Tacoma Northpark, LLC v. NW, LLC

NW, LLC (NW) (defendant), owned a property that it wished to subdivide into 23 lots for individual sale and residential development. NW filed a plat with the City of Tacoma seeking approval of the subdivision plan. While the plat was pending, O’Connor & Associates, LLC (O’Connor), entered into an agreement with NW to buy the property. Addenda to the purchase agreement provided that the sale was subject to the city’s approval of the plat and gave NW’s warranty that the plat would be approved prior to closing. NW and O’Connor set closing dates for various of the 23 lots. However, the plat was not approved prior to these dates, and the sales did not close. O’Connor assigned United Builders of Washington, Inc. (United), two lots. When NW ran out of funds to complete the platting process, it sold the property to Tacoma Northpark, LLC (Tacoma Northpark) (plaintiff). Tacoma Northpark had no knowledge of NW’s prior sale agreement with O’Connor. Tacoma Northpark filed an action to quiet title against O’Connor, NW, and United, as well as certain lenders. O’Connor and United counterclaimed against Tacoma Northpark and additionally sued NW for breach of contract. Specifically, O’Connor argued that NW had breached its purchase agreement with O’Connor. The trial court found that NW had pursued plat approval in good faith and, for this reason, did not breach the purchase agreement. O’Connor appealed. On appeal, O’Connor argued that NW had failed to prove the impossibility of obtaining plat approval, making NW’s failure a breach of NW’s promise in the purchase agreement. NW argued that the plat approval was a condition precedent for the sale, not a contractual duty. For this reason, NW was excused from performance on the contract.