison’s lease clearly limits the rights normally associated with ownership of a mobile home park. See RCW 59.20.090(2). Tison’s rent cap provision does touch and concern the land; it is therefore enforceable against Western Plaza.

V Attorney Fees

¶32 Tison requested attorney fees on appeal in compliance with RAP 18.1. Both the MHLTA and the lease provide that the “prevailing party shall be entitled to reasonable attorney’s fees and costs.” RCW 59.20.110; see also CP at 32. Tison is the prevailing party, and she is therefore entitled to reasonable attorney fees and costs on appeal. Id.

CONCLUSION

¶33 Properly executed rent cap provisions such as Tison’s are permissible under the MHLTA. Further, the writing and signatures on her lease satisfy the statute of frauds applicable to rental agreements for mobile home lots under RCW 59.20.060. We therefore affirm the Court of Appeals and remand for further proceedings consistent with this opinion, including an award of costs and attorney fees to Tison.

Johnson, Owens, Fairhurst, and González, JJ., concur.

1 The MHLTA applies to both “manufactured homes” and “mobile homes,” though it uses slightly different definitions for each. Compare RCW 59.20.030(6), with RCW 59.20.030(8). This opinion uses the term “mobile home” for convenience.

2 The trial court decided this case on cross motions for summary judgment, and there are disputed facts. However, these disputed facts do not affect the outcome of this appeal.

3 Tyson’s rent increased to $355 in October 2003, to $365 in October 2005, and to $375 in October 2007, consistent with the rent cap provision.

4 Because we hold that Tison’s lease satisfied the requirements of the MHLTA statute of frauds, we do not consider Tison’s alternate argument that Western Plaza’s acceptance of her payments constitutes part performance. Thus, the resolution of these disputed facts is irrelevant to this appeal.

5 This calculation was based on a $10 increase to $385 in 2009 and a $10 increase to $395 in 2011.

6 A “tenancy” is “[t]he possession or occupancy of land under a lease.” Black’s Law Dictionary 1694 (10th ed. 2014).

7 There are two additional statutes of frauds governing interests in real estate: RCW 59.18.210, the residential landlord-tenant statute of frauds, and RCW 64.04.010, the general real estate statute of frauds. The Residential Landlord-Tenant Act of 1973, chapter 59.18 RCW, governs rentals of mobile homes, manufactured homes, or park models themselves; it does not govern tenancies regarding a mobile home lot separate from a mobile home itself. RCW 59.20.040. As discussed in greater detail below, RCW 59.04.010 creates an exception to, and takes the place of, RCW 64.04.010 for tenancies.

8 RCW 64.04.010, the real estate statute of frauds, is a general statutory provision. RCW 64.04.010 provides that “[e]very conveyance of real estate, or any interest therein, and every contract creating or evidencing any encumbrance upon real estate, shall be by deed....” Under RCW 64.04.020, “[e]very deed shall be in writing, signed by the party bound thereby, and acknowledged by the party before some person authorized by this act to take acknowledgement of deeds.” (Reviser’s note omitted.)

9 A “tenancy from year to year” is a periodic tenancy that automatically renews for a year unless terminated at the end of the year by notice. Black’s, supra, at 1694. The default lease under the MHLTA is a tenancy from year to year. RCW 59.20.090(1).

10 We reject Western Plaza’s attempts to harmonize the statutes. Western Plaza asserts that the writing expressly required in all leases by RCW 59.20.060(1) does not establish an irreconcilable conflict with RCW 64.04.010’s requirement for greater formality in longer term leases. However,- RCW 64.04.010 requires the same formality for every conveyance regardless of length; these formalities include writing and acknowledgement. RCW 64.04.010, .020. Additionally, even RCW 59.04.010 explicitly requires a writing for every lease; leases governed by that statute that last for over one year also require acknowledgement. The ■requirement of a writing always exists; Western Plaza’s reading would render RCW 59.20.060(1) superfluous.

11 Because we hold that Tison’s lease satisfied the requirements of the MHLTA, we do not consider Western Plaza’s argument that the rent cap provision keeps this lease from being completed within a year.