Opinion
No. 31929-2-II
Filed: May 17, 2005 UNPUBLISHED OPINION
Appeal from Superior Court of Pierce County. Docket No: 04-2-04273-4. Judgment or order under review. Date filed: 06/25/2004. Judge signing: Hon. Ronald E Culpepper.
Counsel for Appellant(s), David Scott Kerruish, Attorney at Law PS, 7016 35th Ave NE, Seattle, WA 98115-5917.
Catherine Wright Smith, Edwards Sieh Smith Goodfriend PS, 1109 1st Ave Ste 500, Seattle, WA 98101-2988.
Counsel for Respondent(s), Charles Kenneth Wiggins, Attorney at Law, 241 Madison Ave N, Bainbridge Island, WA 98110-1811.
Gary J. Racca challenges the trial court's summary judgment dismissal of his claims for (1) breach of oral partnership agreement; (2) misrepresentation/deceit; and (3) declaratory judgment. He argues that issues of material fact exist as to when the parties terminated the oral partnership agreement and, therefore, whether or not the applicable three-year statute of limitations had run. Ned D. and Carol E. Williams respond that the relevant statute of limitations expired and, to the extent any new agreement has been alleged, we cannot consider it because Racca failed to identify it in his complaint. The Williamses also assert that Racca has abandoned his claims for declaratory relief and misrepresentation because he did not argue them in his opening appellate brief. Finding that genuine issues of material fact remain to be resolved, we reverse and remand.
FACTS
We rely on facts averred in the parties' summary judgment pleadings.
Racca and the Williamses entered into an oral partnership agreement for the acquisition and development of a parcel of real property called Lancastle II. Each party put up $25,000 as earnest money for the project. The property was located adjacent to Racca's Lancastle I development. The parties planned for the two developments to use the same access roads and utility placements. Initially, Racca and the Williamses agreed to share equally in all of the costs related to the purchase and development of Lancastle II.
But according to Racca, Ned Williams insisted on obtaining financing through U.S. Bank, which refused to extend financing to Racca. Consequently, Ned Williams suggested that they first acquire the Lancastle II property solely in the Williamses' names. This would have the added benefit of keeping the property from becoming entangled in Racca's pending divorce. Racca would contribute his share to the partnership after the completion of his divorce and other pending development projects. The parties had transacted business in a similar fashion before, and Racca agreed to the new terms.
The Real Estate Purchase and Sale Agreement (REPSA) for Lancastle II reflected the change in the parties' agreement. Although the REPSA originally contemplated that the Williamses and Racca would purchase the property jointly, Racca signed an addendum stating, `The Buyers are to be Ned D. Williams and Carol E. Williams only. The Racca's [sic] are being removed from this purchase and sale agreement.' Clerk's Papers (CP) at 35.
According to Racca's declaration, the Williamses promised Racca that he would remain a partner in the Lancastle II project, and Racca incurred expenses in reliance on this promise. To substantiate his claim, Racca submitted exhibits showing that he retained the services of an engineering firm to prepare documentation for plat approval, advanced funds for the planning and future development of the property, and directed the preparation of documents to form Lancastle LLC.
The deed completing the purchase of Lancastle II was recorded on November 21, 2000. Around that time, Ned Williams requested a meeting with Racca. According to Ned Williams, the purpose of the meeting was to determine the level of Racca's participation in the Lancastle II project. Racca is uncertain about the exact date of this meeting. Ned Williams contends that the meeting took place in October 2000. The Williamses' son, Tim Williams, attended the meeting and provides conflicting testimony about both the meeting date and content.
At his deposition on April 21, 2004, Tim Williams initially testified that the meeting took place in late fall of 2001, but after reviewing a letter that he had written shortly after the meeting, he corrected his testimony and stated that the meeting took place `[r]oughly [in] October of 2000.' CP at 18. He also testified that at the end of the meeting, Racca told Ned Williams to keep the project for himself. Racca has no independent recollection of making this statement.
Shortly after Tim Williams' deposition was taken, he left the Williamses' employment to work with Racca, where they formed a mortgage company for real estate investments.
In a subsequent declaration, Tim Williams modified and explained his earlier deposition testimony, saying that although he was `still not completely sure of the date of the meeting,' he believed the meeting actually took place in early 2001. CP at 116. He stated that he wrote the earlier letter dating the meeting in October 2000 because he was `under considerable personal financial pressure to prepare a letter that was favorable to defendant Ned Williams.' CP at 115. He further declared that the first opportunity he had to review his earlier letter was at the deposition and that he had not been given an adequate opportunity to review the letter in advance. Tim Williams also stated that at the conclusion of the meeting, Racca had no idea that `Williams still planned to oust him from the partnership.' CP at 114.
