DO NOT CITE. SEE GR 14.1(a).
Court of Appeals Division II
State of Washington
Opinion Information Sheet
Docket Number: |
41428-7 |
Title of Case: |
International Shellfish, Appellant V. Dept. Of Natural Resources, Respondent |
File Date: |
03/27/2012 |
SOURCE OF APPEAL
----------------
Appeal from Thurston Superior Court |
Docket No: | 09-2-02139-0 |
Judgment or order under review |
Date filed: | 10/15/2010 |
Judge signing: | Honorable Christine a Pomeroy |
JUDGES
------
Authored by | J. Robin Hunt |
Concurring: | Christine Quinn-Brintnall |
| David H. Armstrong |
COUNSEL OF RECORD
-----------------
Counsel for Appellant(s) |
| Thomas F. Miller |
| Miller Law Office PS |
| 2620 R W Johnson Rd Sw Ste 212 |
| Tumwater, WA, 98512-6111 |
Counsel for Respondent(s) |
| Terence Pruit |
| Attorney General's Office |
| 1125 Washington St Se |
| Po Box 40100 |
| Olympia, WA, 98504-0100 |
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
International Shellfish, No. 41428-7-II
a Washington Limited Liability Company,
Appellant,
v.
STATE OF WASHINGTON, Dept. of Natural UNPUBLISHED OPINION
Resources, AQUATIC RESOURCES
DIVISION,
Respondent.
Hunt, J. -- International Shellfish appeals summary judgment in favor of the Washington
State Department of Natural Resources, Aquatic Resources Division (DNR), concerning an
agreement for harvesting geoduck clams from two tracts of state-owned aquatic land within
specified time frames. International Shellfish argues that the superior court erred in ruling that (1)
the parties' Agreement term, "lost harvest days,"1 was not ambiguous; and (2) DNR properly
calculated International Shellfish's refund amount to compensate for 18 "lost harvest days." We
affirm.
1 Clerk's Papers (CP) at 66.
No. 41428-7-II
FACTS
I. Geoduck Harvesting Agreement
At a public auction on December 3, 2008, International Shellfish was one of ten winning
auction bidders that each purchased an opportunity to harvest geoduck clams from two tracts of
state-owned aquatic land: the Point Beals South tract in King County and the Wyckoff North
tract in Pierce County.2 International Shellfish paid DNR $167,101 for its harvest opportunity
and entered into a standardized "Geoduck Harvesting Agreement" (Agreement) with DNR.
Clerk's Papers (CP) at 60. An International Shellfish representative signed the Agreement on
December 22, 2008, and a DNR representative signed the Agreement on December 31. Section
28 of the Agreement included an integration clause stating that the Agreement constituted the
"final expression" of the parties' agreement and that the parties had no "understandings,
Agreements, or representations, expressed or implied, that [were] not specified in [the
Agreement]." CP at 77.
A. General Provisions
This Agreement gave International Shellfish (1) a nonexclusive right to harvest up to
41,000 pounds of geoducks from the "Property," defined as "the Harvest Area(s)"3 in the
Agreement's Exhibit A, comprising Point Beals and Wyckoff; and (2) 48 days of geoduck
harvesting opportunity on the Property on "legal harvest days," between January 5, 2009, and
2 We refer to the Point Beals South tract as "Point Beals" and the Wyckoff North tract as
"Wyckoff" in this opinion.
3 Subsection 3(a) of the Agreement referred to the Property as the "bedlands" listed in Exhibit A.
CP at 61.
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No. 41428-7-II
March 13, 2009. 4 The Agreement anticipated that, between these dates, Point Beals would be
open for 33 days, and Wyckoff would be open for 15 days. But the Agreement did not guarantee
a specific number of "legal harvest days" or that harvesting would be allowed on any specific
dates for either tract. Nor did the Agreement guarantee that International Shellfish would be able
to harvest any specific quantity of geoduck, such as its 41,000-pound quota. On the contrary,
DNR specifically disclaimed any warranty as to the volume, quality, or grade of geoducks
available for harvest and the accuracy of any pre-bid volume estimates for each tract.
