Cooke Aquaculture Pacific, Llc., V. Dept. Natural Resource ( 2021 )


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  •                                                                                                Filed
    Washington State
    Court of Appeals
    Division Two
    December 14, 2021
    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
    DIVISION II
    COOKE AQUACULTURE PACIFIC, LLC,                                  No. 54564-1-II
    Appellant,
    v.
    WASHINGTON STATE DEPARTMENT OF                            UNPUBLISHED OPINION
    NATURAL RESOURCES, and HILARY
    FRANZ, the Washington Commissioner of
    Public Lands,
    Respondent.
    VELJACIC, J. — Cooke Pacific, LLC (Cooke) appeals the superior court’s order affirming
    the Department of Natural Resources’ (DNR)1 termination of Cooke’s lease. The Commissioner
    of DNR, Hillary Franz, terminated the lease based on Cooke’s default of its lease obligations.
    Cooke asserts the superior court erred by applying the arbitrary and capricious standard of review,
    rather than the de novo standard of review, to DNR’s decision to terminate the lease. It also asserts
    the court erred by affirming the termination decision because a de novo review shows that the
    termination was unlawful. Alternatively, Cooke asserts the court erred in finding that DNR’s
    decision was not arbitrary and capricious.
    We hold that the superior court properly applied the arbitrary and capricious standard of
    review because DNR’s decision to terminate the lease was administrative, and that DNR’s decision
    1
    The respondents are the Commissioner of Public Lands, Hillary Franz (in her official capacity),
    and the Washington State DNR. Because Cooke’s allegations relate primarily to DNR’s decision
    regarding its lease, we refer to respondents collectively as “DNR” except where indicated
    otherwise.
    54564-1-II
    to terminate the lease was not arbitrary and capricious. Accordingly, we affirm the superior court’s
    final order upholding DNR’s lease termination decision.
    FACTS
    I.     BACKGROUND
    Since 1984, several private companies have successively leased aquatic lands in Port
    Angeles harbor from DNR for finfish aquaculture, which involved the use of floating net pen
    structures. Cooke’s Port Angeles fish farm is used “for the net pen farming of Atlantic Salmon . .
    . . This includes stocking, husbandry, harvesting, and other activities related to and in support of
    this activity.” Administrative Record (AR) at 2447. The facility has two floating net pen structures
    within the leasehold area. Cooke uses ancillary equipment within the lease area, to include a
    floating wooden support raft, a feeding machine, generators, pumps, pressure washers, and air
    compressors. The cage system is moored in place with 38 Danforth-style anchors, chains, and
    lines. Tractor tires are used as fenders on the steel structure and come in contact with the water.
    The facility also has a staff building located on the larger net pen structure.
    In 2014, the United States Navy proposed constructing a pier and support facilities adjacent
    to the Port Angeles net pen leasehold. While discussing its project with DNR, the Navy told DNR
    that some of Cooke’s anchor and anchor lines were located outside of Cooke’s leasehold area.
    Cooke denied that any of its anchors were outside of the leasehold area.
    II.    2015 LEASE
    Cooke applied to DNR to renew its lease at the Port Angeles location. Ultimately, the
    parties signed the lease, and it became effective on October 1, 2015. It was set to expire on
    September 30, 2025.
    2
    54564-1-II
    A.      Timely Rent
    Section 4.1(a) of the lease provided that Cooke must pay DNR rent annually, with rent due
    on or before the commencement date (October 1). Historically, Cooke had failed to timely pay its
    rent on several occasions.
    B.      Good Condition and Required Improvements
    Section 11.2(a) required Cooke to keep the property and improvements “in good order and
    repair, in a clean, attractive, and safe condition.” AR at 2437.
    Cooke was also required under the lease to make certain improvements to the property.
