OESTREICH v. OCEAN SHORES

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Docket Number

No. 42654.

Attorney(S)

Lewis S. Armstrong and Edward D. Campbell, for appellants. Davis, Wright, Todd, Riese Jones, Donald A. Schmechel, Judd Kirk, and David B. Goldstein, for respondent Ocean Shores Development Corporation. Riddell, Williams, Voorhees, Ivie Bullitt and Stimson Bullitt, for respondent AVCO Financial Services of Washington.

Judges

PER CURIAM.

Acts

Commerce And Trade — Interstate Land Sales — Definitions

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Smart Summary

Factual and Procedural Background

This action was brought in King County Superior Court by Oceanroad, Inc., and its directors against over 100 lenders and assignees of interests in real estate and contracts arising from the Wendell-West development (a 12,000‑lot community in Ocean Shores, Grays Harbor County, Washington). The amended complaint asserted eight causes of action alleging (1) representations concerning habitability and other matters (some required by the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701–20) and/or implied in sales contracts, (2) falsity or breach of those representations by the defendants and their assignees, and (3) resulting damages to the buyers. The plaintiffs did not seek to repudiate transactions or to declare deeds void. The trial court held the action to be local in character under RCW 4.12.010, dismissed the complaint for want of venue, and the plaintiffs appealed. The Supreme Court of Washington, en banc, reversed and remanded. (Petition for rehearing denied February 25, 1974.)

Legal Issues Presented

Whether an action for damages based on alleged misrepresentations in the sale of realty is "local" under RCW 4.12.010 or is transitory in nature for venue purposes.
Whether a transitory characterization permits the action to be brought in a county other than the county where the land is situated.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Silver Surprize, Inc. v. Sunshine Mining Co., 74 Wn.2d 519, 445 P.2d 334 (1968)	That where the basis of an action is transitory, a court may hear the action even though a question of title may be involved.	The court relied on this holding to support treating the present misrepresentation/damages action as transitory despite potential title-related issues and to find the trial court erred in dismissing for want of venue.
Kaluzok v. Brisson, 27 Cal.2d 760, 167 P.2d 481, 163 A.L.R. 1308 (1946)	Authority indicating that an action at law for damages for alleged misrepresentation in the sale of land is transitory in nature.	Used as supporting authority that misrepresentation-damage actions in realty sales permit venue outside the county where the land is situated.

Court's Reasoning and Analysis

The court first identified RCW 4.12.010's rule that "local" actions must be brought where the subject of the action is situated and quoted the statute's language describing actions affecting title, possession, partition, foreclosure, or injuries to real property. It then examined the amended complaint's allegations—that representations (some required by federal statute and some implied in contracts) were made, breached or false, and caused damages—and noted plaintiffs were not seeking to rescind transactions or void deeds. Applying its prior decision in Silver Surprize (that transitory actions may be heard despite title questions) and authority holding damage actions for misrepresentation in real-estate sales are transitory (including Kaluzok), the court concluded the present action is transitory rather than local. On that basis the trial court's dismissal for want of venue was erroneous. The court therefore reversed and remanded for further proceedings consistent with that conclusion.

Holding and Implications

REVERSED AND REMANDED

Holding: The Supreme Court held that this action — an action for damages based on alleged misrepresentations in a realty sale — is transitory in nature and is not subject to RCW 4.12.010's requirement that local actions be commenced in the county where the land is situated.

Implications: The direct effect is that the King County Superior Court's dismissal for lack of venue was reversed and the case was remanded for further proceedings. The opinion establishes (consistent with cited authority) that damages actions for misrepresentation in real-estate sales may be brought outside the county where the land is located.

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MILTON E. OESTREICH et al., Appellants, v. OCEAN SHORES ESTATES, INC., et al., Respondents.

[1] Venue — Basis of Action — Local or Transitory — In General. While actions whose basis is local must be brought in the jurisdiction wherein the subject of the action is situated (RCW 4.12.010), an action of a transitory nature is not subject to this requirement.

[2] Property — Venue — Basis of Action — Realty Sales — Misrepresentation. An action for damages based on misrepresentation in a realty sale is transitory in nature, is not subject to the "local" action statute (RCW 4.12.010), and may be brought outside the county wherein the land itself is located.

[See 163 A.L.R. 1312; 56 Am. Jur., Venue (1st ed. § 14).]

PER CURIAM.

This action was brought in the King County Superior Court by Oceanroad, Inc., and its directors to seek damages and specific performance from over 100 lenders and assignees of interest in the real estate and contracts of purchase surrounding the original Wendell-West development of a 12,000-lot community in Ocean Shores, Grays Harbor County, Washington. The amended complaint includes eight causes of action which basically assert that: (1) representations were made to the buyers of Ocean Shores property concerning numerous items involving the habitability of the land, many of which were required to be set forth under the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701-20 (1970), and some of which were part of implied agreements under the sales contracts; (2) falsity or breach of these representations by the defendants and their assignees has been committed; and (3) damages have resulted to the buyers. The plaintiffs do not seek to repudiate any real estate transaction nor to declare any of the various deeds void.

The crucial question raised here is whether the subject matter of this suit is basically "local" in nature and therefore falling under RCW 4.12.010. The trial court held that the action was local in character and dismissed the action.

"Actions for the following causes shall be commenced in the county in which the subject of the action, or some part thereof, is situated:
"(1) For the recovery of, for the possession of, for the partition of, for the foreclosure of a mortgage on, or for the determination of all questions affecting the title, or for any injuries to real property.
"(2) All questions involving the rights to the possession or title to any specific article of personal property, in which last mentioned class of cases, damages may also be awarded for the detention and for injury to such personal property." RCW 4.12.010.

[1, 2] We held in Silver Surprize, Inc. v. Sunshine Mining Co., 74 Wn.2d 519, 445 P.2d 334 (1968), that where the basis of an action is transitory, the court may hear and determine the action even though a question of title may be involved and even though the question of title may constitute the essential point on which the case depends. Silver Surprize, Inc. v. Sunshine Mining Co., supra at 526. We also note that what little authority there is on the question indicates that an action at law for damages for alleged misrepresentation in the sale of land is transitory in nature, permitting it to be brought in a county other than that wherein the land is situated. Kaluzok v. Brisson, 27 Cal.2d 760, 167 P.2d 481, 163 A.L.R. 1308 (1946); 56 Am. Jur. Venue § 14, at 7 (Supp. 1973); Annot., Venue of Damage Action for Breach of Real-Estate Sales Contract, 8 A.L.R.3d 489, 491 (1966); Annot., Location of Land as Governing Venue of Action for Damages for Fraud in Sale of Real Property, 163 A.L.R. 1312 (1946). We hold that this action is clearly one of a transitory nature. The King County Superior Court erred in dismissing it for want of jurisdiction.

The judgment is accordingly reversed and remanded to the King County Superior Court for proceedings consistent herewith.

Petition for rehearing denied February 25, 1974.