Wing Central's Roadhouse Grill, Inc. v. Alfred W. Bucheli, et vir
33719-7
| Wash. Ct. App. | Nov 8, 2016Background
- Landlord Alfred Bucheli owned a butcher shop (Matterhorn Meats) and a restaurant property he leased in 2007 to Roadhouse LLC (later Roadhouse Grill Inc.). The lease required the tenant to buy meat from Bucheli or pay a 20% surcharge and gave the tenant an option to purchase the property if not in default.
- Tenants (Shannon and James Rowe) operated the restaurant as Wing Central's Roadhouse Grill and made extensive repairs/alterations after taking possession; landlord later complained some changes were made without consent.
- Disputes arose when tenants stopped buying meat from Matterhorn Meats citing quality and USDA/labeling/inspection concerns; landlord demanded surcharge and later declared them in default, refusing to sell under the purchase option.
- Tenants sued for a declaratory judgment and specific performance to compel sale; Bucheli counterclaimed for breach and sought reformation/rescission based on mutual mistake about his ability to lawfully supply the restaurant.
- At summary judgment, tenants submitted a USDA compliance expert opining that Bucheli could not lawfully supply unlabeled and certain cured/smoked meats to restaurants without inspection/labeling; trial court granted tenants' motion, ordered sale, dismissed Bucheli's counterclaims, and awarded attorneys’ fees.
Issues
| Issue | Plaintiff's Argument (Bucheli) | Defendant's Argument (Tenants) | Held |
|---|---|---|---|
| Mutual mistake about landlord's ability to sell meat | Parties both mistakenly believed Bucheli could lawfully sell meat to the restaurant without USDA labeling/inspection; mistake voids/reforms lease | Tenants: no mutual mistake; Rowes did not share landlord's legal belief and thus cannot rescind; landlord bears risk | No mutual mistake—Bucheli offered no clear evidence Rowes shared his legal mistake; summary judgment for tenants affirmed |
| Enforceability of purchase option (tenant not in default) | Tenant materially breached by not buying meat and by unpaid/unused inventory, so option not exercisable | Tenants: meat was not "available" because unlawful to sell; inventory shortfall was immaterial to a $1.38M sale | Option enforceable; meat unavailable as a legal matter so no breach; inventory underpayment immaterial and has been remedied |
| Whether landlord assumed risk of legal mistake | N/A (alternative) | Tenants: even if mistake existed, Bucheli assumed the risk or it is reasonable to allocate it to him | Court did not need to decide risk allocation because mutual mistake not shown |
| Award of attorneys’ fees | N/A | Tenants: contract authorizes fees to prevailing party; they prevailed below and on appeal | Fees awarded to tenants under lease and on appeal |
Key Cases Cited
- Columbia Community Bank v. Newman Park, LLC, 177 Wn.2d 566 (2013) (de novo standard for appellate review of summary judgment)
- Denaxas v. Sandstone Court of Bellevue, LLC, 148 Wn.2d 654 (2003) (adoption of Restatement approach to mutual mistake)
- Simonson v. Fendell, 101 Wn.2d 88 (1984) (mutual mistake doctrine principles)
- Chemical Bank v. Washington Public Power Supply System, 102 Wn.2d 874 (1984) (clear, cogent, convincing evidence required to rescind for mistake)
- Public Utility District No. 1 of Lewis County v. Washington Public Power Supply System, 104 Wn.2d 353 (1985) (allocation of risk of mistake)
- Seattle Prof’l Eng’g Emps Ass’n v. Boeing Co., 139 Wn.2d 824 (2000) (materiality test for mistake/frustration of contract)
- Jacks v. Blazer, 39 Wn.2d 277 (1951) (material breach and discharge of contractual duty)
- DC Farms, LLC v. Conagra Foods Lamb Weston, Inc., 179 Wn. App. 205 (2014) (material breach analysis factors)