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Covington 18 Partners LLC v. Attu, LLC

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

August 1, 2019

COVINGTON 18 PARTNERS, LLC, Plaintiff, Counter Defendant,
v.
ATTU, LLC; LAKESIDE INDUSTRIES, INC; UNITED STATES OF AMERICA; DEPARTMENT OF ENERGY;' BONNEVILLE POWER ADMINISTRATION; COVINGTON LAND, LLC, Defendants, Counter Claimants, Cross Claimants, Cross Defendants, Third Party Plaintiffs,
v.
JOHN SINCLAIR; JANE DOE SINCLAIR, FIDELITY NATIONAL TITLE INSURANCE CO., Third Party Defendants,

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT ATTU'S MOTION TO STRIKE

          BARBARA J. ROTHSTEIN, UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiff Covington 18 Partners, LLC ("Covington 18") filed this quiet title action on January 16, 2019, seeking a determination that four easements to a parcel of land transferred with the title. Currently before the Court is Plaintiffs motion for summary judgment, Dkt. No. 15, and Defendant Attu, LLC's ("Attu") motion to strike the motion for summary judgment, Dkt. No. 27. Having reviewed the motions, the oppositions thereto, the record of the case, and the relevant legal authorities, the Court will deny Attu's motion to strike and grant Plaintiff's motion for summary judgment.

         II. BACKGROUND

         The crux of this dispute concerns four access and utility easements which Plaintiff claims transferred with ownership after the sale of a parcel of land in Covington, Washington. The events leading to this dispute are described below.

         A. The Property

         In 1998 and 2001, Attu purchased two adjacent parcels of land in Covington, Washington from James Development, Inc. and William and Shirley Stewart. Dkt. No. 1-1 at 3. The property purchased from James Development was a large square-shaped parcel and the property purchased from the Stewarts was a narrow strip of land to the west of the parcel purchased from James Development. Dkt. No. 16-8 at 4. In 2009, Attu conducted a boundary line adjustment, which subdivided the plot into Parcels A and B. Id. Parcels A and B are adjoining, with Parcel A as a square plot in the northeast corner, and Parcel B in an "L" shape bordering it. Id.

         Defendant Bonneville Power Administration ("BPA"), a United States agency, owns the land east of Parcels A and B. Dkt. No. 15 at 2-3. Defendant Lakeside Industries, Inc. ("Lakeside") owns the land north of Parcels A and B. Id. BPA's land abuts a public roadway, but Parcels A and B do not, making the properties landlocked. Id. A map of the relevant plots, provided by Plaintiff, is included as Exhibit A.

         B. Creation of Easements

         To give Attu's property access to the roadway, its neighbors conveyed four easements between 2008 and 2009. Dkt. No. 15 at 4. First, in 2008, prior to the division of Parcels A and B, 'BPA granted Attu an easement for ingress, egress, and utility rights over BPA's land to Covington Way SE, the nearest public road (the "October 2008 Easement"). Dkt. No. 16-6. The deed for the October 2008 Easement states that it "benefits the real property legally described on attached Exhibits A and B," and Exhibit B describes, in metes and bounds, the entirety of Attu's property as it existed in 2008, i.e., both Parcels A and B. Dkt. Nos. 16-2, 16-3, 16-6 at 4. The deed contains a provision stating, "[t]his easement and the covenants herein shall be covenants running with the land and shall be binding upon and inure to the benefit of the successors, heirs, and assigns of both parties hereto." Dkt. No. 16-6 at 5.

         Shortly thereafter, Attu and Lakeside recorded an easement for ingress, egress, and utilities access over their shared border (the "Reciprocal Easement"). Dkt. No. 16-7. The deed for the Reciprocal Easement states that Lakeside grants a "nonexclusive, perpetual easement to Attu to run with and benefit the Attu property" and then describes, in metes and bounds, the entirety of Attu's property as it existed in 2008. Dkt. Nos. 16-2, 16-3, 16-7 at 3, 13. The deed contains a provision stating, "[t]he rights and obligations of the parties shall inure to the benefit of and be binding upon their respective successors and assigns." Dkt. No. 16-7 at 9.

