Wash. Court of Appeals published opinion — 361896_pub.pdf

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The lender agreed to settle in exchange for Burbank selling the farm to generate short-

term cash. But Burbank wanted to keep the farm. It found a way to do both.

Burbank agreed to sell the farm to Borton, and Borton agreed to lease the farm

back to Burbank for three years and to grant Burbank an option to repurchase it. A lease

with an option to purchase is an encumbrance against property that reduces its value to a

purchaser. To induce Borton into the encumbrance, Burbank had to give Borton a deal.

Burbank sold its farm to Borton for approximately 15 percent less than fair market value.

Burbank agreed to the deal, which was necessary to resolve its lender’s lawsuit against it

and its owner. There was nothing inequitable about Burbank receiving 15 percent less

than fair market value for the encumbered farm.

“The goal of equity is to do substantial justice. Equity exists to protect the

interests of deserving parties from the ‘harshness of strict legal rules.’” Columbia Cmty.

Bank v. Newman Park, 177 Wn.2d 566, 569, 304 P.3d 472 (2013) (internal quotation

marks omitted) (quoting Rodriguez v. Dep’t of Labor & Indus., 85 Wn.2d 949, 953, 540

P.2d 1359 (1975)). But what seems substantially just to one party often seems

substantially unjust to the other. It is, therefore, reasonable to require the party seeking

equity to first establish that an inequity has occurred or will occur. In these types of

cases, a party requesting an equitable grace period will seek to establish that forfeiture

will result in an unjust loss to it and an unjust benefit to the opposing party.

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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.
No. 36189-6-III
Borton & Sons v. Burbank Props. (concurring in part)