Jo-Ann Stores LLC v. Sound Properties LLC

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 10 JO-ANN STORES, LLC, CASE NO. C19-1831JLR 11 Plaintiff, ORDER GRANTING MOTION v. FOR SUMMARY JUDGMENT 12 SOUND PROPERTIES, LLC, 13 Defendant. 14 15 I. INTRODUCTION 16 Before the court is Plaintiff Jo-Ann Stores, LLC’s (“Jo-Ann Stores” or “Tenant”) 17 motion for summary judgment. (MSJ (Dkt. # 28); Reply (Dkt. # 35).) Defendant Sound 18 Properties, LLC (“Sound” or “Landlord”) opposes the motion. (Resp. (Dkt. # 31).) The 19 court has reviewed the motion, the submissions filed in support of and in opposition to 20 // 21 // 22 // 1 the motion, the relevant portions of the record, and the applicable law. Being fully 2 advised,1 the court GRANTS the motion. 3 II. BACKGROUND 4 Jo-Ann Stores is “the nation’s leading retailer of fabric and crafting supplies.” 5 (Beegle Decl. (Dkt. # 30) ¶ 3.) In 1996, it entered into a commercial lease for premises 6 (the “Premises”) at the Auburn Shopping Center in Auburn, Washington (the “Shopping 7 Center”). (Id. ¶¶ 4-5, Ex. 1 (“Lease”).) At that time, Jo-Ann Stores signed the lease with 8 John V. Farrell and Leeann Farrell (collectively, the “Farrells”). (See id.) In 2004, the 9 Farrells sold the Shopping Center, and ultimately, Sound bought the property on July 16, 10 2013. (Kirkland Decl. (Dkt. # 33) ¶¶ 4-5.) Around that time, the Shopping Center had 11 various tenants, including a dance studio, laundry and cleaning service businesses, and a 12 financial services business. (Pharmer Decl. (Dkt. # 32) ¶¶ 8-9, Ex. E.) 13 After Sound purchased the Shopping Center, it received an Estoppel Certificate 14 from Jo-Ann Stores, certifying that to Jo-Ann Stores’s knowledge, “the Landlord is not 15 currently in default under the Lease.” (Id. ¶ 10, Ex. E (“Estoppel Cert.”) ¶ 4.) However, 16 Jo-Ann Stores stated that it “has not inspected the Shopping Center . . . to verify the 17 Landlord is in compliance with its obligation with respect thereto, and Tenant hereby 18 reserves all rights regarding the same.” (Id.) Furthermore, the certification provided that 19 “[n]othing contained herein will . . . waive or estop any claims, defenses, rights or 20 remedies of Tenant[] or . . . relieve the Landlord from any of its obligations under the 21 1 Sound requests oral argument (see Resp. at 1), but the court finds that oral argument 22 would not be helpful to its disposition of the motion, see Local Rules W.D. Wash. LCR 7(b)(4). 1 Lease.” (Id. ¶ 9.) Jo-Ann Stores “acknowledge[d] that [Sound is] relying upon this 2 Estoppel Certificate and the accuracy of the information contained herein,” but 3 reaffirmed that it “will not be liable to any party for damages of any kind whatsoever . . . 4 resulting from any statement in this certificate.” (Id. ¶ 12.) 5 Jo-Ann Stores and Sound executed a “Third Lease Modification and Extension 6 Agreement” (the “Lease”) on November 8, 2013. (Beegle Decl. ¶ 4.) Under the Lease, 7 the fixed minimum rent was $10,080 per month for February 1, 2019, to January 31, 8 2021. (Id. ¶ 6.) The Lease also contained the following covenant of the Landlord: 9 The Shopping Center shall be maintained, operated and managed as a first-class retail project in compliance with all laws, regulations and orders 10 and shall be used and occupied only for normal retail uses customarily conducted in first-class shopping centers; and in no event shall the Shopping 11 Center or any portion thereof be used as or for [listing prohibited uses]. 12 (Lease § 26(a)(vii).) The parties agreed that in event of breach by Sound, Jo-Ann Stores 13 had the right: 14 (i) to terminate this Lease at any time during the period or such breach; (ii) to pay Substitute Rent during the period of such breach; and/or 15 (iii) to refrain from making any payment of Rent during the period of such breach provided that business cannot reasonably be conducted from 16 the Premises on a profitable basis of such breach. 