According to Ned Williams, at the conclusion of the final meeting between the parties, they terminated the partnership. Racca, on the other hand, asserts that the parties agreed to continue the partnership as long as Racca eventually obtained financing from an alternative source. According to Racca, `It was only after defendant Ned Williams' rejection of the development financing in late spring or early summer of 2001 that I knew that I had been excluded permanently from participation in the partnership by defendants.' CP at 129. And it was not until October 25, 2002, that the Williamses refunded Racca's $25,000 earnest money deposit. Racca cashed the check on November 1, 2002.
Racca sued the Williamses on January 16, 2004, alleging breach of contract and misrepresentation/deceit and asking for a declaratory judgment reinstating the partnership to develop Lancastle II. The Williamses moved for summary judgment on the grounds that the applicable statute of limitations had lapsed. They also moved to exclude Tim Williams' declaration because it contradicted his prior deposition testimony. The trial court denied the motion to strike Tim Williams' `deposition,' but it granted the Williamses' motion for summary judgment and dismissed Racca's complaint in its entirety. Racca appeals.
At the summary judgment hearing below, the Williamses moved to strike Tim Williams' `declaration,' but the court order states that the Williamses' motion to strike Tim Williams' `deposition' was denied. This appears to be scrivener's error.
ANALYSIS
We review a summary judgment order de novo, performing the same inquiry as the trial court. Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993). We must consider the facts submitted and all reasonable inferences from those facts in the light most favorable to the nonmoving party. Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982).
We grant summary judgment when the pleadings, affidavits, and depositions establish that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Ruff v. County of King, 125 Wn.2d 697, 703, 887 P.2d 886 (1995).
The party opposing a motion for summary judgment `may not rely on speculation, argumentative assertions that unresolved factual issues remain, or in having its affidavits considered at face value. . . . [T]he nonmoving party must set forth specific facts that sufficiently rebut the moving party's contentions and disclose that a genuine issue as to a material fact exists.' Seven Gables Corp. v. MGM/UA Entm't Co., 106 Wn.2d 1, 13, 721 P.2d 1 (1986).
I. Statute of Limitations
The parties dispute the date the partnership agreement was terminated and, thus, the date the statute of limitations began to run.
The statute of limitations for an action on an oral contract, express or implied, is three years. RCW 4.16.080(3). The parties agree that the three-year statute of limitations applies to their oral partnership agreement.
The statute of limitations period generally runs from the time an action has accrued. Rice v. Dow Chem. Co., 124 Wn.2d 205, 211, 875 P.2d 1213 (1994). A cause of action accrues when a party has a right to apply to a court for relief. U.S. Oil Ref. Co. v. Dep't of Ecology, 96 Wn.2d 85, 91, 633 P.2d 1329 (1981). A cause of action for breach of an oral partnership accrues (1) when a partner is wrongfully excluded from the partnership business; or (2) when the partnership is dissolved. Malnar v. Carlson, 128 Wn.2d 521, 530, 910 P.2d 455 (1996).
The party moving for summary judgment based on the statute of limitations has the burden to show there is no material dispute of fact regarding the date of dissolution or exclusion. Finkelstein v. Sec. Prop., Inc., 76 Wn. App. 733, 736, 888 P.2d 161 (1995).
A. Dispute About Meeting Date
`The `facts' required by CR 56(e) to defeat a summary judgment motion are evidentiary in nature. Ultimate facts or conclusions of fact are insufficient. Likewise, conclusory statements of fact will not suffice.' Grimwood v. Univ. of Puget Sound, Inc., 110 Wn.2d 355, 359-60, 753 P.2d 517 (1988) (citation omitted). Lack of recall is not sufficient to controvert clear opposing evidence on a summary judgment motion. Marshall v. AC S Inc., 56 Wn. App, 181, 184, 782 P.2d 1107 (1989) (per curiam).
`[A]n adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.' CR 56(e).
The Williamses assert that the final meeting between the parties occurred in October 2000. Tim Williams dates the meeting in the fall of 2001 in his initial deposition testimony, in October 2000 in his letter and subsequent deposition testimony, and in the spring or summer of 2001 in his declaration. Racca candidly admits that he is uncertain as to the exact date the meeting occurred.