Instead of guarantees, the Agreement provided International Shellfish with an opportunity
to harvest up to 28,000 pounds of geoduck from Point Beals and up to 13,000 pounds from
Wyckoff on days that the tracts were open during the contract period or until International
Shellfish reached its geoduck quota for a particular tract. Once International Shellfish reached its
quota for a particular tract, it could no longer harvest geoducks from that tract5; but it could,
however, harvest geoducks from the second tract of land on days that tract was open, until it met
the second tract's quota.
The Agreement gave DNR the right to close temporarily all or portions of the tracts
during the contract period. Section 2 of the Agreement, for example, (1) expressly reserved to
DNR the right to "change the harvest dates or duration of [the] harvest" at either tract and the
4 The nine other successful auction bidders entered into similar harvesting agreements with DNR,
which granted each other bidder a nonexclusive right to harvest geoducks from Point Beals and
Wyckoff for the same period as International Shellfish.
5 Other successful public auction bidders, however, could continue to harvest on the tract if they
had not yet met their individual quotas for that tract.
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No. 41428-7-II
right to "increase or decrease the [h]arvest [quota]" for either tract at any time during the contract
period; and (2) provided that if DNR "reduce[d] the total number of harvest days . . . by more
than twenty-five percent," International Shellfish would be entitled to a partial refund as provided
in section 11 of the Agreement. CP at 61 (emphasis added). And Section 11 of the Agreement,
entitled "Temporary Closures," provided International Shellfish with notice that temporary
closures of the two tracts were possible if the health department discovered health risks. CP at
65. Subsection 11(b) further provided DNR with "discretion" to close temporarily "all or a
portion of the Property" during the contract period to protect public resources. CP at 65.
B. Refund Provisions
To account for the possibility that International Shellfish could lose harvesting
opportunities when DNR closed tracts, section 11 of the Agreement included a refund provision:
Under subsection 11(d), "Purchaser's Right to Refund," DNR would provide International
Shellfish with a partial refund of the amount it had paid at auction if International Shellfish was
"prohibit[ed]" by governmental action from harvesting on "legal harvest days" under the
Agreement. CP at 66. Subsection 11(d) specified the method for calculating such refund.
Subsection 11(e), "Maximum Refund Total," provided a formula for limiting the maximum refund
amount available to International Shellfish under the Agreement; and it required International
Shellfish to return any excess refunds received to DNR within 30 days. CP at 66.
Subsection 11(d) also provided, however, that International Shellfish would not receive
refunds if it harvested for less than a full day during "partial" closures, which partial days would
nevertheless count as days harvested under the Agreement if International Shellfish elected to
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No. 41428-7-II
harvest for such days or if the closure did not exceed four hours of otherwise legal harvest time.6
Subsection 11(a) authorized DNR to "recall" any geoducks harvested at the time of a health
department closure and required DNR to compensate International Shellfish for such recalled
geoducks. CP at 65.
II. Performance under the Agreement
A. Point Beals Temporary Closure; Refund for Recalled Geoducks
International Shellfish began harvesting geoducks from Point Beals on January 5, 2009,
the first day of its contract period. Concerned about paralytic shellfish poisoning, the health
department temporarily closed Point Beals to geoduck harvesting at some point on January 5 and
reopened it on February 20,7 23, and 24. International Shellfish harvested geoducks at Point
Beals all three reopened days.
International Shellfish also began harvesting at Point Beals on February 25, before the
health department again closed the tract temporarily for health reasons. CP at 58. When the
health department reopened Point Beals from March 9 to March 13, International Shellfish
harvested geoducks from the tract on March 10, 11, and 13. CP at 58, 83. By March 13, the end
of the contract period under the Agreement, International Shellfish had harvested geoducks from
Point Beals on six of the eight days that it had been open. DNR recalled the 710 pounds of
geoduck that International Shellfish had harvested from Point Beals on January 5 and February 25
6 See CP at 66: "A harvest closure for a partial day shall not be counted as a lost harvest day if
[International Shellfish] elects to harvest for the partial day, or if the lost harvest does not exceed
four (4) hours that day." (Emphasis added.)
7 Under the Agreement, Point Beals was not open for geoduck harvesting on weekends; therefore,
there was no harvesting allowed on February 21 and 22, Saturday and Sunday.
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No. 41428-7-II
before the health department closure and paid International Shellfish $4.08 per pound for the
recalled geoduck, or $2,896.80 total.
