Court of Appeals Division III
State of Washington

Opinion Information Sheet

			

                                                                               FILED

                                                                           Feb. 14, 2012

                                                                    In the Office of the Clerk of Court
                                                                  WA State Court of Appeals, Division III

       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JOHN LEPIANE and RUTH                                     No.  29649-1-III
LEPIANE, husband and wife,                      )
                                                )
                      Respondents,              )
                                                )
       v.                                       )         Division Three
                                                )
IRREANTUM, LLC, a Washington                    )
limited liability company; MARK W.              )
GILBERT and SUSAN G. GILBERT,                   )
husband and wife, individually and the          )
marital community comprised thereof,            )
                                                )
                      Appellants,               )
                                                )
WG NISSAN, LLC, a Washington                    )
limited liability company,                      )
                                                )         UNPUBLISHED OPINION
                      Defendant.                )
                                                )

       Siddoway, J.  --  Mark and Susan Gilbert and Irreantum LLC appeal the trial 

court's summary judgment determination that the statute of frauds did not bar John and 

Ruth Lepiane's action to collect unpaid rent and utilities under an assigned lease.  Finding 

no error, we affirm. 

No. 29649-1-III
Lepiane v. Irreantum LLC

                      FACTS AND PROCEDURAL BACKGROUND

       The real property at issue in this case is commercial property located on West 

Poplar in Walla Walla, at which auto dealerships have been operated for many years.  

The property was owned at all relevant times by John and Ruth Lepiane.  For several 

years leading up to the 2008-09 time frame at issue, the property had been occupied by 

Irreantum LLC, which is owned by Mark and Susan Gilbert.  Irreantum leased the 

property under an assignment of lease entered into in June 2006. 

       Irreantum vacated the property at the end of November 2008, a year before the end 

of the lease term, reportedly on account of a misunderstanding as to when the lease 

expired. The Lepianes were unable to re-let the property during the remainder of the 

lease term.

       The Lepianes commenced this action against Irreantum and WG Nissan LLC, the

prior lessee who had assigned its interest to Irreantum, and against the Gilberts based on 

their guarantee of Irreantum's lease obligations.  The collection action brought to light 

alleged errors and deficiencies in the controlling documents that Irreantum and the 

Gilberts argue render Irreantum's lease obligation unenforceable under the statute of 

frauds.

       There is no question as to the adequacy of the underlying lease under the statute of 

frauds.  It was entered into between the Lepianes and Tri-City Nissan Inc. in 2004.  Its 

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Lepiane v. Irreantum LLC

term was for five years commencing on December 1, 2004 and ending on November 30, 

2009. Within the body of the lease, the subject property was identified as "the building 

and real property located at 715 West Poplar, Walla Walla, Washington, more 

particularly described in Exhibit A, attached hereto and made a part hereof by this 

reference."  Clerk's Papers (CP) at 32. Exhibit A provided a full legal description of the 

property by lot numbers, block number, addition, city, county, and state.  

       Fifteen months later, Tri-City Nissan was acquired by WG Nissan LLC and on

March 8, 2006, Tri-City Nissan assigned its interest in the lease to WG Nissan. Here, 

too, the adequacy of the legal description is not challenged.  The assignment of the lease

correctly described the underlying lease by its date and parties and incorporated it by 

reference.  

       Within a matter of months, WG Nissan wished to assign its interest in the lease to 

the Gilberts, and on June 27, 2006, the Lepianes executed a document entitled "Consent 

of Lessor to Assignment," in which they agreed to WG Nissan assigning the 2004 lease to 

Mark and Susan Gilbert subject to the Gilberts' obligation to perform the lessee's 

obligations and other terms.  The consent also permitted assignment of the lease to 

Irreantum LLC, "provided that Mark W. Gilbert and Susan G. Gilbert . . . execute a 

personal guarantee therefor."  CP at 43.  

       It is with this consent and an assignment of lease agreement entered into a few 

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Lepiane v. Irreantum LLC

days later that deficiencies with the documentation begin.  Irreantum1 points out that in 

describing the 2004 lease, the consent identified Tri-City Nissan as "Tri-City Nissan, 

LLC."  CP at 43 (emphasis added).  This was an error.  Tri-City Nissan was a 

Washington corporation, not a limited liability company, and as noted above, was 

correctly identified in the lease as Tri-City Nissan Inc.  

