Mullendore Theatres, Inc. v. Growth Realty Investors Co.

A 1969 lease required the original landlord to refund tenant Conner Theatres' $22,500 security deposit at the lease's expiration unless Conner defaulted, and stated all lease covenants would run with the land; the lease was later assigned to Mullendore Theatres (plaintiff), with the deposit reduced to $6,000. The property changed hands multiple times, eventually reaching Growth Realty Investors Co. (GRIC) (defendant), which sold the property to the City of Tacoma while agreeing to indemnify the city for any liability on the deposit; when Mullendore negotiated a new lease with the city and released the city from claims (while reserving claims against other parties), it sued GRIC for the deposit's return. The trial court found the refund covenant ran with the land and bound GRIC through its indemnification agreement, and GRIC appealed.