William Holdner v. Port Of Vancouver ( 2015 )

FILED
COURT OF APPEAL S
DFYISID= I
2O 5 JUN 23 AN 8: 32
IN THE COURT OF APPEALS OF THE STATE OF WASHIN
DIVISION II
WILLIAM HOLDNER, RANDALL No. 46154 -4 -II
WILLIAM HOLDNER, HOLDNER FARMS,
and HOLDNER FARMS WASHINGTON,
Appellants,
v.
UNPUBLISHED OPINION
PORT OF VANCOUVER, USA, a Washington
municipal corporation,
Respondent.
MAXA, J. — William Holdner, Randall Holdner, Holdner Farms, and Holdner Farms
Washington (the Holdners) appeal the trial court' s order granting the Port of Vancouver' s ( Port)
motion for summary judgment on their claims related to the Port' s destruction of a mobile home
and damage to silage. The destruction followed execution of a writ of restitution on agricultural
land the Holdners had leased from the Port. The Holdners argue that the trial court erred in
granting summary judgment because ( 1) the trial court improperly based its ruling on
inadmissible hearsay evidence, and ( 2) the Port had a duty under its lease agreement with the
Holdners and under tort law to preserve the mobile home and silage. We disagree and affirm the
trial court' s order granting summary judgment.
FACTS
The Holdners leased property along the Columbia River from the Port, which they used
for cattle ranching and feed crop cultivation and storage. This lease was governed by a written
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lease agreement. The lease agreement included an early termination provision that gave the Port
the power to terminate the lease at any time, subject to a 90 -day notice requirement.
The Holdners leased and used the property for several years. A mobile home was on the
property at the beginning of the lease, which was gifted to the Holdners by its prior owner. The
Holdners made substantial improvements to the mobile home, incurring costs exceeding $ 19, 000
plus labor to install those improvements.
On May 12, 2006, the Port sent the Holdners notice that it was terminating the lease
pursuant to the early termination provision. The notice stated that the lease would terminate on
August 15, 2006.
The Holdners sued the Port to prevent termination and remained on the land after August
15. The Port filed an unlawful detainer action and moved for summary judgment. The two suits
were consolidated, and the trial court resolved the case by finding the Holdners in unlawful
detainer and issuing a writ of restitution. The Port executed the writ of restitution on November
9, 2006, and retook possession of the land. The Holdners appealed the trial court' s decision to
this court, and we affirmed in February 2008.
At the time the Port executed the writ in November 2006, various items of the Holdners'
personal property remained on the land. The Port' s executive director, Todd Coleman, walked
through the land with Randall Holdner, identified which items the Holdners wished to keep, and
made a list of those items. The Port told the Holdners it would give them 45 days to remove the
listed property.
Among the items not on the list of property to be preserved were the mobile home and
harvested feed crops the Holdners had been storing in a silage pit. According to Coleman' s
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declaration, a sheriff' s deputy told him during the walkthrough that the mobile home was in a
hazardous condition and should be destroyed and removed from the land. On November 13, the
Port destroyed the mobile home.
On November 30, the utility company shut off electrical service to that portion of the
land. The silage pit was protected from flooding by an electric pump on that portion of the land
that would divert wastewater away from the pit. At some point after November 30, the silage
was flooded, contaminated by wastewater, and effectively destroyed. The Holdners believed that
the Port instructed the utility company to shut off power to the land, and claimed that a utility
company employee, Jason Hutcheson, had confirmed this over the phone. Hutcheson at his
deposition and Coleman in a declaration stated that the utility company had acted on its own due
to unpaid electrical service bills.
The Holdners subsequently sued the Port for damages resulting from the destruction of
the mobile home and the silage. They asserted claims for breach of the lease agreement, breach
of the covenant of good faith and fair dealing, and negligence.
The Port moved for summary judgment, which the trial court granted. In its order
granting summary judgment, the trial court noted that it considered neither the Holdners'
deposition testimony regarding Hutcheson' s hearsay statements nor evidence of the sheriff s
deputy' s hearsay statements to Coleman concerning the condition of the mobile home.
The Holdners appeal the trial court' s order granting summary judgment.
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ANALYSIS
A. SUMMARY JUDGMENT STANDARD
We review a trial court' s summary judgment order de novo, performing the same inquiry as
the trial court. Vernon v. Aacres Allvest, LLC, 183 Wn. App. 422, 427, 333 P.3d 534 ( 2014), review
denied, 182 Wn.2d 1006 ( 2015). We view all facts and reasonable inferences drawn from those facts
in the light most favorable to the party that did not move for summary judgment —in effect, we give
the nonmoving party the benefit of every doubt. Id. If there are no genuine issues of material fact,
and the moving party is entitled to judgment as a matter of law, we will affirm the trial court' s
summary judgment order. Lakey v. Puget Sound Energy, Inc., 176 Wn.2d 909, 922, 296 P. 3d 8602013).
