Columbia Park Golf Course, Inc. v. City of Kennewick, 248 P.3d 1067

Columbia Park Golf Course Inc. sued the City of Kennewick for breach of a development option agreement (DOA) and the implied covenant of good faith and fair dealing.
The DOA granted Columbia an exclusive option to develop an RV park, shoreline improvements, and boat moorage within Columbia Park, with conditions to pursue permits and site plans.
Columbia had a 50-year sublease for the golf course, and the City approved modifications extending Columbia’s term and capital-improvement rights.
Columbia proceeded with SEPA and shoreline permit applications; the City and Corps showed support, and the City approved a shoreline permit in May 2006.
Tri-River Sports Facilities Inc. later proposed an alternative development in the park, creating competitive pressures and influencing the City’s handling of Columbia’s project.
Columbia proved, at trial, that the City breached the DOA and the covenant, and the jury awarded $3 million in damages; the City sought reversal or remittitur.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Damages for breach of DOA; were expectation damages recoverable?	Columbia asserts damages may include market value of the rights, not merely reliance.	City argues damages are speculative and should be limited or denied as a matter of law.	Damages including market-based value were recoverable; not limited to reliance.
Should the court have instructed the ‘new business rule’ limiting damages for a new venture?	Columbia contends no special prohibition on recovering damages for a new business was required.	City argues damages for a new business should be barred or restricted.	The trial court did not need to give a new-business instruction; proper damages were allowed under the given instructions.
Measure of damages when contract to negotiate is involved	Columbia seeks damages reflecting value of the rights (market value) rather than mere lost profits.	City contends reliance damages should apply or damages should be limited due to speculative nature.	Damages honoring the market value of the rights were sustained; the court did not remand for reliance-only damages.

Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171 (Wash. 2004) (enforceability of contracts to negotiate; open-terms; mutual assent; damages not decided there)
Eastlake Constr. Co. v. Hess, 102 Wn.2d 30 (Wash. 1984) (damages for breach of contract; foreseeability; certainty)
Kadiak Fisheries Co. v. Murphy Diesel Co., 70 Wn.2d 153 (Wash. 1967) (reasonableness/certainty in measuring damages)
Venture Assocs. v. Zenith Data Systems Corp., 96 F.3d 275 (7th Cir. 1996) (damages for contract to negotiate; reliance vs. prospective profits; market-based valuation)
Larsen v. Walton Plywood Co., 65 Wn.2d 1 (Wash. 1964) (new business rule; limits on lost profits for startups)
Badgett v. Security State Bank, 116 Wn.2d 563 (Wash. 1991) (precontractual negotiations; good-faith obligations; open-ended negotiations)