B. Wycoff Harvesting Opportunity To Offset Point Beals' Closure
To offset the temporary full-day closures of Point Beals, DNR allowed International
Shellfish and the other auction bidders to harvest geoducks early at Wyckoff, beginning January 6,
the second day of the contract period, continuing for the full 15 days initially allotted for that
tract's harvesting period under the Agreement. After the fifteenth day, January 27,8 DNR
"extended" Wyckoff's harvesting period, under section 2 of the Agreement, allowing International
Shellfish and the other auction bidders to harvest geoducks from the tract until February 20, the
date that Point Beals initially reopened after its first closure. CP at 57. DNR also offered
International Shellfish and the other auction bidders an opportunity to purchase the right to
harvest up to 900 additional pounds of geoduck to add to their Wyckoff tract quotas.
Taking advantage of this opportunity, International Shellfish and the other auction bidders
purchased additional quotas and harvested additional days at the Wyckoff tract. When
International Shellfish completed its initial Agreement quota for the Wyckoff tract on February 2,
it used this additional opportunity to harvest another 729 pounds of geoduck at Wyckoff on
February 9 and 10.
C. Refunds
According to DNR, the ten auction bidders had varying degrees of success in harvesting
8 Because the Agreement did not allow geoduck harvesting on state holidays, Point Beals and
Wyckoff were likely closed on Martin Luther King, Jr. Day, a state holiday within this period.
6
No. 41428-7-II
their respective geoduck quotas from the Point Beals tract on the eight days that the tract was
open. International Shellfish harvested 5,976 pounds of geoduck, or 21 percent of its quota for
the tract under the Agreement. In contrast, Tri-State, another auction bidder, harvested 19,637
pounds of geoduck, or 70 percent of its quota for the tract. At the end of the contract period,
DNR issued partial refunds to International Shellfish and to the other auction bidders to reimburse
them for the contract days they had been "prohibited"9 from harvesting as a result of the Point
Beals temporary closure.
DNR calculated these refunds using the formula in subsection 11(d) of the Agreement.10
The formula required DNR to divide International Shellfish's auction bid ($167,101) by the
number of "legal harvest days" (48 days) in the contract term and then to multiply the resulting
figure by the number of "lost harvest days." CP at 66. Although subsection 11(d) did not define
"lost harvest days," DNR used "the number of days that [International Shellfish] did not have an
opportunity to harvest on an open tract"11 (Point Beals or Wyckoff), as opposed to the number of
days that International Shellfish did not have an opportunity to harvest at Point Beals specifically.
9 CP at 66.
10 Subsection 11(d) of the Agreement provided:
If the actions of a governmental agency, beyond the control of [International
Shellfish], its agents[,] or its employees, prohibit harvesting on legal harvest days
during the term of this contract, [International Shellfish] shall be entitled to a
refund of a portion of the [auction bid] equal to the amount of the [auction bid]
divided by the number of legal harvest days included within the term of this
contract multiplied by the number of lost harvest days.
CP at 66 (emphasis added).
11 CP at 57 (emphasis added).
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No. 41428-7-II
DNR calculated that International Shellfish had the opportunity to harvest on the Wyckoff tract
for the 15 days originally allotted under the Agreement,12 plus an additional 5 days13 that
International Shellfish had harvested when DNR extended Wyckoff's harvest period. Thus, DNR
determined that International Shellfish had 20 days of "harvest opportunity" on the Wyckoff tract.
CP at 57. DNR similarly determined that International Shellfish had 8 days of "harvest
opportunity" on the Point Beals tract (February 20, 23, and 24, and March 9-13), during which
International Shellfish had chosen to harvest on only 6 days and not to harvest on 2 days, March 9
and 12. CP at 58.
DNR added the Wyckoff and Point Beals "harvest opportunity" day totals together and
concluded that there had been 28 harvest days without closures during which International
Shellfish had the "opportunity" to harvest geoducks under the Agreement. CP at 58. To this
"harvest opportunity" total DNR added the two partial days that International Shellfish had
"elected" to harvest at Point Beals (January 5 and February 25) before the health department
temporarily closed that tract,14 for which DNR had compensated International Shellfish for the
12 DNR included the date that it had opened Wyckoff early; thus, that tract's 15-day harvest term
spanned January 6 to January 27, 2009, under the Agreement.
