Legal Case Summary

Please the court I've Charles Watts representing the appellance Jerry and Michelle Hahn Mr. Hahn is in the courtroom with me today. I would go attempt to reserve five minutes for a rebuttal. This case involves a detailed signed letter of March of 1989 where a defendant, respondent, strosser acknowledges his responsibility to pay to Jerry and Michelle Hahn money when he receives it, a share of money that he receives at a contingent on certain future date. That letter, as I say, was signed by both parties. The district court in this case found fault with a letter as a written contract under the six-year Washington Statute of Limitations. This is a Washington Law case. The district court found fault because it did not state, and this is the quote from the court's decision. It did not state the performance required of Hahn. At the time the letter was signed by strosser, Hahn had already performed. There was no performance required of Hahn. We cite to the court the case of Claus versus Honeywell, Alley associated versus Lewis. We cite even one case of the court itself, the district court cited, and that's the SCOAN case. The support for the proposition that under Washington Law, which has a unique Statute of Limitations provision that deals with express or implied contracts, that under Washington Law, which may be unique to the entire country, this type of absence, if you will, of what the consideration already provided by Hahn was, does not fatal to the determination that we have a six-year Statute of Limitations. Mr. Walsh, yes. Looked you look like you've been around for a while. I'm going to the Senior Lawyers' luncheon when I leave here today

. As I have here under, I'm not sure if that's good or bad. We'd like to see... One of the standard phrases that you always see in written contracts is, for good and valuable consideration received. Standard, that's better played. Under your theory, that's superfluous. Well, it's not my theory. It's the Washington Statute of Limitations that is unique in allowing the court to imply terms that are not expressly stated. But in class, there was an offer of employment as a nurse, and what was implied was people don't work for nothing since slavery was abolished. So you imply that there'd be a reasonable payment for the services. But here, there's no implication of anything that Mr. Hahn was to do, certainly. And there was nothing more implication of what he had done. The commission, which is mentioned in the letter, is to be paid to Mr. Straser, and the commission might imply that Mr. Straser was to do something, but it certainly didn't imply that Mr

. Hahn was to do anything. So I don't see where there's an implication of any service that Mr. Hahn was to do. And now it goes from the case of class. I hope he on that. All right. Thank you, Madam. For the question. First of all, it is common in promissory notes to have four value received, and then you recite the obligation that it pertains to the money back. That value received, of course, does not state necessarily what the consideration is. It simply says, I've gotten something. Under Washington Law, it is our position, and we believe the case law supports it. And we believe the district court was in error in not accepting that position. It is our position that the court is entitled to imply, already performed, consideration as it were. Now, in answer to your question, the letter itself, the relationship of the parties, is very similar to a class in that we have a unilateral contract. Honeywell says to Mr. Claus, you go to nurse school and will make you a head nurse at our Muckle Tio operation, which we're setting up

. He went to nurse school. By the way, that was all oral. Now, we have a written document here that says everything except, quote, for value received. A class goes to nursing school, and he gets out of nursing school, and Honeywell says, well, we don't have a job for you, so he goes back to work as a maintenance employee. That is an entirely oral contract, where the only document is a memorandum internal to Honeywell. It was a copy was sent to Claus. Entirely, if you will, distant from the facts in this case, where we have the letter. Now, if you return to the March 20, 1989 letter, it does everything but, say, for value received. The only way that a person reading this letter, I respectfully suggest to this court, the only way a person reading this letter could conclude that it isn't for the promise of Strasser, is not for value received, is to say that Strasser intended to make on a gift. What else would there be that caused Strasser to sign this letter on March 21, 1989? Or could be an assignment? Well, of course, in a way, we think it is. It is an assignment by Strasser, half the money, is to get from closing on the deal. You don't argue that it is an assignment. You don't argue that it is an assignment. We don't claim it is an assignment. We claim it is an obligation from Strasser, not something we could present to the..

. Well, we may have been able to present it to the seller, but we didn't do that. Or the buyer, excuse me. But it talks about commission in line three. It talks about confirm in line two. I'm referring to the letter now. It refers to income tax consequences. It talks about commission. It talks about a total share of the commission. It talks about the interest that we have. It talks about profits. It talks about commission again. And then in the last sentence, it talks about participating with you in this venture. The idea that this would be anything other than a quid pro quo for Hans' performance is simply too much of a stretch. And we believe under Washington law that the court has the power and has the duty to infer or imply that there was consideration here under the class principle. We don't..

. I do not submit to this court that classes nearly as strong as our facts or our law in terms of the class facts versus our facts, as I've already described, class had a writing. I mean, class had no writing. We have a writing. So your argument is even though you have to infer some consideration or performance by Hans, it's still six years, not three. That's our argument. And that's where we think the court went wrong. And the court went wrong. We believe in requiring a demonstration of Hans' already completed performance. This is a unilateral contract in the Vogel and Gates, the two Vogel and Gates cases, Zoppel and Mountain Resources. The court was looking at a bilateral contract in the first case, Mountain Resources. The court concluded that there was no reciprocal promises. Therefore, there was no contract at all. That was a bilateral contract situation. In the second case, the Vogel and Gates versus Zoppel, the court concluded that Zoppel wasn't a party to any contract. Neither case involved a unilateral contract already performed by one side. Classed as associated brokers versus Louis does. Your argument is this a little bit like two people agree that one of them is going to buy a lottery ticket

. And the person goes out and they may even have a little bit of writing. But the second person goes out and buys the lottery ticket and wins the lottery. That you don't have to infer anything performance on first party, even payment for part of the lottery ticket purchase, right? Well, in all respect, you're on it. That's not right. Because our Washington courts have made clear that the language in the statute, the limitation statutes that talks about express or implied, does not eliminate the requirement of a writing. I think your example assumes that they're at the 7-11 and 1 buys and the other gives them a 50 cents or something. In our case, we have the writing. We have the required writing to bring us within the six-year statute of limitations. What the Washington courts uniquely do in this country, we believe, in the Washington Supreme Court said so, is that we don't have to have every T cross and every I dotted in that writing if a reasonable inference or the word in the statute is implication can be made from what is in the writing and the surrounding circumstances to fill in that gap. Now, in our case, the gap, of course, is performance that's already happened. So there's no promise by Han to figure out. The question is, you mentioned income tax consequences and that intrigued me. Can we imply from the fact that the parties to this contract agreed that there would be income tax consequences to Han? That Han had rendered a service for which he received taxable income. We would hope that could be implied. We certainly think so. From the language of the letter itself. Yes, we agree

