Woods View II, LLC v. Kitsap CountyWoods View II, LLC v. Kitsap County
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- Before:
- Johanson, Bjorgen, Melnick
FACTS
This case involves a failed residential development, four decisions concerning the real property, and the timeliness of these decisions. Because this case is factually complex with a voluminous record, we begin by establishing the basic factual background and explaining the applicable administrative framework. Then, we discuss the facts that give rise to WVII‘s claims. Finally, we discuss the procedural history.
I. BACKGROUND: THE WOODS VIEW PROJECT
The appellants are WVII and its managing member, sole owner, and agent Piper. WVII intended to build a residential development called “Woods View” on 19.76 acres in small “legacy lots”1 in south Kitsap County. Piper was personally invested in the project: she was the sole owner of the construction company that would have served as the general contractor, she personally funded $350,000 in development expenses, and she personally guaranteed a $2,927,000 loan to WVII.
The Woods View project was highly controversial in the community. The county commissioners received many complaints about the development. Concerned citizens wrote to the County to complain about the project. One constituent characterized the development as a “mobile home park.” Clerk‘s Papers (CP) at 445. The Woods View project was subjected to scrutiny by
The County was sensitive to these concerns because it had faced frequent criticism for its land use decisions in the past. CP at 1265 (County commissioner noted in his deposition, “[T]he County gets picked on more than any other county in terms of any of the land use actions that it takes.“). In fact, it had very recently been challenged before the Growth Management Hearings Board for failing to regulate “urban service” in rural areas.2 See Harless v. Kitsap County, No. 07-3-0032, 2007 WL 4181033 (Cent. Puget Sound Growth Mgmt. Hr‘gs Bd. Nov. 15, 2007).
In an e-mail to a constituent who was upset about Woods View, County Commissioner Steve Bauer indicated that “the County staff and elected officials believe that they have actively worked to find ways within the law to deny this project. I don‘t think anyone can look at this project and conclude that it is either good for the area or consistent with current land use standards.” CP at 436 (emphasis added).
II. BACKGROUND AND HISTORY
At issue are four decisions regarding (1) a “Site Development Activity Permit” (SDAP), (2) a State Environmental Policy Act (SEPA),
The Woods View project required the County Department of Community Development (DCD) to issue a SDAP. Kitsap County Code (KCC) 12.10.030. Similarly, local government is obliged to carry out a SEPA review and issue a determination of significance (DS), a determination of nonsignificance (DNS), or a mitigated determination of nonsignificance (MDNS). City of Fed. Way v. Town & Country Real Estate, LLC, 161 Wn. App. 17, 53, 252 P.3d 382 (2011) (citing Moss v. City of Bellingham, 109 Wn. App. 6, 15, 31 P.3d 703 (2001), review denied, 146 Wn.2d 1017 (2002));
WVII completed its SEPA “application” on April 14, 2006, and its SDAP application on May 5, 2006.5 The County issued a MDNS on January 4, 2007. The SDAP was issued on December 10, 2007. Community groups appealed both decisions to the hearing examiner and the Kitsap County Superior Court, but their appeals were rejected.6 According to WVII, the hearing
B. ORIGINAL LOSS PROPOSAL: 2006-2008
A LOSS is a type of waste treatment system that serves multiple lots. Unlike the SDAP and SEPA review, the LOSS was not absolutely necessary for the project to move forward, but it would have allowed Woods View to double its density. With the LOSS, Woods View could support 78 single-family homes. Without the LOSS, Woods View could support only 39 homes using individual septic systems.
The state Department of Health (DOH) is responsible for evaluating LOSS applications.
At the relevant time, the DOH rules imposed requirements on the LOSS system‘s management depending on how the land serviced by the LOSS would be used. Where the lots were individually owned, a LOSS could only be managed by a public entity or a private operator guaranteed by a public entity. Former
WVII requested a LOSS permit at some time in 2006. DOH granted the LOSS permit on March 19, 2008, conditioned on the Woods View lots being held by a single owner. At first, WVII agreed to the condition and recorded a “Covenant to Retain Single Ownership” on the same day. But WVII soon found the single-owner condition a barrier to financing: it approached the Legacy Group (Legacy) for a business loan, but Legacy “liked the project as depicted with an individual owner model” and found DOH‘s conditions made the project a “non-starter.” CP at 125. As such, WVII decided to petition DOH for a modification to its LOSS permit that would allow the lots to be sold individually.9
C. MODIFIED LOSS PROPOSAL (2009-2010)
WVII submitted all necessary documents for its modified LOSS proposal in November 2009. Richard Benson, the DOH engineer who initially worked on the Woods View permit, indicated that DOH could make the change “in a matter of a week to two weeks except that if the county had objections to it, he said, quote-unquote, `I‘m going to have to dot my i‘s and cross my
III. ALLEGED WRONGFUL ACTIONS BY THE COUNTY
WVII alleges that the County caused the aforementioned delays as part of a deliberate plan to undermine the Woods View project. While WVII points to many instances of the County‘s alleged intermeddling, its facts can be reduced to three main courses of conduct: communications with DOH, communications with third parties, and internal delays. We explore these courses of conduct in turn.
