Opinion
No. 56330-1-I.
December 11, 2006.
Appeal from a judgment of the Superior Court for King County, No. 03-1-25678-1, Paris K. Kallas, J., entered May 3, 2005.
Counsel for Appellant(s), Matthew F. Davis, Attorney at Law, Seattle, WA, 98118-2587.
Counsel for Respondent(s), Louis L. `larry' Barokas, Attorney at Law, Seattle, WA, 98122-3604.
Jonathan P Mcquade, BAROKAS MARTIN TOMLINSON, WA, 98122-3604.
Authored by Ann Schindler, Concurring:, H Joseph Coleman, Ronald Cox.
Honorable Paris K Kallas.
Affirmed by unpublished opinion per Schindler, A.C.J., concurred in by Coleman and Cox, JJ.
William Grover sued Marc L. Rousso and Jay Mezistrano for tortious interference with Grover's real estate agreement to purchase property. The trial court ruled that Rousso's competing agreement to purchase the property was not enforceable, but because Rousso in good faith believed he had an enforceable agreement, the court concluded Rousso was not liable for tortious interference. Based on the unchallenged conclusion that Rousso did not have an enforceable agreement, Grover contends Rousso cannot assert a good faith defense to tortious interference. In his cross-appeal, Rousso argues the trial court erred in dismissing his counterclaim against Grover for filing a lis pendens on the property. We conclude Rousso's mistaken belief that he had an enforceable contract does not prevent asserting a good faith defense and substantial evidence supports the trial court's findings that Rousso acted in good faith. Because Grover had an enforceable agreement to purchase the property, the court also properly dismissed Rousso's counterclaim. We affirm.
FACTS
William Grover, Marc L. Rousso, and Jay Mezistrano are licensed real estate agents. In early April 2003, Grover and Rousso together with Mezistrano (collectively "Rousso") made competing offers to purchase property in Renton (the property) that was owned by the Colombi Trust (the Trust).
On April 12, 2003, Grover made an offer for the property of $301,000 subject to a financing contingency and $3,000 in earnest money. Grover's offer expired on April 15. At approximately 8:20 a.m. on April 14, Rousso made an all cash offer of $295,000 and $10,000 in earnest money. Rousso's offer expired at the end of the day on April 14.
Grover and Rousso both used the Northwest Multiple Listing Service Form 21 Residential Real Estate Purchase and "Sale Agreement" (Form 21) in submitting their offers. Form 21 requires that any notice, including revocation of an offer or a counteroffer must be in writing and signed by at least one Seller.
[A]ny notice required or permitted in, or related to, this Agreement (including revocation of offers or counteroffers) must be in writing. . . . Notices to Buyer must be signed by at least one Seller and shall be deemed given only when the notice is received by Buyer. . . .
Exhibit (Ex.) 1.
In the morning of April 14, the Trust's listing agent, Kate Gundermann, faxed a counteroffer to Rousso of $306,770. The Trust signed or initialed each of the ten pages of the counteroffer. After receiving the counteroffer, Rousso went to Mezistrano's office to get his signature to accept the counteroffer. When Rousso returned to his office later that day, he received a fax from Gundermann. The fax stated: "Marc — Please be advised seller is rescinding their counteroffer to you — paperwork to follow!" Unlike the counteroffer, the Trust did not sign or initial the fax. Rousso testified that because the Trust had not signed or initialed the fax, he believed Gundermann's attempt to rescind was invalid and decided to accept the Trust's signed counteroffer. After faxing the acceptance of the counteroffer, Rousso listened to a voicemail message from Gundermann saying the Trust was going to withdraw its counteroffer. Rousso called Gundermann and told her he had accepted the counteroffer.
Ex. 3.
On April 15, the Trust and Grover entered into an "Addendum/Amendment to Purchase and Sale Agreement" (Addendum). In the Addendum, Grover agreed to pay $330,777 in cash and increased the earnest money to $10,000. The Addendum also states that the "[e]arnest money will become non-refundable upon Buyer receiving written notification from Seller confirming that any and all other offers on subject property are void." On April 16, the Trust added another handwritten provision to the
Addendum stating that the agreement was "[s]ubject to purchase sale agreement between Russo [sic] Colombi being voided." Grover agreed to the terms of the
Ex. 10.
Addendum on April 16.