. And we think there's ample language, including that language. And obviously, what Mr. Straser was trying to do is to defeat the idea that there was a gift involved where he would be taxable on even the half that he gave Jerry Han. So he wants in this letter the fact that Han's going to have to pay half of the, or have to pay tax on the money Han gets. So it won't be taxed a Straser and then not a deductible gift. I had a thought and now I've lost it, but I also can't remember. I think I'm on my way to the deductible gift. These people are not in charity. No, that's right. We're not not taxable. No, not. Well, it wouldn't be. Not taxable, you're on. We would be not taxable to Han. It would be the entire income would be taxable to Straser. And then Straser wouldn't have a deduction or any way to offset the tax he paid on the money that he gave to Han. I will reserve unless the court has more questions at this time

. Thank you. Thank you. I didn't cover two other issues that I don't want to be considered to have been waived here. That's the issue of the discovery rule and the equitable toll. Thank you. Thank you. Please the court. My name is David Ebel. I represent the appellate Steven's Straser. To answer your question, you're on about whether we can infer from the income language and the letter, whether there was some sort of services. There may be an implication possibly that some sort of services were either going to be rendered in the past or in the future. But the problem is we don't know. We don't know what those services were. That's the crux of this case. We don't know whether it was, well, it does because it doesn't matter. Because instead of implying a service, the contract had said, for services that Han has rendered, which we will not describe and keep confidential until our death. That would be fine

. So we don't care what the services were. But your honor, what we don't know from this letter is whether, if you read this paragraph carefully, we do not know whether it's for services to be performed in the future, whether it's been services. Would the letter, there'd be a consideration either past or future or the promise of a consideration? There's no knowing whether or not the consideration or performance has occurred. If it said for performance to be performed in the future. The law requires specificity. My distinguished opposing counsel reference that if it's past, executive past, consideration that's been performed, and again, we need parole evidence to determine whether or not there's been any past performance accomplished. But if it's past consideration performed, then the law allows less particulars, you can say, for services rendered. However, if you're talking about a proposed act in the future, there has to be specificity terms and conditions of what that would be. What's your best case for that proposal? The case, I don't have any answer for that, Your Honor. I believe it's in our briefing. We responded to their argument on past executive performance. Let's take your point. You mean to say that a written contract saying for services to be rendered in the future would be an insufficient relation of consideration unless I would say for services rendered in the future as a finder for the sale of the Aurora Center property. It looks like a rumor, then as a matter of contract law in Washington, the recitation of the consideration would be inadequate. And so I ask you, what can you say? I don't have the answer for your Honor, but the terms and conditions in that instance would be lacking. For instance, if I have a contract with, if I write something to you that says, I'm going to share half my salary with you this year. And for income tax purposes, we reach report half, right? And we both sign it

. That's not a contract. We would be turning contract law upside down if we say that that is an enforceable written contract because there's no indication of what your performance has been in the past, whether it's in the in the in the future, whether you did something and you're saying that you're going to pay income tax on it, whether you, whether you've serviced me by giving me free legal advice or whether, hey, you know, painted my house or sold my boat or whatever, we don't know, we cannot infer from this writing what the performance, whether it was passed or future or whether part of it was passed or part of it was the future, we cannot from this document determine what that is. If with the courts and doldens, and I may add your Honor, in your Honor, in this case, the declaration testimony, again, pro-elevenants of the parties, is very different as to what the offer was, what the performance was, whether or not performance even occurred. And that magnifies the problem in this case because we cannot determine from the face of the letter what the contract was, what the essential elements of the contract were, what was Han supposed to do, what was he supposed to do, did he do it in the past, did he do it, was he supposed to do it in the future, is it, is it not, no obligation at all, like the case and like LeVold or that we don't know, this doesn't commit Mr. Han to anything, there's no commitment whatsoever, it's lacking essential elements, once the trial court, and of course we're here, Your Honor, asking, Your Honor, we're asking that the court affirm the district court's order granting summary judgment in Mr. Strosser's favor and denying summary judgment, the most for summary judgment by Mr. Han. Once it's established that the three-year statute of limitations applies, it becomes just a math problem. The alleged breach is April 16th, 2004. It is undisputed. It's undisputed as well that the loss it was filed, almost six years later on March 20th, 2010. This court is bound, yes. In the last sentence of this document, it reads, Steve, I want to thank you again for giving me the opportunity to participate with you in this venture. Does that indicate the mission by Mr. Strosser that this was a joint venture and therefore that he had a fiduciary relationship with his joint venture which required him to be loyal to this joint venture and to give him notice of the same? I don't think it constitutes an admission, Your Honor. It also doesn't establish what that participation is, whether it's something again, respectfully, whether it's something the opportunity to participate in the future, performance is going to occur in the future. We're a joint venture then the discovery rule would apply. There would be equitable tolling of a statute because the fiduciary joint venture or Mr. Hahn had not told his co-producer, Mr. Strosser, had not told Mr. Hahn about the sale. Well, Your Honor, I'm not aware of any evidence that this is a joint venture. It's an opportunity to buy something. But what venture, but we don't know what venture it is. Participating in a venture is what I'm wondering. In reading this entire letter, which I might add is written by a lawyer and if it was intended to be a contract, correct. And if it was intended to be a contract, we know that it would include a contract. This is pretty clearly consistent with the declaration of Mr. Strosser, which says, I asked my lawyer to write a letter so that I don't get taxed on the full $50,000 when you put something together. If Mr. Hahn intended to be a contract, it would be. But that's your question, Your Honor. If you read this entire letter, if there's any venture, it's not a venture. The word venture here is clearly not referencing any venture between Mr

