No. 47323-9-I.The Court of Appeals of Washington, Division One.
Filed: November 5, 2001. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION.
Appeal from Superior Court of King County, No. 99-2-27428-8, Hon. Linda Lau, August 15, 2000, Judgment or order under review.
Counsel for Appellant(s), Kristin E. Sweeney, Davis Wright Tremaine, 2600 Century Square, 1501 4th Ave, Seattle, WA 98101-1688.
Counsel for Respondent(s), Ellen L. Szymanski, 520 N 67th St, Seattle, WA 98103.
Robert P. Majerus, 701 5th Ave 4400, Seattle, WA 98104-7016.
Mark Rosencrantz, 701 5th Ave Ste 4400, Seattle, WA 98104.
WALTER E. WEBSTER, J.
In 1996 and 1997, Wittco Systems, Inc. (`Wittco’) sold two photocopy machines to Gene Juarez Salons, Inc. (`Juarez’). For separate consideration, the parties entered into two copier maintenance agreements (the `Maintenance Agreements’). Under the Maintenance Agreements, Wittco was responsible for maintaining the two photocopy machines. The terms of the agreements provided that they would renew annually or upon the meter reading a certain number.
On or about August 12, 1999, the parties entered into a new contract, the Equipment Acquisition Agreement. The Equipment Acquisition Agreement, which Wittco prepared, also dealt with copiers at Gene Juarez. Paragraph 15 of the Acquisition Agreement provided in bold-faced type that:
This contract is a complete, unambiguous and exclusive statement of the terms of the agreement between the parties and is intended to supersede and replace all prior or contemporaneous writings and oral agreements and understandings and to prevail over any course of dealing or usage of the trade inconsistent with any express term contained herein. Any and all representations, promises, warranties, or statements by Wittco’s representative that differ in any way from the terms of this written agreement shall be given no force or effect. The terms of this agreement may be modified or terminated only by a writing signed by the buyer and an officer of Wittco.
CP 21, 50. It further provided that Juarez’s obligation to purchase the new copiers was `subject to trial’ and that the trial period was from August 17 to August 20, 1999. CP 20.
After execution of the Equipment Acquisition Agreement, Wittco removed the two existing copy machines that had been covered by the Maintenance Agreements and replaced them with two new copy machines for Juarez to try on an interim basis. During this period, Juarez solicited bids from other companies for new copiers. While Wittco submitted a bid, Juarez received a lower bid from a different company and entered into a contract with that company. Wittco then removed the new copy machines and replaced them with the old machines. About a week later, Wittco demanded payment under the Maintenance Agreements, maintaining that the agreement had automatically renewed. Juarez refused, arguing that the Maintenance Agreements had been superseded by the Acquisition Agreements.
Wittco sued Juarez for breach of the Maintenance Agreements, and the trial court granted Juarez’s motion for summary judgment. After the trial court granted summary judgment, Juarez dismissed its claims under the Washington Consumer Protection Act. The trial court granted Juarez’s motion for litigation expenses.
Wittco appeals, and we reverse and remand for a trial on the merits.
DISCUSSION
Standard of Review The standard of review for summary judgment is well settled.[1]
Analysis
Wittco argues that summary judgment was inappropriate because there is still a question of material fact as to whether the Maintenance Agreements were superseded by the Acquisition Agreements.
First, Wittco argues that the Acquisition Agreement never became a binding agreement. Wittco argues that because the sale contemplated in the agreement was `subject to trial,’ and because Juarez did not ultimately accept the copiers, the agreement did not become binding. Wittco argues that the terms of the contract, including Paragraph 15, were only to go into effect if Juarez had accepted the copiers for purchase. Therefore, it argues, the Acquisition Agreement was not an enforceable agreement.
Second, Wittco argues that even if the Acquisition Agreement is enforceable, its language did not act to supersede the Maintenance Agreements. It maintains that Paragraph 15 does not serve to rescind the Maintenance Agreements, but only serves to establish that the Acquisition Agreement is an exclusive statement of the terms of `the Agreement’ between the parties, and does not affect other agreements. Wittco is correct. Paragraph 15 is not ambiguous. Reading the contract as a whole, the only reasonable interpretation is that Paragraph 15 does not affect other consistent agreements between the parties.
Third, Wittco maintains that the Maintenance Agreements, which covered the maintenance of the two old copy machines, are not inconsistent with the Acquisition Agreement, which covered the purchase and sale of two new copy machines. The terms of the Acquisition Agreement do not deal with maintenance in any way. Therefore, according to Wittco, the agreements deal with different subject matter and are not inconsistent. This argument is supported by the facts. The Maintenance Agreements covered two old copy machines, which were replaced by two new copy machines that were covered by the Acquisition Agreement. And after the Acquisition Agreement expired, the old copiers were returned to Juarez. `Generally, when two contracts are in conflict, the legal effect of a subsequent contract made by the same parties and covering the same subject matter, but containing inconsistent terms, `is to rescind the earlier contract. It becomes a substitute therefor, and is the only agreement between the parties upon the subject.”[2]
`In considering the application of this rule, each case presented must be considered on its own state of facts and in connection with all the surrounding circumstances.’[3] Here, it cannot be said that the two contracts concern the same subject matter `so that the two cannot stand together.’[4] Certainly, Juarez could continue to desire maintenance on its old copy machines while purchasing new ones. Juarez maintains that the agreements are inconsistent because they concern the same subject matter, copy machines. But the contracts do not concern the same copy machines. This difference distinguishes this case from the case cited by Juarez, wherein the new contract concerned the same subject matter as the old contract.[5]
Finally, Wittco argues that the Acquisition Agreement does not supersede the Maintenance Agreements because there was no mutual intent to rescind the Maintenance Agreements.[6] Mutual modification of a contract by subsequent agreement arises out of the intentions of the parties and requires a meeting of the minds.[7] The evidence presented by Wittco shows that Wittco believed the maintenance contracts were still in force. Moreover, considering that the two contracts contemplated different subject matter, a jury could find that belief to be reasonable.[8] While Juarez argues that no reasonable person would infer from the evidence that Juarez would intend to be bound to the Maintenance Agreements for copiers it no longer wanted, the record shows that Juarez was still using the old copiers. Whether there was a mutual intent to rescind the maintenance contacts is for the jury.
Because there is a question of material fact as to whether the maintenance contracts are enforceable, the trial court erred in granting Juarez summary judgment.
Judge Linda Lau granted Juarez’s petition for award of litigation expenses on October 31, 2000. Because we reverse the court’s grant of summary judgment, we consequently vacate the award of litigation expenses.
Attorney Fees
Both parties have requested reasonable attorney fees and costs under the contracts in this case and pursuant to RCW 4.84.330 and RAP 18.1(b).
The amount of fees and expenses shall be determined by the trial court after remand. RAP 18.1(i).
We reverse and remand for a trial on the merits.
WE CONCUR: ELLINGTON, J., BECKER, J.
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