17 (Id. § 26(b).) Substitute Rent was defined as $1,000 per month, invokable on a 18 retroactive basis back to the date the breach first occurred. (Id. §§ 14, 38.) The Lease 19 additionally included the following section entitled “No Waiver of Default”: 20 No waiver by either party of any of the . . . covenants . . . and no waiver of any legal or equitable relief or remedy shall be implied by the failure of either 21 party to assert any rights, or to declare any forfeiture, or for any other reason, and no waiver of any of said . . . covenants . . . shall be valid unless it shall 22 be in writing signed by both parties hereto. No waiver by either party or 1 forgiveness of performance by either party in respect to one or more tenants of the Shopping Center shall constitute a waiver or forgiveness of 2 performance in favor of Tenant, Landlord or any other tenant, nor shall the waiver or the forgiveness of performance of any one or more of the terms . . . 3 of this Lease be claimed or pleaded by Tenant or Landlord to excuse a subsequent failure of performance of any of the . . . covenants. 4 (Id. § 31.) The Lease is governed by Washington state law. (Id. § 41.) 5 In November 2018, Sound leased space in the Shopping Center to Ideal Option, 6 PLLC (“Ideal Option”), a “counseling-based business that helps individuals overcome 7 addiction-related problems.” (Kirkland Decl. ¶ 7; see Riojas Decl. (Dkt. # 29) ¶ 2, Ex. A 8 (“Ideal Option Lease”).) The lease with Ideal Option specified that Ideal Option: 9 shall use the Premises solely for the purpose of conducting the business of a 10 medical addiction treatment clinic . . . and for no other use without Landlord’s consent. 11 (Ideal Option Lease § 5.1.) The lease further specified that Ideal Option “agrees not to 12 use the Premises for the sale of merchandise . . . without Landlord’s prior written 13 consent.” (Id. § 5.3.) 14 After Sound leased space to Ideal Option, Jo-Ann Stores notified Sound on 15 December 4, 2018, that Sound was in breach of the Lease, which, it argued, entitled 16 Jo-Ann Stores to pay Substitute Rent retroactive to November 1, 2018. (Beegle Decl. ¶ 17 7, Ex. 2; Kirkland Decl. ¶ 8.) Sound responded on December 6, 2018, acknowledging 18 “the occupancy by Ideal Option as a retail counseling and therapy center” but “reject[ing] 19 [Jo-Ann Stores’s] assertion that representations and covenants are not being met” because 20 Sound was “continu[ing] to maintain, operate and manage the [Shopping Center] as a 21 first class retail project.” (Kirkland Decl. ¶ 9, Ex. A at 1.) Jo-Ann Stores replied on 22 1 January 3, 2019, disagreeing “with the assertion that the addiction treatment center is a 2 retail use that is normally found in first-class shopping centers.” (Beegle Decl. ¶ 8, Ex. 3 3 at 1.) It declared its intent to pay Substitute Rent for so long as Ideal Option continues to 4 operate in the Shopping Center. (Id.) 5 The parties continued to correspond over the matter. On March 20, 2019, Sound 6 acknowledged that Ideal Option is “not presently retailing[,] as-such [sic] the Landlord is 7 working closely with them exploring a retail use that they can implement.” (Beegle Decl. 8 ¶ 9, Ex. 4 at 1; see also Riojas Decl. ¶ 3, Ex. B at 14 (stating in interrogatory answer that 9 “Ideal Option is primarily a service-based business”).) Sound expressed its “intent to 10 assist [Ideal Option] to institute retail such that there is no technical violation of [the] 11 Lease.” (Id.) However, although Sound “attempted to [sic] with Ideal Option to expand 12 its services into retail, including but not limited to supplements and vitamins,” there is no 13 evidence that Ideal Option ever did so. (See Riojas Decl. ¶ 3, Ex. B at 14.) Reaching no 14 resolution, Sound threatened to evict Jo-Ann Stores on April 16, 2019, due to outstanding 15 rent of $45,158.40—the full rent minus the Substitute Rent Jo-Ann Stores had been 16 paying. (Beegle Decl. ¶ 10, Ex. 5 at 1.) 