Spokane Airport Bd. v. Experimental Aircraft Ass'n, Chapter 79

FILE
THIS OPINION WAS FILED
FOR RECORD AT 8 A.M. ON
SEPTEMBER 30, 2021
IN CLERK’S OFFICE
SUPREME COURT, STATE OF WASHINGTON
SEPTEMBER 30, 2021
ERIN L. LENNON
SUPREME COURT CLERK

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

SPOKANE AIRPORT BOARD, ) No. 99180-4
)
Petitioner, )
)
v. ) EN BANC
)
EXPERIMENTAL AIRCRAFT )
ASSOCIATION, CHAPTER 79, )
) Filed : September 30, 2021
Respondent. )
______________________________ )

MONTOYA-LEWIS, J.—Under RCW 59.12.030(1), a tenant who leases

premises for a specified term or period becomes a holdover tenant liable for unlawful

detainer when they remain in possession of the premises “after the expiration of the

term for which it is let to him or her.” The question before the court is whether a

tenant in a fixed-term commercial lease can become a holdover tenant when the

tenancy ends pursuant to an early termination provision. The tenant argues that this

unlawful detainer provision applies only when the tenant remains after the end of

the original term specified in the lease. We disagree. We hold that in this case,

exercising the no-fault early termination provision in the lease revised the term of
Spokane Airport Bd. v. Experimental Aircraft Ass’n Ch. 79
No. 99180-4

the lease, and the term expired on the revised termination date. Therefore, the tenant

became a holdover tenant under RCW 59.12.030(1) when they continued in

possession of the leased premises after that date. Accordingly, we reverse.

I. FACTS AND PROCEDURAL HISTORY

A. Factual Background

In 2011, Experimental Aircraft Association, Chapter 79 (EAA), entered into

a lease agreement with the Spokane Airport Board (Airport) to rent an aircraft hangar

at Felts Field airport in Spokane. EAA leased Building 7 “to offer facilities and

training for aircraft construction, restoration, and flight training.” 2 Clerk’s Papers

(CP) at 417.

Article 1 of the original lease agreement specified a term of 5 years, from

March 1, 2011, to February 28, 2016, “unless sooner terminated or canceled as

herein provided.” Id. at 34. The next sentence of that clause also stated, “Either party

may cancel this Agreement upon one hundred eighty (180) days advance written

notice.” Id.

Other provisions of the lease addressed the circumstances under which the

parties could terminate the lease for cause; some delineated specific notice

requirements and cure periods, while others were silent as to notice. For example,

Article 5 entitled the landlord to reenter and take possession of the premises when a

tenant failed to pay rent, and it specified a 10-day notice and cure period. Article 23

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addressed the landlord’s rights of cancellation if the tenant breached any of its

covenants in the lease, and it specified a 30-day notice and cure period. It also

permitted the landlord to terminate the lease under various circumstances involving

the tenant’s bankruptcy, which did not require any form of notice from the landlord.

These termination rights were “[i]n addition to any conditions as specified herein

and all other remedies available to the Airport.” Id. at 46. Article 24 addressed the

tenant’s rights of cancellation. Similar to the provisions addressing the landlord’s

rights, some of the tenant provisions required written notice and/or the passage of a

specified time period (60 days for the Airport’s breach of any lease covenants, 90

days for actions by the federal government that restrict use of the premises), while

others would apparently be automatic (e.g., abandonment or force majeure).

The lease also included an option to renew for an additional 5-year term. In

February 2016, the parties executed an amendment to the lease agreement, amending

the term to “five (5) years commencing March 1, 2016 and ending February 28, 2021

unless sooner terminated or canceled as herein provided.” Id. at 56. The term

provision in the lease amendment reiterated the language, “Either party may cancel

this Agreement upon one hundred eighty (180) days advance written notice.” Id. The

amendment adjusted the amount of rent due but otherwise stated that “[a]ll other

terms and conditions [of the original lease agreement] . . . shall remain in full force

and effect.” Id. at 57.

