In Washington, the Department of Ecology regulates compliance with stormwater laws. Federally, the U.S. Environmental Protection Agency is the regulatory body. The above link leads to a document authored by attorney Allan Bakalian, which contains examples of DOE and EPA enforcement actions and helpful tips for avoiding liability.
As a follow-up to the previous post, the above link takes you to a document authored by environmental law attorney Allan Bakalian that identifies emerging SEPA issues and discusses court cases that address those issues.
SEPA was adopted to ensure the government takes the environment into consideration during the decision-making process. SEPA is codified at Chapter 43.21C of the Revised Code of Washington (RCW). The Washington State Department of Ecology adopted administrative rules that supplement the RCW. Those rules are found at Chapter 197-11 of the Washington Administrative Code (WAC). If you click the above link you will find an overview of SEPA prepared by Allan Bakalian, a partner at Zeno Bakalian P.S. Mr. Bakalian has over twenty five years of experience in all aspects of environmental law, including SEPA matters.
In Peyton Building LLC v. Niko’s Gourmet, Inc., 2014 WL 1632243 (Wn.App. Div. 3, April 2014), a building was originally owned by a Corporation. In 2002 the Corporation entered into a 10 year lease with a Restaurant. The Restaurant’s Owner guaranteed the lease. A LLC later acquired the Corporation but, as part of that acquisition, did not obtain an assignment of the lease or the guarantee. In 2011 the Restaurant defaulted and vacated the rental premises. The LLC sued the Restaurant and its Owner to collect the unpaid rent. The trial court ruled in the LLC’s favor against both the Restaurant and its Owner, awarding the LLC a judgment for roughly $100,000. On appeal, the court considered whether the LLC could enforce the lease against the Restaurant and the guarantee against the Restaurant’s Owner considering the LLC did not obtain an assignment of either contract. The court of appeals upheld the judgment against the Restaurant because the lease “touched and concerned” the land (e.g., payments under the lease were sufficiently connected to the use of the premises), but overturned the judgment against the Restaurant Owner because the guarantee was not sufficiently related to the use of the rented space. So what’s the take-away? Always get an assignment of the lease and guarantee.
In CalPortland Co. v. LevelOne Concrete LLC, 321 P.3d 1261 (Wn. App. Div. 2, March 2014), a concrete supplier to a commercial building project was not paid for concrete it delivered to a subcontractor on the job. When this happens, Washington law gives the unpaid contractor (1) 90 days from the date it last provided services or materials for the project to record its “claim of lien,” (2) 8 months from the date the claim of lien is recorded to file a lawsuit to foreclose that lien, and (3) 90 days from the date that lawsuit is filed to serve the summons and complaint on the “owner of the subject property.” RCW 60.04.091, .141. In CalPortland, after the concrete supplier recorded its claim of lien but before it filed its lawsuit the general contractor recorded a “bond in lieu of claim.” By recording the bond, the general contractor effectively replaced the land identified in the claim of lien with the bond as the property subject to the concrete supplier’s lien. The concrete supplier filed its lawsuit within the eight month window, then served the general contractor–not the landowner–with the summons and complaint. Ninety days passed from the date the lawsuit was filed and the concrete supplier still had not served the landowner. The general contractor argued the concrete supplier’s claims should be dismissed because the concrete supplier did not serve the landowner within the 90 day service window. The trial court agreed and dismissed the concrete supplier’s claims. But the court of appeals reversed the trial court. By posting the bond and naming itself as principal under the bond, the general contractor became the “owner of the subject property” that was subject to the lien and it was appropriate for the concrete supplier to serve the general contractor. The takeaway: If you’re an unpaid contractor and a bond in lieu of claim is recorded before you file your lawsuit, to be safe you should name both the landowner and the principal/surety under the bond as defendants and serve both. At the very least, sue and serve the principal and surety under the bond.
In February 2014, the U.S. District Court for the Western District of Washington listed the following factors as relevant when courts consider whether to invalidate a foreclosure sale after the sale occurs:
- whether a violation of the Deeds of Trust Act divested the trustee (who handles the foreclosure) of its authority to conduct the foreclose sale;
- whether the borrower had an adequate opportunity to prevent the foreclosure;
- whether the lender or the trustee caused unfairness or surprise;
- whether the purchaser at the foreclosure sale was on inquiry notice of the procedural irregularities or was truly innocent and would be unfairly harmed if the foreclose sale were voided;
- whether the sale price is grossly inadequate compared to the fair market value; and
- whether the borrower promptly asserted his or her objections after the sale.
Mulachy v. Federal Home Loan Mortgage Corp., 2014 WL 504836, *4 (W.D. Wash. Feb. 2014).
This issue was addressed in Allison v. Bale, 173 Wn. App. 435 (Feb. 2013), reconsideration granted (Mar. 12, 2013). Here’s what happened in Bale: Bob owned a cabin. He had two nephews (John and Robert). Bob regularly took his nephews to the cabin. Bob married Edna in 1971. Edna had two adult sons (Dennis and Allen) who regularly used and made improvements to the cabin. Edna disliked John and Bob, so from 1971 until Edna died in 1999 John and Robert stopped visiting the cabin. In 2003 Bob executed a will, declaring his intent that the cabin be conveyed to Dennis and Allen on his death. In 2008 Bob was diagnosed with lung cancer and invited John and Robert over for lunch. During lunch Bob told John and Robert that he wanted them to have the cabin. John then found a form quit claim deed online. Bob filled it out, leaving the lines after “in consideration of” and “quit claims to” blank. But he did put John and Robert’s names in the grantee section of the deed’s caption. On the real estate excise tax form (and the supplemental statement, required for gift deeds) Bob also indicated there was no debt on the cabin and that he was gifting it to John and Robert. The deed was recorded in December 2008. Bob died in April 2009. Dennis and Allen filed a lawsuit, contending the gift deed was unenforceable because it recited no consideration and, therefore, the will controlled. The trial court agreed with Dennis and Allen. The Court of Appeals reversed, concluding (1) a recital of consideration is not needed to gift real property, and (2) Bob’s will did not rebut the strong evidence of Bob’s intent, evidenced by the gift deed. RCW 64.04.050 says “Quitclaim deeds may be in substance in the following form: …” The statutory form includes a space to recite consideration. But a quitclaim deed need not precisely match the statutory form to be enforceable. The Washington Supreme Court granted reconsideration in March 2013. We’ll have to wait-and-see if Washington’s top court agrees with the trial court or the Court of Appeals.