No. 26759-4-II.The Court of Appeals of Washington, Division Two.
Filed: February 22, 2002. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION.
Appeal from Superior Court of Thurston County, No. 93-2-02348-8, Hon. Christine A. Pomeroy, November 17, 2000, Judgment or order under review.
Counsel for Appellant(s), Steven W. Davies, Comfort Davies Comfort, Ste. 200, 1901 65th Ave.W., Tacoma, WA 98466.
Counsel for Respondent(s), Stephen J. Hosch, Hosch Law Office, 8315 Rhondo St SW, Olympia, WA 98512-7548.
ARMSTRONG, C.J.
Craig Peck sold a six-acre lot to James and Patricia Walton. In the purchase and sale agreement, the Waltons agreed to deed four of the six acres back to Peck after closing. But the final real estate contract did not contain this agreement. Approximately six years later, when the Waltons had still not conveyed the four acres back to Peck, the parties executed a new agreement that required Peck to segregate the property. Still, the parties could not agree on whether Peck had segregated the property, and Peck sued on the segregation agreement. We ultimately held that the contract was void because the parties had not agreed on the meaning of segregation. On remand, Peck amended his complaint, seeking in part to foreclose the real estate contract. The trial court ordered the Waltons to pay the amount due on the real estate contract and dismissed the remaining claims. Both parties appeal. The Waltons argue that the statute of limitations bars Peck’s foreclosure claim. We agree. Accordingly, we reverse Peck’s judgment for the balance due on the real estate contract.
FACTS
Craig Peck owned a six-acre lot in Thurston County. Two acres lie between a lake and a proposed road, and four acres lie on the upland side of the road. In 1985, Peck decided to sell the two lakeside acres to James and Patricia Walton and retain the four upland acres. But the parties learned that the two acres could not be sold as a separate parcel. Thus, they executed an addendum to the purchase and sale agreement in which the Waltons agreed to purchase the entire lot and deed the four upland acres back to Peck after closing. But the agreement to deed back four acres was not in the real estate contract, which recited simply a sale of the entire six acres.
The Waltons stopped paying on the real estate contract in 1991.[1] By 1992, the property had not yet been divided, and the parties were in dispute. In October 1992, they executed a new agreement to settle the dispute. The Waltons agreed to sign a quitclaim deed for the four acres and leave it with their attorney. The attorney was authorized to release the deed to Peck `upon approval of all aspects of the segregation of the subject property by Thurston County on or before twelve (12) months from the date of full and complete execution of this document.’ CP at 353. Peck was responsible for `segregating’ the property.
The Waltons agreed to buy Peck’s interest in the property for $13,400 if he did not complete the segregation within 12 months. Peck did not subdivide the property under Chapter 58.17 RCW. Rather, he caused the county assessor to divide the property into two tax lots. Meanwhile, the City of Lacey was in the process of annexing the property. As part of the annexation, the City required the Waltons to execute a dedication deed for a public street through the property. Peck believed that this process divided the property into two separate parcels. After the City completed the annexation, Peck demanded the quitclaim deed. The Waltons withheld the deed because Peck had not subdivided the property.
Peck sued for breach of the 1992 agreement, seeking specific performance and damages. Although the trial court found that the term `segregation’ had different meanings to the parties, the court ruled that the agreement was enforceable and ordered the Waltons to hand over the quitclaim deed. The Waltons appealed. We reversed the trial court in an unpublished opinion, holding that there was no contract because the parties had not agreed on the meaning of `segregation.’
Peck returned to the superior court where he amended his complaint and sought either quiet title in the four acres or foreclosure under the real estate contract. He also alleged that the Waltons and the City of Lacey misrepresented that the property would be legally subdivided through the annexation process. The trial court entered a summary judgment against Peck on his quiet title and misrepresentation claims. The court specifically rejected Peck’s argument that it could admit extrinsic evidence to show that the 1985 real estate contract incorporated the parties’ intent to divide the property. But the trial court ordered foreclosure on the real estate contract, ruling that the statute of limitations did not bar the claim because it related back to the claims alleged in the original 1993 complaint. The court then quieted title to the four acres in the Waltons and ordered them to pay the amount due, with interest, under the real estate contract. The court awarded Peck his attorney fees.
Both parties appeal.
ANALYSIS
Peck appeals the trial court’s summary judgment on his quiet title and misrepresentation claims. We review a summary judgment de novo, engaging in the same inquiry as the trial court. Wilson v. Steinbach, 98 Wn.2d 434, 437, 656 P.2d 1030 (1982). Summary judgment is proper if no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. CR 56(c); Wilson, 98 Wn.2d at 437. The court construes the facts and all reasonable inferences in the light most favorable to the nonmoving party. Wilson, 98 Wn.2d at 437. The Waltons argue that the statute of limitations barred Peck’s foreclosure claim. Whether a statute of limitations applies is also a question of law that this court reviews de novo. Ellis v. Barto, 82 Wn. App. 454, 457, 918 P.2d 540 (1996).