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On November 28, 2017, the Airport provided written notice to EAA that it

was canceling the lease with 180 days’ notice, effective May 29, 2018. The Airport

informed EAA that it was terminating the lease for Building 7 because the hangar

was going to be demolished to allow construction of a new building. The Airport

indicated that it hoped to work with EAA to lease a portion of a different hangar and

that, since the Airport planned to move forward with the construction project as soon

as possible, EAA may need to move into the other building before the lease ended. 1

The written notice stated that the Airport was canceling the lease “[p]ursuant to

Article 1 – Term, either party may cancel this agreement upon providing 180 days

written notice.” Id. at 60.

Over the next nine months, EAA and the Airport tried to determine whether

another hangar, Building 17, would provide a suitable space for EAA to lease.

Meanwhile, since the construction project did not move forward as quickly as the

Airport had anticipated, the Airport sent EAA several notices extending its

occupancy in Building 7, eventually extending the termination of the lease to August

17, 2018. 2

1
The lease provided that the Airport may require the tenant to relocate if it determined
relocation was “necessary for the orderly expansion and development of the [Felts Field]
facilities.” 2 CP at 52.
2
The parties do not advance any arguments regarding the validity or effect of the
extensions. We view it conceded that if the Airport was permitted to terminate the lease early at
will, it was also permitted to extend the termination date to August 17, 2018, with notice to EAA.
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As the final deadline for EAA’s occupancy of Building 7 approached, the

Airport began preparing to coordinate EAA’s move to Building 17. The Airport

made arrangements to move EAA to Building 17 the week of August 13, 2018, and

obtained EAA’s consent to an indemnification agreement for the move—but it had

to cancel the reservation with the moving company when EAA failed to find a

member who could be present to oversee the move. The parties also negotiated over

a new lease for Building 17 to begin September 1, 2018, but EAA never signed the

new lease agreement. August 17, 2018, passed, and EAA remained in Building 7.

B. Procedural History

On August 20, 2018, the Airport filed a complaint for unlawful detainer under

RCW 59.12.030(1). The superior court issued an order authorizing a writ of

restitution and issued the writ the same day. EAA filed a motion to stay the writ, but

the court fixed the bond at an amount much higher than what EAA proposed, and

EAA did not post the bond. See RCW 59.12.100. The writ of restitution was

executed on August 27, 2018. 3

The parties filed cross motions for summary judgment. EAA argued that the

unlawful detainer action should be dismissed because the lease term would not

expire until February 28, 2021, the end date specified in the lease amendment. EAA

3
The Airport had the locks to Building 7 changed. The Airport permitted EAA access to
the building to remove its property on August 28, 2018, and the Airport later stored and disposed
of the items that EAA left behind.
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maintained that Articles 23 and 24 of the lease identified the sole grounds for

cancellation of the lease and that the Airport could not cancel the lease agreement

absent any default or breach. In contrast, the Airport argued that it properly

terminated the lease agreement pursuant to Article 1 and that EAA was liable for

unlawful detainer under RCW 59.12.030(1). The Airport further argued that it

should recover double damages under RCW 59.12.170, as well as reasonable

attorney fees and costs.

The court granted the Airport’s motion for summary judgment as to unlawful

detainer, reserved the matters of the Airport’s damages and attorney fees, and denied

EAA’s motion. It concluded that the cancellation provision in Article 1 of the lease

permitted the Airport to terminate the lease at will with proper notice. Therefore, it

reasoned, the lease term expired after the 180-day written notice to cancel and EAA

was liable for unlawful detainer when it held over after that time.

The Court of Appeals reversed in an unpublished decision. Spokane Airport

Bd. v. Experimental Aircraft Ass’n Chapter 79, No. 36612-0-III, slip op. (Wash. Ct.

App. Aug. 4, 2020) (unpublished), https://www.courts.wa.gov/opinions/pdf/366120

_unp.pdf. It concluded that under FPA Crescent Associates v. Jamie’s LLC, 190 Wn.