       A few days later, on June 30, 2006, WG Nissan and Irreantum entered into an 

agreement entitled "Assignment and Assumption of Lease." Irreantum points out that in

this agreement, WG Nissan LLC was identified by its correct name and was correctly 

identified as "Assignor," but the assignment then proceeded to describe the rights being 

assigned as "the Assignor's right, title, and interest in the Lease dated December 1, 2004 

("Lease"), a copy of which is attached hereto and by this reference incorporated herein, 

made and executed by Assignor, as Lessee, and John and Ruth Lepiane . . . as Lessor, 

leasing the premises described as 715 West Poplar Avenue, Walla Walla." CP at 62 

(emphasis added).  Irreantum correctly notes that WG Nissan was not the lessee under the 

original 2004 lease; Tri-City Nissan was.  While the assignment states that a copy of the 

underlying lease was attached, it is undisputed that there were no attachments.

       In accordance with the earlier consent by the Lepianes, the Gilberts also executed 

       1 In describing the arguments and assertions of appellants Irreantum and the 
Gilberts hereafter, we refer to them collectively as "Irreantum."

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Lepiane v. Irreantum LLC

a personal guaranty on June 30.  The Gilberts point out that the guaranty misidentified Tri-

City Nissan as a limited liability company, obligating them to "personally guarantee the 

performance of that certain Lease dated December 1, 2004 between John and Ruth 

Lepiane, husband and wife, as Lessors, and Tri-City Nissan LLC, as Lessee, and 

Irreantum, LLC, as Assignee." CP at 41 (emphasis added).

       Irreantum and the Gilberts defended against the collection action on the basis that 

in light of these flawed identifications of the underlying lease, the agreements on which 

the Lepianes rely for their claims violate the statute of frauds.  In response, the Lepianes 

argued that no one was confused by the misidentification of parties to the underlying 

lease and that the errors, being scrivener's errors, could be corrected through reformation.  

They also argued that even if the assignment of lease failed to comply with the statute of 

frauds, the parties' part performance nonetheless made the lease and guaranty obligations

enforceable.  

       The parties filed cross motions for summary judgment on the statute of frauds 

issues, the only matter ultimately in dispute between them. The trial court granted 

summary judgment on the issue of liability in favor of the Lepianes.  The parties later

stipulated to the damage amount, reserving Irreantum's and the Gilberts' right to appeal 

liability.  

       Irreantum argues on appeal that the trial court erred in failing to recognize that the 

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No. 29649-1-III
Lepiane v. Irreantum LLC

statute of frauds bars the Lepianes' claims because (1) the full legal description of the 

subject property was not included in any of the agreements to which they are parties and 

(2) the legal description attached to the 2004 lease was not effectively incorporated by 

reference due to the documents' consistent misidentification of that lease.

                                         ANALYSIS

       Summary judgment is appropriate only 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."  CR 56(c); McGowan v. State, 148 Wn.2d 278, 289, 60 

P.3d 67 (2002).  This court engages in the same inquiry as the trial court in reviewing a 

summary judgment order, reviewing it de novo and viewing all evidence in the light most 

favorable to the nonmoving party.  Trimble v. Wash. State Univ., 140 Wn.2d 88, 92-93, 

993 P.2d 259 (2000).  No material facts are in dispute.  We address the enforceability of 

the agreements and the effect of part performance in turn.

                                               I

       "Every conveyance of real estate, or any interest therein, and every contract 

creating or evidencing any encumbrance upon real estate, shall be by deed." RCW 

64.04.010.  Every deed "shall be in writing, signed by the party bound thereby, and 

acknowledged." RCW 64.04.020.  It is the unusually strict, but well-settled, rule in 

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No. 29649-1-III
Lepiane v. Irreantum LLC

Washington that real estate subject to a conveyance may not be identified by its street 

address; in the case of platted real property, a contract or agreement of conveyance must 

contain, in addition to the other requirements of the statute, the description of property by 

the correct lot number, block number, addition, city, county and state.  Martin v. Seigel, 

35 Wn.2d 223, 229, 212 P.2d 107 (1949); Key Design, Inc. v. Moser, 138 Wn.2d 875, 

883-84, 983 P.2d 653 (1999).  Washington's real property statute of frauds requires that

parties to a conveyance properly and adequately describe it, "so that courts may not be 

compelled to resort to extrinsic evidence in order to find out what was in the minds of the 

contracting parties."  Martin, 35 Wn.2d at 228.