13 After the Agreement's original harvesting period ended on January 27, International Shellfish
harvested at the Wyckoff tract on the following five additional "opportunity" days: January 28-
30, February 9, and February 10. CP at 57, 83.
14 According to DNR, subsection 11(d) of the Agreement specifically stated that a "partial
closure" would not count as a "lost harvest day" if International Shellfish "elected" to harvest on
such partial days. CP at 58. Because International Shellfish had actually harvested geoduck at
Point Beals before the health department temporarily closed the tract on January 5 and February
25, DNR determined that International Shellfish had "elected" to harvest partial days on January 5
and February 25; therefore, DNR did not count these two partial harvest days in its calculation of
"lost harvest days." CP at 58. DNR did, however, compensate International Shellfish for the 710
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No. 41428-7-II
recalled geoducks harvested before the closures. CP at 58. DNR calculated that International
Shellfish had 30 days of harvest opportunity under the Agreement: 10 days at Point Beals,
including the 2 partial days on January 5 and February 25; and 20 days at Wyckoff.
Because International Shellfish had actually harvested or had the opportunity to harvest
geoducks on only 30 of the 48 total "legal harvest days" provided in the Agreement, DNR
determined that International Shellfish was entitled to a refund for the 18 "lost harvest days" that
it had been "prohibited" from harvesting at either tract when the health department closed the
Point Beals tract. CP at 58. Consequently, DNR refunded International Shellfish $62,662.88:
$3,481.27 for each of the 18 "lost harvest days." DNR added this $62,662.88 to the $2,896.80
that it had already paid International Shellfish for the 710 pounds of recalled geoduck harvested
on January 5 and February 25 before the temporary closures. Thus, DNR calculated that
International Shellfish was entitled to a total refund of $65,559.68 for the "lost harvest days" and
recalled geoducks.
In a letter dated April 16, 2009, DNR explained to International Shellfish the methodology
it (DNR) had used in calculating this $65,559.6815 net refund amount to which it was entitled.
The letter referred to three factors: (1) 18 "Days of Lost Opportunity," which the letter also
described as "days that you [International Shellfish] were not physically on tract"; (2) 710 pounds
of geoduck recalled based on health department concerns; and (3) the "Maximum Refund Total,"
referenced in subsection 11(e) of the Agreement. CP at 84 (emphasis added). In a May 8 letter,
pounds of unsalable geoduck harvested on those days.
15 DNR's April 16 letter appears to have erroneously stated that International Shellfish's refund
was $65,556.58, not the $65,559.68 stated elsewhere in the record. The parties, however, do not
dispute that International Shellfish received a total refund of $65,559.68 from DNR.
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No. 41428-7-II
International Shellfish disputed DNR's calculation, claiming it was entitled to a
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No. 41428-7-II
refund of either $93,994.29 for "27 lost harvest days"16 or $89,857.92 for the contract value of
the geoduck quota that it did not harvest from the Point Beals tract.17 CP at 85. In response,
DNR sent International Shellfish a second letter, dated May 20, stating that DNR had correctly
calculated International Shellfish's refund amount in its April 16 letter and that DNR did not owe
International Shellfish additional money.
III. Lawsuit
International Shellfish sued DNR for breach of contract, alleging that DNR had failed to
pay the refund amount owed under the Agreement. International Shellfish sought approximately
$25,000 in breach of contract damages or the amount proven at trial, prejudgment interest, and
reasonable attorney fees and costs under the Agreement. DNR answered that it did not owe
International Shellfish an additional refund.
DNR also moved for summary judgment, arguing that it had paid International Shellfish
the correct refund amount under the Agreement when it compensated International Shellfish for
18 "lost harvest days." The superior court granted DNR's summary judgment motion and
dismissed International Shellfish's complaint with prejudice. International Shellfish appeals.
16 International Shellfish provided the following formula: "Actual Harvest Days Lost (x) Avg.
Price per Contract Harvest Day" -- i.e., 27 lost days (x) $3,481.27/day = $93,994.29. CP at 85.
But International Shellfish did not explain how it calculated that it was entitled to a refund for "27
lost harvest days." CP at 85. During oral argument, however, International Shellfish noted it was
seeking a refund for only 23 days total -- or 5 additional days beyond the days for which it had
already received DNR refunds -- not the 27 days that it had previously alleged.