Since Racca admits he is uncertain of the meeting date, his declaration is insufficient to raise an issue of material fact. See Marshall, 56 Wn. App. at 184. Therefore, the existence of a disputed factual issue about the meeting date hinges on Tim Williams' various statements. But Tim Williams also admits that he is `still not completely sure of the date of the meeting.' CP at 116. And a party opposing summary judgment may not rely on speculation. Petcu v. State, 121 Wn. App. 36, 55, 86 P.3d 1234, review denied, 152 Wn.2d 1033 (2004). Tim Williams' uncertain, speculative, and equivocal testimony is insufficient to raise a genuine issue of material fact about the meeting date.
But the meeting date is not determinative of this dispute; it is the meeting content and the final communications between the parties that are material to their dispute over when the statute of limitations began to run. We must, therefore, determine if disputed issues of material fact exist about whether the oral partnership agreement continued beyond the date of the meeting.
B. Continuation of Oral Partnership Agreement
Generally, the trier of fact should make the final determination about the existence of an oral contract. Duckworth v. Langland, 95 Wn. App. 1, 7, 988 P.2d 967 (1998). Disputes about oral contracts should not be decided on summary judgment because the resolution of such disputes often depends on the credibility of witnesses. Crown Plaza Corp. v. Synapse Software Sys., Inc., 87 Wn. App. 495, 500-01, 962 P.2d 824 (1997).
Racca asserts that the terms of the partnership to develop the Lancastle II property were renegotiated at the meeting and, at the end of the meeting, the parties had reached an understanding that the partnership would continue, provided Racca was able to obtain alternate financing: Defendant Ned Williams agreed that if I could obtain the development financing from another source, he would agree to maintain our partnership for Lancastle II as previously agreed. At the conclusion of the meeting, we had agreed that I would obtain outside financing for my half of the development of the project. . . . I left the meeting determined to provide the financing for the Lancastle project.
CP at 126.
Ned Williams, on the other hand, contends that the parties terminated the partnership at the meeting and that Racca clearly renounced his participation in the Lancastle II development:
In October, 2000, I met with Gary Racca and Tim Williams at my Olympic Equities Corporation office in Puyallup, Washington. The purpose of the meeting was to discuss Mr. Racca's contribution of cash and/or collateral to participate in the acquisition and development of the Lancastle, Division II project. Mr. Racca, instead, offered his promissory note and personal guaranty for his share of the project. I declined this offer and informed Mr. Racca that a promissory note and personal guaranty were not acceptable. Without a contribution of cash and/or collateral, Mr. Racca could not participate in the project. Mr. Racca was unable or unwilling to contribute his share of the project. At the close of this meeting, Mr. Racca informed me to keep the Lancastle, Division II project for myself. Mr. Racca did not thereafter contribute financially nor otherwise participate in the Lancastle, Division II project.
CP at 29-30.
On a motion for summary judgment, all facts and reasonable inferences must be viewed in a light most favorable to the nonmoving party. Wilson Court Ltd. P'ship v. Tony Maroni's, Inc., 134 Wn.2d 692, 698, 952 P.2d 590 (1998). A conflict in the facts asserted in the declarations presents an issue of credibility and, when there is a conflict that raises issues of credibility, summary judgment should be denied. Balise v. Underwood, 62 Wn.2d 195, 200, 381 P.2d 966 (1963); Morinaga v. Vue, 85 Wn. App. 822, 828, 935 P.2d 637 (1997).
Tim Williams' testimony about the meeting between Ned Williams and Racca supports both partners' versions about continuing the partnership. Whether Tim Williams' explanation of this inconsistency is plausible is a matter best left to the trier of fact. Safeco Ins. Co. v. McGrath, 63 Wn. App. 170, 175, 817 P.2d 861 (1991). But the declarations of Racca and Ned Williams alone are sufficient to raise genuine and material factual issues. Viewing the record in the light most favorable to Racca, disputed issues of material fact remain about whether the parties agreed to continue their partnership beyond the date of the meeting. Thus, the trial court erred when it granted summary judgment dismissing Racca's complaint.
C. Effect of Racca's Contributions to the Partnership
Racca also argues that his continuing payments for services connected with the Lancastle II project demonstrate that the partnership continued beyond the date of the disputed meeting between the parties.
We determine the terms and existence of an agreement by the objective manifestations of both parties and not by one party's subjective beliefs. City of Everett v. Sumstad's Estate, 95 Wn.2d 853, 855, 631 P.2d 366 (1981); Hadaller v. Port of Chehalis, 97 Wn. App. 750, 755, 986 P.2d 836 (1999).