. There would be equitable tolling of a statute because the fiduciary joint venture or Mr. Hahn had not told his co-producer, Mr. Strosser, had not told Mr. Hahn about the sale. Well, Your Honor, I'm not aware of any evidence that this is a joint venture. It's an opportunity to buy something. But what venture, but we don't know what venture it is. Participating in a venture is what I'm wondering. In reading this entire letter, which I might add is written by a lawyer and if it was intended to be a contract, correct. And if it was intended to be a contract, we know that it would include a contract. This is pretty clearly consistent with the declaration of Mr. Strosser, which says, I asked my lawyer to write a letter so that I don't get taxed on the full $50,000 when you put something together. If Mr. Hahn intended to be a contract, it would be. But that's your question, Your Honor. If you read this entire letter, if there's any venture, it's not a venture. The word venture here is clearly not referencing any venture between Mr. Hahn and Mr. Strosser. But instead, this purchase, whether or not it happens in the past or the future, this purchase of the property. So you say that Mr. Strosser declaration shows that he didn't want to get taxed for the whole $50,000. Correct. Does not imply that Mr. Hahn did some work for which he would be taxed? Again, that's parole evidence. That's the declaration of Mr. Hahn upon which were, the reason we're even talking about it is because something outside of the writing, the writing, the. It would corroborate the implication which we discussed earlier that acknowledging income tax liability implies that Mr. Hahn did some work. Well, Mr. Strosser's declaration says that lays out what he believes the terms of the offer was, which is completely different than what Mr. Hahn says, and also the performance. And in that declaration, Mr. Strosser testifies that Jerry asked him to split the commission and he gave him the $25,000

. Hahn and Mr. Strosser. But instead, this purchase, whether or not it happens in the past or the future, this purchase of the property. So you say that Mr. Strosser declaration shows that he didn't want to get taxed for the whole $50,000. Correct. Does not imply that Mr. Hahn did some work for which he would be taxed? Again, that's parole evidence. That's the declaration of Mr. Hahn upon which were, the reason we're even talking about it is because something outside of the writing, the writing, the. It would corroborate the implication which we discussed earlier that acknowledging income tax liability implies that Mr. Hahn did some work. Well, Mr. Strosser's declaration says that lays out what he believes the terms of the offer was, which is completely different than what Mr. Hahn says, and also the performance. And in that declaration, Mr. Strosser testifies that Jerry asked him to split the commission and he gave him the $25,000. To split the $25,000, the $50,000 and he gave it to him. As a gift? Well, there's been a lot of discussion about that, Your Honor. I don't know whether Mr. there's no record evidence, and I personally don't know whether there was any taxation as a gift or not. Mr. Strosser, Maneca file a gift tax or so? Well, that's what we don't know, Your Honor. That was raised in the appellate record that issue, that question for the first time. So it's not a record, and I personally do not know the answer to that. A lot of unanswered questions in this case. Why shouldn't we send it back to have the record flushed out? Well, because Your Honor, the reason that there are the fact that there are unanswered questions, the very fact that there are unanswered questions about what the offer was, what was the performance, if any, what were the conditions that were placed on the performance, the very fact that there's these disputes, illustrates the reason that this case that the trial court should be affirmed. Because the existence of those fact questions, which cannot be resolved on the four corners of the document, tell us under long standing Washington law, almost a hundred years, that if their parole evidence is necessary to establish any element of contract in a writing, then the writing is not a written contract for purposes of statute limitations, it is partly oral and partly written. And so because there are these unanswered questions, that is the very reason that the case is time bar. This, Mr., this may be, this letter may be evidence, Your Honor, that a contract existed. It may be evidence, but it is not a written contract on its face. And if we call this a written contract on its face, we would be ignoring the law of contracts in Washington and also the statute of limitations law in Washington, which finds that this, this would be at most a partly oral, partly written question, written partly written, partly oral contract. Your Honor, just, Your Honor, is briefly, there is the issue of RPC 1

. To split the $25,000, the $50,000 and he gave it to him. As a gift? Well, there's been a lot of discussion about that, Your Honor. I don't know whether Mr. there's no record evidence, and I personally don't know whether there was any taxation as a gift or not. Mr. Strosser, Maneca file a gift tax or so? Well, that's what we don't know, Your Honor. That was raised in the appellate record that issue, that question for the first time. So it's not a record, and I personally do not know the answer to that. A lot of unanswered questions in this case. Why shouldn't we send it back to have the record flushed out? Well, because Your Honor, the reason that there are the fact that there are unanswered questions, the very fact that there are unanswered questions about what the offer was, what was the performance, if any, what were the conditions that were placed on the performance, the very fact that there's these disputes, illustrates the reason that this case that the trial court should be affirmed. Because the existence of those fact questions, which cannot be resolved on the four corners of the document, tell us under long standing Washington law, almost a hundred years, that if their parole evidence is necessary to establish any element of contract in a writing, then the writing is not a written contract for purposes of statute limitations, it is partly oral and partly written. And so because there are these unanswered questions, that is the very reason that the case is time bar. This, Mr., this may be, this letter may be evidence, Your Honor, that a contract existed. It may be evidence, but it is not a written contract on its face. And if we call this a written contract on its face, we would be ignoring the law of contracts in Washington and also the statute of limitations law in Washington, which finds that this, this would be at most a partly oral, partly written question, written partly written, partly oral contract. Your Honor, just, Your Honor, is briefly, there is the issue of RPC 1.8. If for any reason that the court doesn't find that the, this case, that the cause of action was, was time bar, we've got the issue of RPC 1.8. Of course, when an lawyer and a client enter into a business transaction, there are certain safeguards that must be fulfilled. And if the safeguards aren't fulfilled, then it's a violation of that rule. And the law in Washington is that a violation of the RPC is an unenforceable contract. So, of course, the first question is, is this an attorney client relationship? The Supreme, Washington Supreme Court in Haley says that the determination of whether or not it's an attorney client relationship is based largely on the subjective belief of the client, but that it also must be based on, must be, the subjective belief must be reasonably based upon the conduct and actions of the lawyer. In this case, the, the evidence from Mr. Straser's Declaration is his subjective belief was that Mr. Hahn was his lawyer. Now, the conduct and the actions. Mr. Hahn was Mr. Straser's lawyer for the purpose of what? Well, you're on to that, that goes to the second question. Mr. Hahn, for general business purposes, and possibly for this. How do you handle the language here that to the extent that attorney's fee, attorney services were performed, $300 of attorney's fees to the law firm was a deduction