17 International Shellfish provided the following formula: "(Contract lbs (less) Harvest lbs) (x)
Contract $/lb" -- i.e., (28,000 lbs (less) 5,976 lbs) (x) $4.08/lb = $89,857.92. CP at 85.
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No. 41428-7-II
ANALYSIS
I. Agreement Refund Provision Not Ambiguous
International Shellfish argues that (1) subsection 11(d) of the Agreement was ambiguous
because it did not specifically define the term "lost opportunitydays"18; (2) "International Shellfish
intended to obtain a refund for the days not harvested based on closed tracts, here due to
[paralytic shellfish poisoning]"19; and (3) therefore, because there was a genuine issue of material
fact concerning the parties' intent for refunds for "lost opportunity days," the superior court erred
in granting DNR summary judgment.20 Br. of Appellant at 5. DNR responds that the language of
subsection 11(d) is not ambiguous when read in the context of the entire Agreement and that
DNR properly calculated International Shellfish's refund under the express terms of the
Agreement. We agree with DNR.
A. Standard of Review
We review summary judgment orders de novo, performing the same inquiry as the trial
18 We note that, although International Shellfish uses the term "lost opportunity days" in its brief,
the Agreement does not use this term. Br. of Appellant at 5. Instead, the Agreement uses the
term "lost harvest days." CP at 66.
19 Br. of Appellant at 7.
20 International Shellfish also contends that, if subsection 11(d) provided a refund only when it
was "prohibited" from harvesting on either tract, then all the auction bidders should have had the
"same" number of "lost opportunity days" because each had signed an agreement for 48 total
harvest days. Br. of Appellant at 3. International Shellfish does not, however, develop or support
this contention on appeal with argument in its Brief of Appellant, contrary to RAP 10.3(a)(6).
Therefore, we do not further address this contention. Cowiche Canyon Conservancy v. Bosley,
118 Wn.2d 801, 809, 828 P.2d 549 (1992).
12
No. 41428-7-II
court.21 Summary judgment is appropriate "if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law."22 A material fact is one on which the outcome of the litigation depends.23 We
consider all facts in the light most favorable to the nonmoving party.24
Summary judgment is proper if reasonable persons could reach but one conclusion after
reviewing all of the evidence.25 In the contract interpretation context, "'[s]ummary judgment is
not proper if the parties' written contract, viewed in light of the parties' other objective
manifestations, has two or more reasonable but competing meanings.'"26 But "'[i]f a contract is
unambiguous, summary judgment is proper even if the parties dispute the legal effect of a certain
provision.'"27 Here, we must decide whether subsection 11(d) of the Agreement is unambiguous
or whether it is subject to two or more reasonable interpretations.
21 Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004).
22 CR 56(c); see also Retired Pub. Employees Council v. Charles, 148 Wn.2d 602, 612, 62 P.3d
470 (2003).
23 Greater Harbor 2000 v. City of Seattle, 132 Wn.2d 267, 279, 937 P.2d 1082 (1997).
24 Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005).
25 Vallandigham, 154 Wn.2d at 26.
26 Go2Net, Inc. v. C I Host, Inc., 115 Wn. App. 73, 83, 60 P.3d 1245 (2003) (internal quotation
marks omitted) (quoting Hall v. Custom Craft Fixtures, Inc., 87 Wn. App. 1, 9, 937 P.2d 1143
(1997)).
27 Mayer v. Pierce County Medical Bureau, Inc., 80 Wn. App. 416, 420, 909 P.2d 1323 (1995)
(quoting Voorde Poorte v. Evans, 66 Wn. App. 358, 362, 832 P.2d 105 (1992)).
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No. 41428-7-II
B. Rules of Contract Interpretation
The goal of interpreting a written contract is to ascertain the parties' mutual intent.28
Washington follows the "objective manifestation" theory of contracts. Hearst Communications,
Inc. v. Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005). Under this approach, we
determine the parties' intent by focusing on the objective manifestations expressed in their
contract rather than on the parties' unexpressed subjective intentions. Hearst, 154 Wn.2d at 503.
