USPS v. Bellevue Post Office, No. 14-35100 (9th Cir. 2016)
Annotate this CaseIn 1963, USPS and Bellevue’s predecessor-in-interest entered into a twenty-year initial lease with five options to renew the lease and an option to purchase certain property. When USPS attempted to exercise the purchase option, Bellevue refused to honor it. The district court granted summary judgment for USPS and ordered specific performance of the sale of the property. The court applied Washington’s heightened evidentiary standard for specific performance and held that USPS has shown clearly and unequivocally that it has a contractual right to purchase the property. Even under Washington law’s high standard for awarding specific performance, USPS successfully provided “clear and unequivocal evidence” that it exercised its options to extend the term of the lease in strict compliance with the terms of the lease, and that the lease therefore continued to exist through the time it also properly exercised its purchase option. Finally, the court agreed with the district court that the 1963 lease remained valid. Accordingly, the court affirmed the district court’s order granting summary judgment to USPS and compelling specific performance for the sale of the property.
Court Description: Contracts. The panel affirmed the district court’s order granting summary judgment to the United States Postal Service and compelling specific performance for the sale of property in a case involving a dispute over a lease and purchase option between Bellevue Post Office LLC and the Postal Service. The Postal Service and Bellevue’s predecessor-in-interest entered into an initial lease with options to renew the lease and an option to purchase a parcel of real property in Bellevue, Washington where the Postal Service has operated a branch Post Office location since 1963. When the Postal Service attempted to exercise the purchase option, Bellevue refused, arguing that the Postal Service had failed to strictly comply with the option requirements for the lease renewals. The panel held that Washington law should be used as the applicable federal common law in the case. The panel applied Washington’s heightened evidentiary standard for specific performance. The panel held that even under Washington law’s high standard for awarding specific performance, the Postal Service successfully provided “clear and unequivocal” evidence that it exercised its options to extend the term of the lease in strict compliance with the terms of the lease, and that the lease therefore continued to exist through the time it also USPS V. BELLEVUE POST OFFICE 3 properly exercised its purchase option. The panel also held that the Postal Service provided persuasive evidence that its representatives had adequate contracting authority to validly exercise the various options in the lease. The panel agreed with the district court that the initial 1963 lease remained valid.
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