Racca paid partnership-related expenses after the meeting. He asserts that this is objective evidence that the partnership continued because he would have no reason to pay partnership expenses if the partnership had been dissolved. The evidence suggests that Racca's claimed expenses were for services performed before the final meeting. But Racca argues that the date he incurred the expenses is not relevant and that it is the date he paid the expenses that matters. We agree. Racca's continued financial participation in Lancastle II, coupled with the Williamses' retention of Racca's earnest money, amount to objective manifestations of an agreement to continue the partnership. Furthermore, Racca's payments are evidence that contradicts Tim Williams' early testimony that Racca had abandoned the partnership, another unresolved factual issue.
II. Lack of Specificity in Complaint
The Williamses contend that to the extent the parties reached a new agreement at the 2000/2001 meeting, it is not properly before the court because Racca failed to identify it in his complaint. For the first time on appeal, the Williamses argue that the parties' conduct during the course of their partnership constitutes three distinct agreements and that Racca's complaint is defective because it does not include a separate allegation regarding the final agreement.
We need not consider the argument because the Williamses raise it for the first time on appeal. RAP 2.5(a). But because this argument may arise on remand, we will address it.
According to the Williamses, `Agreement 1' encompasses the initial decision to develop Lancastle II and to share all expenses equally. They freely admit that the parties entered into this agreement.
The Williamses assert that `Agreement 2' reflects the amendment to the initial agreement made after U.S. Bank refused to finance Racca. Under the terms of `Agreement 2,' the Williamses were to finance the Lancastle II property alone until Racca completed his divorce and finished other development projects. The Williamses contend that `Agreement 2' was terminated at the 2000/2001 meeting with Racca.
Finally, the Williamses argue that `Agreement 3' is the final alleged agreement, under which the partnership would continue, provided Racca found a different financing source for the Lancastle II project. They dispute the existence of `Agreement 3,' but maintain that even if it does exist, it cannot preclude summary judgment in their favor because Racca did not specifically identify `Agreement 3' in his complaint.
The Williamses' assertions regarding the existence of three agreements are not persuasive. The evidence is clear that there was an agreement between Racca and the Williamses to jointly develop Lancastle II. How they arranged financing, paid for expenses, took title, and proceeded forward all flowed from that basic agreement. This dispute concerns the continued existence of the agreement, not how they implemented or renegotiated its terms.
Furthermore, a pleading is sufficient if it sets forth `(1) a short and plain statement of the claim showing that the pleader is entitled to relief and (2) a demand for judgment.' CR 8(a). Pleadings are primarily intended to give notice to the court and the opponent of the general nature of the claim asserted. Pierce County Sheriff v. Civil Serv. Comm'n of Pierce County, 98 Wn.2d 690, 695, 658 P.2d 648 (1983); Chen v. State, 86 Wn. App. 183, 194, 937 P.2d 612 (1997). It is not necessary for a plaintiff to plead facts constituting a cause of action. Hofto v. Blumer, 74 Wn.2d 321, 326, 444 P.2d 657 (1968) (reversing dismissal).
Racca's complaint alleges that: (1) the parties entered into a partnership to develop land; (2) the Williamses agreed to hold the property for the benefit of the partnership; (3) Racca continued to incur costs related to the Lancastle II property; and (4) Racca was unlawfully excluded from the partnership in late spring or early summer of 2001. His complaint is sufficient to alert the court and the Williamses to the general nature of the claim asserted and broad enough to encompass the conduct the Williamses label `Agreement 3.'
The Williamses' argument is without merit. To the extent the parties renegotiated the terms of their partnership agreement at the 2000/2001 meeting, an action based on the agreement to jointly develop Lancastle II is not barred by any deficiency in Racca's complaint.
III. Abandonment of Claims
The Williamses assert that Racca abandoned his claims for declaratory judgment and misrepresentation/deceit by failing to argue them in his opening brief on appeal. Racca responds that it is not necessary to specifically address each claim when all claims are dismissed on the basis of the statute of limitations.
Assignments of error not argued in the briefs are deemed abandoned. RAP 10.3(a)(5); Pappas v. Hershberger, 85 Wn.2d 152, 530 P.2d 642 (1975). Here, Racca properly assigns error to the trial court's summary judgment dismissal of his entire complaint. Since Racca's claims for declaratory relief and misrepresentation/deceit are also subject to the three-year statute of limitations and, since the running of the statutory period hinges on the same disputed factual determinations as those involved in his breach of contract action, we hold that neither claim has been abandoned.
We reverse and remand for further proceedings.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
ARMSTRONG and HUNT, JJ., concur.