17 To preserve its continued use of the space, Jo-Ann Stores paid the outstanding 18 amount and agreed to pay the full rent moving forward, with the expectation that if a 19 court rules in its favor, it would seek to recover the overpayments. (Id. ¶ 11, Ex. 6 at 1.) 20 On April 24, 2020, Jo-Ann Stores provided Sound with a 30-day notice that it will 21 “vacate the Premises and terminate the Lease” due to Sound’s “breach of operating the 22 [S]hopping [C]enter as a ‘first-class retail project.’” (Beegle Decl. ¶ 12, Ex. 7 at 1.) 1 Jo-Ann Stores based its early termination on its right to terminate the Lease at any time 2 during the period of a breach. (Id.; see Lease § 26(b).) 3 Jo-Ann Stores filed suit on November 12, 2019, seeking damages and a 4 declaratory judgment that Sound breached the Lease. (Compl. (Dkt. # 1) ¶¶ 19-31.) In 5 its answer, Sound raised several affirmative defenses, including that Jo-Ann’s Stores was 6 estopped from bringing this suit; that it had waived its rights; and that the doctrine of 7 laches barred the suit. (Am. Ans. (Dkt. # 26) at 5.) Sound also brought a counterclaim 8 that Jo-Ann Stores breached the Lease through its early termination. (Id. at 6-11.) 9 III. ANALYSIS 10 Summary judgment is appropriate if the evidence shows “that there is no genuine 11 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 12 Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. 13 Cty. of L.A., 477 F.3d 652, 658 (9th Cir. 2007). A fact is “material” if it might affect the 14 outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A 15 factual dispute is “‘genuine’ only if there is sufficient evidence for a reasonable fact 16 finder to find for the non-moving party.” Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 17 992 (9th Cir. 2001) (citing Anderson, 477 U.S. at 248-49). 18 The moving party bears the initial burden of showing there is no genuine dispute 19 of material fact and that it is entitled to prevail as a matter of law. Celotex, 477 U.S. at 20 323. If the moving party does not bear the ultimate burden of persuasion at trial, it can 21 show the absence of such a dispute in two ways: (1) by producing evidence negating an 22 essential element of the nonmoving party’s case, or (2) by showing that the nonmoving 1 party lacks evidence of an essential element of its claim or defense. Nissan Fire & 2 Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party 3 meets its burden of production, the burden then shifts to the nonmoving party to identify 4 specific facts from which a fact finder could reasonably find in the nonmoving party’s 5 favor. Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 252. 6 The court is “required to view the facts and draw reasonable inferences in the light 7 most favorable to the [nonmoving] party.” Scott v. Harris, 550 U.S. 372, 378 (2007). 8 The court may not weigh evidence or make credibility determinations in analyzing a 9 motion for summary judgment because those are “jury functions, not those of a judge.” 10 Anderson, 477 U.S. at 249-50. Nevertheless, the nonmoving party “must do more than 11 simply show that there is some metaphysical doubt as to the material facts . . . . Where 12 the record taken as a whole could not lead a rational trier of fact to find for the 13 nonmoving party, there is no genuine issue for trial.” Scott, 550 U.S. at 380 (internal 14 quotation marks omitted) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 15 475 U.S. 574, 586-87 (1986)). 