[WSBARP] Defensive Equitable Estoppel vs. Offensive Promissory Estoppel - Can A Commercial Lease Guarantor Be Held Liable After Many Lease Term Extensions Not No Extension of the Guranty And No Legal and No Notary?

Wed Dec 11 10:53:47 PST 2019

Why is the landlord estopped?  What action or inaction has he taken that the tenant relied on?

Andrew Hay
Hay & Swann PLLC
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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Rowley, Rob
Sent: Wednesday, December 11, 2019 10:13 AM
To: WSBA Real Property Listserv
Subject: [WSBARP] Defensive Equitable Estoppel vs. Offensive Promissory Estoppel - Can A Commercial Lease Guarantor Be Held Liable After Many Lease Term Extensions Not No Extension of the Guranty And No Legal and No Notary?

Defensive equitable estoppel protects the tenant who takes possession/does improvements from a landlord who would give a notice to terminate. Offensive promissory estoppel allows for the landlord to obtain damages.

The question is what are the landlord's damages (if any) where the tenant properly raises the defensive equitable estoppel and vacates the property?

To allow a landlord to collect damages for the entire lease term would render equitable estoppel meaningless.

How about as to the guarantor?

Rob

------

Equitable estoppel is properly applied "as a `shield' or defense, while promissory estoppel can be used as a `sword' in a cause of action for damages." Harberd v. City of Kettle Falls, 84 P.3d 1241, 1252 (Div. 3, 2004); State ex rel. D.R.M. v. Wood, 109 Wash.App. 182, 196, 34 P.3d 887 (2001)<https://scholar.google.com/scholar_case?case=972222103401496970&q=harberd&hl=en&as_sdt=4,48> (quoting Klinke v. Famous Recipe Fried Chicken, Inc., 94 Wash.2d 255, 259, 616 P.2d 644 (1980)<https://scholar.google.com/scholar_case?case=14702378598599616897&q=harberd&hl=en&as_sdt=4,48>).

 In Washington, the statute of frauds applies to promissory estoppel claims. Greaves v. Med. Imaging Sys., Inc., 124 Wn.2d 389, 879 P.2d 276 (1994) (rejecting Restatement (Second) of Contracts § 139 (1981), which would allow enforcement of an oral promise despite the statute of frauds if reliance is foreseeable and injustice can be avoided only by enforcement). RCW 64.04.010 provides that "[e]very conveyance of real estate, or any interest therein, and every contract creating or evidencing any encumbrance upon real estate, shall be by deed."

On Wed, Dec 11, 2019 at 9:45 AM Bryce Dille <Bryce at dillelaw.com<mailto:Bryce at dillelaw.com>> wrote:
I agree there is also the doctrine of part performance to take out of operation of S/F.In my experience most judges are very reluctant in cases of this type to use a technicality (Which is what most judges would consider this defense ) to create a month to month tenancy where for years the parties have considered it as a lease for years. What if shoe was on the other foot and LL decided to give 30 days notice to terminate the tenancy
And tenant considered it a long term lease?
From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Rob Wilson-Hoss
Sent: Wednesday, December 11, 2019 9:23 AM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] Can A Commercial Lease Guarantor Be Held Liable After Many Lease Term Extensions Not No Extension of the Guranty And No Legal and No Notary?

1.     Many strong cases that say that with an unnotarized, unrecorded lease, it can still be valid for the sole reason that the parties have treated it as valid for years. Don’t even require what we are used to thinking about with part performance tests. Just, length of time they treated it as controlling. I am pretty sure some of them also deal with inadequate legal descriptions.
2.     There may well be some reason that the lease guarantee itself, as a separate contract, is not also consecrated by time. I don’t know enough about guarantee law to speculate.

Rob

“Success consecrates the most offensive crimes.” Seneca the Elder.

Robert D. Wilson-Hoss
Hoss & Wilson-Hoss, LLP
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Rowley, Rob
Sent: Wednesday, December 11, 2019 8:53 AM
To: WSBA RPPT <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Can A Commercial Lease Guarantor Be Held Liable After Many Lease Term Extensions Not No Extension of the Guranty And No Legal and No Notary?

Assume long term commercial lease signed by sophisticated landlord and sophisticated corporate tenant who also signs as guarantor (spouse doesn't sign).  Lease was never notarized nor contain a legal description.  In my humble opinion it converted to a month to month tenancy after the first year.

Assume several lease term extensions/estoppel certificate (no legal and no notary) between landlord and corporate tenant but no new personal guaranties.  Landlord claims it terminates many years in the future.

I'm aware of RCW 64.04.010 and case law as to legal description requirements.  Read Stoebuck's Deskbook.

Landlord is attempting to use offensive equitable estoppel and breach of warranty of authority (IMHO no such cause of action) to revive the lease beyond a month to month tenancy. At best they could recover damages (if any) under promissory estoppel for breach of the month to month tenancy.

Defenses? Arguments?

--
Robert R. Rowley
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Robert R. Rowley
Attorney & Counselor At Law
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509.252.5074  m: 509.994.1143
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509.928.3084
a:
7 S Howard St, Ste 218, Spokane, WA 99201
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Practice concentrated on business, real estate and general legal matters in Washington and Idaho. NOTICE: The contents of this message and any attachments may be protected by the attorney-client privilege, work product doctrine or other applicable protections. If you are not the intended recipient or have received this message in error, please notify the sender and promptly delete the message. Thank you for your assistance. DISCLAIMER: You should recognize that responses provided by e-mail means are akin to ordinary telephone or face-to-face conversations and do not reflect the level of factual or legal inquiry or analysis which would be applied in the case of a formal legal opinion. A formal opinion may very well reach a different conclusion.

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