Rousso retained attorney Doug Tingvall to enforce his rights under the purchase and sale agreement with the Trust. Neither Rousso nor Tingvall knew about Grover's competing offer or Grover's April 16 agreement with the Trust.
On April 18, Tingvall wrote a letter to the Trust stating the attempted revocation did not comply with the requirements of Form 21 and Rousso intended to enforce his agreement with the Trust. Tingvall urged the Trust to retain an attorney and requested written assurance by April 25, 2003, that the Trust would honor its agreement. If the Trust did not, Tingvall stated Rousso would sue and file a lis pendens on the property.
The Trust retained a real estate attorney with Gordon, Thomas, Honeywell and Grover retained attorney Matthew Davis. On April 23, the Trust faxed a "Notice to Purchaser Grover from Seller Colombi Trust (Re: Property located at 1800 Jones Ave. NE, Renton, WA 98055)". The notice states that the agreement between Grover and the Trust is "subject to the Purchase and Sale Agreement between Rousso and the Trust being voided" and advised Grover that because the "Purchase and Sale Agreement between Russo [sic] and Colombi Trust has not been voided . . . [Grover's] offer has been placed in second/backup position." The Trust also said that if Rousso's "primary offer" was abandoned or Rousso failed to perform, Grover's offer would then be in first position.
Ex. 11.
On April 24, Davis contacted Tingvall by email and expressed an interest in resolving the dispute between Grover and Rousso through alternative dispute resolution. On April 25, Davis requested a response to his email. On April 28, Tingvall emailed Davis and the Trust's attorney stating he would not negotiate with Grover because his contract was only with the Trust. Tingvall also said that if he did not receive written confirmation of the Trust's intention to honor its agreement with Rousso by 5:00 p.m., Rousso would file a lawsuit and record a lis pendens against the property. At 5:00 p.m., the Trust attorney emailed Tingvall agreeing to sell the property to Rousso under the terms of the counteroffer. The Trust also agreed to close on or before May 10.
On May 20, Grover filed a lawsuit against Rousso for tortious interference with his agreement to purchase the property. Grover also filed a lis pendens against the property on May 20. In Rousso's answer and counterclaim he asserted a number of affirmative defenses, including a good faith defense to tortious interference, and alleged Grover wrongfully filed the lis pendens.
Rousso also filed a third party claim against the Trust. The record is unclear, but apparently the lawsuit against the Trust was dismissed prior to the March 21, 2005 trial.
Following a bench trial, the court ruled that Grover had a valid contract with the Trust and Rousso did not. But because the court also concluded that Rousso acted in good faith in asserting an arguably valid and legally protected interest, the court dismissed Grover's lawsuit against Rousso for tortious interference. Because Grover had a valid contract to purchase the property, the court also dismissed Rousso's counterclaim. Grover appeals the trial court's decision to dismiss his lawsuit. Rousso appeals the trial court's dismissal of his counterclaim against Grover for filing a lis pendens.
ANALYSIS
Good Faith Defense to Tortious Interference
Grover contends the trial court erred in concluding Rousso could assert a good faith defense to his claim that Rousso tortuously interfered with his contract to purchase the property from the Trust. Grover also contends the trial court's finding that Rousso believed he had a valid agreement with the Trust is not supported by substantial evidence.
Where the trial court hears the evidence and enters findings of fact and conclusions of law, the scope of appellate review is limited to determining whether the findings of fact are supported by substantial evidence and, if so, whether the findings support the trial court's conclusions of law. Holland v. Boeing Co., 90 Wn.2d 384, 390, 583 P.2d 621 (1978); Quadra Enterprises, Inc. v. Hanson Co., Inc., 35 Wn. App. 523, 526, 667 P.2d 1120 (1983). Substantial evidence is the quantum of evidence sufficient to persuade a rational, fair-minded person that the premise is true. Wenatchee Sportsmen Ass'n v. Chelan County, 141 Wn.2d 169, 176, 4 P.3d 123 (2000). Conclusions of law are reviewed de novo. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wn.2d 873, 879-880, 73 P.3d 369 (2003). We defer to the trier of fact for purposes of resolving conflicting testimony and evaluating the persuasiveness of the evidence and the credibility of the witnesses. Burnside v. Simpson Paper Co., 123 Wn.2d 93, 108, 864 P.2d 937 (1994). Whether interference is improper and whether the defendant can successfully assert a good-faith defense, is generally a question of fact that depends on the circumstances of the case. Quadra, 35 Wn. App. at 527; RESTATEMENT (SECOND) OF TORTS § 767, cmt. l (1979).
