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Property Keyed to Merrill
Mullendore Theatres, Inc. v. Growth Realty Investors Co.
Citation:
691 P.2d 970Facts
In 1974, the plaintiff, Mullendore, was assigned a leasehold interest in property previously occupied by Connor Theatres. A covenant in the lease required Mullendore to pay a refundable $6,000 security deposit. The lease expressly stated that all covenants in the lease “ran with the land.” At the time of the deposit, the landlord was North Pacific World Trade Center, Ltd. The defendant, Growth Realty, acquired the property when North Pacific defaulted on a note and deed of trust. Subsequently, Growth Realty sold the property to the City of Tacoma. The City of Tacoma expressed concern over its potential liability on the security deposit, so Growth Realty included an indemnification clause in the sales contract. In a further effort to facilitate the transaction, Mullendore signed a release releasing the City of Tacoma from all claims Mullendore might have against it, but purported to reserve its claims against others. Mullendore then brought suit against Growth Realty, claiming Growth Realty was liable for the refund of the security deposit by virtue of theindemnification clause.
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