16 Jo-Ann Stores moves for summary judgment on its breach of contract claim, 17 which would necessarily dismiss Sound’s breach of contract counterclaim. (MSJ at 18 9-18.) Sound argues that the Lease is ambiguous and thus, a genuine issue of material 19 fact precludes summary judgment. (Resp. at 9-15.) Furthermore, Sound purports that 20 various affirmative defenses create a genuine issue of material fact. (Id. at 15-18.) The 21 court addresses Jo-Ann Stores’s breach of contract claim before turning to Sound’s 22 affirmative defenses. 1 A. Jo-Ann Stores’s Breach of Contract Claim 2 When interpreting contracts such as the Lease, the court’s primary objective is to 3 “discern the parties’ intent.” Supervalu Holdings, Inc. v. Barbara Morris Testamentary 4 Tr., No. C09-5351BHS, 2010 WL 3947500, at *5 (W.D. Wash. Oct. 6, 2010). 5 Washington follows the “objective manifestation theory of contracts,” which instructs 6 courts to determine the parties’ intent “by focusing on the objective manifestations of the 7 agreement, rather than on the unexpressed subjective intent of the parties.” Hearst 8 Commc’ns, Inc. v. Seattle Times Co., 115 P.3d 262, 267 (Wash. 2005). Courts may 9 “impute an intention corresponding to the reasonable meaning of the words used,” Martin 10 v. Smith, 368 P.3d 227, 230 (Wash. 2005), and “can neither disregard contract language 11 . . . nor revise the contract under a theory of construing it,” Wagner v. Wagner, 621 P.2d 12 1279, 1283 (Wash. 1980). Generally, courts give words in a contract “their ordinary, 13 usual, and popular meaning,” which can be ascertained by reference to standard English 14 dictionaries. Hearst, 115 P.3d at 267; Supervalu Holdings, 2010 WL 3947500, at *5. 15 “[T]he interpretation of an unambiguous contract is a question of law.” Paradise 16 Orchards Gen. P’ship v. Fearing, 94 P.3d 372, 377 (Wash. Ct. App. 2004). 17 Washington has “recognized the difficulties associated with interpreting contracts 18 solely on the basis of the ‘plain meaning’ of the words in the document” and thus adopted 19 the “context rule,” which allows courts to “examin[e] the context surrounding an 20 instrument’s execution.” Hearst, 115 P.3d at 266. “If relevant for determining mutual 21 intent, extrinsic evidence may include (1) the subject matter and objective of the contract, 22 (2) all the circumstances surrounding the making of the contract, (3) the subsequent acts 1 and conduct of the parties, and (4) the reasonableness of respective interpretations urged 2 by the parties.” Id. However, extrinsic evidence cannot be used to “show an intention 3 independent of the instrument” or to “vary, contradict or modify the written word.” Id. at 4 267 (quoting Hollis v. Garwall, Inc., 974 P.2d 836, 843 (Wash. 1999)) (internal quotation 5 marks omitted). 6 At issue here is the meaning of the word “retail” as used in the provision that the 7 Shopping Center “shall be used and occupied only for normal retail uses.” (Lease 8 § 26(a)(vii).) “Retail” is defined as “the sale of commodities or goods in small quantities 9 to ultimate consumers.” Retail, Merriam Webster Dictionary, https://www.merriam- 10 webster.com/dictionary/retail (last visited June 2, 2021); see also Retail, Oxford English 11 Dictionary, https://www.oed.com/view/Entry/164142 (last visited June 2, 2021) (defining 12 “retail” as “action or business of selling goods in relatively small quantities for use or 13 consumption rather than for resale”). Courts that have analyzed the term “retail” have 14 consistently interpreted it to reference a place where merchandise or goods are sold. See, 15 e.g., Foremost Dairies, Inc. v. Tax Comm’n, 453 P.2d 870, 873 (Wash. 1969). To that 16 end, courts have declined to qualify medical clinics as retail entities. See, e.g., Cutting v. 17 Down E. Orthopedic Assocs., P.A., 278 F. Supp. 3d 485, 495-96 (D. Me. 2017) 18 (concluding that “retail sale” does not include “provision of medical services”); Schultz v. 19 Nalle Clinic, 444 F.2d 17, 19 (4th Cir. 1971) (“Applying terms normally attributable to 20 the sale of merchandise to the practice of medicine seems contrary to common usage.”). 