We impute to the parties an intention that corresponds with the reasonable meaning of the words
used in their contract. Hearst, 154 Wn.2d at 503. We also give undefined words their ordinary,
usual, and popular meaning unless the entirety of the contract clearly demonstrates a contrary
intent. Hearst, 154 Wn.2d at 504; Nishikawa v. U.S. Eagle High, LLC, 138 Wn. App. 841, 849,
158 P.3d 1265 (2007). And we harmonize clauses that seem to conflict in an attempt to interpret
the contract in a manner that gives effect to all of the contract's provisions. Nishikawa, 138 Wn.
App. at 849.
Under the "context rule" announced in Berg,29 a court may admit extrinsic evidence to
show the parties' situation and the circumstances under which the parties executed a written
contract, for purposes of both ascertaining the parties' intent and construing the contract. Berg v.
Hudesman, 115 Wn.2d 657, 669, 801 P.2d 222 (1990). The context rule applies regardless of
whether a contract term is ambiguous or unambiguous. Berg, 115 Wn.2d at 669. Since Berg,
however, the Washington Supreme Court has further explained that surrounding circumstances
28 U.S. Life Credit Life Ins. Co. v. Williams, 129 Wn.2d 565, 569, 919 P.2d 594 (1996).
29 Berg v. Hudesman, 115 Wn.2d 657, 801 P.2d 222 (1990).
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No. 41428-7-II
and other extrinsic evidence are admissible only "'to determine the meaning of specific words and
terms used'" in a contract and not to "'show an intention independent of the instrument' or to
'vary, contradict or modify the written word.'" Hearst, 154 Wn.2d at 503 (quoting Hollis v.
Garwall, Inc., 137 Wn.2d 683, 695-96, 974 P.2d 836 (1999)). Therefore, if extrinsic evidence is
relevant to determining the parties' mutual intent (as opposed to one party's unexpressed
subjective intent about the meaning of a contract term), such extrinsic evidence may include (1)
the subject matter and objective of the contract, (2) all the circumstances surrounding the making
of the contract, (3) the parties' subsequent acts and conduct, and (4) the reasonableness of the
parties' respective interpretations. Hearst, 154 Wn.2d at 502.
When construing a written contract, we apply the following principles: (1) The parties'
intent controls, (2) we ascertain their intent from reading the contract as a whole, and (3) we will
not read ambiguity into a contract that is otherwise clear and unambiguous. Mayer, 80 Wn. App.
at 420. A contract provision is ambiguous "if its terms are uncertain or they are subject to more
than one meaning." Dice v. City of Montesano, 131 Wn. App. 675, 684, 128 P.3d 1253 (2006).
A contract provision, however, is not ambiguous simply because the parties suggest opposing
meanings; and we will not read ambiguity "'into a contract where it can reasonably be avoided.'"
Mayer, 80 Wn. App. at 421 (quoting McGary v. Westlake Investors, 99 Wn.2d 280, 285, 661
P.2d 971 (1983)). We also avoid interpreting a contract in a manner that would lead to absurd
results. Forest Mktg. Enters., Inc. v. State of Wash., Dep't of Natural Res., 125 Wn. App. 126,
132, 104 P.3d 40 (2005).
C. Subsection 11(d) Refund Provision
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No. 41428-7-II
International Shellfish asserts that (1) when it entered the Agreement, it understood
subsection 11(d) would provide a partial refund for any day that tract closures occurred; and (2) it
understood that the five additional days it had harvested at Wyckoff after DNR extended that
tract's harvest period were "optional," and, thus, they "would not count against its lost
opportunity days on Point Beals." Br. of Appellant at 4. International Shellfish also suggests
that, because it viewed the quality of harvesting opportunity at Point Beals greater than that at
Wyckoff, it would not have harvested those five additional days at Wyckoff had it known they
would reduce its total refund amount. Br. of Appellant at 4. International Shellfish, however,
does not base these assertions on any express language in the Agreement or on any evidence in
the record indicating the parties' mutual intent. Thus, these assertions reflect International
Shellfish's unexpressed subjective intentions, which are not relevant to contract interpretation
under the "objective manifestation" theory. Again, "the subjective intent of the parties is generally
irrelevant if the [parties'] intent can be determined from the actual words used" in their contract.30
Hearst, 154 Wn.2d at 504.
