Wash. Court of Appeals published opinion — D2 59088-3-II Published Opinion.pdf

Citation: Wash. Court of Appeals published opinion — D2 59088-3-II Published Opinion.pdf
Jurisdiction: Washington (state)
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Original Source: https://www.courts.wa.gov/opinions/pdf/D2%2059088-3-II%20Published%20Opinion.pdf ↗

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on the facts of that case. Id. at 397. Here, the Receiver rejected the PSA, resulting in the breach

11
Because the superior court approved the Receiver’s request to reject the PSA, specific
performance is not an available remedy.
12
107 Wn.2d 388, 397, 730 P.2d 45 (1986).

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For the current opinion, go to https://www.lexisnexis.com/clients/wareports/.

No. 59088-3-II

of the PSA, functionally making it ECM’s breach through no fault of LGI. Therefore, Willener is

inapposite, and as discussed above, Article 11 of the PSA provided what happens in the case of

ECM’s breach.

Because the breach must be viewed as occurring prior to the appointment of the Receiver,

LGI’s entitlement to its deposit is “outside” the receivership. RCW 7.60.130(2). Indeed, RCW

7.60.130(2) provides that upon a receiver’s rejection of an executory contract, the receiver’s right

to possess or use property pursuant that contract “shall terminate.” Therefore, the Receiver has no

right to possess or administer the $450,000, and the $450,000 cannot be considered as part of the

receivership estate that is ultimately distributed to creditors. Accordingly, we agree with LGI’s

reasoning and with the superior court’s finding of fact 1 in the May 11, 2023 Order. The Phase 2

deposit is not part of the receivership estate.13

b. LGI assumed risk of losing its deposit

The record shows that the Receiver did not return LGI’s $450,000 Phase 2 deposit at the

time the Receiver rejected the PSA. The record suggests that there were no funds, or insufficient

funds, with which the Receiver could have returned the Phase 2 deposit to LGI. Based on the

terms of the PSA, LGI’s deposit was not sitting aside in a separate escrow account for the duration