The moving party bears the initial burden of showing that there is no genuine issue of
material fact. Lee v. Metro Parks Tacoma, 183 Wn. App. 961, 964, 335 P. 3d 1014 ( 2014). A
moving defendant can meet this burden by showing that there is an absence of evidence to support
the plaintiff's case. Id. The burden then shifts to the plaintiff to come forward with sufficient
evidence to establish the existence of each essential element of the plaintiffs case. Id. If the
plaintiff does not submit such evidence, summary judgment is appropriate. Id. The nonmoving
party —here, the Holdners —may not rely on speculation or argumentative assertions that unresolved
factual issues remain. Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 ( 2008).
B. CONSIDERATION OF HEARSAY EVIDENCE
The Holdners claim that the trial court erred in granting summary judgment based on
inadmissible hearsay evidence. Although the Holdners present no specific argument on this claim,
they apparently are referring to a sheriff' s deputy' s statement about the condition of the mobile home.
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However, the trial court made it clear in its summary judgment order that the deputy' s
statement was immaterial to its decision to grant summary judgment and that it did not consider that
evidence. Therefore, we reject the Holdners' claim that the trial court' s summary judgment order was
based on inadmissible hearsay evidence.
C. DUTY TO PRESERVE PERSONAL PROPERTY
The Holdners argue that the Port had a duty to preserve the mobile home and the silage both
under the terms of the lease agreement and under negligence law. For the reasons stated below, we
hold that the Port owed no such duty to the Holdners, and therefore that the Port was not liable for the
destruction of the mobile home and the damage to the silage.
1. Contractual Duty
The Holdners claim the Port breached contractual duties by destroying the mobile home and
failing to protect the silage. They argue that ( 1) the Port breached an affirmative obligation under the
Lease Agreement to reasonably allow them to remove the mobile home and silage, and ( 2) the Port
failed to uphold its duty to act in good faith in performance of the contract. We disagree with both
arguments.'
a. Lease Agreement Terms
The Holdners argue that the express terms of the lease agreement obligated the Port to
preserve the mobile home and the silage. We disagree.
1 The Port argues that it had no continuing obligations under the lease agreement because it was
terminated according to its terms on August 15, 2006. However, the provision of the lease agreement
relevant to the Holdners' appeal arguably seems designed to survive termination for an unspecified
period. See Clerk' s Papers at 152 ( using the triggering language " upon the termination of this lease
or any extension For purposes of our analysis, we assume without deciding that the Port
thereof").
remained bound by the provisions upon which the Holdners rely.
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i. Mobile Home
The Holdners argue that the lease agreement required the Port to allow them to remove the
mobile home because the Port agreed to allow them to remove any improvements on the land. Section
5 of the lease agreement provided that
The LESSEE shall have the privilege of adding special leasehold improvements to the
agricultural facilities and other improvements on said property, subject to the approval
of the PORT which shall not be unreasonably withheld. The LESSEE shall be entitled
to remove all or any of the improvements placed on said property by the LESSEE
upon the termination of this lease or any extension thereof.
Clerk' s Papers ( CP) at 152.
The Holdners contend that they made improvements, to the property by making repairs and
improvements to the mobile home. But the " said property" to which section 5 refers was the leased
real property, as described in an exhibit to the lease agreement. Because both the Holdners and the
previous owner of the mobile home treated it as personal property rather than a fixture on the land, it
was not part of the leasehold. See SSG Corp. v. Cunningham, 74 Wn. App. 708, 710 -11, 875 P. 2d 161994) ( characterizing structures erected on land as personal property when they were treated as
personal property when erected). Therefore, section 5 did not cover the mobile home, which was the
Holdners' personal property and was not subject to the lease agreement.
Even if the mobile home itself could be considered an improvement to the property, it clearly
was not " placed on said property" by the Holdners. When the Holdners first took possession of the
land, the mobile home was already situated on it. And it was undisputed below that the mobile home
was not part of the leasehold and was not the Holdners' property when they took possession. The
Holdners gained ownership of the mobile home after the previous owner gifted it to them, but they
apparently never moved it. Because section 5 of the lease agreement gave the Holdners the right to
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remove only improvements " placed on said property" during the term of the lease, it did not extend
to the mobile home.
Any improvements to the mobile home were not improvements to the leasehold. Therefore,
we hold that the Port had no contractual obligation under the lease agreement to allow the Holdners
to recover any such improvements or the mobile home in its entirety.
ii. Silage
The Holdners also appear to argue that the Port' s contractual obligation to allow the Holdners
to harvest crops growing at the time of termination included an obligation to preserve the silage. The
lease agreement provided:
The PORT shall give at least ninety ( 90) days written notice to the LESSEE of its
intention to terminate said lease and in addition, shall give the LESSEE an opportunity
to remove all of its growing crops or in lieu thereof, the PORT shall pay the LESSEE
the value of said crops which cannot be harvested by reason of the early termination
of said Lease.