.8. If for any reason that the court doesn't find that the, this case, that the cause of action was, was time bar, we've got the issue of RPC 1.8. Of course, when an lawyer and a client enter into a business transaction, there are certain safeguards that must be fulfilled. And if the safeguards aren't fulfilled, then it's a violation of that rule. And the law in Washington is that a violation of the RPC is an unenforceable contract. So, of course, the first question is, is this an attorney client relationship? The Supreme, Washington Supreme Court in Haley says that the determination of whether or not it's an attorney client relationship is based largely on the subjective belief of the client, but that it also must be based on, must be, the subjective belief must be reasonably based upon the conduct and actions of the lawyer. In this case, the, the evidence from Mr. Straser's Declaration is his subjective belief was that Mr. Hahn was his lawyer. Now, the conduct and the actions. Mr. Hahn was Mr. Straser's lawyer for the purpose of what? Well, you're on to that, that goes to the second question. Mr. Hahn, for general business purposes, and possibly for this. How do you handle the language here that to the extent that attorney's fee, attorney services were performed, $300 of attorney's fees to the law firm was a deduction. That was paid directly to the deduction. So, how do you square that with the idea that in addition to that, Mr. Hahn was Mr. Straser's lawyer? Well, I'm sorry. Are you asking your honor whether that paragraph of the letter implies that Mr. Hahn was Mr. Straser's lawyer or whether it shows that it was just the opposite? Well, the record shows that the payment of that money was to the, was to the seller or for the benefit of the seller apparently paid by Mr. Straser for the terms of this letter. But Mr. Hahn admits in his declaration, his first declaration, mind you before the RPC issue came up, he says at ER28 that Mr. Straser was a client of mine. He became a client of mine between 1987 and 1989 and 85 and 87. Again, this is 89. And I, and I represented him principally on business matters. Mr. again, Mr. Straser believed he was his lawyer

. That was paid directly to the deduction. So, how do you square that with the idea that in addition to that, Mr. Hahn was Mr. Straser's lawyer? Well, I'm sorry. Are you asking your honor whether that paragraph of the letter implies that Mr. Hahn was Mr. Straser's lawyer or whether it shows that it was just the opposite? Well, the record shows that the payment of that money was to the, was to the seller or for the benefit of the seller apparently paid by Mr. Straser for the terms of this letter. But Mr. Hahn admits in his declaration, his first declaration, mind you before the RPC issue came up, he says at ER28 that Mr. Straser was a client of mine. He became a client of mine between 1987 and 1989 and 85 and 87. Again, this is 89. And I, and I represented him principally on business matters. Mr. again, Mr. Straser believed he was his lawyer. Mr. Hahn later admits in his declaration that he had nine open files for at that time in 1987 and 89, again during the time, nine open files for Mr. Straser's company. And for Mr. Straser and, and his partner Jerry Schupe. So we've got, we've got the subjective belief that it's an attorney. Oh, one last thing, honor. This letter that appellants claim is a, is a contract and we claim is not a written contract on its own. It was on Mr. Hahn's letterhead to his someone he had represented in the past, which he admits. So there's, there's, there's actions and conduct that clearly demonstrate that this was an attorney, client, relationship and subjective belief. And RPC 1.8 requires that the terms of this agreement be fully disclosed in writing. Mr. Hahn has admits in all of the pleadings that this was, this was some oral agreement that occurred well before with this letter occurred. So there's no writing. And even if this letter is considered a writing, it doesn't fully disclose the terms of the term

. Mr. Hahn later admits in his declaration that he had nine open files for at that time in 1987 and 89, again during the time, nine open files for Mr. Straser's company. And for Mr. Straser and, and his partner Jerry Schupe. So we've got, we've got the subjective belief that it's an attorney. Oh, one last thing, honor. This letter that appellants claim is a, is a contract and we claim is not a written contract on its own. It was on Mr. Hahn's letterhead to his someone he had represented in the past, which he admits. So there's, there's, there's actions and conduct that clearly demonstrate that this was an attorney, client, relationship and subjective belief. And RPC 1.8 requires that the terms of this agreement be fully disclosed in writing. Mr. Hahn has admits in all of the pleadings that this was, this was some oral agreement that occurred well before with this letter occurred. So there's no writing. And even if this letter is considered a writing, it doesn't fully disclose the terms of the term. So there's no other transaction as required by 1.8 and quick question. Yes. Yes or no answer. The judge Martinez reached this issue. Judge Martinez did not reach that. Is he not finding the answers? No. No. Thank you. My time is up your honors unless you have any questions. Thank you. Mr. Watson, time reserve. I guess I do remember how much she'll tell you I just got told, well, you know, my age came up and I have to say to you that I get real tired after 71 years on this earth of doing what I'm doing until I'm challenged intellectually. And this is a great honor to be in front of your honors today for that purpose. The for value received example, which is so common is a perfect example of a lack of description of what gave rise to the promissory note. In other words, just to say for value received only says it's for value doesn't say what it is

