Marysville and restaurant owners will arbitrate lease dispute

Published 11:17 pm Wednesday, April 15, 2009

EVERETT — The owners of the Cedarcrest Golf Course restaurant have won the first round in their dispute with the city of Marysville.

Snohomish County Superior Court Judge Thomas J. Wynne ordered the city on Wednesday to go to arbitration with owners Pat and Kathy Regan to determine who will run the restaurant.

The Regans missed a deadline last fall to renew their lease with the city, and Marysville officials decided afterward they wanted the city to run the restaurant instead. The Regans say they inadvertently missed the deadline and would like to stay.

The Regans and their Seattle attorney, Bob Henry, on April 7 filed suit in Superior Court to force the city into arbitration over the case.

Wynne ruled that the lease between the city and the Regans ­requires the parties to go to arbitration in case of any dispute. Attorneys for the city had argued otherwise.

“A very pleasing and somewhat predictable result,” Henry said following the brief hearing.

Marysville officials have said little about the case, citing the legal proceedings. City attorney Grant Weed made a brief written statement following Wednesday’s ruling.

“Now that the court has decided that the matter is subject to arbitration, the city will now be able to focus its attention on advancing its position in arbitration,” Weed said. “We will look forward to the opportunity to present the city’s case.”

Wynne’s ruling pre-empts a lawsuit the city filed on April 2 to evict the Regans from the premises.

The Regans, who have run the restaurant since early 2003, may continue to do so until the arbitration is finished. No date has been set.

“We’ll just do business as usual and our customers will be very happy,” a smiling Kathy Regan said after the ruling Wednesday.

Henry told the judge on Wednesday that the case falls under a precedent set in Wharf Restaurant vs. the Port of Seattle, 1979. In that case, the restaurant’s lease was reinstated after it was ruled the owners’ failure to renew their lease on time was inadvertent.

The Regans say they intended to renew their lease on time but overlooked the Oct. 1 deadline. The Regans have been operating without a lease since Dec. 31.

City attorneys argued that the Regans’ failure to renew on time forfeited several rights under their lease. City officials say the city could make more money running the restaurant on its own and pay down its debt on the golf course buildings.

Wynne told both parties they could make their case in arbitration.

Bill Sheets: 425-339-3439; sheets@heraldnet.com.