App. 666, 360 P.3d 934 (2015), RCW 59.12.030(1) applies “only to lessees who

hold over following the expiration of a fixed term, not to lessees who hold over after

a term that has not expired but has been lawfully shortened by the exercise of a right

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of cancellation or termination.” Id. at 9. We granted the Airport’s petition for review.

196 Wn.2d 1037 (2021). The Washington Airport Management Association filed a

brief of amicus curiae.

II. ANALYSIS

We review an order granting summary judgment de novo. Grundy v. Thurston

County, 155 Wn.2d 1, 6, 117 P.2d 1089 (2005). Summary judgment is proper “if the

pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.” CR 56(c).

We also review the meaning of a statute de novo. Dep’t of Ecology v. Campbell &

Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002). In interpreting statutes, our

“objective is to ascertain and carry out the Legislature’s intent.” Id. We discern the

plain meaning by considering the language of the statute and related statutes. Id. at

11. If the statute is ambiguous, we then refer to legislative history and other aids to

construction. Id. at 12. Washington’s unlawful detainer statute is in derogation to the

common law and must be strictly construed in favor of the tenant. Hous. Auth. v.

Terry, 114 Wn.2d 558, 563, 789 P.2d 745 (1990). 4

4
On May 10, 2021, Engrossed Substitute House Bill 1236 went into effect, amending
chapter 59.18 RCW (the Residential Landlord-Tenant Act of 1973 (RLTA)) and RCW 59.18.030
(the unlawful detainer statute). LAWS OF 2021, ch. 212. Relevant here, it added language stating
that a tenant is liable for unlawful detainer under RCW 59.12.030 “[e]xcept as limited under
section 2 of this act relating to tenancies under chapter 59.18 RCW.” Id. at § 6. This commercial
lease is not subject to the RLTA. RCW 59.18.030(34) (under the RLTA, “A ‘tenant’ is any person
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A. Termination of the Lease

As a threshold matter, we must determine whether the Airport was permitted

to terminate the lease early without cause. We hold that Article 1 of the lease

agreement contained a no-fault termination provision that permitted the Airport to

terminate the lease with 180 days’ written notice absent any breach by EAA.

Leases are conveyances whose covenants are interpreted under contract law,

where we aim to ascertain the intent of the parties. Berg v. Hudesman, 115 Wn.2d

657, 663, 801 P.2d 222 (1990). Ambiguities must be construed against the drafter,

but “[a]n ambiguity will not be read into a contract where it can reasonably be

avoided by reading the contract as a whole.” McGary v. Westlake Inv’rs, 99 Wn.2d

280, 287, 285, 661 P.2d 971 (1983). A lease provision that allows one party to

terminate the lease prior to the expiration of the term as originally fixed is valid and

enforceable. Lane v. Wahl, 101 Wn. App. 878, 883, 6 P.3d 621 (2000) (quoting and

citing Peoples Park & Amusement Ass’n v. Anrooney, 200 Wash. 51, 56-57, 93 P.2d

362 (1939)).

who is entitled to occupy a dwelling unit primarily for living or dwelling purposes under a rental
agreement.”) (emphasis added). Moreover, we generally presume a statute operates prospectively
unless the legislature indicates that it operates retroactively. Densley v. Dep’t of Ret. Sys., 162
Wn.2d 210, 223, 173 P.3d 885 (2007) (citing cases). Therefore, we presume that the recent
amendments do not apply to this commercial lease or to the events that occurred in this case several
years earlier, and we interpret the law that was in effect at the time, former RCW 59.12.030 (LAWS
OF 1998, ch. 276, § 6). Densley, 162 Wn.2d at 223.