    Section 7.1(a) of the lease defines “improvements” as “additions within, upon, or attached to the
    land,” including “fill, structures, bulkheads, docks, pilings, or other fixtures.” AR at 2421. Section
    7.2 defines “existing improvements” as including “thirty-eight (38) Danforth-style anchors.” AR
    at 2421.
    Exhibit B to the lease provided that Cooke was also required to “replace existing
    unencapsulated floatation materials with encapsulated floatation materials” by December 1, 2016.
    AR at 2447. This referred to certain floating Styrofoam near a wooden float on the leasehold.
    Cooke was also required to ensure that all improvements, defined to include the anchors, were
    located entirely on the property within the leasehold by October 1, 2016. As noted above, DNR
    had been informed that Cooke placed anchors outside its leasehold.2
    2
    During lease negotiations, DNR staff wrote an internal memorandum requesting to enter into the
    new lease and described the issues, including issues with some of the anchoring system being
    located outside the lease area that Cooke was aware of. The memo stated, in relevant part:
    Additional obligations were added to Exhibit B. They pertain to . . . ensuring that
    all improvements are located on the Property. The improvements in question are
    anchoring systems that may be outside of the current lease area.
    AR at 498.
    3
    54564-1-II
    C.      Leasehold Boundaries
    Relatedly, under section 1.2(a) of the lease, Exhibit A provided a legal description of the
    property, which Cooke warranted was a true and accurate description of the lease boundaries:
    (a) State leases to [Cooke] and [Cooke] leases from State the real property described
    in Exhibit A together with all the rights of State, if any, to improvements on and
    easements benefiting the Property, but subject to the exceptions and restrictions set
    forth in this Lease (collectively the “Property”).
    AR at 2416.
    D.      Default and Event of Default
    Section 14.1 of the lease defines “default” to include (1) the failure to pay rent when due
    and (2) the failure to comply with any other provision of the lease.
    The lease also provided remedies in the event that a party breached provisions in the lease.
    Section 14.2(c) defines an “Event of Default”:
    State may elect to deem a default by Tenant as an Event of Default if the default
    occurs within six (6) months after a default by Tenant for which State has provided
    notice and opportunity to cure and regardless of whether the first and subsequent
    defaults are of the same nature.
    AR at 2439. If an event of default occurred, DNR had the remedies listed in section 14.3, which
    included the option to terminate the lease.
    III.   COMPLIANCE, DNR’S INVESTIGATION, AND DNR’S TERMINATION OF THE LEASE
    A.      Confirmation of Compliance
    On February 10, 2017, DNR asked Cooke to confirm that Cooke was in compliance with
    the lease provisions. In particular, DNR inquired whether Cooke was in compliance with the
    requirement that Cooke replace the unencapsulated flotation materials and ensure that all
    improvements, which includes anchors, were located within the leasehold. Cooke responded three
    days later and confirmed that it was in compliance. Cooke stated, “all the tires have been removed
    4
    54564-1-II
    along with the wooden dock. The repairs were made to the concrete barge that sealed up the
    broken areas and exposed Styrofoam. And all the improvements are located within the property.”
    AR at 1468.
    B.      Cypress Island Collapse and Failure to Timely Pay Rent
    In August 2017, a net pen at Cooke’s Cypress Island commercial fish farm suffered a
    structural collapse resulting in the release of Atlantic salmon into the surrounding waters.
    DNR began an exhaustive review of the structural integrity of the Cypress Island fish farm,
    the cause of the collapse, and the structural integrity of Cooke’s other farms throughout the state.
    In October, Cooke failed to timely pay DNR its annual rent. DNR sent Cooke a notice of
    default and provided it a 60-day cure period. Cooke cured this default five days later.
    C.      Mott MacDonald Inspection
    In November, DNR hired a marine engineering firm, Mott MacDonald, which contracted
    with Collins Engineers, to inspect Cooke’s net pen locations. Mott MacDonald and Collins
    Engineers inspected the Port Angeles net pen on December 4 and 5. At this inspection, they
    noticed several anchors that were located outside the leasehold boundaries.