21 Applied here, there is no dispute that Ideal Option, a clinic that offers medical 22 treatment services for addiction, does not engage in retail because they do not sell 1 merchandise or commodities. (Kirkland Decl. ¶ 7; see Ideal Option Lease § 5.1 (defining 2 its business as “medical addiction treatment”).) Indeed, Ideal Option’s lease prohibits the 3 sale of merchandise without the Landlord’s consent. (Ideal Option Lease §§ 5.1, 5.3.) 4 Sound has acknowledged as much, conceding in March 2019 that Ideal Option was not 5 “presently retailing” and attempting to “explor[e] a retail use that [it] can implement.” 6 (Beegle Decl. ¶ 9, Ex. 4 at 1; see also Riojas Decl. ¶ 3, Ex. B at 14 (admitting that “Ideal 7 Option is primarily a service-based business”).) Sound offers no evidence that any retail 8 use was subsequently implemented. (See generally Resp.; Dkt.) Similar to the courts 9 that have previously considered the applicability of retail to medical clinics, the court 10 concludes that Ideal Option does not participate in “normal retail uses.” See, e.g., 11 Cutting, 278 F. Supp. 3d at 495-96; Schultz, 444 F.2d at 19. 12 Sound does not dispute the definition of retail as discussed above. (See Resp.) 13 Nor does Sound argue that Ideal Option is engaged in a normal retail use. (See id.) 14 Instead, Sound pivots and maintains that the term “first-class retail” is ambiguous 15 because it is uncertain and subject to more than one meaning. (Id. at 12-14.) In support, 16 Sound cites Jo-Ann Stores, Inc. v. Property Operating Company, LLC, 880 A.2d 945 17 (Conn. App. Ct. 2005), in which the court found the term “first-class retail” ambiguous 18 because there is a “reasonable basis for difference of opinion as to what was intended to 19 be included within the term’s definition.” (Id. at 12 (citing Jo-Ann Stores, 880 A.2d at 20 953).) But the contract in that case did not have the additional language that the premises 21 “shall be used and occupied only for normal retail uses.” See Jo-Ann Stores, 880 A.2d at 22 953. The court cannot ignore that language here, which solidifies both the meaning of 1 “retail” and that tenants engage only in retail use as an independent requirement from 2 “first class” use. See Wagner, 621 P.2d at 1283; Bogomolov v. Lake Villas Condo., 127 3 P.3d 762, 766 (Wash. Ct. App. 2006) (preferring interpretation that “gives meaning to all 4 provisions”). 5 Sound additionally relies on the “context rule,” arguing that Jo-Ann Stores’s 6 subsequent conduct reveals that the original contracting parties “did not intend [§] 26(vii) 7 to prohibit all non-retail uses.” (Resp. at 14-15.) Specifically, Sound points to the fact 8 that the Shopping Center historically had “a plethora of non-retail tenants/businesses 9 without objection from [Jo-Ann Stores].” (Id. at 14.) But the Washington Supreme 10 Court has made clear that extrinsic evidence cannot “vary, contradict or modify the 11 written word” of the contract. Hearst, 115 P.3d at 267. And here, Sound’s proposed 12 interpretation through the use of extrinsic evidence directly contradicts the written word 13 of the Lease—namely that the Shopping Center “shall be used and occupied only for 14 normal retail uses.” (See Lease § 26(a)(vii).) Again, the court cannot, “under the guise 15 of interpretation,” “rewrite contracts the parties have deliberately made for themselves.”2 16 See McCormick v. Dunn & Black, P.S., 167 P.3d 610, 619 (Wash. Ct. App. 2007). 