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The lease agreement and amendment between the Airport and EAA provided

that the term would end on February 28, 2021, “unless sooner terminated or canceled

as herein provided. Either party may cancel this Agreement upon one hundred eighty

(180) days advance written notice.” 2 CP at 34, 56. EAA argues that this provision

was a general notice requirement, which applied to the other provisions in the lease

that allowed cancellation for cause. However, applying the 180-day notice

requirement to those for-cause cancellation provisions would create ambiguities

about how much notice was required depending on the reason for termination. See

McGary, 99 Wn.2d at 285. Under Articles 5 and 23, the landlord was required to

provide either 10 or 30 days’ notice, respectively, before it could reenter and take

possession based on the tenant’s breach of different covenants. Under Article 24, the

tenant was required to provide either 60 or 90 days’ notice before they could cancel

the lease based on the landlord’s breach or actions by the government, respectively.

No notice was required for the landlord to cancel based on the tenant’s bankruptcy

or for the tenant to cancel based on abandonment or force majeure.

Applying the 180-day notice requirement from Article 1 to those for-cause

provisions would create conflicts with the notice periods specified in the for-cause

provisions. That ambiguity can be avoided by reading the contract as a whole; each

clause that provided a basis for termination also specified how much (if any) notice

would be required for termination on that basis. Id. The 180-day notice requirement

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in Article 1 applied to an at-will, no-fault right to termination for both parties,

distinct from other provisions allowing for termination for cause. The Airport

properly canceled the lease under Article 1 when it provided 180 days’ written notice

that the lease would terminate, and the lease ended on August 17, 2018.

B. Unlawful Detainer

Next, we must determine whether an unlawful detainer action under RCW

59.12.030(1) was available when EAA remained in Building 7 after August 17,

2018. We hold that it was. RCW 59.12.030(1) is not limited to circumstances when

the original commercial lease period expires. Instead, parties to a lease can contract

to change the lease term, and a tenant becomes a holdover when they remain after

the modified (or unmodified) term expires. Reading the contract and the statute

together to come to any other conclusion would violate the plain language

construction of both.

The unlawful detainer action under chapter 59.12 RCW provides an expedited

method for resolving the right of possession and “hastening recovery of possession

of real property.” MacRae v. Way, 64 Wn.2d 544, 546, 392 P.2d 827 (1964). “[T]he

superior court sits as a special statutory tribunal, limited to deciding the primary

issue of right to possession together with the statutorily designated incidents thereto,

i.e., restitution and rent or damages.” Id. The unlawful detainer action is designed to

provide an efficient summary proceeding to “remove the necessity to which the

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landlord was subjected at common law, of bringing an action of ejectment with its

attendant delays and expenses.” Wilson v. Daniels, 31 Wn.2d 633, 643-44, 198 P.2d

496 (1948); cf. ch. 7.28 RCW. “However, in order to take advantage of its favorable

provisions, a landlord must comply with the requirements of the statute.” Terry, 114

Wn.2d at 563-64.

Under RCW 59.12.030(1), in a tenancy for a term of years, a tenant becomes

liable for unlawful detainer when they hold over in possession of the premises “after

the expiration of the term for which it is let to him or her.” A tenancy for a term of

years terminates “without notice at the expiration of the specified term or period.”

RCW 59.12.030(1). Other provisions of the unlawful detainer statute apply when the

tenant holds over at the end of a periodic tenancy, defaults in rent, or breaches other

lease covenants; those provisions impose notice requirements before the landlord

can commence an unlawful detainer action. See RCW 59.12.030(2), (3), (4). While

the notice and opportunity to cure requirements under those provisions must be

strictly construed in favor of the tenant, subsection (1) imposes no requirements

other than requiring that the term of the lease has expired. Terry, 114 Wn.2d at 563,

569; Sav. Bank of Puget Sound v. Mink, 49 Wn. App. 204, 207, 741 P.2d 1043

(1987).

In FPA Crescent, a landlord tried to avoid the notice and opportunity to cure

requirements of a different provision of the unlawful detainer statute, RCW

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59.12.030(3), by declaring the lease terminated when the tenant defaulted in rent

payments. 190 Wn. App. 666. There, the lease agreement “defined the ‘lease term’

as beginning on the commencement date and ending on the expiration date, unless

terminated sooner pursuant to the express terms and conditions of the lease.” Id. at

669. The lease agreement permitted the landlord to terminate the lease upon the

event of the tenant’s default in rent, but it apparently did not include a no-fault or at-

will termination clause. Id. When the tenant failed to timely pay the rent, the landlord

served them with a notice stating that the lease was terminated, effective

immediately, pursuant to the default provision of the lease. Id. at 669-70. The

landlord rejected the tenant’s attempts to cure the default and filed an unlawful

detainer action with a general citation to RCW 59.12.030. Id. at 670.