    On December 15, the Mott MacDonald firm issued its preliminary findings. It found that
    the anchor lines were “deemed to be in satisfactory to fair condition.” AR at 1724. It found
    “numerous errant/abandoned anchor line ropes . . . either draped over or wrapped around the
    anchor lines of the two net pens systems.” AR at 1724. Mott McDonald also found unencapsulated
    floatation material: “[t]here was an 8 ft long by 5 ft tall area of missing concrete with exposed
    reinforcing wire at the southeast corner.” AR at 1727. Mott McDonald found that, “[i]nspections
    conducted by the Owner do not appear in accordance with manufacturer’s recommendations or
    5
    54564-1-II
    industry standards.” AR at 1730. And “[s]ome anchors are likely outside the limits of the leased
    area.” AR at 1730.
    On December 18, Mott MacDonald sent DNR its full report. The report noted that while
    there are deficiencies with multiple anchors one “must be addressed immediately” because “[t]here
    is a broken link in the section of chain near the anchor.” AR at 4218. The report also stated that
    mooring lines were “missing” and were “wrapped around other lines,” among additional problems.
    AR at 4218. Finally, it noted that the float supporting the shed was in disrepair: “[c]oncrete float
    has a large damaged area along the eastern face.” AR at 4220.
    D.      Lease Defaults
    Based on the December 15, preliminary findings, DNR determined that Cooke had three
    defaults related to the lease requirements:
    Exhibit B, Paragraph 2.B, [of the October, 2015 lease] identified an existing
    concrete float on the site, and required Cooke to “replace all unencapsulated
    floatation material on the concrete float by December 1, 2016.” In violation of this
    provision, as of December 9, 2017, the Styrofoam floatation material on the
    concrete float remained unencapsulated.
    Exhibit B, Paragraph 2.K, required, “By October 1, 2016, [Cooke] will
    ensure that all Improvements are located entirely on the Property.” In violation of
    this provision, as of December 9, 2017, anchors associated with both the primary
    and secondary net pen arrays at the site were located outside of the leasehold.
    Section 7.2 of the Lease explicitly defines anchors as “Existing Improvements” at
    the site.
    ...
    Furthermore, Section 11.2 of the Lease requires Cooke to “keep and
    maintain the [leasehold] and all improvements . . . in good order and repair, in a
    clear, attractive, and safe condition.” In violation of this provision, as of December
    9, 2017, two net pen anchor chains were disconnected from their anchors, and a
    third anchor chain had an open link that is vulnerable to complete failure.
    AR at 1719-20.
    Due to these defaults, DNR sent a notice of default and termination of the lease to Cooke
    on December 15. The notice stated that DNR was terminating the lease based on an event of
    6
    54564-1-II
    default: the untimely rent that occurred within a six-month period of three other defaults. DNR
    did not give Cooke any additional time to cure its defaults.
    IV.    PROCEDURAL HISTORY
    On January 4, 2018, Cooke filed a “notice of appeal under RCW 79.02.030” (lease
    termination action) and a complaint for declaratory judgment in Clallam County Superior Court. 3
    DNR moved to change venue because the lease contained a forum selection clause that designated
    Thurston County as the proper venue. The court granted DNR’s motion.
    Upon transfer, DNR moved to bifurcate the lease termination action and the declaratory
    action. Cooke did not oppose DNR’s motion and the court granted the motion. This case involves
    the lease termination action.
    On December 23, 2019, Cooke filed a brief on the merits. With respect to the standard of
    review, Cooke argued that DNR’s decision to terminate the lease agreement was quasi-judicial
    rather than administrative in nature. Therefore, Cooke argued, the trial court should review DNR’s
    findings of fact for substantial evidence, and review de novo whether those findings supported its
    conclusion of law. Accordingly, it contended that DNR’s findings of fact were not supported by
    substantial evidence in the record, and therefore, those findings did not support DNR’s decision to
    terminate the lease. In the alternative, Cooke argued that if the arbitrary and capricious standard
    of review applied, then DNR’s decision to terminate the lease was arbitrary and capricious because
    its action was willful, unreasoning, and in disregard of the facts and circumstances.