17 Because § 26 is unambiguous that the Shopping Center be used only for retail 18 purposes, and because there is no dispute that Ideal Option does not engage in retail, 19 20 2 Sound also points to the fact that, in another case brought ten years ago against a different landlord in a different state, Jo-Ann Stores “never argues that [another tenant’s] use is ‘non-retail’ in general,” despite the lease having an identical non-retail covenant. (Resp. at 13 21 (citing Jo-Ann Stores, Inc. v. Bay-Gard, LTD, No. 11-CA-05096 (Fla. Cir. Ct. 2011).) The court places no weight on the legal strategy Jo-Ann Stores may have adopted in a different case a 22 decade ago. 1 Sound breached § 26 of the Lease with Jo-Ann Stores. Thus, Jo-Ann Stores was entitled, 2 under § 38 of the Lease, to pay Substitute Rent on a retroactive basis back to November 3 1, 2018, when Sound leased space to Ideal Option. (See Lease § 38; Kirkland Decl. ¶ 7.) 4 Furthermore, because Sound breached the Lease, Jo-Ann Stores was also entitled to 5 terminate the Lease, thus defeating Sound’s breach of contract counterclaim. (See Lease 6 § 26(b).) Having resolved the breach of contract claim and counterclaim, the court now 7 turns to Sound’s affirmative defenses. 8 B. Sound’s Affirmative Defenses 9 Sound raises three affirmative defenses of estoppel, waiver, and laches. (Resp. at 10 15-18.) All of the defenses are premised on the fact that Jo-Ann Stores did not object to 11 previous non-retail tenants and signed the Estoppel Certificate in 2013 indicating that the 12 landlord at that time was not in default. (See id.) The court finds these defenses 13 unavailing as a matter of law. 14 At the outset, the court notes that the Lease as well as the Estoppel Certificate 15 foreclose the defenses of estoppel and waiver. The Lease contains a nonwaiver clause 16 that states that the failure to “assert any rights” or “to declare any forfeiture” will not 17 imply a waiver and that no waiver shall be valid unless it is in writing signed by both 18 parties. (Lease § 31.) No such writing has been produced. (See Resp.) Even if Jo-Ann 19 Stores had waived its rights concerning the tenants in 2013, the nonwaiver clause 20 provides that no waiver “in respect to one or more tenants . . . shall constitute a waiver or 21 forgiveness of performance in favor of . . . any other tenant,” nor “shall the waiver . . . 22 excuse a subsequent failure of performance.” (Lease § 31.) The Estoppel Certificate also 1 contains a nonwaiver provision that “[n]othing contained herein will . . . waive or estop 2 any claims . . . of Tenant.” (Estoppel Cert. ¶ 9.) Sound makes no argument as to why its 3 estoppel and waiver defenses survive either of these nonwaiver clauses. (See Resp.); see 4 First Un. Mgmt., Inc. v. Slack, 679 P.2d 936, 940 (Wash. Ct. App. 1984) (upholding 5 nonwaiver clause in lease). 6 Even if the Lease and Estoppel Certificate did not foreclose Sound’s estoppel and 7 waiver defenses, those defenses still fail as a matter of law. Estoppel requires “(1) an 8 admission, statement or act inconsistent with the claim afterward asserted, (2) action by 9 the other party on the faith of such admission, statement, or act, and (3) injury to such 10 other party resulting from allowing the first party to contradict or repudiate such 11 admission, statement or act.” Wagner, 621 P.2d at 1284. For “[m]ere silence” to 12 effectuate estoppel, the silence “must have operated as a fraud, must have been intended 13 to mislead, and itself must have actually misled.” Nickell v. Southview Homeowners 14 Ass’n, 271 P.3d 973, 980 (Wash. Ct. App. 2012). Although Sound points to Jo-Ann 15 Stores’s acknowledgement in the Estoppel