Moreover, International Shellfish's subjective views about the disparate qualities of
harvesting opportunities at Point Beals and Wyckoff are contradicted by the express terms of the
Agreement, which valued "lost harvest days" the same regardless of whether they occurred at
30 To the extent that we may look at extrinsic evidence to ascertain the parties' mutual intent, we
further note that International Shellfish and the other auction bidders each took advantage of the
opportunityto purchase additional quotas and to harvest additional days at the Wyckoff tract; this
fact is also evidence that the parties mutually intended the Agreement's refund provision to
pertain to the number of days that a particular tract of land was closed.
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No. 41428-7-II
Point Beals or Wyckoff.31 Contrary to International Shellfish's unexpressed subjective intentions,
the express language of subsection 11(d) did not entitle International Shellfish to a refund for
every day in the contract term that tract closures occurred. On the contrary, the relevant portion
of subsection 11(d) stated:
If the actions of a governmental agency, beyond the control of [International
Shellfish], its agents[,] or its employees, prohibit harvesting on legal harvest days
during the term of this contract, [International Shellfish] shall be entitled to a
refund of a portion of the [auction bid] equal to the amount of the [auction bid]
divided by the number of legal harvest days included within the term of this
contract multiplied by the number of lost harvest days.
CP at 66 (emphasis added). Under this provision, (1) International Shellfish was entitled to a
refund only for the contract period days that a governmental agency "prohibit[ed]" International
Shellfish from "harvesting"; and (2) DNR would calculate such refund by ascertaining the number
of "lost" harvest days. CP at 66. A plain reading of the dictionary definitions of "prohibited"32
and "lost"33 shows that International Shellfish was not "prohibited" from harvesting geoducks on
the days that it either actually harvested or had the opportunity to harvest (but did not actually
harvest) on either tract.
31 All "lost harvest days" have the same refund value under the Agreement because the formula
treats them all the same: Subsection 11(d) required DNR to calculate International Shellfish's
refund by dividing its auction bid ($167,101) by the total number of days included within the
contract (48) to arrive at the a refund amount for "lost harvest days." CP at 66.
32 Webster's Dictionary defines "prohibit" as: "to prevent from doing or accomplishing
something" or "to make impossible." Webster's Third New International Dictionary 1813 (2002).
33 "Lost" is the past participle of "lose"; the dictionary defines "lose" as "to suffer deprivation of."
Webster's at 1338. Webster's Dictionary defines the term "lost" as: "taken away or beyond
reach or attainment." Webster's at 1338.
17
No. 41428-7-II
International Shellfish, however, suggests that the Agreement conferred on it a right, even
an expectation, that it would harvest a particular number of days on each tract of land until
18
No. 41428-7-II
it reached its harvest quota for that tract.34 The Agreement's plain language does not support this
contention. On the contrary, nothing in subsection 11(d) modified the term "harvesting" to
suggest that it applied to specific tracts of land. CP at 66. This reading is also consistent with the
express language in section 235 and subsection 3(a)36 of the Agreement, which defined the term
"Property" on which International Shellfish could harvest geoducks as including both Point Beals
34 Although DNR's harvesting agreements set individual quotas that a particular bidder could
harvest from each tract, as mentioned above, these agreements neither stated nor guaranteed a
bidder a specific number of harvest days on each tract. Neither did these agreements create an
expectation that "lost harvest days" would be calculated by the number of days that a particular
tract of land was closed. Once a bidder reached its quota for an individual tract, the bidder could
no longer harvest geoduck on that tract, even if the bidder had remaining geoduck quota available
to harvest from the second tract of land identified in the Agreement. In such situations, the bidder
was effectively "prohibited" from harvesting under the Agreement, and it began accruing "lost
harvest days."
The Point Beals closure, thus, affected bidders differently and yielded a different number
of "lost harvest days," depending on how quickly each bidder harvested its quota from the
Wyckoff tract. Contrary to International Shellfish's suggestion that DNR did not uniformly apply
its refund formula or base such formula on the days that the bidders were "prohibited" from
harvesting, the bidders' various speeds in harvesting their Wyckoff quotas alone account for their
disparate "lost harvest days" and refund amounts. International Shellfish made no showing why
DNR's disparate "lost harvest day" calculations created a factual issue for trial.
35 Section 2 of the Agreement provided:
DNR agrees to sell to [International Shellfish], and [International Shellfish] agrees
to purchase and remove geoducks from the Property described in Clause 3. The
Property consists of one or more area(s) in which harvesting may take place.