Interference with a contract is an intentional tort. Quadra, 35 Wn. App. at 526. The elements of tortious interference are: (1) a valid contractual relationship or business expectancy; (2) the defendant's knowledge of and intentional interference with that relationship; (3) a breach or termination of that relationship induced or caused by the interference; (4) interference by an improper purpose or improper means; and (5) damages. Interference is improper if it is wrongful by some means beyond the interference itself. Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133, 157 930 P.2d 288 (1997).; Pleas v. City of Seattle, 112 Wn.2d 794, 814, 774 P.2d 1158 (1989).
But even if the plaintiff establishes the elements of tortious interference, there is no liability if the defendant in good faith asserts a legally protected interest which he believes may be impaired. Singer Credit Corp. v. Mercer Island, 131 Wn. App. 877, 884, 538 P.2d 544 (1995). See also, Leingang, 131 Wn.2d at 157 (citing RESTATEMENT (SECOND) OF TORTS § 773 (1979)); Quadra, 35 Wn. App. 523.
Being mistaken about the law does not defeat the good faith defense to tortious interference. See RESTATEMENT (SECOND) OF TORTS § 773; Leingang, 131 Wn.2d at 157.
Restatement (Second) of Torts § 773 provides:
One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other's relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction.
Grover's primary argument is that the trial court erred in concluding Rousso acted in good faith in asserting a legally protected interest. Grover does not challenge the trial court's statement of the law on a good faith defense to tortious interference in conclusion of law 6 and 7.
6. A good faith assertion of a legally protected interest and threat to protect that interest by resort to the Courts does not constitute improper interference if the actor believes his interest may otherwise be impaired, even if it causes a third person not to perform an existing contract or enter into a prospective contract relation with another person.
7. To be wrongful, the interference must consist of actions beyond the fact of the interference itself, such as improper means.
Nor does Grover challenge the trial court's conclusion that the good faith defense "does not require that the actor be correct in his position." Grover's challenge is limited to conclusion of law 8.
Conclusion of Law 8.
In conclusion of law 8, the trial court decided that a good faith defense to tortious interference "only requires that there be a good faith assertion of an arguable interpretation of the law" and that Rousso's position "was neither arbitrary nor was it an unfounded assertion of a legal right by either Tingvall or Rousso." Conclusion of Law 8 states:
The legally protected interest does not require that the actor be correct in his position. It only requires that there be a good faith assertion of an arguable interpretation of the law. I find that Rousso and Tingvall acted in good faith and that Rousso's position is an arguable interpretation of the law. While in some cases a person will not be allowed to hide behind counsel and counsel's actions, this is not such a situation. Instead, attorney Tingvall evaluated the situation, relying on his experience and knowledge, including his service on the forms committee and his investigation into this issue in other cases. His investigation is more than enough for purposes of a good faith analysis. His position was neither arbitrary nor was it an unfounded assertion of a legal right by either Tingvall or Rousso.
Relying on language the Washington Supreme Court used in Leingang, Grover argues an interferor can only assert a good faith defense based on an interpretation of existing law. Leingang, 131 Wn.2d at 133. Because Rousso did not have an enforceable contract, Grover contends the court's conclusion that Rousso could assert a good faith defense was erroneous. But other than quoting language used in the Leingang opinion, Grover provides no analysis to support his contention that conclusion of law 8 is inconsistent with Leingang. Where a party fails to present any relevant analysis, the court need not consider an argument. R. A. Hanson Co., v. Magnuson, 79 Wn. App. 497, 505, 903 P.2d 496 (1995). Nevertheless, we conclude the language Grover relies on from Leingang is taken out of context.
In rejecting the argument that the insurer was liable for tortious interference, the court in Leingang stated the insurer was "merely asserting an arguable interpretation of existing law." Leingang, 131 Wn.2d at 157. In the context of the opinion, the court was addressing the facts of that case. The court was not defining or limiting the requirements for asserting a good faith defense to tortious interference. Leingang, 131 Wn.2d at 147.
