Bremmeyer Excavating, Inc. v. McKenna

Court of Appeals of Washington
44 Wash. App. 267, 721 P.2d 567 (1986)

ELI5:

Rule of Law:

For a contractual obligation to be a covenant running with the land, it must directly "touch and concern" the land by imposing a benefit or burden upon it, not merely a personal obligation on the landowner. Additionally, horizontal privity must exist, meaning the covenant was created in conjunction with the conveyance of an estate in the land between the original contracting parties.

Facts:

On January 29, 1980, Bremmeyer Excavating, Inc. (Bremmeyer) and Gerald Parks entered into a written agreement regarding a parcel of property owned by Parks.
The agreement gave Bremmeyer the exclusive right, at its option, for a five-year period to perform all hauling of fill material and all installation of water and sewer utilities on the property.
The contract stipulated that if Bremmeyer exercised its right, it would meet the lowest competitive price Parks could obtain from another responsible contractor.
Sometime after the agreement was made, Parks sold the property to John McKenna and John Pietromonaco.
McKenna and Pietromonaco subsequently had fill work performed on the property without using Bremmeyer's services.

Procedural Posture:

Bremmeyer Excavating, Inc. filed a complaint against John McKenna and John Pietromonaco in a state trial court, alleging breach of contract.
The defendants moved for summary judgment, arguing the contract was not a covenant running with the land.
The trial court granted summary judgment in favor of McKenna and Pietromonaco, dismissing Bremmeyer's complaint.
Bremmeyer Excavating, Inc., as appellant, appealed the trial court's order to the Court of Appeals of Washington.

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Issue:

Does a contract granting a company an exclusive five-year option to perform all fill and utility work on a parcel of land create a covenant running with the land that is binding on subsequent purchasers?

Opinions:

Majority - Grosse, J.

No. A contract granting an exclusive option to perform fill work on property at the owner's discretion is a personal obligation and does not create a covenant running with the land that is binding on subsequent purchasers. The court applied the established five-part test for a covenant to run with the land and found that the agreement failed on at least two critical elements. First, the agreement did not 'touch and concern' the land because it did not impose a direct benefit or burden on the property itself; rather, it imposed a personal burden on the landowner, Parks, regarding his choice of a contractor, and this right was only triggered if the owner decided to do the work. Second, there was no horizontal privity of estate because the record did not show that the agreement was created in conjunction with a conveyance of an interest in the land between the original parties, Bremmeyer and Parks. Citing precedent, the court emphasized that intent alone cannot convert a personal covenant into one that runs with the land.

Analysis:

This decision clarifies the strict requirements for creating a real covenant that binds subsequent landowners in Washington. It reinforces the principle that merely relating a contract to a piece of land is insufficient; the covenant must directly affect the property's use or value to 'touch and concern' it. The case also underscores the importance of the horizontal privity requirement, meaning the covenant must be created within a deed or other instrument conveying an interest in land. This holding serves as a precedent against treating service contracts or rights of first refusal for services as interests that run with the land, thereby protecting subsequent purchasers from personal obligations of their predecessors.

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