. So there's no other transaction as required by 1.8 and quick question. Yes. Yes or no answer. The judge Martinez reached this issue. Judge Martinez did not reach that. Is he not finding the answers? No. No. Thank you. My time is up your honors unless you have any questions. Thank you. Mr. Watson, time reserve. I guess I do remember how much she'll tell you I just got told, well, you know, my age came up and I have to say to you that I get real tired after 71 years on this earth of doing what I'm doing until I'm challenged intellectually. And this is a great honor to be in front of your honors today for that purpose. The for value received example, which is so common is a perfect example of a lack of description of what gave rise to the promissory note. In other words, just to say for value received only says it's for value doesn't say what it is. We believe that the Washington statute on statutes of limitations and the case law that we have relied on in our brief and cited you and discussed here in the argument makes clear that you do not need to go into detail about already performed consideration. I would like to refer you this is quoted in the brief, but I think it's so I feel that the restatement of contracts since contract law has been around since the code of homerob by I assume I feel that the restatement of contracts, which is a compilation has been around for decades has some very strong influence on our courts in this country. So for that reason, I want to call your attention to section 131 of the restatement of contracts second and in comment G, it talks about the essential terms of unperformed contracts must be stated, but details or particulars need not what is essential depends on the agreement and its context and also on the subsequent conduct of the parties, including the dispute out of which the. Dispute which arises in remedy saw admission or erroneous statement of an agreed term makes no difference if the same term is supplied by implication or rule of law comment H and I only coat part of this is. Aside from explicit statutory provisions the prevailing view is that error or mission in the recital of past events does not affect the sufficiency of a member and it's comment H to section 131 goes on we're on the other hand, the considerate. So the consideration for a promise consists of return promise not yet performed performance of the return promise is commonly a condition of the promise or a duty. So I think the restatement makes very clear that there's a distinction between the obligation in a written contract to recite already performed promise or consideration and the recite and the need to recite executory are non performed. The indisha here of the contract our payment of suggests that most mortals would not be giving $25,000 to somebody else unless there was a good and sufficient reason for it. The letter itself that we've been talking about the March 89 letter refers to the fact that payment has been made. Mr. Strosser admits in his declaration that that he told Mr. Han he would get he would pay him half if he found a buyer and that's a paragraph five of the Strosser declaration in the record here. Quote I did tell Jerry that I would split the commission from the seller if he brought me a buyer that's a judicial admission under oath in this case in the record. Mr. Strosser a lawyer signed the agreement and he's attempted to say well I don't remember if I read it or not but I think a lawyer can't get very far with any court on that theory. The letter itself we suggest impliedly if not directly acknowledges performance. The breach date we don't agree with of course under our theories of equitable tolling or the discovery rule

. We believe that the Washington statute on statutes of limitations and the case law that we have relied on in our brief and cited you and discussed here in the argument makes clear that you do not need to go into detail about already performed consideration. I would like to refer you this is quoted in the brief, but I think it's so I feel that the restatement of contracts since contract law has been around since the code of homerob by I assume I feel that the restatement of contracts, which is a compilation has been around for decades has some very strong influence on our courts in this country. So for that reason, I want to call your attention to section 131 of the restatement of contracts second and in comment G, it talks about the essential terms of unperformed contracts must be stated, but details or particulars need not what is essential depends on the agreement and its context and also on the subsequent conduct of the parties, including the dispute out of which the. Dispute which arises in remedy saw admission or erroneous statement of an agreed term makes no difference if the same term is supplied by implication or rule of law comment H and I only coat part of this is. Aside from explicit statutory provisions the prevailing view is that error or mission in the recital of past events does not affect the sufficiency of a member and it's comment H to section 131 goes on we're on the other hand, the considerate. So the consideration for a promise consists of return promise not yet performed performance of the return promise is commonly a condition of the promise or a duty. So I think the restatement makes very clear that there's a distinction between the obligation in a written contract to recite already performed promise or consideration and the recite and the need to recite executory are non performed. The indisha here of the contract our payment of suggests that most mortals would not be giving $25,000 to somebody else unless there was a good and sufficient reason for it. The letter itself that we've been talking about the March 89 letter refers to the fact that payment has been made. Mr. Strosser admits in his declaration that that he told Mr. Han he would get he would pay him half if he found a buyer and that's a paragraph five of the Strosser declaration in the record here. Quote I did tell Jerry that I would split the commission from the seller if he brought me a buyer that's a judicial admission under oath in this case in the record. Mr. Strosser a lawyer signed the agreement and he's attempted to say well I don't remember if I read it or not but I think a lawyer can't get very far with any court on that theory. The letter itself we suggest impliedly if not directly acknowledges performance. The breach date we don't agree with of course under our theories of equitable tolling or the discovery rule. It is true the property sold in April of 2004 but it is not true that we agree that that under all theories of our case that that is the date from which the six years should measure. I might just comment that under the discovery rule we believe the court is wrong in citing vertex for the proposition that there is no discovery rule in contract cases in the state of Washington. A careful reading of vertex particularly footnote five shows that that is an open question and the court acknowledges in footnote five. The majority of the states in the nation allow a discovery rule in contract breach situations for purposes of statute of limitations signaling that in the right case we suggest signaling in the right case they will do so in Washington. Councillor Neill wishes to sum up your over your time. Oh sorry. Well I just sum up to say that we believe class and other similar cases associated rules and the scone case cited by the district court here. Support the proposition that Washington is unique in its statute of limitations. Thank you. Thank you both counsel and again for another very interesting case and Han versus Strosser will be submitted.

