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Nicholson v. Thrifty Payless, Inc.

United States District Court, W.D. Washington, Seattle

February 18, 2014

BRENT NICHOLSON, et al., Plaintiffs,
THRIFTY PAYLESS, INC., et al., Defendants.


ROBERT S. LASNIK, District Judge.

This matter comes before the Court on "Rite Aid's Motion for Summary Judgment Dismissing Plaintiffs' Third Through Tenth Causes of Action." Dkt. # 31. Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine dispute as to any material fact that would preclude the entry of judgment as a matter of law. L.A. Printex Indus., Inc. v. Aeropostale, Inc. , 676 F.3d 841, 846 (9th Cir. 2012). The party seeking summary dismissal of the case "bears the initial responsibility of informing the district court of the basis for its motion" ( Celotex Corp. v. Catrett , 477 U.S. 317, 323 (1986)) and identifying those portions of the materials in the record that show the absence of a genuine issue of material fact (Fed. R. Civ. P. 56(c)(1)). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to identify specific factual disputes that must be resolved at trial. Hexcel Corp. v. Ineos Polymers, Inc. , 681 F.3d 1055, 1059 (9th Cir. 2012). The mere existence of a scintilla of evidence in support of the non-moving party's position will not preclude summary judgment, however, unless a reasonable jury viewing the evidence in the light most favorable to the non-moving party could return a verdict in its favor. U.S. v. Arango , 670 F.3d 988, 992 (9th Cir. 2012).

Having reviewed the memoranda, declarations, and exhibits submitted by the parties in the light most favorable to plaintiffs and having heard the arguments of counsel, the Court finds as follows:

A. Quantum Meruit (Third Cause of Action)

A party to an express contract may not bring an action based on an implied or quasi-contract related to the same matter. Chandler v. Wash. Toll Bridge Auth. , 17 Wn.2d 591, 604 (1943); Lance Camper Mfg. Corp. v. Republic Indem. Co. , 51 Cal.Rptr.2d 622, 628 (Cal.App. 1996). Plaintiffs' right to recover for services rendered and/or costs expended was established by the terms of the leases that governed the Concord, Silverdale, Bremerton, Port Angeles, Everett, Blaine, San Pablo, Santa Rosa, Oakley, and Sunnyvale projects. Plaintiffs do not challenge the validity of those contracts, but simply argue that a quasi-contractual theory should be available to them if the contracts do not provide recovery. Neither Washington nor California law support such a proposition.

With regards to the Poulsbo project, plaintiffs may not get around the statute of frauds by supplying the missing terms by implication. Henry v. Green, 143 Wn.App. 1007 (2008) (quoting Cushing v. Monarch Timber Co. , 75 Wash. 678, 687 (1913)). Nor have plaintiffs raised a reasonable inference that Poulsbo Holding's acquisition of property and preliminary attempts to develop a pharmacy on the site provided any benefit to Rite Aid. It is undisputed that the pharmacy was never built, and there is no evidence that the real property or any other asset was turned over to Rite Aid. Plaintiff's conjecture that its work "provided Rite Aid with valuable information regarding these markets" and an "opportunity to develop the stores" is unsupported. Dkt. # 44 at 5. Rite Aid sought to lease a pharmacy from plaintiffs, not options on empty lots or obtain plat approvals that were never developed. Absent evidence that Rite Aid obtained possession of an asset or that the work plaintiffs did materially advanced subsequent efforts to build a pharmacy in Poulsbo, plaintiffs have not raised a genuine issue of fact as to the benefit prong of a quantum meruit claim.

B. Promissory Estoppel (Fourth Cause of Action)

Promissory estoppel requires, "(1) [a] promise which (2) the promisor should reasonably expect to cause the promisee to change his position and (3) which does cause the promisee to change his position (4) justifiably relying upon the promise, in such a manner that (5) injustice can be avoided only by enforcement of the promise." Corbit v. J.I. Case Co. , 70 Wn.2d 522, 539 (1967). See also U.S. Ecology, Inc. v. State , 28 Cal.Rptr.3d 894, 901 (Cal.App. 2005). Plaintiffs' promissory estoppel claim is an alternative to or adjunct of its breach of contract claim: if the factfinder were to conclude that the agreed-upon extensions of the delivery dates for Concord, Port Angeles, Everett, Blaine, San Pablo, Santa Rosa, Oakley, and Sunnyvale lacked consideration or were otherwise unenforceable in contract, plaintiffs may seek a balancing of the equities in order to avoid injustice. See Corey v. Pierce County , 154 Wn.App. 752, 768 (2010); Kim v. Dean , 133 Wn.App. 338, 346-47 (2006); Kajima/Ray Wilson v. Los Angeles County Metro. Transp. Auth. , 1 P.3d 63, 66 (Cal. 2000). Plaintiffs may, therefore, proceed on their promissory estoppel claim as to Concord, Port Angeles, Everett, Blaine, San Pablo, Santa Rosa, Oakley, and Sunnyvale.[1]

The promissory estoppel claim fails with regards to the Silverdale, Bremerton, and Poulsbo projects, however. Promissory estoppel requires, in the first instance, a promise: "although promissory estoppel may apply in the absence of mutual assent or consideration, the doctrine may not be used as a way of supplying a promise." Havens v. C&D Plastics, Inc. , 124 Wn.2d 158, 173 (1994). There is no evidence that defendants promised to extend the delivery dates for the Silverdale and Bremerton projects beyond December 2010, when the termination letters were sent.

With regards to Poulsbo, the Washington Supreme Court has consistently declined to adopt Restatement (Second) of Contracts § 139, which would allow a party to use promissory estoppel to avoid the statute of frauds. See Greaves v. Med. Imaging Sys., Inc. , 124 Wn.2d 389, 398-401 (1994). While there is some indication that Washington courts might be willing to ignore the statute if its application would be "grossly unjust" ( Lectus, Inc. v. Rainier Nat'l Bank , 97 Wn.2d 584, 588 (1994)), that is not the case here. As discussed more fully in the "Order Granting in Part Thrifty's Motion for Partial Summary Judgment, " the parties never reached an agreement regarding a key term of the Poulsbo lease - the rental amount. Defendants made no promises as to the amount they would pay in rent, no lease was signed, and plaintiffs were fully aware of these facts. Plaintiff Nicholson was an experienced real estate developer who knew the requirements of the statute of frauds and yet failed to provide defendants with the cost and expense data they needed to calculate the rental payment and finalize the contract. There is no indication that defendants misled plaintiffs into believing that a partial oral agreement for a twenty year lease of real property would be effective: plaintiffs' efforts to develop the Poulsbo site were made on the hopeful assumption that the parties would eventually reach agreement, not in reasonable reliance on any promise made by defendants. If the equities in Greaves did not warrant the adoption of Restatement (Second) of Contracts § 139, the circumstances of this case certainly do not.

C. Breach of Fiduciary Duty (Fifth Cause of Action)

Plaintiffs have abandoned their breach of fiduciary duty claim.

D. Washington Consumer Protection Act ("CPA") (Sixth Cause of Action)

The CPA prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." RCW 19.86.020. A private cause of action exists under the CPA if (1) the conduct is unfair or deceptive, (2) occurs in trade or commerce, (3) affects the public interest, and (4) causes injury (5) to plaintiff's business or property. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co. , 105 Wn.2d 778, 780 (1986). Defendant argues that the ...

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