         In 2009, following the subdivision of the land into Parcels A and B, BPA granted Attu an easement for access and utilities along the entire eastern boundary of Attu's property (the "168th Extension Easement'.'). Dkt. No. 16-9. The deed describes the easement in metes and bounds as touching both Parcels AandB. Dkt. Nos. 16-2, 16-3, 16-9 at 6. The deed provides that it is granted to Attu "and its assigns." Dkt. No. 16-9 at 3.

         Similarly, BPA granted Attu an easement for utilities from the southeast corner of the 168th Easement to the road (the "Utilities Easement"). Dkt. No. 16-10. The deed describes the easement in metes and bounds as touching the portion of the 168th Extension Easement that is adjacent to Parcel B. Dkt. Nos. 16-2, 16-3, 16-10 at 6. The deed provides that it is granted to Attu "and their assigns." Dkt. No. 16-10 at 3.

         C. Covington 18's Purchase of Parcel B

         In 2012, Plaintiff purchased Parcel B from Attu, using a standard form Purchase and Sale Agreement ("PSA"). Dkt. No. 15 at 5. Attu alleges that it engaged in significant negotiations with Plaintiff regarding the purchase of Parcel B, and the easements specifically. Dkt. No. 25 at 4-6. Attu alleges that the parties initially discussed Plaintiff purchasing both parcels, but the cost was too high for Plaintiff, so the parties entered an option agreement giving Plaintiff the right to purchase Parcel A in'the next five years, so that Plaintiff could eventually develop both parcels. Id. The four easements were not addressed in the PSA, option agreement, or deed for Parcel B. Dkt. No. 15 at 5.

         An early version of the PSA, drafted while still in negotiations, included a "page six," which contained a provision addressing transferal of personal property. Dkt. Nos.' 15 at 19, 25 at 5-6. Specifically, it provided that "[t]his sale includes all right, title and interest of Seller to the following tangible personal property: [None]." Dkt. No. 26-8 at 7. During the course of negotiations for Parcel B, the parties decided to exclude page six from the final PSA. Dkt. Nos. 15 at 19, 25 at 5-6.oThe parties agreed, however, to include the same page six of the standard agreement in the option agreement. Dkt. No. 25 at 6. Attu alleges that the reason for the exclusion of page six from the PSA and its inclusion in the option agreement was that as part of the negotiations the parties agreed to transfer all the easements and rights of way only when Plaintiff exercised the option to purchase Parcel A. Id. at 6-7.

         D. The Current Dispute

         In the years following the purchase of the Parcel B, Plaintiff used all four easements for access and utilities. Dkt. No. 15 at 5. In 2015, however, Attu claimed that it had not conveyed the easements to Plaintiff and that Plaintiff did not have an interest in them until it chose to exercise the option agreement. Id. Around this time, Plaintiff entered into negotiations for the sale of Parcel B to a third party, but the third party terminated negotiations, in part, according to Plaintiff, because of the dispute over the easements. Dkt. No. 1-1 at 6.

         In 2017, Attu sold Parcel A to Covington Land LLC ("Covington Land").[1] Dkt. No. 15 at 6-7. In the agreement for the sale, Attu stated that the four easements remained in Attu's interest and that Attu retained the right to grant Parcel A's easement rights to the owner of Parcel B. Id. After the sale of Parcel A, Attu attempted to block Plaintiffs use of the easements by placing a truck, trailer, and ecology blocks on the easements. Dkt. No. 1-1 at 7-8. Attu also sought to have Covington Land block Plaintiffs access to the easements, but Covington Land did not comply with Attu's requests. Dkt. No. 15 at 8.

         E. Procedural History

         In 2016, Plaintiff filed a declaratory judgment suit in King County Superior Court, seeking judgment that all four of the easements transferred with the sale of Parcel B. Dkt. No. 15 at 6. While a decision was pending, Plaintiff voluntarily dismissed the suit without prejudice due to the death of the principal and managing member of the company, Laurent Girard. Id. Attu did not file an objection to the dismissal. Id. Discovery had taken place before dismissal, including a deposition of Girard. Id.