Please the court I've Charles Watts representing the appellance Jerry and Michelle Hahn Mr. Hahn is in the courtroom with me today. I would go attempt to reserve five minutes for a rebuttal. This case involves a detailed signed letter of March of 1989 where a defendant, respondent, strosser acknowledges his responsibility to pay to Jerry and Michelle Hahn money when he receives it, a share of money that he receives at a contingent on certain future date. That letter, as I say, was signed by both parties. The district court in this case found fault with a letter as a written contract under the six-year Washington Statute of Limitations. This is a Washington Law case. The district court found fault because it did not state, and this is the quote from the court's decision. It did not state the performance required of Hahn. At the time the letter was signed by strosser, Hahn had already performed. There was no performance required of Hahn. We cite to the court the case of Claus versus Honeywell, Alley associated versus Lewis. We cite even one case of the court itself, the district court cited, and that's the SCOAN case. The support for the proposition that under Washington Law, which has a unique Statute of Limitations provision that deals with express or implied contracts, that under Washington Law, which may be unique to the entire country, this type of absence, if you will, of what the consideration already provided by Hahn was, does not fatal to the determination that we have a six-year Statute of Limitations. Mr. Walsh, yes. Looked you look like you've been around for a while. I'm going to the Senior Lawyers' luncheon when I leave here today. As I have here under, I'm not sure if that's good or bad. We'd like to see... One of the standard phrases that you always see in written contracts is, for good and valuable consideration received. Standard, that's better played. Under your theory, that's superfluous. Well, it's not my theory. It's the Washington Statute of Limitations that is unique in allowing the court to imply terms that are not expressly stated. But in class, there was an offer of employment as a nurse, and what was implied was people don't work for nothing since slavery was abolished. So you imply that there'd be a reasonable payment for the services. But here, there's no implication of anything that Mr. Hahn was to do, certainly. And there was nothing more implication of what he had done. The commission, which is mentioned in the letter, is to be paid to Mr. Straser, and the commission might imply that Mr. Straser was to do something, but it certainly didn't imply that Mr. Hahn was to do anything. So I don't see where there's an implication of any service that Mr. Hahn was to do. And now it goes from the case of class. I hope he on that. All right. Thank you, Madam. For the question. First of all, it is common in promissory notes to have four value received, and then you recite the obligation that it pertains to the money back. That value received, of course, does not state necessarily what the consideration is. It simply says, I've gotten something. Under Washington Law, it is our position, and we believe the case law supports it. And we believe the district court was in error in not accepting that position. It is our position that the court is entitled to imply, already performed, consideration as it were. Now, in answer to your question, the letter itself, the relationship of the parties, is very similar to a class in that we have a unilateral contract. Honeywell says to Mr. Claus, you go to nurse school and will make you a head nurse at our Muckle Tio operation, which we're setting up. He went to nurse school. By the way, that was all oral. Now, we have a written document here that says everything except, quote, for value received. A class goes to nursing school, and he gets out of nursing school, and Honeywell says, well, we don't have a job for you, so he goes back to work as a maintenance employee. That is an entirely oral contract, where the only document is a memorandum internal to Honeywell. It was a copy was sent to Claus. Entirely, if you will, distant from the facts in this case, where we have the letter. Now, if you return to the March 20, 1989 letter, it does everything but, say, for value received. The only way that a person reading this letter, I respectfully suggest to this court, the only way a person reading this letter could conclude that it isn't for the promise of Strasser, is not for value received, is to say that Strasser intended to make on a gift. What else would there be that caused Strasser to sign this letter on March 21, 1989? Or could be an assignment? Well, of course, in a way, we think it is. It is an assignment by Strasser, half the money, is to get from closing on the deal. You don't argue that it is an assignment. You don't argue that it is an assignment. We don't claim it is an assignment. We claim it is an obligation from Strasser, not something we could present to the... Well, we may have been able to present it to the seller, but we didn't do that. Or the buyer, excuse me. But it talks about commission in line three. It talks about confirm in line two. I'm referring to the letter now. It refers to income tax consequences. It talks about commission. It talks about a total share of the commission. It talks about the interest that we have. It talks about profits. It talks about commission again. And then in the last sentence, it talks about participating with you in this venture. The idea that this would be anything other than a quid pro quo for Hans' performance is simply too much of a stretch. And we believe under Washington law that the court has the power and has the duty to infer or imply that there was consideration here under the class principle. We don't... I do not submit to this court that classes nearly as strong as our facts or our law in terms of the class facts versus our facts, as I've already described, class had a writing. I mean, class had no writing. We have a writing. So your argument is even though you have to infer some consideration or performance by Hans, it's still six years, not three. That's our argument. And that's where we think the court went wrong. And the court went wrong. We believe in requiring a demonstration of Hans' already completed performance. This is a unilateral contract in the Vogel and Gates, the two Vogel and Gates cases, Zoppel and Mountain Resources. The court was looking at a bilateral contract in the first case, Mountain Resources. The court concluded that there was no reciprocal promises. Therefore, there was no contract at all. That was a bilateral contract situation. In the second case, the Vogel and Gates versus Zoppel, the court concluded that Zoppel wasn't a party to any contract. Neither case involved a unilateral contract already performed by one side. Classed as associated brokers versus Louis does. Your argument is this a little bit like two people agree that one of them is going to buy a lottery ticket. And the person goes out and they may even have a little bit of writing. But the second person goes out and buys the lottery ticket and wins the lottery. That you don't have to infer anything performance on first party, even payment for part of the lottery ticket purchase, right? Well, in all respect, you're on it. That's not right. Because our Washington courts have made clear that the language in the statute, the limitation statutes that talks about express or implied, does not eliminate the requirement of a writing. I think your example assumes that they're at the 7-11 and 1 buys and the other gives them a 50 cents or something. In our case, we have the writing. We have the required writing to bring us within the six-year statute of limitations. What the Washington courts uniquely do in this country, we believe, in the Washington Supreme Court said so, is that we don't have to have every T cross and every I dotted in that writing if a reasonable inference or the word in the statute is implication can be made from what is in the writing and the surrounding circumstances to fill in that gap. Now, in our case, the gap, of course, is performance that's already happened. So there's no promise by Han to figure out. The question is, you mentioned income tax consequences and that intrigued me. Can we imply from the fact that the parties to this contract agreed that there would be income tax consequences to Han? That Han had rendered a service for which he received taxable income. We would hope that could be implied. We certainly think so. From the language of the letter itself. Yes, we agree. And we think there's ample language, including that language. And obviously, what Mr. Straser was trying to do is to defeat the idea that there was a gift involved where he would be taxable on even the half that he gave Jerry Han. So he wants in this letter the fact that Han's going to have to pay half of the, or have to pay tax on the money Han gets. So it won't be taxed a Straser and then not a deductible gift. I had a