I. Quiet Title
Peck argues that the trial court erred by dismissing his quiet title action on summary judgment. He contends that the trial court should have considered extrinsic evidence to interpret the 1985 real estate contract. He wanted the court to consider the parties’ original intent to divide the property after the sale and their actions before and after closing. Based on this evidence, Peck argues that he is entitled to an equitable interest in the four acres.
Absent accident, fraud, or mistake, a court will not admit extrinsic evidence to add to, subtract from, vary, or contradict an `integrated’ contract that is valid, complete, and unambiguous. Berg v. Hudesman, 115 Wn.2d 657, 670, 801 P.2d 222 (1990). A contract is `integrated’ if the parties intended the writing to be a final expression of the terms of their agreement. Berg, 115 Wn.2d at 670. Even if a contract is integrated, a court may admit extrinsic evidence `as to the entire circumstances under which the contract was made, as an aid in ascertaining the parties’ intent.’ Berg, 115 Wn.2d at 667. Thus, a court may admit extrinsic evidence to help understand the terms of a contract, but not to change or add terms.
Peck asked the trial court to rule that the real estate contract included the parties’ separate agreement to divide the property after the sale. But the contract states nothing about this agreement. Peck does not challenge the trial court’s conclusion that the real estate contract was integrated and complete. The evidence Peck sought to use would not have clarified any provision of the real estate contract. Rather, it would have added an entirely new provision to the contract — the agreement to reconvey. Berg does not go so far. The trial court did not err by refusing to consider this extrinsic evidence.
II. Misrepresentation
Peck also argues that the trial court erred by dismissing his misrepresentation claim on summary judgment. He argues that he presented enough evidence to survive the summary judgment motions.
A plaintiff proves an intentional misrepresentation claim by establishing that: (1) the defendant made a statement of fact; (2) the fact was material; (3) the statement was false; (4) the defendant knew that the statement was false; (5) the defendant intended that the plaintiff rely upon the statement; (6) the plaintiff did not know that the statement was false; (7) the plaintiff relied on the statement; (8) the plaintiff had a right to rely on the statement; and (9) the plaintiff suffered damages by relying on the statement. Hoffer v. State, 110 Wn.2d 415, 425, 755 P.2d 781 (1988). Peck contends that the Waltons misrepresent[ed]: (1) their obligation to divide the property outside of closing; (2) that the additional cash sum of $13,497.46 and bank debt related to the full six acres; (3) their cooperation in the annexation process by taking away a power of attorney relied upon by the plaintiff and the City of Lacey; and (4) their statements that they knew the plaintiff would never be able to divide the property in one year. Appellant’s Brief at 23.
But Peck did not rely on any of these statements, even if true, when he agreed to sell the property. The statements are no more than the Waltons’ responses during the litigation to Peck’s claims. Moreover, Peck did not allege misrepresentation based on these facts in his complaint. In the complaint, he alleged that the Waltons and the City of Lacey misrepresented that the property would be legally subdivided through the annexation process. The Waltons maintain that they never gave Peck any instructions on how to subdivide the property. And Peck presented nothing to the trial court to show how the Waltons misled him about the effect of the annexation. We affirm the summary judgment on Peck’s misrepresentation claim.
III. Statute of Limitations
The Waltons argue that the six-year statute of limitations barred Peck’s foreclosure claim. See RCW 4.16.040(1). They argue that the trial court erred by finding that this claim related back to the causes of action in Peck’s original complaint. We review a trial court’s ruling on relation back for an abuse of discretion. Foothills Dev. Co. v. Clark County Bd. of County Comm’rs, 46 Wn. App. 369, 374, 730 P.2d 1369
(1986).
Peck’s foreclosure cause of action arose in 1991 when the Waltons stopped paying on the real estate contract. Peck filed his amended complaint in 1999, long after the statute of limitations had run. But if the foreclosure claim `arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading,’ then it relates back to the date of the original complaint. CR 15(c).
Courts liberally construe CR 15(c) to find that a cause of action relates back if the amendment will not disadvantage the defendant and the plaintiff did not delay the amendment in bad faith. Schwartz v. Douglas, 98 Wn. App. 836, 840, 991 P.2d 665, review denied, 141 Wn.2d 1003
(2000).
Peck’s original complaint alleged only a breach of the parties’ 1992 agreement. In fact, the complaint did not even mention the 1985 contract or the purchase and sale transaction. Peck argues, however, that his claims regarding the 1985 contract relate back because, if not for the 1985 transaction, the parties never would have executed the 1992 agreement. We disagree. CR 15(c) requires more than some connection between the subjects of the original and amended complaints. The new cause of action must arise from the same transaction that was the subject of the original complaint. Here, rather obviously, the 1985 transaction did not arise from the parties’ 1992 agreement.
Accordingly, the trial court erred in ruling that Peck’s foreclosure claim survived the running of the statute of limitations. The court should have granted the Waltons’ summary judgment motion based on the statute of limitations.
VI. Attorney Fees
The trial court awarded Peck his attorney fees and costs. Because we reverse the judgment in his favor, the attorney fee award also must be reversed. The Waltons are entitled to attorney fees on appeal under RAP 18.1.
Reversed.
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 pursuant to RCW 2.06.040, it is so ordered.
WE CONCUR: BRIDGEWATER, J., HUNT, J.