In Leingang, the insured, Leingang, sued his insurer for violation of the Consumer Protection Act (CPA) and tortious interference. Even though the insurer paid Leingang's medical bills, the insurer insisted on maintaining its right under the insurance contract to seek reimbursement against the uninsured motorist (UIM) carrier. Leingang alleged the insurance contract provision allowing for reimbursement from a UIM carrier violated the CPA and constituted tortious interference.
While the case was pending, the Washington Supreme Court, in Brown v. Snohomish Cy. Physicians Corp., 120 Wn.2d 747, 759 n. 2, 845 P.2d 334 (1993), ruled the UIM insurance contract exclusion violated public policy. Based on the court's decision in Brown, Leingang argued that as a matter of law the insured's UIM exclusion violated the CPA. In rejecting Leingang's argument, the court held that "[a]cts performed in good faith under an arguable interpretation of existing law do not constitute unfair conduct violative of the consumer protection law" and affirmed dismissal of the CPA claim. Leingang, 131 Wn.2d at 155 (citing to Perry v. Island Sav. Loan Ass'n, 101 Wn.2d 795, 810, 684 P2d 1281 (1984)). The court also affirmed dismissal of Leingang's tortious interference claim, concluding that there was no evidence of improper purpose or of improper means. In deciding there was no evidence of improper purpose or means, the court reiterated its previous conclusion that, "[w]hen Mr. Leingang refused to sign the subrogation agreement, PCM paid his medical bills and sought reimbursement in court. PCM was merely asserting an arguable interpretation of existing law." Id. at 157. Because the court was addressing improper means, it is unclear whether the court was addressing the basis for asserting a good faith defense. In any event, we conclude Grover's reliance on the language in Leingang is taken out of context and the court did not limit a defendant from asserting a good faith defense based only on existing law instead of on an honest but erroneous belief.
Here, the trial court's conclusion that a "legally protected interest" requires "a good faith assertion of an arguable interpretation of the law" is not challenged by either party. Conclusion of Law 8.
Because under Restatement (Second)  § 773, one who asserts a legally protected interest does not ultimately have to be correct in his position, we need not address Grover's request to adopt Restatement (Second) of Contracts  § 43, Indirect Communication of Revocation.
The first illustration to  § 773 of the (Second) Restatement also supports the trial court's conclusion that an interferor can assert a good faith defense based on an honest but erroneous belief. The facts in the illustration are nearly identical to the facts in this case. Under the illustration, interference with a contract to purchase property is not improper when the interferor "honestly believes" he has a right of way.
A enters into a contact to buy Blackacre from B. C honestly believes that he has a right of way over Blackacre. With knowledge of the contract, C
in good faith informs A of his interest and threatens to enforce it by legal proceedings if, as when the owners of Blackacre should deny his claim. A thereupon refuses to perform his contract with B. C's interference is not improper under the rule stated in this Section. RESTATEMENT (SECOND) OF TORTS Â § 773, cmt. a, ills. 1 (1979).
Grover also argues that Rousso is precluded from asserting a good faith defense because he refused to engage in dispute resolution and threatened litigation. Grover does not cite authority to support of his argument. Instead, Grover asserts that the Leingang opinion "suggests" that a party has an obligation to resolve a dispute in order to assert a good faith defense. We disagree with Grover's interpretation of Leingang.
Arguments that are not supported by citation to legal authority will not be considered on appeal. RAP 10.3(a)(5); see also Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809, 828 P.2d 549 (1992); State v. Lord, 117 Wn.2d 829, 853, 822 P.2d 177 (1991).
In Leingang, the court merely noted that despite Leingang's refusal to sign the insurer's subrogation agreement, the insurer paid Leingang's medical benefits before seeking reimbursement. Leingang at 157. And, unlike here, an insurer has a fiduciary and statutory duty of good faith. Tank v. State Farm Fire Cas. Co., 105 Wn.2d 381, 394, 715 P.2d 1133 (1986). Here, the trial court also considered Rousso's refusal to engage in alternative dispute resolution in deciding whether Rousso acted in good faith.
Grover also challenges the trial court's finding that Rousso believed in good faith that the attempt to rescind his counteroffer was invalid and that he had a binding agreement. Grover contends Rousso's testimony contradicts Finding of Fact 5 and
Finding of Fact 5 is not supported by substantial evidence.