thought and now I've lost it, but I also can't remember. I think I'm on my way to the deductible gift. These people are not in charity. No, that's right. We're not not taxable. No, not. Well, it wouldn't be. Not taxable, you're on. We would be not taxable to Han. It would be the entire income would be taxable to Straser. And then Straser wouldn't have a deduction or any way to offset the tax he paid on the money that he gave to Han. I will reserve unless the court has more questions at this time. Thank you. Thank you. I didn't cover two other issues that I don't want to be considered to have been waived here. That's the issue of the discovery rule and the equitable toll. Thank you. Thank you. Please the court. My name is David Ebel. I represent the appellate Steven's Straser. To answer your question, you're on about whether we can infer from the income language and the letter, whether there was some sort of services. There may be an implication possibly that some sort of services were either going to be rendered in the past or in the future. But the problem is we don't know. We don't know what those services were. That's the crux of this case. We don't know whether it was, well, it does because it doesn't matter. Because instead of implying a service, the contract had said, for services that Han has rendered, which we will not describe and keep confidential until our death. That would be fine. So we don't care what the services were. But your honor, what we don't know from this letter is whether, if you read this paragraph carefully, we do not know whether it's for services to be performed in the future, whether it's been services. Would the letter, there'd be a consideration either past or future or the promise of a consideration? There's no knowing whether or not the consideration or performance has occurred. If it said for performance to be performed in the future. The law requires specificity. My distinguished opposing counsel reference that if it's past, executive past, consideration that's been performed, and again, we need parole evidence to determine whether or not there's been any past performance accomplished. But if it's past consideration performed, then the law allows less particulars, you can say, for services rendered. However, if you're talking about a proposed act in the future, there has to be specificity terms and conditions of what that would be. What's your best case for that proposal? The case, I don't have any answer for that, Your Honor. I believe it's in our briefing. We responded to their argument on past executive performance. Let's take your point. You mean to say that a written contract saying for services to be rendered in the future would be an insufficient relation of consideration unless I would say for services rendered in the future as a finder for the sale of the Aurora Center property. It looks like a rumor, then as a matter of contract law in Washington, the recitation of the consideration would be inadequate. And so I ask you, what can you say? I don't have the answer for your Honor, but the terms and conditions in that instance would be lacking. For instance, if I have a contract with, if I write something to you that says, I'm going to share half my salary with you this year. And for income tax purposes, we reach report half, right? And we both sign it. That's not a contract. We would be turning contract law upside down if we say that that is an enforceable written contract because there's no indication of what your performance has been in the past, whether it's in the in the in the future, whether you did something and you're saying that you're going to pay income tax on it, whether you, whether you've serviced me by giving me free legal advice or whether, hey, you know, painted my house or sold my boat or whatever, we don't know, we cannot infer from this writing what the performance, whether it was passed or future or whether part of it was passed or part of it was the future, we cannot from this document determine what that is. If with the courts and doldens, and I may add your Honor, in your Honor, in this case, the declaration testimony, again, pro-elevenants of the parties, is very different as to what the offer was, what the performance was, whether or not performance even occurred. And that magnifies the problem in this case because we cannot determine from the face of the letter what the contract was, what the essential elements of the contract were, what was Han supposed to do, what was he supposed to do, did he do it in the past, did he do it, was he supposed to do it in the future, is it, is it not, no obligation at all, like the case and like LeVold or that we don't know, this doesn't commit Mr. Han to anything, there's no commitment whatsoever, it's lacking essential elements, once the trial court, and of course we're here, Your Honor, asking, Your Honor, we're asking that the court affirm the district court's order granting summary judgment in Mr. Strosser's favor and denying summary judgment, the most for summary judgment by Mr. Han. Once it's established that the three-year statute of limitations applies, it becomes just a math problem. The alleged breach is April 16th, 2004. It is undisputed. It's undisputed as well that the loss it was filed, almost six years later on March 20th, 2010. This court is bound, yes. In the last sentence of this document, it reads, Steve, I want to thank you again for giving me the opportunity to participate with you in this venture. Does that indicate the mission by Mr. Strosser that this was a joint venture and therefore that he had a fiduciary relationship with his joint venture which required him to be loyal to this joint venture and to give him notice of the same? I don't think it constitutes an admission, Your Honor. It also doesn't establish what that participation is, whether it's something again, respectfully, whether it's something the opportunity to participate in the future, performance is going to occur in the future. We're a joint venture then the discovery rule would apply. There would be equitable tolling of a statute because the fiduciary joint venture or Mr. Hahn had not told his co-producer, Mr. Strosser, had not told Mr. Hahn about the sale. Well, Your Honor, I'm not aware of any evidence that this is a joint venture. It's an opportunity to buy something. But what venture, but we don't know what venture it is. Participating in a venture is what I'm wondering. In reading this entire letter, which I might add is written by a lawyer and if it was intended to be a contract, correct. And if it was intended to be a contract, we know that it would include a contract. This is pretty clearly consistent with the declaration of Mr. Strosser, which says, I asked my lawyer to write a letter so that I don't get taxed on the full $50,000 when you put something together. If Mr. Hahn intended to be a contract, it would be. But that's your question, Your Honor. If you read this entire letter, if there's any venture, it's not a venture. The word venture here is clearly not referencing any venture between Mr. Hahn and Mr. Strosser. But instead, this purchase, whether or not it happens in the past or the future, this purchase of the property. So you say that Mr. Strosser declaration shows that he didn't want to get taxed for the whole $50,000. Correct. Does not imply that Mr. Hahn did some work for which he would be taxed? Again, that's parole evidence. That's the declaration of Mr. Hahn upon which were, the reason we're even talking about it is because something outside of the writing, the writing, the. It would corroborate the implication which we discussed earlier that acknowledging income tax liability implies that Mr. Hahn did some work. Well, Mr. Strosser's declaration says that lays out what he believes the terms of the offer was, which is completely different than what Mr. Hahn says, and also the performance. And in that declaration, Mr. Strosser testifies that Jerry asked him to split the commission and he gave him the $25,000. To split the $25,000, the $50,000 and he gave it to him. As a gift? Well, there's been a lot of discussion about that, Your Honor. I don't know whether Mr. there's no record evidence, and I personally don't know whether there was any taxation as a gift or not. Mr. Strosser, Maneca file a gift tax or so? Well, that's what we don't know, Your Honor. That was raised in the appellate record that issue, that question for the first time. So it's not a record, and I personally do not know the answer to that. A lot of unanswered questions in this case. Why shouldn't we send it back to have the record flushed out? Well, because Your Honor, the reason that there are the fact that there are unanswered questions, the very fact that there are unanswered questions about what the offer was, what was the performance, if any, what were the conditions that were placed on the performance, the very fact that there's these disputes, illustrates the reason that this case that the trial court should be affirmed. Because