CP at 156. Under this .provision, the Port was obligated to allow the Holdners to remove any
unharvested crops under cultivation at the time of termination. But the provision is expressly limited
to " growing crops." The silage consisted of harvested crops, which are not encompassed by this
language.
The Holdners appear to interpret " growing crops" to include stored, harvested crops. Because
this interpretation is plainly inconsistent with the language of the lease agreement, we hold that the
Port had no express contractual duty to preserve the silage.
b. Implied Duty of Good Faith
The .Holdners seem to argue that the Port also violated its duty of good faith and fair dealing
in performance of the lease agreement. We disagree.
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Under Washington law, [ t]here is in every contract an implied duty of good faith and fair
dealing' that `obligates the parties to cooperate with each other so that each may obtain the full benefit
of performance.' " Rekhter v. Dep' t of Soc. & Health Servs., 180 Wn.2d 102, 112 -13, 323 P. 3d 10362014) ( quoting Badgett v. Sec. State Bank, 116 Wn.2d 563, 569, 807 P. 2d 356 ( 1991)). However,
this duty extends only to performance of agreed -upon obligations under the contract. Rekhter, 180
Wn.2d at 113. " If there is no contractual duty, there is nothing that must be performed in good faith."
Johnson v. Yousoofian, 84 Wn. App. 755, 762, 930 P. 2d 921 ( 1996).
The Holdners appear to argue that the Port gave them insufficient time to remove their
personal property from the land before destroying it. They made this argument more cogently below,
noting that "[ f]ull performance of the contract would reasonably include the ability to remove
personalty from the leased premises." CP at 28. But the lease agreement is silent as to personal
property other than unharvested crops under cultivation. Regardless of whether it was reasonable to
allow the Holdners to remove their other personal property —including the mobile home and the silage
the lease agreement imposed no obligations on the Port regarding any such property.
Full performance ofthe terms of the lease agreement did not require preservation of the mobile
home or the silage. Therefore, we hold that the Port owed the Holdners no implied duty under the
guise of good faith to preserve those items for the Holdners to remove.
2. Negligence Duty of Care
The Holdners appear to argue that the Port is liable under a negligence theory because it
directed the utility company to shut off power to the leased property, resulting in the destruction of
the silage. We hold that the Port owed the Holdners no tort duty to preserve the silage after
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terminating the lease and that the Holdners did not present sufficient evidence that the Port was
involved with shutting off the power.
To sustain a negligence claim, the Holdners must show, among other things, that the
defendant owed them a duty of care. Munich v. Skagit Emergency Commc 'ns Ctr., 175 Wn.2d
871, 877, 288 P. 3d 328 ( 2012). Whether any applicable duty exists is a question of law. Eastwood
v. Horse Harbor Found., Inc., 170 Wn.2d 380, 389, 241 P. 3d 1256 ( 2010).
No Washington court has held that a commercial or agricultural landlord has a tort duty to
preserve a tenant' s personal property after executing a writ of restitution. In the residential context,
landlords do have such a duty, which is imposed by statute. See RCW 59. 18. 312( 1); Parker v. Taylor,
136 Wn. App. 524, 526, 150 P. 3d 127 ( 2007). But no similar statute applies to commercial or
agricultural leases. The Holdners provide no authority that would support such a duty in the
commercial or agricultural context. Therefore, we hold that the Port owed the Holdners no duty to
preserve the silage. See RAP 10. 3( a); Joy v. Dep' t of Labor & Indus., 170 Wn. App. 614, 629, 285
P. 3d 187 ( 2012) ( holding that we need not consider issues not properly argued).
Even if the Port had a duty to preserve the silage, the Holdners presented no evidence that the
Port was involved in shutting off the power to the property. William Holdner testified at his
deposition that a utility company employee told him that the Port had directed the company to shut
the power off, but the trial court properly excluded this testimony as hearsay not subject to any
exception. The only admissible evidence on the matter — deposition testimony from the utility
employee with whom William Holdner spoke — showed that the Port never directed the utility
company to shut the power off. Based on this evidence, the trial court correctly decided that the
evidence did not support a genuine dispute as to this matter.
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Because the Port owed the Holdners no tort duty to preserve the silage and because the
Holdners did not produce admission evidence that the Port directed that the power be shut off, the
Holdners' negligence claim fails as a matter of law.
We affirm the trial court' s grant of summary judgment in favor of the Port.
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 in accordance with RCW 2. 06. 040,
it is so ordered.
We concur:
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