State v. CostichState v. Costich
- Reporters:
- ,
- Before:
- Sanders (en banc)
SANDERS, J.
This is a condemnation action brought by the State to acquire Mr. Phillip Costich‘s property in north Spokane County. The Court of Appeals affirmed a trial court‘s award of reasonable attorney and expert witness fees to Mr. Costich based on the trial court‘s invalidation of the State‘s settlement offer because the State did not (1) itemize in the settlement offer the State‘s estimation of the property‘s fair market value and (2) leave the offer open for a 30-day period prior to trial. At issue is whether invalidation of the settlement offer was appropriate. We hold it was not. Accordingly we reverse.
FACTS
The underlying facts are, for the most part, undisputed. In September 2000 the State notified Mr. Costich1 that it needed to acquire his property to begin highway construction
The DOT had the Costich property appraised again in August 2001, this time by a different appraiser, Bruce Jolicoeur. He ultimately appraised the Costich property at $191,200. Mr. Costich received Mr. Jolicoeur‘s appraisal on November 29, 2001. However the State did not raise its original offer until January 30, 2002, when it mailed an offer of settlement to Mr. Costich‘s attorney, which was received the following day. The letter offered “$282,500 as its all-inclusive offer in full settlement” but was to expire on February 8, 2002. Clerk‘s Papers (CP) at 36 (emphasis added). Mr. Costich responded the next day by requesting an itemization of the offer, claiming he was “unable to ascertain what the State is offering as Fair Market Value for Mr. Costich‘s property.” CP at 395. The State answered by stating the offer was “the written settlement offer referred to in
Dissatisfied with the State‘s refusal to break down the January 30 offer, Mr. Costich filed a motion seeking a pretrial declaratory ruling that the offer was invalid under
The jury valuation trial was held, resulting in an award of $252,000 as just compensation for the taking. Despite the State‘s $282,500 offer on January 30, the net effect of the trial court‘s declaratory ruling left the $134,000 as the sole offer to compare the judgment to determine whether an additional award of reasonable attorney fees and expert witness fees was warranted.
The State appealed to Division Three of the Court of Appeals which affirmed by a divided court. State v. Costich, 117 Wash.App. 491, 72 P.3d 190 (2003), review granted, 151 Wash.2d 1009, 88 P.3d 964 (2004). In addition to holding the settlement offer was invalid because it “did not establish the State‘s determination of just compensation,” id. at 502, the Court of Appeals majority “mention[ed] in passing — purely as dictum — that, as we read this statute, the
ANALYSIS
At the outset it is important to note we are not examining the extent of the State‘s eminent domain power, see
Our analysis of
I. Segregating just compensation offered
Under various circumstances a condemnee may recover reasonable attorney fees and expert witness fees in addition to the just compensation which is constitutionally required. E.g.,
the judgment awarded as a result of the trial [held for purpose of fixing of the amount of compensation] exceeds by ten percent or more the highest written offer in settlement submitted to those condemnees appearing in the action by condemnor in effect thirty days before the trial.
Relying on State v. Swarva, 86 Wash.2d 29, 541 P.2d 982 (1975), the State contends the trial court and Court of Appeals erred by holding the $282,500 offer invalid “because that figure exceeded the State‘s evidence of just compensation.” Supp‘l Br. of Pet‘r at 9. In Swarva the State offered roughly $123,000 as compensation for the condemned property, which it deposited into the court registry upon the condemnees’ rejection thereof. Swarva, 86 Wash.2d at 30, 541 P.2d 982. After the jury returned a verdict of $107,000, the trial court granted an additur, reasoning the State impermissibly introduced evidence lower than the amount it deposited as an offer of just compensation. Id. We reversed, holding:
[T]he State may not offer in settlement an amount less than the fair market value established by the State‘s appraisal. However, nothing in the statute prohibits the State from offering an amount in excess of its lowest appraisal, in the interest of a pretrial settlement. Such practice is one purpose of a settlement — to avoid litigation and its resulting cost and delay.
Id. at 33, 541 P.2d 982 (emphasis added). Because the verdict was within the jury‘s province to decide based on the testimony given, we reinstated the jury‘s verdict. Id. at 35-36, 541 P.2d 982.
The State is correct Swarva expressly recognizes that no barrier exists to prevent the condemnor from offering a sum greater than the just compensation to which it believes the condemnee is entitled. Id. at 33, 541 P.2d 982. Hence the trial court ruling to the contrary was erroneous.6 However the Court of Appeals based its affirmance on different grounds, namely
Every acquiring agency shall, to the greatest extent practicable, be guided by the following policies:
(1) Every reasonable effort shall be made to acquire expeditiously real property by negotiation.