The issue became whether subsection (1) applied because the tenant was a

holdover or whether subsection (3) applied because the tenant defaulted in rent;

subsection (3) required the landlord to provide 14 days’ notice and an opportunity

to cure before the tenant could be liable for unlawful detainer. RCW 59.12.030(3).

The Court of Appeals held that the landlord could not “bypass the notice and right

to cure provision of [subsection](3) by declaring a tenant in default for nonpayment

of rent, then terminating the tenancy, and then arguing that the tenant is a holdover

tenant unlawfully detaining under [subsection](1).” FPA Crescent, 190 Wn. App. at

668. The court consulted the dictionary definitions of the terms “expiration” (“‘[t]he

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ending of a fixed period of time’”) and “let” (“‘[t]o offer (property) for lease’”) and

concluded that a tenant becomes a holdover under RCW 59.12.030(1) only if they

remain in possession of the property “past the fixed period of time for which the

property is leased.” Id. at 676-77 (alterations in original) (quoting BLACK’S LAW

DICTIONARY 700, 1043 (10th ed. 2014)). Thus, the tenant had not become a holdover

when they defaulted in rent because the fixed term of the lease agreement had not

expired. Id. at 677.

In contrast, in this case, subsection (1) of the unlawful detainer statute was the

only provision available to the landlord because the tenant had not breached any

covenant of the fixed-term lease. Compare RCW 59.12.030(2) (holdover in a

periodic tenancy), and .030(3) (nonpayment of rent), and .030(4) (breach of other

covenants), and .030(5) (waste), and .030(6) (trespass), with .030(7) (gang-related

activity). The Airport did not seek to avoid the notice requirements of any other

provision of the unlawful detainer statute. Instead, the Airport exercised its right to

modify the term of the lease under Article 1 and then pursued the only pertinent

unlawful detainer action under RCW 59.12.030(1).

In FPA Crescent, the court was concerned with a landlord avoiding the notice

and opportunity to cure requirements of the applicable provision of the unlawful

detainer statute by simply declaring the lease terminated and seeking relief under

subsection (1). But part of the rationale in that case was that in light of the statute’s

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purpose to provide landlords with an expedient method of recovering possession

without resorting to self-help or having to maintain a more costly and time-

consuming ejectment action, “‘[i]t is no hardship to require the giving of the

statutory notice as a condition precedent to invoking the benefit of the statutory

remedy.’” FPA Crescent, 190 Wn. App. at 678 (quoting Jeffries v. Spencer, 86

Wash. 133, 136, 149 P. 651 (1915)). But no notice is required under the provision

for a holdover tenant in a fixed-term tenancy. RCW 59.12.030(1) (“[T]he tenancy

shall be terminated without notice at the expiration of the specified term or period.”).

That provision does not contemplate any obligations of the landlord or any condition

precedent, other than the end of the tenancy.

When a party properly exercises an option to terminate the lease, the lease

terminates on the specified date and the leasehold ceases to exist. State v. Sheets, 48

Wn.2d 65, 68, 290 P.2d 974 (1955). In addition to being consistent with FPA

Crescent, this analysis comports with landlord-tenant law more generally. A lease

for a “fixed maximum duration” may be “automatically terminated earlier upon the

happening of an event or contingency. Just as freehold estates may be subject to

defeasance, so also an estate for years can be created subject to a special limitation,

a condition subsequent, an executory limitation, or an option to terminate.” ROBERT

S. SCHOSHINSKI, AMERICAN LAW OF LANDLORD & TENANT 41-42 (1980) (citing,

inter alia, Peoples Park & Amusement Ass’n, 200 Wash. 51) (footnotes omitted); see

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also WILLIAM B. STOEBUCK & DALE A. WHITMAN, THE LAW OF PROPERTY 402 (3d

ed. 2000) (“‘Surrender’ is the early termination of a leasehold by either the parties’

agreement or by. . . ‘operation of law.’ Surrender by agreement is like modification

or cancellation of a contract.”).