    3
    For the declaratory judgment action, Cooke argued that it was not in default of the lease; that
    DNR did not have a basis to terminate the lease; and that DNR failed to act in good faith and fair
    dealing by terminating the lease.
    7
    54564-1-II
    Additionally, Cooke appeared to argue that it was entitled to a cure period under the lease
    agreement, and therefore, its lease was erroneously terminated. Further, Cooke appeared to argue
    that DNR breached its duty of good faith and fair dealing in terminating the lease.
    In response, DNR argued the trial court should affirm its decision to terminate the lease.
    First, relying on Northwest Alloys, Inc. v. Dep’t of Natural Resources, 10 Wn. App. 2d 169, 
    447 P.3d 620
     (2019), review denied, 
    194 Wn.2d 1019
     (2020), DNR contended that its decision to
    terminate Cooke’s lease was administrative in nature, and therefore, it contended that proper
    standard of review was the arbitrary and capricious standard. Under that standard, DNR argued
    that its decision “was well reasoned and made after having considered the relevant facts and
    surrounding circumstances,” and therefore, it “lawfully and reasonably exercised [the] option
    provided under the contract to terminate Cooke’s Lease for a series of defaults.” CP at 647.
    The trial court agreed with DNR that the arbitrary and capricious standard of review applied
    based on Nw. Alloys, 10 Wn. App. 2d 169. And based on that standard of review, “the court
    [found] that there [was] a basis in the record to support the termination decision.” Report of
    Proceedings at 83. Accordingly, the court affirmed DNR’s decision to terminate Cooke’s lease.
    Cooke timely filed this notice of appeal.
    ANALYSIS
    I.     STANDARD OF REVIEW
    The parties disagree as to the appropriate standard of review. Cooke argues that DNR
    made a quasi-judicial determination when terminating the lease. DNR argues that it was acting in
    its administrative capacity in terminating the lease and that we, like the superior court, should
    apply the arbitrary and capricious standard of review under Northwest Alloys, 10 Wn. App. 2d 169.
    We agree with DNR.
    8
    54564-1-II
    A.     Legal Principles
    A determination of the correct standard of review is a purely legal question that we review
    de novo. See End Prison Indus. Complex v. King County, 
    192 Wn.2d 560
    , 566, 
    431 P.3d 998
    (2018).
    RCW 79.02.030 provides that:
    Any applicant to purchase, or lease, any public lands of the state . . . and
    any person whose property rights or interests will be affected by such sale or lease,
    feeling aggrieved by any order or decision of the . . . commissioner, concerning the
    same, may appeal therefrom to the superior court of the county in which such lands
    or materials are situated . . . . The hearing and trial of said appeal in the superior
    court shall be de novo before the court, without a jury, upon the pleadings and
    papers so certified. . . . Any party feeling aggrieved by the judgment of the superior
    court may seek appellate review as in other civil cases.
    “Although RCW 79.02.030 uses the language ‘de novo’ review, such a review of an administrative
    agency’s decision ‘is only permissible when the agency acts in a quasi-judicial manner.’” Nw.
    Alloys, 10 Wn. App. 2d at 184 (quoting Yaw v. Walla Walla Sch. Dist. No. 140, 
    106 Wn.2d 408
    ,
    413, 
    722 P.2d 803
     (1986)). “In cases in which the agency acted in its administrative function,
    review is limited to whether the agency acted arbitrarily, capriciously, or contrary to law.” Nw.
    Alloys, 10 Wn. App. 2d at 184. “‘Allowing only limited appellate review over administrative
    decisions, rather than original or appellate jurisdiction as a matter of right, serves an important
    policy purpose in protecting the integrity of administrative decision-making.’” Nw. Alloys, 10 Wn.