       The requirement to properly and adequately describe the property does not require 

the complete legal description to appear in the body of the conveyance; the technique of 

incorporation by reference allows a party to satisfy the statute of frauds by several 

documents.  The statute is satisfied if the contract or deed for the conveyance of land

contains either a description of the land sufficiently definite to locate it without recourse 

to oral testimony, or a reference to another instrument which does contain a sufficient 

description.  Bartlett v. Betlach, 136 Wn. App. 8, 14, 146 P.3d 1235 (2006) (quoting 

Berg v. Ting, 125 Wn.2d 544, 551, 886 P.2d 564 (1995)), review denied, 162 Wn.2d 

1004 (2007).  Nor is it necessarily a problem if the conveyance purports to include the 

incorporated document as an attachment, but, through oversight, does not.  In Knight v. 

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No. 29649-1-III
Lepiane v. Irreantum LLC

American National Bank, 52 Wn. App. 1, 5, 756 P.2d 757, review denied, 111 Wn.2d 

1027 (1988), for example, the description of the property covered by a lease was included 

in a site plan that the lease identified and indicated was attached as its exhibit B.  No 

exhibit B was ever appended to the lease.  Nonetheless, because the lease referred to the 

site plan, "parol evidence is not necessary to connect the two writings."  Knight, 52 Wn. 

App. at 5.

       This case presents a unique incorporation issue in that the underlying lease 

contains an adequate legal description and was intended to be incorporated by reference

into the assignment, but the lease itself was misdescribed.  Irreantum takes the position 

that because the statute of frauds generally prohibits recourse to oral testimony to locate 

the land, and because the assignment's attempt to identify and incorporate the lease 

instead describes a lease that does not exist, the link between the assignment and the 

underlying lease cannot be established, causing the assignment to fail.  

       The Lepianes contend, however, that the undisputed evidence supports reformation 

of the assignment to correct for minor scrivener's errors, before assessing its validity 

under the statute of frauds.  Berg, 125 Wn.2d at 553-54 (contracts subject to the statute of 

frauds may be reformed where a scrivener's error or mutual mistake leads to the deficient 

description).  Typically, it is the inadequate legal description itself that is reformed where 

the deficiency is due to a mistake by the scrivener.  Wilhelm v. Beyersdorf, 100 Wn. App. 

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No. 29649-1-III
Lepiane v. Irreantum LLC

836, 843-44, 999 P.2d 54 (2000).  But reformation is equally available to correct a 

deficient identification of a document that the parties intended to incorporate for its 

proper and adequate description of the property.

       A party seeking reformation must establish by clear and convincing evidence facts 

that warrant allowance of the remedy.  Saterlie v. Lineberry, 92 Wn. App. 624, 628, 962 

P.2d 863 (1998).  The party seeking reformation need only show that the parties had 

agreed to accomplish a particular object by the instrument and that the instrument, as 

executed, is insufficient to execute their intention.  Id. 

       In deciding the cross motions for summary judgment, the trial court had before it 

the 2004 lease between the Lepianes and Tri-City Nissan, which contained an adequate 

legal description.  Mr. Lepiane identified it as the underlying lease intended to be 

assigned to, and assumed by, Irreantum in June 2006.  While Irreantum posited the 

theoretical possibility of a different lease (a hypothetical lease to Tri-City Nissan LLC) in 

arguing the statute of frauds issue, it offered no evidence to counter the Lepianes' proof 

that the West Poplar property was subject to the 2004 lease in June 2006 and it was

therefore the only lease to which the assignment and associated documents could refer.  

From this undisputed evidence, the trial court could find that there was no genuine issue 

of fact that reference in the parties' agreements to Tri-City Nissan LLC was a scrivener's 

error and an intended reference to Tri-City Nissan Inc.; that reference in their agreements

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No. 29649-1-III
Lepiane v. Irreantum LLC

to "the Lease dated December 1, 2004 . . . made and executed by Assignor, as Lessee,

and John and Ruth Lepiane, husband and wife, as Lessor," was a scrivener's error and an 

intended reference to the 2004 lease under which Tri-City Nissan Inc. was lessee; and 

that the agreements should be reformed to reflect these corrections.  Thus reformed, the 

reference to the 2004 lease in the assignment was a sufficient incorporation of its 

adequate legal description, notwithstanding the parties' failure to attach it.

                                               II

       Even if the parties' agreements were inadequate under the statute of frauds, the 

equitable doctrine of part performance would remove the assignment from the statute's

operation.  "A lease that is deficient under the statute of frauds for lack of a legal 

description may nevertheless be saved by part performance."  Losh Family, LLC v. 

