Battle Ground Cinema v. Robert Bernhardt
47718-1
| Wash. Ct. App. | Dec 12, 2017Background
- Kassab developed the Gardner Center and, through entities, leased movie-theatre space to Battle Ground Cinema (the Cinema) in a 2004 lease; Kassab personally guarantied the lease.
- Walker Ownership bought the Gardner Center in 2006 and received assignment of the Cinema lease; the Cinema later struggled financially and complained (2012–2013) about poor common-area conditions (trash area, sidewalks, parking, water feature).
- A CAM Agreement appointed Walker Ownership as "Maintenance Director," obligating it to operate and maintain common areas; CCRs, recorded in 2004, also addressed common-area maintenance and referenced a "Declarant."
- The Cinema sued Walker Ownership (Lease Case) for breach of lease (failure to maintain common areas) and overcharging CAM assessments. Walker Ownership sued Kassab and others (Guaranty Case) asserting the guaranty was 25 years and alleging fraud if a third guaranty page existed. Cases were consolidated.
- The superior court granted Walker Ownership summary judgment on the Lease Case and on the guaranty’s 25-year enforceability; it awarded attorney fees to Walker Ownership. The Court of Appeals reversed summary judgment on the Lease Case, vacated the fee award, and held the discovery-master in-camera order moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Walker Ownership had a contractual duty to maintain common areas | Cinema: Lease (§3.2(1)), CAM Agreement, CCRs, and common law show landlord assumed maintenance duties | Walker: Lease does not impose maintenance duties; tenant obligations and indemnity (§6.5, Exhibit E ¶13) bar recovery | Court: Duty exists—lease ambiguous but CAM Agreement and contract context show Walker intended to assume maintenance; summary judgment for Walker reversed |
| Whether there was a triable issue that Walker breached that duty | Cinema: Inspection reports, photos, and e-mails show ongoing defects (trash, pests, cracked sidewalks, fountain) creating factual dispute | Walker: Issues were or would be addressed; no unresolved material fact | Court: Evidence creates genuine issue of material fact about whether Walker breached and whether repairs were timely |
| Whether lease provisions (§6.5 indemnity; Exhibit E ¶13) waive Cinema’s breach claim | Walker: §6.5 waives tenant claims; Exhibit E shifts certain exterior cleaning responsibilities to tenant | Cinema: Those provisions do not waive landlord’s maintenance duty or claims for breach of lease | Court: §6.5 is an indemnity for injuries/property loss and does not bar breach-of-lease claim; Exhibit E ¶13 does not waive landlord’s maintenance duty |
| Award of attorney fees and discovery rulings on remand | Kassab/Cinema: Fee award should be vacated or limited if Lease judgment reversed; discovery in-camera review now moot | Walker: Claims interrelated; fee award justified; in-camera review may still be relevant | Court: Vacated fee award and remanded fee determination to trial court after final resolution; discovery-master order moot as tied to guaranty-page issue; no appellate fees awarded yet |
Key Cases Cited
- Lakey v. Puget Sound Energy, Inc., 176 Wn.2d 909 (review standard for summary judgment)
- Mut. of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wn.2d 411 (contract interpretation principles)
- Holden v. Farmers Ins. Co. of Wash., 169 Wn.2d 750 (ambiguity standard)
- Viking Bank v. Firgrove Commons 3, LLC, 183 Wn. App. 706 (extrinsic evidence and mixed question of law/fact)
- Berg v. Hudesman, 115 Wn.2d 657 (context rule; use of subsequent conduct)
- Hearst Commc'ns, Inc. v. Seattle Times Co., 154 Wn.2d 493 (objective manifestation theory)
- Thorstad v. Federal Way Water and Sewer Dist., 73 Wn. App. 638 (effect of recorded covenants on transferred property)
- Pac. Marine Ins. Co. v. Dep’t of Revenue, 181 Wn. App. 730 (summary judgment evidence view toward nonmoving party)
- Young v. Key Pharms., Inc., 112 Wn.2d 216 (moving party burden at summary judgment)
- In re Estate of Black, 153 Wn.2d 152 (material fact definition)
- Hume v. Am. Disposal Co., 124 Wn.2d 656 (when related claims permit nonsegregated fee award)
- Mayer v. City of Seattle, 102 Wn. App. 66 (remand for reconsideration of attorney fees after reversal)