         Two years later, on January 16, 2019, Plaintiff filed this quiet title action in King County Superior Court. Dkt. No. 1-1. On February 21, 2019, Defendant United States, on behalf of itself, the Department of Energy, and BPA, removed to this Court under 28 U.S.C. § 1442(a)(1).[2] Dkt. No. 1. Plaintiff filed a motion for summary judgment on April 4, 2019. Dkt. No. 15. Attu subsequently filed a motion to strike the motion for summary judgment on April 25, 2019. Dkt. No. 27.

         In response to the quiet title action, several parties have filed additional claims. Attu filed a counterclaim against Plaintiff for tortious interference with a contractual relationship and a crossclaim against Covington Land for tortious interference with a business expectancy. Dkt. No. 11. Attu also filed a third-party complaint against Fidelity National Title Insurance Company for unfair or deceptive acts or practices in its role as an escrow and closing agent for the Parcel B sale. Dkt. No. 41. Covington Land filed a counterclaim against Plaintiff for quiet title to the easements and an injunction for.trespass if the Court concludes that the easements do not belong to Plaintiff. Dkt. No. 20. Covington Land also filed a crossclaim against Attu for contractual indemnity and a third-party complaint against John Sinclair, the managing member of Attu, and Jane Doe Sinclair, his wife, for contractual indemnity. Id. Attu also filed a motion for leave to file a third-party complaint, but proceeded to file the complaint without leave, per the Court's standing order. Dkt. Nos. 31, 40.

         III. MOTION TO STRIKE

         The Court will first address Attu's motion to strike the motion for summary judgment, Dkt. No. 27, as it will determine the Court's disposition of the motion for summary judgment.

         A. Legal Standard

         Attu filed a motion to strike the motion for summary judgment, but does not cite a Federal Rule of Civil Procedure as a basis for its motion. Dkt. No. 27 at 2-3. Rule 12(f) provides that the Court may strike from the record "an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter" in a pleading. Fed.R.Civ.P. 12(f). In its motion, however, Attu seeks something more akin to a delay than a strike, stating that "Plaintiff brought its motion before Attu has had time to conduct discovery on its affirmative defenses of laches and equitable estoppel, and before any party has conducted any discovery." Dkt. No. 27 at 2.

         Delaying summary judgment is more appropriately asserted under Rule 56(d), which allows the Court to defer or deny judgment if the nonmovant shows it "cannot present facts essential to justify its, opposition." Fed.R.Civ.P. 56(d). Under Rule 56(d), the party requesting a delay in summary judgment must "show that (1) it has set forth in affidavit form the specific facts it hopes to elicit from further discovery; (2) the facts sought exist; and (3) the sought-after facts are essential to oppose summary judgment." Stevens v. Corelogic, Inc., 899 F.3d 666, 678 (9th Cir. 2018) (quoting Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Morlg. Corp., 525 F.3d 822, 827 (9th Cir. 2008)). The party does not have to name precisely what discovery will reveal, but must be seeking evidence that is more than speculative. Id.

         B. Discussion

         Attu argues that the Court should grant its motion to strike because it has not had sufficient time to conduct discovery on its affirmative defenses of laches and equitable estoppel, and that it would therefore be unfair to grant summary judgment at this point. Dkt. No. 27 at 2-3. In "Declaration of Patrick J. Schneider," Attu's counsel asserts,

This case was removed to this District Court by the Bonneville Power Administration before most of the parties, including Attu, had answered Plaintiffs Complaint. Defendant Covington Land, LLC only filed its answer yesterday [April 24th], the day before Attu's response is due to Plaintiffs motion for summary judgment. Covington Land included a third-party action against ATTU and its principals, and I will not have time to read this pleading, let alone evaluate it, until after I respond to Plaintiffs motion for summary judgment. ...

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