    App. 2d at 184 (internal quotation marks omitted) (quoting Residents Opposed to Kittitas Turbines
    v. State Energy Facility Site Evaluation Council, 
    165 Wn.2d 275
    , 295, 
    197 P.3d 1153
     (2008)).
    Our Supreme Court identified a four-part test to determine whether an agency’s action was
    administrative or quasi-judicial in Francisco v. Board of Directors of Bellevue Public School, 
    85 Wn.2d 575
    , 579, 
    537 P.2d 789
     (1975). The action is quasi-judicial only if (1) the court could have
    been charged in the first instance with making the decision; (2) the agency function is one that
    9
    54564-1-II
    courts typically perform; (3) the agency is performing functions of investigation, declaration, and
    enforcement of liabilities as they stand on present or past facts under existing laws; and (4) the
    agency’s action is comparable to the ordinary business of courts. Nw. Alloys, 10 Wn. App. 2d at
    184 (applying the four-part test from Francisco, 
    85 Wn.2d at 579
    ).
    B.      Right to Terminate under Lease Provisions
    An application of the Francisco factors shows that whether DNR had the right to terminate
    the lease based on the lease provisions was quasi-judicial. The interpretation of lease provisions
    is something with which the court could have been charged, and that function typically is one that
    courts perform. DNR was declaring and enforcing liabilities under the lease. And DNR’s action
    was comparable to the ordinary business of the courts. Therefore, the correct standard of review
    for whether DNR had the right to terminate the lease is de novo.
    C.      Decision to Terminate the Lease
    An application of the Francisco factors shows that the decision whether to terminate the
    lease was administrative. First, “[t]hrough the aquatic lands statutes, the State granted sovereign
    powers to DNR for protection of the State’s interest in the [public] trust.” Nw. Alloys, 10 Wn.
    App. 2d at 185. Like denying the opportunity to sublet, as in Northwest Alloys, DNR is vested
    with the discretionary, administrative responsibility to terminate a lease if the leaseholder breaches
    the lease as the interests of the State or affected trust require. In contrast to functions a court could
    be charged with, DNR clearly holds a unique, constitutionally mandated position vis a vis its
    management of navigable waters and underlying lands.
    Second, courts have not “historically managed aquatic lands held in public trust because
    that is a function DNR performs.” Id. at 186.
    10
    54564-1-II
    Third, in deciding to terminate the lease, DNR performed no formal inquest or inquiry,
    made no formal declaration of rights among parties as a court would do in a declaratory judgment
    action, and conducted no enforcement of liabilities aside from enforcing remedies available to it
    in the contract with Cooke.
    Fourth, what DNR was doing here was, in its capacity as property manager or landlord,
    acting upon a contractual remedy available to it through its lease with Cooke. While courts may
    terminate leases as a remedy to a cause of action, courts do not, in the ordinary course, act as
    property managers or landlords.
    We hold that DNR’s decision to terminate the lease was administrative, not quasi-judicial,
    and thus, the correct standard of review of DNR’s termination decision is whether it was arbitrary
    and capricious.
    II.    DNR HAD THE RIGHT TO TERMINATE THE LEASE UNDER THE LEASE PROVISIONS
    There is no question that Cooke’s failure to pay rent on October 1, 2017 constituted a
    default under section 14.1(a) of the lease. This means that under section 14.2(c), DNR could
    declare an event of default if another default occurred within six months. And under section
    14.3(a), DNR had the option to terminate the lease if an event of default occurred. We conclude
    that additional defaults did occur within six months of October 1, 2017.
    First, exhibit B, paragraph 2.K—defined in section 7.2 to include anchors—required Cooke
    to ensure that by October 1, 2016 all improvements were located within the leasehold area. There
    is no question that Mott McDonald’s investigation revealed that some anchors remained outside
    the limits of the leased area. Under section 14.1(c), this failure to comply with a lease provision
    constituted a default.
