Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc.

614 P.2d 249, 26 Wash. App. 882, 1980 Wash. App. LEXIS 2149
CourtCourt of Appeals of Washington
DecidedJuly 21, 1980
Docket7486-5-I
StatusPublished
Cited by5 cases

This text of 614 P.2d 249 (Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc.) 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
Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc., 614 P.2d 249, 26 Wash. App. 882, 1980 Wash. App. LEXIS 2149 (Wash. Ct. App. 1980).

Opinions

[883]*883Ringold, J.

—Weyerhaeuser Real Estate Company (Weyerhaeuser), the lessor, appeals the trial court's judgment denying its claim for rental due under a mining lease on the basis of commercial frustration. Stoneway Concrete, Inc. (Stoneway), the lessee, cross-appeals the trial court's dismissal of its other affirmative defenses. We conclude that the trial court erred in relieving the lessee Stoneway of its obligations under the theory of commercial frustration and therefore reverse.

On September 15, 1969, the parties entered into a 9-year mineral lease for the strip mining for sand and gravel of a tract of Weyerhaeuser land near Soos Creek in south King County. The lease provided:

3. Basic Rental
Lessee shall pay Lessor a basic minimum annual rental equal to
(a) $10,000 per year during the first two years of this lease contract;
(b) $25,000 for each contract year thereafter.
This basic minimum annual rental shall be due and payable irrespective of whether Lessee produces any minerals from the leasehold. It shall be paid in equal monthly installments. Each installment shall be paid in advance on or before the 5th day of the calendar month for which it is due.

(Italics ours.) Other relevant lease provisions were:

11. Zoning
(a) Lessee shall see to it that its mining and other operations under this lease are at all times in full and strict compliance with all zoning regulations applicable to the leasehold.
(b) Lessor agrees to assist Lessee at all times in securing and maintaining such rezonings, zoning classifications and/or zoning permits as it may require for its contemplated operations hereunder.
(c) Any violation by Lessee of applicable zoning regulations which is not cured within the time allowed by the proper zoning enforcement authorities shall entitle Lessor to cancel this lease upon six months' notice.
[884]*88425. Lessee's Option to Terminate Lease
Lessee may terminate this lease as of the end of any contract year by giving Lessor one year's notice of its intention to do so if in Lessee's reasonable judgment the mining operations contemplated hereby have become uneconomical.

In other sections Weyerhaeuser promised to assist Stone-way to obtain and maintain such zoning and pollution control permits "as it [Stoneway] may require for its contemplated operations hereunder."

The plan required an unclassified use permit from the King County Planning Department. As proposed by the planning department to the King County Council the unclassified use permit contained conditions, some requiring approval of other state agencies including the Department of Fisheries and the Water Pollution Control Commission.

Over public opposition the King County Council granted the permit resulting in a referendum against its issuance. During litigation regarding the permit and referendum Stoneway continued seeking other necessary permits. In April of 1971, Stoneway accused Weyerhaeuser of reneging on its obligation to assist in obtaining the necessary permits and therefore paid no further rental installments, but continued to. participate in the litigation. By the time the Supreme Court resolved the use permit and referendum litigation, the State Environmental Policy Act of 1971 (SEPA) had been enacted. Another lawsuit regarding the unclassified use permit was begun and certified as a class action requiring King County to comply with SEPA. By January 1975, it was clear that either the State Department of Ecology, the County, or both were going to require an environmental impact statement, whereupon Stoneway in mid-1975 abandoned its efforts to get permits for the project and in December 1976 gave notice of termination of the lease to Weyerhaeuser pursuant to paragraph 25 quoted above.

[885]*885This action was commenced by Weyerhaeuser for rentals due. Stoneway pleaded as affirmative defenses Weyerhaeuser's breach of contract, implied modification of contract, implied conditions precedent and commercial frustration. In addition Stoneway filed four counterclaims. The trial court adjudged that the lessee sustained the defense of commercial frustration, and should be relieved of obligations under the lease as of the time when the parties had expected the permits to have been granted, January 1, 1972. The relevant findings provide:

23.
In mid-1975, as a result of the costs anticipated and the uncertainty of result, Stoneway abandoned the project. Weyerhaeuser commenced this action in January, 1976. Stoneway had conducted only minimal site operations (test borings) but had extracted no minerals.
24.
The Court finds that, . . . the parties contemplated and were fully aware of the necessity of obtaining permits from the regulatory agencies involved and that this process might require as much as two years, . . .
25.
The decision of Stoneway in mid-1975 to decline to proceed further in pursuit of permits for the project was reasonable and prudent. The indications were, and their counsel so advised them, that workable permits for the extraction of minerals from this site could not, in all probability, be obtained within a practical period of time, if ever. Further expenditures of money and time on the project could not be justified.
26.
Payment of rentals were not expressly conditioned upon receipt of permits, or whatever else might be required, from public agencies before beginning operations, and certainly it is obvious from the terms of the lease that payment of rentals was not expressly conditioned upon public approval of defendant's operation.

Stoneway neither presents argument nor authority regarding its cross appeal. An assignment of error unsupported by argument or authority will not be reviewed. In re [886]*886Marriage of Croley, 91 Wn.2d 288, 294, 588 P.2d 738 (1978). We, therefore, consider only Weyerhaeuser's appeal.

The principle underlying the doctrine of commercial frustration has long been recognized by the Washington courts. Adams v. Washington Brick, Lime & Mfg. Co., 38 Wash. 243, 248, 80 P. 446 (1905), where the court said:

The business contemplated . . . became thenceforth impossible, by reason of something which neither foresaw or anticipated—by a change that neither expected in a condition which, in entering upon the contract, both assumed would continue . . . That which was the essence—the subject-matter—of their contract became nonexistent.

See also RCW 62A.2-615, for a statutory expression of the doctrine.

Weyerhaeuser argues that only frustration of the "desired object of the contract" should warrant application of the doctrine of commercial frustration.

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Related

Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc.
637 P.2d 647 (Washington Supreme Court, 1981)
Weyerhaeuser Real Estate Co. v. Stoneway Concrete, Inc.
614 P.2d 249 (Court of Appeals of Washington, 1980)

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Bluebook (online)
614 P.2d 249, 26 Wash. App. 882, 1980 Wash. App. LEXIS 2149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/weyerhaeuser-real-estate-co-v-stoneway-concrete-inc-washctapp-1980.