For over half a century, this court has recognized that the term expires and the

leasehold ceases to exist when a lease terminates early according to the terms of the

agreement. In Sheets, a lease agreement provided that the lease could be canceled by

either party in the event the premises were condemned and taken over by a

governmental body. 48 Wn.2d at 66. When the State commenced an action to

condemn the property, the landlord notified the tenant that the lease was canceled,

pursuant to that provision. Id. When the tenant later sought to recover a portion of

the compensation for the condemnation, this court held that his right to share in the

compensation—a right created by the tenancy—was terminated by the landlord’s

exercise of the cancellation provision: “When a written lease provides that the taking

. . . of the leased property may terminate the lease at the option of either party, the

term expires when such taking occurs and the option is exercised, and no unexpired

leasehold remains for which the lessee can claim compensation.” Id. at 68 (emphasis

added); see also W. Union Tel. Co. v. Hansen & Rowland Corp., 166 F.2d 258, 262

(9th Cir. 1948) (the expiration of a lease terminates the tenancy). An option to

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terminate operates similarly, ending the leasehold when it is exercised.

SCHOSHINSKI, supra, at 41-42.

Given that a no-fault early termination provision is valid and enforceable, and

no notice is required to terminate a fixed-term tenancy, landlords and tenants will

expect early termination provisions to be enforceable under the unlawful detainer

statute. RCW 59.12.030(1); Lane, 101 Wn. App. at 883. It would be contrary to the

plain language and purpose of the unlawful detainer statute to require a landlord to

wait until the (no longer applicable) original term expires or else bring an ejectment

action when a tenant holds over after the lease lawfully terminates early.

Additionally, under the plain language of the lease agreement between the Airport

and EAA, the lease term would end February 28, 2021, unless sooner terminated or

canceled under the agreement—which allowed either party to cancel with 180 days’

written notice. When the Airport gave proper notice that the lease would terminate,

it modified the term of the lease, pursuant to Article 1. Thus, EAA became a

holdover tenant when it remained in Building 7 after the fixed term expired on

August 17, 2018. FPA Crescent, 190 Wn. App. at 677.

Therefore, we hold that a tenant in a fixed term commercial lease becomes a

holdover tenant liable for unlawful detainer when they remain in possession “after

the expiration of the term for which it is let,” whether that term is the period fixed in

the original lease agreement or as modified pursuant to an early termination

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provision. RCW 59.12.030(1). The trial court properly granted the Airport’s motion

for summary judgment on the matter of unlawful detainer. We reverse the Court of

Appeals.

C. Attorney Fees

The Airport is entitled to an award of attorney fees and costs on appeal. RAP

18.1. Article 26 of the lease agreement entitled the prevailing party to recover

reasonable attorney fees in a legal action to enforce the agreement. The trial court

granted the Airport’s motion for summary judgment on the issue of unlawful

detainer and reserved the issues of damages and attorney fees because factual

disputes remained as to the amount of the Airport’s damages. Therefore, we remand

to the trial court to determine the amount of fees to award to the Airport. RAP 18.1(i).

III. CONCLUSION

The holdover tenant provision of the unlawful detainer statute is not limited

to the expiration of the term specified in the original lease agreement but, instead,

also applies when a party exercises their agreed-upon right to modify that term.

Therefore, EAA became a holdover tenant under RCW 59.12.030(1) when it

remained in possession of the premises after the Airport gave 180 days’ notice and

the lease terminated on August 17, 2018. We reverse and remand to the trial court

to determine the Airport’s award of damages and attorney fees.

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______________________________

WE CONCUR:

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