the existence of those fact questions, which cannot be resolved on the four corners of the document, tell us under long standing Washington law, almost a hundred years, that if their parole evidence is necessary to establish any element of contract in a writing, then the writing is not a written contract for purposes of statute limitations, it is partly oral and partly written. And so because there are these unanswered questions, that is the very reason that the case is time bar. This, Mr., this may be, this letter may be evidence, Your Honor, that a contract existed. It may be evidence, but it is not a written contract on its face. And if we call this a written contract on its face, we would be ignoring the law of contracts in Washington and also the statute of limitations law in Washington, which finds that this, this would be at most a partly oral, partly written question, written partly written, partly oral contract. Your Honor, just, Your Honor, is briefly, there is the issue of RPC 1.8. If for any reason that the court doesn't find that the, this case, that the cause of action was, was time bar, we've got the issue of RPC 1.8. Of course, when an lawyer and a client enter into a business transaction, there are certain safeguards that must be fulfilled. And if the safeguards aren't fulfilled, then it's a violation of that rule. And the law in Washington is that a violation of the RPC is an unenforceable contract. So, of course, the first question is, is this an attorney client relationship? The Supreme, Washington Supreme Court in Haley says that the determination of whether or not it's an attorney client relationship is based largely on the subjective belief of the client, but that it also must be based on, must be, the subjective belief must be reasonably based upon the conduct and actions of the lawyer. In this case, the, the evidence from Mr. Straser's Declaration is his subjective belief was that Mr. Hahn was his lawyer. Now, the conduct and the actions. Mr. Hahn was Mr. Straser's lawyer for the purpose of what? Well, you're on to that, that goes to the second question. Mr. Hahn, for general business purposes, and possibly for this. How do you handle the language here that to the extent that attorney's fee, attorney services were performed, $300 of attorney's fees to the law firm was a deduction. That was paid directly to the deduction. So, how do you square that with the idea that in addition to that, Mr. Hahn was Mr. Straser's lawyer? Well, I'm sorry. Are you asking your honor whether that paragraph of the letter implies that Mr. Hahn was Mr. Straser's lawyer or whether it shows that it was just the opposite? Well, the record shows that the payment of that money was to the, was to the seller or for the benefit of the seller apparently paid by Mr. Straser for the terms of this letter. But Mr. Hahn admits in his declaration, his first declaration, mind you before the RPC issue came up, he says at ER28 that Mr. Straser was a client of mine. He became a client of mine between 1987 and 1989 and 85 and 87. Again, this is 89. And I, and I represented him principally on business matters. Mr. again, Mr. Straser believed he was his lawyer. Mr. Hahn later admits in his declaration that he had nine open files for at that time in 1987 and 89, again during the time, nine open files for Mr. Straser's company. And for Mr. Straser and, and his partner Jerry Schupe. So we've got, we've got the subjective belief that it's an attorney. Oh, one last thing, honor. This letter that appellants claim is a, is a contract and we claim is not a written contract on its own. It was on Mr. Hahn's letterhead to his someone he had represented in the past, which he admits. So there's, there's, there's actions and conduct that clearly demonstrate that this was an attorney, client, relationship and subjective belief. And RPC 1.8 requires that the terms of this agreement be fully disclosed in writing. Mr. Hahn has admits in all of the pleadings that this was, this was some oral agreement that occurred well before with this letter occurred. So there's no writing. And even if this letter is considered a writing, it doesn't fully disclose the terms of the term. So there's no other transaction as required by 1.8 and quick question. Yes. Yes or no answer. The judge Martinez reached this issue. Judge Martinez did not reach that. Is he not finding the answers? No. No. Thank you. My time is up your honors unless you have any questions. Thank you. Mr. Watson, time reserve. I guess I do remember how much she'll tell you I just got told, well, you know, my age came up and I have to say to you that I get real tired after 71 years on this earth of doing what I'm doing until I'm challenged intellectually. And this is a great honor to be in front of your honors today for that purpose. The for value received example, which is so common is a perfect example of a lack of description of what gave rise to the promissory note. In other words, just to say for value received only says it's for value doesn't say what it is. We believe that the Washington statute on statutes of limitations and the case law that we have relied on in our brief and cited you and discussed here in the argument makes clear that you do not need to go into detail about already performed consideration. I would like to refer you this is quoted in the brief, but I think it's so I feel that the restatement of contracts since contract law has been around since the code of homerob by I assume I feel that the restatement of contracts, which is a compilation has been around for decades has some very strong influence on our courts in this country. So for that reason, I want to call your attention to section 131 of the restatement of contracts second and in comment G, it talks about the essential terms of unperformed contracts must be stated, but details or particulars need not what is essential depends on the agreement and its context and also on the subsequent conduct of the parties, including the dispute out of which the. Dispute which arises in remedy saw admission or erroneous statement of an agreed term makes no difference if the same term is supplied by implication or rule of law comment H and I only coat part of this is. Aside from explicit statutory provisions the prevailing view is that error or mission in the recital of past events does not affect the sufficiency of a member and it's comment H to section 131 goes on we're on the other hand, the considerate. So the consideration for a promise consists of return promise not yet performed performance of the return promise is commonly a condition of the promise or a duty. So I think the restatement makes very clear that there's a distinction between the obligation in a written contract to recite already performed promise or consideration and the recite and the need to recite executory are non performed. The indisha here of the contract our payment of suggests that most mortals would not be giving $25,000 to somebody else unless there was a good and sufficient reason for it. The letter itself that we've been talking about the March 89 letter refers to the fact that payment has been made. Mr. Strosser admits in his declaration that that he told Mr. Han he would get he would pay him half if he found a buyer and that's a paragraph five of the Strosser declaration in the record here. Quote I did tell Jerry that I would split the commission from the seller if he brought me a buyer that's a judicial admission under oath in this case in the record. Mr. Strosser a lawyer signed the agreement and he's attempted to say well I don't remember if I read it or not but I think a lawyer can't get very far with any court on that theory. The letter itself we suggest impliedly if not directly acknowledges performance. The breach date we don't agree with of course under our theories of equitable tolling or the discovery rule. It is true the property sold in April of 2004 but it is not true that we agree that that under all theories of our case that that is the date from which the six years should measure. I might just comment that under the discovery rule we believe the court is wrong in citing vertex for the proposition that there is no discovery rule in contract cases in the state of Washington. A careful reading of vertex particularly footnote five shows that that is an open question and the court acknowledges in footnote five. The majority of the states in the nation allow a discovery rule in contract breach situations for purposes of statute of limitations signaling that in the right case we suggest signaling in the right case they will do so in Washington. Councillor Neill wishes to sum up your over your time. Oh sorry. Well I just sum up to say that we believe class and other similar cases associated rules and the scone case cited by the district court here. Support the proposition that Washington is unique in its statute of limitations. Thank you. Thank you both counsel and again for another very interesting case and Han versus Strosser will be submitted