Orville L. Berg v. David Hudesman, Respondents

Summary

The Washington Supreme Court reversed summary judgment for the landlord in a dispute over rent calculation under a 99-year ground lease, holding that extrinsic evidence of the entire circumstances surrounding a contract's making is admissible to ascertain the parties' intent even if the writing appears unambiguous on its face. Expressly rejecting the 'plain meaning rule' and overruling contrary cases, the court adopted the context rule embodied in Restatement (Second) of Contracts sections 212 and 214(c), under which interpretation questions turning on the credibility of extrinsic evidence or a choice among reasonable inferences are for the trier of fact. Because the trial court excluded all extrinsic evidence and material questions remain about 'gross rentals,' 'net rentals,' the interaction of the adjusted $5,000 minimum rent with the 50-percent formula, and the limit on deductible real estate commissions, the court reversed, modified the Court of Appeals opinion, and remanded for trial, leaving the tenant free to argue partial integration and reserving estoppel/waiver defenses for proceedings below.