....
(3) Before the initiation of negotiations for real property, the acquiring agency shall establish an amount which it believes to be just compensation therefor, and shall make a prompt offer to acquire the property for the full amount so established. In no event shall such amount be less than the agency‘s approved appraisal of the fair market value of such property.
While it is true the quoted provisions of
In all actions for the condemnation of property, or any interest therein, at least thirty days prior to the date set for trial of such action the condemnor shall serve a written statement showing the amount of total just compensation to be paid in the event of settlement on each condemnee who has made an appearance in the action.
(Emphasis added.) It belies common sense to require the condemnor to inform the condemnee in the settlement offer the amount asserted as just compensation when such disclosure is already required separately as a matter of law. This record reveals the State fully complied with
Despite Swarva, both the Court of Appeals and trial court relied heavily on City of SeaTac v. Cassan, 93 Wash.App. 357, 967 P.2d 1274 (1998) for support. Cassan held a property owner could not use statutory attorney fees,8 statutory expert witness fees, or deposition costs awarded to augment the condemnee‘s
Mr. Costich argues since Cassan held the condemnee could not use attorney fees, expert witness fees, and other factors outside of the jury‘s determination to broaden the gap between the offer and jury award, the condemnor may not augment its side of the comparative equation with attorney fees, expert witness fees, and other factors to narrow the gap. We reject this argument for two reasons. First, Swarva expressly allows the condemnor to offer sums above and beyond just compensation to settle the litigation. Swarva, 86 Wash.2d at 33, 541 P.2d 982. Second, we are not bound to follow Cassan.
We also question whether Cassan was rightly decided.
Mr. Costich further argues “highest offer in settlement” must refer to just compensation since that amount is the sole issue determined at valuation trials. See 6A WASHINGTON PATTERN JURY INSTRUCTIONS: CIVIL 150.03, at 62 (4th ed.2002). This argument lacks merit. Even in stipulated liability lawsuits, parties settle damage issues not because they agree to the amount of the damages owed, but rather to avoid the time, expense, and trouble litigation entails.
The essence of Mr. Costich‘s objection to the State‘s “all-inclusive” January 30 offer is summarized in his Court of Appeals brief where he complains the State‘s refusal to itemize its settlement offer prejudiced him “because it was the amount of any just compensation offer which established the bar Respondents had to ‘beat’ by 10 [percent] at trial in order to recover their fees and expenses.” Resp‘ts Costichs’ Resp. Br. at 6 (emphasis added). This contradicts what
Mr. Costich nonetheless asserts that this interpretation creates an apples-to-oranges comparison between the jury award (comprised of just compensation alone) and the settlement offer (comprised of just compensation offered in addition to other amounts). Mr. Costich contends this runs afoul of the purpose of
First, we do not hold that the condemnee side of the equation is measured merely by the jury award, but rather yield to
Therefore the State need not itemize its settlement offer to comply with
II. 30-day period
As an alternative for upholding the trial court‘s declaratory ruling, Mr. Costich
The operative language at issue stems from the same statutory provision discussed supra. Again, the statute provides the settlement offer to which the jury award is compared is the “highest written offer in settlement submitted to those condemnees appearing in the action by condemnor in effect thirty days before the trial.”
The statute certainly may be read either way, and resolution of this issue would be much simpler had the legislature used more clarity when drafting the text. The statute‘s ambiguity permits this court to look beyond the plain language of the statute and examine the circumstances leading to its enactment. Mahoney v. Shinpoch, 107 Wash.2d 679, 684, 732 P.2d 510 (1987). A review of these circumstances reveals “in effect 30 days before trial” imposed a temporal proximity requirement rather than a durational requirement.
Prior to 1984 the comparative factor was the “the highest written offer in settlement submitted to those condemnees appearing in the action by condemnor at least thirty days prior to commencement of said trial.” Former
CONCLUSION
We hold the State need not itemize in a condemnation settlement offer its opinion of the just compensation owed. We further hold the settlement offer need not remain open for a 30-day period to remain valid. The State‘s January 30, 2002 “all-inclusive” settlement offer that remained open for eight days was a valid offer to which “the judgment awarded as a result of the trial” was to be compared.
The Court of Appeals is reversed, and we remand the case to the Spokane County Superior Court for further proceedings consistent with this opinion.
WE CONCUR: ALEXANDER, C.J., JOHNSON, MADSEN, IRELAND, BRIDGE, CHAMBERS, OWENS, FAIRHURST, JJ.