    11
    54564-1-II
    Cooke admits that the anchors securing the fish farm apparatus were outside the leasehold,
    but that DNR had “known for years that the anchors were outside the leasehold.” Appellant’s Br.
    at 44. It also argues that it was not required by paragraph 2.K of exhibit B to relocate the anchors
    to inside the leasehold. But anchors are defined as “improvements” in the lease. Paragraph 2.K
    of exhibit B, listing Cooke’s additional obligations reads, “By October 1, 2016, [Cooke] will
    ensure that all Improvements are located entirely on the Property.” AR at 2448 (emphasis added).
    Cooke proceeds to argue that this obligation was really about the net pens, which they had
    confirmed were within the leasehold prior to termination. To the extent Cooke is asking us to
    disregard the plain language of the lease and read the requirement that “all Improvements [be]
    located on the Property,” AR at 2448, excludes anchors, we decline to do so.
    Second, Mott McDonald documented serious deficiencies with multiple anchors, including
    that two net pen anchor chains were disconnected from their anchors, and that a third anchor chain
    had an open link that made it subject to failure. These deficiencies violated section 11.2(a) of the
    lease, which required Cooke to keep all improvements in good repair and in a safe condition.
    Under section 14.1(c), this failure to comply with a lease provision constituted a default.
    Cooke does not refute that the anchor chains were disconnected from their anchors or that
    the third chain had an open link, but instead argues that the final Mott McDonald report found that
    the facility was in “fair condition” and that the anchors themselves (versus the lines) were in
    satisfactory to fair condition. But even if there is an alternative interpretation of the facts, we
    review an agency’s factual findings for substantial evidence, asking whether the record contains
    12
    54564-1-II
    evidence sufficient to convince a rational, fair-minded person that the finding is true. B & R Sales,
    Inc. v. Dep’t of Labor & Indus., 
    186 Wn. App. 367
    , 374, 
    344 P.3d 741
     (2015). Substantial evidence
    is that which is sufficient “‘to persuade a fair-minded person of the truth of the declared premises.’”
    Ames v. Wash. State Health Dep’t Med. Quality Health Assurance Comm’n, 
    166 Wn.2d 255
    , 261,
    
    208 P.3d 549
     (2009) (internal quotation marks omitted) (quoting Heinmiller v. Dep’t of Health,
    
    127 Wn.2d 595
    , 607, 
    903 P.2d 433
    , 
    909 P.2d 1294
     (1995)).
    Cooke ignores other portions of the Mott McDonald report which clearly described that
    two of the anchor lines were disconnected from their anchors and that one had an open link. Under
    a substantial evidence standard, we are only concerned with whether Mott McDonald’s
    observation was sufficient to persuade a fair-minded person that the two anchor chains were
    disconnected and that one had an open link. We conclude that substantial evidence supports
    DNR’s claim that as of December 9, 2017, two anchor chains were disconnected from their anchors
    and one anchor chain had an open link.
    Cooke argues that it was contractually obligated and entitled to an opportunity to cure any
    alleged defects prior to the termination of the lease. In support of this assertion, Cooke relies on
    section 14.2(b) of the lease, which provides a 60-day cure period for a defaults. However, by the
    plain terms of section 14.2(b), it only applies “[u]nless expressly provided elsewhere in this
    Lease.” AR at 2439. “Elsewhere in this Lease” includes section 14.2(c), by which DNR may
    deem a default an “Event of Default” if the default occurs within six months after a default in
    which DNR provided Cooke notice and an opportunity to cure. AR at 2439.
    13
    54564-1-II
    DNR provided notice and an opportunity to cure regarding Cooke’s default of the rent
    provision on October 20, 2017. On December 9, 2017, DNR became aware of additional defaults
    of the lease regarding the property itself. At that point, DNR could deem one or more of the
    subsequent defaults an event of default. Cooke was not entitled to an opportunity to cure.4
    Accordingly, we hold that DNR had the right under the terms of the lease to terminate
    Cooke’s lease.