Kertsman, 155 Wn. App. 458, 465, 228 P.3d 793 (2010).  The three factors or elements 

examined to determine if there has been part performance of the agreement so as to take it 

out of the statute of frauds are (1) delivery and assumption of actual and exclusive 

possession; (2) payment or tender of consideration; and (3) the making of permanent, 

substantial and valuable improvements, referable to the contract.  Berg, 125 Wn.2d at

556.  In addition, where specific performance of the agreement is sought, the contract 

must be proven by evidence that is clear and unequivocal and which leaves no doubt as to 

the terms, character, and existence of the contract.  Id.

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Lepiane v. Irreantum LLC

       The Lepianes presented undisputed evidence that Irreantum paid rent, utilities and 

property taxes for more than two years.  The sufficiency of that part performance 

presented no issues of credibility.  The trial court's grant of summary judgment was 

based in part on its conclusion that "[t]here certainly was part performance herein." CP 

at 98.  Irreantum argues that there is no evidence of its making improvements on the 

property, however, and that we should reject the authority cited by the Lepianes -- the 

opinion of Division One of our court in Ben Holt Industries, Inc. v. Milne, 36 Wn. App. 

468, 675 P.2d 1256 (1984) -- that the making of improvements is not essential to a finding 

of part performance.  Reply Br. of Appellants at 6-8.

       But controlling decisions of our Supreme Court similarly hold that it is not 

essential that a party arguing part performance prove that it has made improvements to 

the property.  The court has never set forth a rigid requirement that even two of the three 

factors be present, although usually where part performance is found, two of the three 

factors are present.  Berg, 125 Wn.2d at 557-58.  Rather, "'the court's overriding concern 

is precisely directed toward and concerned with a quantum of proof certain enough to 

remove doubts as to the parties' oral agreement.'" Id. at 558 (emphasis omitted) (quoting 

Miller v. McCamish, 78 Wn.2d 821, 828-29, 479 P.2d 919 (1971)).  Where relief is 

granted from the statute of frauds, it is for "'the specific reason that to enforce the statute 

would be to defeat the very purpose for which it was enacted -- i.e., the prevention of 

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No. 29649-1-III
Lepiane v. Irreantum LLC

fraud arising from uncertainty inherent in oral contractual undertakings.'"  Id. (emphasis 

omitted) (quoting Miller, 78 Wn.2d at 829).  Ultimately, the three factors "serve an 

evidentiary function allowing the court to be certain the contract existed and its terms."  

Losh, 155 Wn. App. at 466 (citing Miller, 78 Wn.2d at 826).  

       As a general rule, the presence of all three factors presents a "strong case for the 

application of the part performance doctrine."  Pardee v. Jolly, 163 Wn.2d 558, 567, 182 

P.3d 967 (2008).  "The making of substantial and valuable improvements [to the leased 

property] is the strongest factor, while payment alone is the weakest."  Losh, 155 Wn. 

App. at 467 (citation omitted).  However, the "existence of improvements [is] not 

essential to proving part performance so long as the acts relied upon to prove part 

performance unmistakably point to the existence of the claimed agreement."  Id.  The 

crucial inquiry is whether the facts establish that "'the parties acted upon the instrument 

as a lease.'"  Id. at 466 (quoting Tiegs v. Watts, 135 Wn.2d 1, 16, 954 P.2d 877 (1998)).

       The evidence that Irreantum took exclusive possession of the property and 

performed its obligations to pay rent, property taxes, and utilities up until the end of 

November 2008 is sufficient evidence of part performance under controlling cases.  

Irreantum errs in arguing that it is not.  

                                               III

       The Lepianes seek an award of their attorney fees incurred on appeal. RAP 

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No. 29649-1-III
Lepiane v. Irreantum LLC

18.1(a) authorizes an award of fees on appeal if provided for by applicable law.  Attorney 

fees may be awarded if authorized by contract.  Bowles v. Dep't of Ret. Sys., 121 Wn.2d 

52, 70, 847 P.2d 440 (1993).

       The assigned lease agreement provides that in "any action brought by way of 

enforcement or interpretation of this lease . . . the prevailing party hereunder shall be 

entitled to a reasonable sum for and as attorney fees and costs incurred." CP at 34.  The 

Lepianes have prevailed.

       We affirm the trial court's order and judgment and award the Lepianes their

attorney fees on appeal upon compliance with RAP 18.1(d).

       A majority of the panel has determined that this opinion will not be printed in the 

Washington Appellate Reports but it will be filed for public record pursuant to RCW 

2.06.040.

                                                __________________________________
                                                Siddoway, J.

WE CONCUR:

___________________________________
Korsmo, A.C.J.

___________________________________
Brown, J.

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