Certificate that the Landlord is relying upon 16 the representations within (see Estoppel Cert. ¶ 12), it introduces no evidence raising a 17 genuine dispute of material fact that its specific breach—leasing space to Ideal Option— 18 was done on the faith of the Estoppel Certificate, see Wagner, 621 P.2d at 1284. Nor 19 does Sound produce any evidence that Jo-Ann Stores’s failure to object to previous 20 tenants amounted to fraud with an intent to mislead. (See Resp.) 21 The same applies to waiver. Waiver is “the intentional relinquishment of a known 22 right” and requires that Jo-Ann Stores “intended to relinquish the right, advantage, or 1 benefit and [its] action must be inconsistent with any other intent.” Wagner, 621 P.2d at 2 1283; see also id. at 1284 (requiring “unequivocal acts or conduct evincing an intent to 3 waive”). Sound provides no evidence raising a genuine dispute of material fact regarding 4 Jo-Ann Stores’s intent to relinquish the right to assert a breach regarding the tenancy of 5 Ideal Option—an entity that was not at the Shopping Center in 2013. (See Estoppel 6 Cert.; Ideal Option Lease.) The evidence in the record suggests the opposite: a month 7 after Ideal Option’s tenancy, Jo-Ann Stores notified Sound that it had breached the Lease. 8 (Beegle Decl. ¶ 7, Ex. 2; Kirkland Decl. ¶ 8.) 9 Sound’s final affirmative defense of laches is equally without merit. Laches is an 10 “extraordinary defense” that is “only appropriate . . . when a party, knowing his rights, 11 takes no steps to enforce them and the condition of the other party has in good faith 12 become so changed that he cannot be restored to his former state.” Brost v. L.A.N.D., 13 Inc., 680 P.2d 453, 456 (Wash. Ct. App. 1984). Barring “highly unusual circumstances,” 14 the court is “generally precluded . . . from imposing a shorter period under the doctrine of 15 laches than that of the relevant statute of limitations.” Id. at 455-56. “Mere delay, lapse 16 of time, and acquiescence, standing alone, do not bar a claim short of the statute of 17 limitations.” Rutter v. Rutter’s Est., 370 P.2d 862, 865 (Wash. 1962). Sound has not 18 introduced any evidence of the “highly unusual circumstances” needed for this court to 19 impose a shorter period than the six-year statute of limitations for a breach of contract 20 claim. See Brost, 680 P.2d at 455-56; RCW 4.16.040(1); (see Resp.) Thus, there is no 21 genuine dispute of material fact that laches does not bar Jo-Ann Stores’s claim. 22 // 1 Because Sound breached the retail provision of the Lease and none of Sound’s 2 affirmative defenses are availing as a matter of law, the court grants summary judgment 3 to Jo-Ann Stores on its breach of contract claim. The court additionally grants summary 4 judgment to Jo-Ann Stores on Sound’s breach of contract counterclaim and dismisses the 5 counterclaim with prejudice. Jo-Ann Stores is entitled to a damages award of the 6 overpayment plus pre- and post-judgment interest. See Dautel v. Heritage Home Ctr., 7 Inc., 948 P.2d 397, 400 (Wash. Ct. App. 1997) (allowing prejudgment interest as a matter 8 of right when claim is liquidated). Moreover, under the Lease, Jo-Ann Stores is entitled 9 to “all costs, expenses, and reasonable attorney’s fees.” (Lease § 19(d).) Thus, the court 10 awards Jo-Ann Stores its costs and fees associated with bringing this suit. 11 IV. CONCLUSION 12 For the foregoing reasons, the court GRANTS Jo-Ann Stores’s motion for 13 summary judgment (Dkt. # 28). The court AWARDS Jo-Ann Stores $173,872 plus 14 pre- and post-judgment interest. The court additionally ORDERS Jo-Ann Stores to file a 15 motion for costs and fees within 14 days of this order. 16 Dated this 7th day of June, 2021. 17 A 18 19 JAMES L. ROBART United States District Judge 20 21 22