63 Wash. App. 133 | Wash. Ct. App. | 1991
This is an action by Patrick H. Kofinehl and Linda M. Kofinehl, as sellers, to obtain specific performance of payments due under a real estate contract involving the sale of the Golden Door Motel in Spokane. The trial court concluded service by the Kofinehls of a notice of intent to declare forfeiture under RCW 61.30 constituted an election of remedies and dismissed the action. The Kofinehls appeal. We reverse and remand for trial.
After the sale, two transfers by purchaser's assignments of contract and deed were made. First, on November 20, 1979, the Steelmans transferred their interest to the Wilson Investment Group XXXV,
Mr. Kuder began remodeling the motel. The City required him to remove old gas storage tanks and level the lot at an unanticipated cost of $35,000. As a result, he borrowed $20,000, secured by a second mortgage on the property, and spent an additional $10,000 to $15,000 of his own money. During October 1986, Mr. Kuder ceased making monthly payments and was unable to pay the real estate taxes or maintain the insurance required by the contract. At the time of default, the motel was in a state of demolition. Only three units were available for rent.
Early in 1987, Mr. Kofmehl talked to Mr. Wilson about the delinquent payments and Mr. Wilson assured him Mr. Kuder would soon have cash from a pending sale of other real estate. Nonetheless, Mr. Kofmehl hired Jerry Kagele, an attorney, to collect the delinquent funds.
On June 1, 1987, Mr. Kagele sent Mr. Wilson a "Notice of Intention to Declare Forfeiture of and Cancel Contract Pursuant to Chapter 61.30.010 R.C.W. et seq." The notice specifically referred to the delinquent payments for the period November 1986 through March 1987. The notice stated
On June 24, Mr. Kagele realized his office had inadvertently failed to send the same notice to Mr. Kuder. He immediately sent a notice to Mr. Kuder with a cure date of October 1, 1987, and the notice was recorded. A copy of this notice was not sent to Mr. Wilson, the Steelmans or the Wilson group investors.
During the fall of 1987, negotiations were conducted in an attempt to settle the matter. Mr. Kuder's offer of $5,000 and an increase in the monthly payments was rejected. At that time, Mr. Kagele told counsel for Mr. Kuder that the Kofinehls "wished" to proceed with forfeiture. However, no declaration of forfeiture was signed, recorded or sent to any of the parties. Instead, this action for specific performance was instituted in May 1988.
First, the Kofinehls contend the court erred in holding the notice of intent to declare a forfeiture constituted an election of remedies precluding this action for specific performance. The Kofinehls contend the delivery of the preliminary notice did not constitute an election of remedies, a conclusion supported by case law from other jurisdictions. On the other hand, Mr. Kuder and Mr. Wilson argue the issue is whether the court abused its discretion in failing to grant specific performance. We agree with the Kofinehls.
Here, the notice of intent to declare a forfeiture was issued pursuant to RCW 61.30.010 et seq. That statute, referred to as the Real Estate Contract Forfeiture Act, effective January 1, 1986, created a nonjudicial procedure for forfeiture of a purchaser's rights under a contract. It was a significant departure from similar rules developed at common law. See Hume, The Washington Real Estate Contract Forfeiture Act, 61 Wash. L. Rev. 803 (1986). The language of a statute will be held to mean exactly what it says and rules of construction will not be applied if the statute is free of ambiguity. Clarke v. Equinox Holdings,
RCW 61.30.030 requires certain conditions be met before forfeiture occurs:
(1) The contract being forfeited, or a memorandum thereof, is recorded in each county in which any of the property is located;[2 ]
(2) A breach has occurred in one or more of the purchaser's obligations under the contract and the contract provides that as a result of such breach the seller is entitled to forfeit the contract;[3 ] and
(3) Except for petitions for the appointment of a receiver, no arbitration or judicial action is pending on a claim made by the seller against the purchaser on any obligation secured by the contract.
RCW 61.30.020 provides in part:
A purchaser's rights under a real estate contract shall not be forfeited except as provided in this chapter. Forfeiture shall be accomplished by giving and recording the required notices as specified in this chapter.
(Italics ours.) RCW 61.30.010(8) defines required notices as "the notice of intent to forfeit and the declaration of forfeiture. " (Italics ours.) Thus, the statute requires serving and recording both the notice of intent to declare forfeiture and the declaration of forfeiture. See Schultz v. Werelius, 60 Wn. App. 450, 453, 803 P.2d 1334, review denied, 116 Wn.2d 1027 (1991).
The notice of intent here was served and recorded as required by RCW 61.30.040(5), but a declaration of forfeiture was not signed, served or recorded. The serving and filing of the declaration of forfeiture is at the seller's discretion. RCW 61.30.070(2).
Second, the Kofinehls contend the court erred in ruling they were equitably estopped from seeking specific performance. We agree.
Since specific performance is an action in equity,
The dismissal is reversed and the cause is remanded for retrial.
Thompson, A.C.J., and Munson, J., concur.
Judge Dale M. Green was a member of the Court of Appeals at the time oral argument was heard on this matter. He is now serving as a judge pro tempore of the court pursuant to RCW 2.06.150.
The heading for this action lists Wilson Investment Group XXV; we note from the record the name is Wilson Investment Group XXXV.
There is no indication the contract in this particular instance was recorded; however, no issue has been raised regarding failure to record.
The contract so provides.
Former RCW 61.30.070(2), in effect at the time, provides in part:
"If the default is not cured as provided in RCW 61.30.090, the seller may forfeit the contract by giving and recording a declaration of forfeiture ...". (Italics ours.)
"A trial court, sitting in equity, may fashion broad remedies to do substantial justice . . Carpenter v. Folkerts, 29 Wn. App. 73, 78, 627 P.2d 559 (1981). The court may award damages to make the parties whole. Carpenter, at 80; Rekhi v. Olason, 28 Wn. App. 751, 757, 626 P.2d 513 (1981); Streater v. White, 26 Wn. App. 430, 433, 613 P.2d 187, review denied, 94 Wn.2d 1014 (1980).
The Kofmehls contend Mr. Wilson remains liable as a surety. That issue was not addressed at the trial court because of the dismissal. It is a proper issue to be decided on remand.