Finding of Fact 5 states:
Rousso believed he had a binding transaction because he understood the fax and the voicemail to mean that Gundermann was indicating the Colombi Trust's future intent to revoke their counteroffer. Rousso relied on the absence of the seller's signature and the language of Paragraph K of Form 21. Relying on these, he believed the attempted revocation was not effective. He then faxed his acceptance of the Colombi Trust counteroffer to Gundermann.
Trial court's Finding of Fact 5.
Grover relies on the following part of Rousso's testimony to support his argument that Rousso's testimony contradicts Finding of Fact 5.
Q When you read Exhibit No. 3 [Gundermann's fax], you understood that Kate Gundermann was attempting to revoke the seller's counteroffer, didn't you?
A Correct.
Q But you believed that the revocation was not effective because it was not signed by the Colombis?
A I knew that Kate Gundermann was attempting to rescind the offer.
The testimony Grover relies on is not inconsistent with Finding of Fact 5. Rousso testified that while he understood the intent of Gundermann's fax and voicemail was to rescind the counteroffer, he believed the attempted rescission was not valid because the fax was not signed or initialed by the Trust as required by Form 21.
The trial court's finding that Rousso believed he had a binding contract because the Trust did not comply with the requirements of Form 21 and that Gundermann's fax and voicemail indicated a future intent to rescind is also supported by substantial evidence.
Rousso is a licensed real estate broker who is familiar with the provisions of Form 21 and the requirements of an offer and a counteroffer. Each page of the counteroffer was signed or initialed by the Trust, as required by Form 21. The later fax from Gundermann was not. The record also shows that the listing agent was unsure whether Grover or Rousso had priority. In addition, the April 16 agreement between Grover and the Trust includes a provision that the agreement was "subject to the Purchase and Sale Agreement between Russo [sic] and Colombi being voided."
The trial court also relied on Tingvall's uncontroverted deposition testimony concerning his advice to Rousso. Tingvall's deposition was admitted as an exhibit and incorporated by reference in the court's findings. Tingvall testified that Gundermann's fax and voicemail message was not an effective revocation for a number of reasons. The fax was not signed by the Trust as required by Form 21. The language used in the fax "Paperwork to follow" was unclear — "[w]hat paperwork would follow if the fax was intended to effectively revoke the counteroffer?" And the language used indicated future action by the Trust, the only party who had the right to revoke. Tingvall also testified that he served on the Forms Committee for Northwest Multiple Forms and participated in drafting and modifying Form 21.
Unchallenged findings are verities on appeal. Davis v. Department of Labor Indus., 94 Wn.2d 119, 615 P.2d 1279 (1980).
The trial court found Rousso's testimony credible and that he acted in good faith. The trial court also found Tingvall was credible and that he acted in good faith in advising Rousso. On this record, we conclude substantial evidence supports Finding of Fact 5.
Grover did not sue Tingvall for tortious interference with a contract. Grover only sued Rousso for tortious interference. Under Restatement (Second) of Torts  § 772, "Advice as Proper or Improper Interference," to prevail on a claim against Tingvall for tortious interference based on the advice he gave to Rousso, Grover must show dishonesty or bad faith.  § 772 states:
One who intentionally causes a third person not to perform a contract or not to enter into a prospective contractual relation with another does not interfere improperly with the other's contractual relation, by giving the third person
(a) truthful information, or
(b) honest advice within the scope of a request for the advice.
RESTATEMENT (SECOND) OF TORTS § 772 (1979). See also Havsy v. Flynn, 88 Wn. App.514, 519-520, 945 P.2d 221 (1997).
Rousso's Cross Appeal
Rousso contends the trial court erred by not awarding him damages under RCW 4.28.328 as a result of Grover wrongfully filing a lis pendens.
The trial court concluded, as a matter of law, that Grover had a valid contractual relationship with the Trust and that he was justified in filing his lis pendens. We find the trial court's conclusion is supported by its findings of facts, which are not challenged by Rousso. Therefore, the trial court property dismissed Rousso's counterclaim for damages as a result of the lis pendens.
CONCLUSION
We affirm the trial court's dismissal of Grover's claim for tortious interference with a contract and Rousso's counterclaim for a wrongful filing of a lis pendens. WE CONCUR: