Narrows Real Estate, Inc., Resp/cross-app. v. Mdhr, Consumer Protection Div., App/cross-resp
199 Wash. App. 842
| Wash. Ct. App. | 2017Background
- Tenant Lucila Santiago filed a MHDRP complaint alleging Rainier Vista (mobile home park landlord) overcharged tenants for water utility fees.
- The City of Lacey billed the park on a single park meter; Rainier Vista then allocated a monthly "water service" charge to tenants based on estimated occupancy plus Rainier Vista’s estimated distribution/admin costs.
- MHDRP investigation found Rainier Vista charged tenants more than the City billed the park and issued a notice of violation ordering $35,240 in refunds (difference between City charges and tenants’ billed amounts).
- Rainier Vista appealed to the OAH; OAH affirmed liability but independently recalculated refunds on a per-tenant basis and ordered $88,445.77.
- Superior court affirmed liability as to the complainant but limited relief to only the complaining tenant; the Court of Appeals affirmed violation, held MHDRP had authority to investigate community-wide impact, rejected due process claim, but ruled OAH exceeded authority by substituting its own remedy and remanded to test MHDRP’s calculation by a preponderance of evidence.
Issues
| Issue | Plaintiff's Argument (MHDRP/Santiago) | Defendant's Argument (Rainier Vista) | Held |
|---|---|---|---|
| Meaning of "actual utility costs" under RCW 59.20.070(6) | Means the amount actually charged/paid to the utility provider (City); landlord cannot pass through extra estimated distribution/admin costs unless separately disclosed | Includes Rainier Vista’s internal costs to deliver water (infrastructure, labor, billing, maintenance) — i.e., cost to deliver to tenants, not just City bill | "Actual utility costs" limited to amounts charged by or paid to the utility provider; landlord cannot pass unlisted internal/estimated costs as part of that utility fee |
| MHDRP authority to include non-complaining tenants in relief | MHDRP has discretion to investigate and must consider impact on community; may order refunds impacting non-complainants when relevant | MHDRP lacked authority to expand complaint into a park-wide action or require refunds to tenants who did not complain | MHDRP has statutory discretion to investigate community impact and may order refunds/relief addressing the broader community when determining penalties/remedies |
| Procedural due process — adequacy of MHDRP investigation and OAH facthandling | MHDRP/OAH procedures were proper; evidence showed tenants were charged more than City billed | Rainier Vista claimed MHDRP/OAH denied fair process and improperly excluded evidence of distribution costs | No denial of due process; additional internal/estimated charges were irrelevant once excess over the City bill was shown |
| OAH authority to alter MHDRP remedy | MHDRP’s notice set a specific refund amount; OAH could only decide whether MHDRP’s finding was supported by a preponderance of evidence | OAH may independently determine the correct remedy (recalculate and impose a different refund) | OAH exceeded statutory authority by imposing a different remedy calculation than MHDRP’s notice; remand for OAH to decide whether MHDRP’s calculation is supported by the evidence |
Key Cases Cited
- Cornelius v. Dep’t of Ecology, 182 Wn.2d 574 (review standard and agency deference) (gives framework for reviewing agency decisions)
- Darkenwald v. Emp’t Sec. Dep’t, 183 Wn.2d 237 (unchallenged agency findings are verities on appeal)
- Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801 (preservation of issues and waiver for unsupported assignments of error)
- McGahuey v. Hwang, 104 Wn. App. 176 (prior restatement that landlords may not charge utility fees in excess of actual costs)
- Jordan v. Nationstar Mortg., LLC, 185 Wn.2d 876 (contract provisions conflicting with statute unenforceable)
- W. Plaza, LLC v. Tison, 180 Wn. App. 17 (rental agreement terms conflicting with MHLTA unenforceable)
- Conway v. Dep’t of Social & Health Servs., 131 Wn. App. 406 (ALJ may not impose a remedy different from agency’s; limits ALJ remedial authority)