Jeffery v. Weintraub
32 Wash. App. 536, 648 P.2d 914 (1982)
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Rule of Law:
A claim of unconscionability must be based on the circumstances existing at the time the contract was made, not on subsequent events that place one party at a disadvantage. A court may decide the issue of unconscionability on a motion for summary judgment if the non-moving party fails to present sufficient facts to raise a genuine issue of unconscionability at the time of contract formation.
Facts:
- Gordon and Margaret Jeffery owned and operated a floating home moorage facility on Lake Union in Seattle.
- Thirteen homeowners moored their floating homes at Jeffery's facility.
- On May 29, 1979, Jeffery gave notice to the homeowners of an approximately 20% increase in moorage fees, effective July 1, 1979.
- Pursuant to a city ordinance, the homeowners petitioned for a fact-finding process to determine the reasonableness of the increase.
- On September 27, 1979, a city-appointed fact finder concluded that the proposed increase was unreasonable.
- Despite the fact finder's non-binding decision, Jeffery informed the homeowners the increase would take effect, and the homeowners subsequently refused to pay the increased amount.
- The homeowners asserted that due to regulations and a lack of available spaces, they had no legal place to move their floating homes, giving them no bargaining power.
- Jeffery presented evidence that an established market for selling floating homes existed and that some new moorages had become available.
Procedural Posture:
- Gordon and Margaret Jeffery filed 14 separate actions in district court against the homeowners for unpaid moorage fee increases.
- The parties agreed to consolidate the 14 actions into a single proceeding.
- The district court entered judgment in favor of Jeffery.
- Thirteen of the homeowners (appellants) appealed the district court's judgment to the superior court for a trial de novo.
- In the superior court, Jeffery (appellee) filed a motion for summary judgment.
- The superior court granted Jeffery's motion for summary judgment.
- The homeowners (appellants) appealed the superior court's summary judgment order to the Court of Appeals of Washington.
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Issue:
Is a moorage fee increase unconscionable when the homeowners' claim is based on a current lack of alternative moorages, rather than on the circumstances at the time the original tenancy contracts were made?
Opinions:
Majority - Ringold, J.
No, the moorage fee increase is not unconscionable. A claim of unconscionability must be evaluated based on the circumstances that existed at the time the contract was formed, not on later developments. The court held that while unconscionability is a matter of law for the court to decide, it can be determined on summary judgment if the party claiming it fails to present a threshold showing of facts demonstrating unfairness at the contract's inception. The homeowners provided no evidence that the initial contracts were unconscionable when made; they only argued that a current scarcity of moorages created a disadvantage. The court found this insufficient, as the relevant inquiry is into the parties' relative bargaining power and the foreseeability of such issues when they first entered into the tenancy. Since the homeowners did not allege they were forced into the contracts or that the terms were 'monstrously harsh' at the outset, there was no genuine issue of material fact regarding unconscionability.
Analysis:
This decision solidifies the principle that the doctrine of unconscionability is a shield against unfairness at the time of contract formation, not a tool for courts to rewrite agreements due to subsequent market shifts or changes in a party's circumstances. It establishes that unconscionability is assessed at the moment of contracting, preventing parties from invalidating contracts that simply become disadvantageous over time. By affirming that unconscionability claims can be resolved on summary judgment, the court also promotes judicial efficiency, allowing for dismissal of such claims when a party cannot produce evidence of procedural or substantive unfairness in the original bargain.