    IV.    DNR’S DECISION WAS NOT ARBITRARY AND CAPRICIOUS
    Next, Cooke argues that DNR’s decision to terminate its lease was arbitrary and
    capricious.5 DNR argues that its termination of the lease was based on the facts and was authorized
    under the lease, therefore its decision to terminate the lease was not arbitrary and capricious. We
    agree with DNR.
    Agency action is arbitrary and capricious if it is willful, unreasoned, and
    taken without regard to the attending facts or circumstances. Where there is room
    for two opinions, agency action taken after due consideration is not arbitrary and
    capricious even if a reviewing court may believe it to be erroneous. Deference will
    be given to the specialized knowledge and expertise of the administrative agency.
    The party who challenges an agency action under this standard carries a heavy
    burden.
    4
    Cooke also argues that DNR breached the lease by failing to act in good faith and fair dealing
    because the parties’ course of conduct established that DNR accepted Cooke’s late rental payments
    for years prior to terminating the lease. Cooke argues that DNR failed to act in good faith and fair
    dealing because it did not allow Cooke a cure period for the unencapsulated Styrofoam and the
    improvements prior to its termination of the lease. But these arguments are waiver arguments by
    another name, and Cooke did not assign error to the superior court’s determination that waiver did
    not apply. Accordingly, we do not reach these arguments.
    5
    Cooke also argues that the superior court erred in not making findings and conclusions. But the
    superior court is not required to enter written findings of fact under RCW 79.02.030. Nw. Alloys,
    10 Wn. App. 2d at 183 (“[u]nder RCW 79.02.030, the superior court defers to the factual findings
    of the commissioner and limits its review to the application of law to the admitted facts.”).
    Accordingly, the superior court did not err by not entering findings of fact.
    14
    54564-1-II
    Nw. Alloys, 10 Wn. App. 2d at 187 (internal citations omitted). “‘[N]either the existence of
    contradictory evidence nor the possibility of deriving conflicting conclusions from the evidence
    renders an agency decision arbitrary and capricious.’” Squaxin Island Tribe v. Dep’t of Ecology,
    
    177 Wn. App. 734
    , 742, 
    312 P.3d 766
     (2013) (quoting Rios v. Dep’t of Labor & Indust., 
    145 Wn.2d 483
    , 504, 
    39 P.3d 961
     (2002)).
    DNR terminated the lease under section 14.2(c), which states that the
    State may elect to deem a default by Tenant as an Event of Default if the default
    occurs within six (6) months after a default by Tenant for which State has provided
    notice and opportunity to cure and regardless of whether the first and subsequent
    defaults are of the same nature.
    AR at 2439. “Default” includes, among other things a “[f]ailure to pay rent or other expenses
    when due” and “[f]ailure to comply with any other provision of this Lease.” AR at 2439. As set
    out above, substantial evidence supports that Cooke failed to make the timely rent payment by
    October 1, 2017 and failed to maintain the property and all improvements in good order and repair
    in a clean, attractive, and safe condition by allowing disconnected anchors and an open link on
    another anchor chain. As the lease describes, once an event of default occurs, the State may elect
    to terminate the lease: “14.3 Remedies . . . (a) Upon an Event of Default, State may terminate this
    Lease and remove Tenant by summary proceedings or otherwise.” AR at 2439.
    DNR’s decision to terminate the lease was based on facts supported by substantial
    evidence, pursuant to plain terms of the contract, was well reasoned and made with due regard to
    the facts and circumstances.
    15
    54564-1-II
    CONCLUSION
    We affirm the superior court’s final order upholding DNR’s lease termination decision.
    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.
    Veljacic, J.
    We concur:
    Maxa, P.J.
    Cruser, J.
    16