CP at 61 (emphasis added).
36 Subsection 3(a), entitled "Property," also stated:
DNR agrees to grant to [International Shellfish] a nonexclusive right to
commercially harvest geoducks from [the] bedlands owned by the State of
Washington in the County(ies) listed in Exhibit A. An approximate description of
the bedlands is set forth in Exhibit B.
CP at 61 (emphasis added); see CP at 81 (Ex. A listing the "Property" as Point Beals and
Wyckoff).
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and Wyckoff. Consistent with these express sections, the Agreement as a whole treated the two
tracts of land as interchangeable resources, which DNR could substitute to meet various public
needs.37 In addition, section 2 expressly provided that International Shellfish was entitled to a
refund under section 11 if DNR's decision to change the harvest dates reduced the "total" number
of harvest days under the Agreement by more than 25 percent. CP at 61.
International Shellfish does not dispute that (1) Point Beals was open for 8 full days under
the Agreement; (2) it harvested at Point Beals for only 6 of the 8 days; (3) it harvested 2 partial
days at Point Beals on January 5 and February 25; or (4) it harvested 5 additional days at Wyckoff
beyond the 15 days originally allotted for the tract under the Agreement, after DNR "extended"
the tract's harvest period. But International Shellfish asserts it understood that the 5 additional
days at Wyckoff were "optional" and would not count against its "lost opportunity days" at Point
Beals. Br. of Appellant at 4. At oral argument, International Shellfish reiterated this argument
and added that it should be entitled to a refund for these five days. This argument fails.
It would be "absurd"38 to read the refund provision as entitling International Shellfish to a
refund for five additional "lost harvest days" at Wyckoff, during DNR's extension of the tract's
harvest period, because International Shellfish both actually harvested and retained the geoducks
that it harvested on these five additional days, presumably selling these geoducks for profit. A
refund for these days would effectively allow International Shellfish to have harvested geoducks
37 See Section 2 of the Agreement, giving DNR the right to "change the harvest dates or [the]
duration of [the] harvest" and the right to "increase or decrease the [h]arvest [quota]" for either
tract of land during the contract term. CP at 61.
38 See Forest Mktg. Enters., Inc., 125 Wn. App. at 132.
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No. 41428-7-II
free for five days, thus, giving International Shellfish a windfall from public funds that the
Agreement did not provide.39 Applying the rules of contract interpretation, we hold that
subsection 11(d) is not ambiguous when read in relation to the entire Agreement or under the
"context rule"40 and that the Agreement did not give International Shellfish a right, an
expectation, or a guarantee that it would harvest geoduck for a particular number of days on
either tract.
II. Refund Calculation
We also hold that the superior court did not err in ruling that DNR properly calculated
International Shellfish's refund amount under the Agreement. As we have already explained,
DNR properly determined that International Shellfish lost 18 harvest days under the Agreement,
which, when inserted into the formula, provided a refund of $62,662.88. Adding the $2,896.80
that DNR paid International Shellfish for recalled geoduck harvested on January 5 and February
25, yielded a total refund of $65,559.68 to which International Shellfish was entitled under the
Agreement, an amount International Shellfish does not dispute that it has already received from
DNR. Thus, the superior court did not err in ruling that DNR did not owe International
39 Article VIII, section 5 of the Washington Constitution provides: "The credit of the state shall
not, in any manner be given or loaned to, or in aid of, any individual, association, company or
corporation." As our Supreme Court has stated, this provision "'prevent[s] state funds from
being used to benefit private interests where the public interest is not primarily served.'" CLEAN
v. State, 130 Wn.2d 782, 797, 928 P.2d 1054 (1996) (quoting Japan Line, Ltd. v. McCaffree, 88
Wn.2d 93, 98, 558 P.2d 211 (1977)). Thus, it does not appear that DNR could legally provide
such additional "refunds" to International Shellfish outside the Agreement.
40 Because we hold that subsection 11(d) is unambiguous when read in the context of the entire
Agreement, we do not address International Shellfish's argument that we must construe any
ambiguity in subsection 11(d) against DNR.
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No. 41428-7-II
Shellfish an additional refund amount and in granting summary judgment to DNR.
We affirm.
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.
Hunt, J.
We concur:
Armstrong, P.J.
Quinn-Brintnall, J.
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