A. COMMUNICATIONS WITH DOH
In an internal County e-mail, a deputy prosecutor proposed “a `loop’ with the state to ensure that the county is not allowing urban development in a rural area.” CP at 433. Specifically, the County‘s attorney told her colleagues that
even though [the Woods View project] is “vested” it is not conforming to our current plan. Thus, if the state were to inquire of DCD whether this meets our plan - DCD could say no, and the state would have tо deny it.
CP at 433.
As described above, the state did not deny the LOSS permit. Still, the record indicates that the “issue of compliance with current land use standards” was a “significant issue that [DOH was] grappling with” and was a “relatively important issue in the final approval.” CP at 1631. During the pendency of both of WVII‘s LOSS applications, the County remained in contact with DOH. On November 14, 2007, the deputy prosecutor e-mailed DOH a Growth Management Hearings
In a letter dated December 3, 2007, the director of the county DCD referenced the same Growth Management Hearings Board decision, which explained that land-use densities as determined by the County in its GMA Land Use Plan and zoning are the controlling factor in any review for septic systems, even if review is conducted by the state. He told DOH that WVII did not meet current designations, but was a legal nonconforming use because the proposed LOSS was to serve lots that, while legally created prior to the enactment of the GMA, did not meet current county comprehensive plan or zoning designations for the areа. DCD closed the letter by stating that it was merely informing DOH as to the Growth Management Hearings Board‘s decision, but that it was not advocating any specific action, leaving that to the state‘s discretion.
Then, when DOH was “near approval after a lengthy review process” (CP at 343), county representatives met with DOH on March 12, 2008. The County told DOH that the Woods View project should not be approved
because the over-all development is not consistent with the County‘s and GMA‘s land use designations. They assert this violates the State‘s duty to ensure projects are consistent with local planning.
. . . However, the County sees that it has no authority to deny the project.
CP at 340. The County did request that DOH condition the LOSS permit on single ownership of the Woods View lots.
When WVII made its modified LOSS proposal, the County‘s attorney sent the Attorney General‘s Office a series of e-mails between September 3 and September 10, 2009, expressing concern about the amendments. The County‘s attorney believed that WVII‘s requested permitting change was an “‘after the fact’ change, outside the public process, and is [sic] essentially is circumventing the law. We feel it cannot be approved and are hereby lodging our objections.” CP at 351.
On September 3, 2009, Benson e-mailed the county DCD to check if WVII would be “a violation of county code” and confirm whether DCD would oppose the development. CP at 417. DCD e-mailed back on September 15 to state that “urban levels of service are being provided outside an urban growth area, which is inconsistent with the County‘s comprehensive plan and the Growth Management Act.” CP at 417. That same month, DOH required WVII to submit renewed proof that it was in compliance with local land use standards. In March 2010, DOH transferred WVII‘s LOSS application from Benson to a different examiner who was not aware of the County‘s objections. It was this second examiner who ultimately approved the revised LOSS five months later.
B. COMMUNICATIONS WITH THIRD PARTIES
In September of 2007, KCSD did not renew its agreement to manage the Woods View LOSS. WVII alleges that this nonrenewal occurred because the County intimidated KCSD. Specifically, on June 7, 2007, county representatives met with KCSD and opined that KCSD was
The County indicated that “if the District decided to own and/or operate the LOSS, Kitsap County could not tell KCSD not to.” CP at 835. But the County then declared a moratorium to preclude the use of a LOSS in rural areas, thereby preventing entities like KCSD from participating in projects like Woods View. KCSD determined that it “did not wish to own or operate the LOSS for Woods View if Kitsap County had an ordinance prohibiting it.” CP at 835. KCSD‘s withdrawal left WVII without a public operator for its LOSS.
Furthermore, WVII argues that it would have received development loan financing from Legacy but for the County‘s actions. Legacy had committed to a loan but had second thoughts when, as part of its due diligence, Legacy had a conference call with county officials. The County told Legacy that “the ownership change was a `big change of use’ and that it could necessitate hearings and delay timelines.” CP at 124. But the County did not know what DOH was going to do. On the other hand, Legacy also indicated that
[t]he County did not give us assurances of how the DCD process would play out . . . we did not feel as though the County actors tried to discourage our consideration of loaning to Woods View II LLC and did not perceive the County as trying to inject itself into our business relationship with Woods View II LLC or Ms. Piper.
CP at 124-25. Following the call with the County, Legacy declined to fund the loan.
C. COUNTY‘S INTERNAL DELAY
WVII alleges that the County was purposely slow to issue its SDAP permit, but points to only one specific act by the County. On October 13, 2006, Kitsap County Administrator Cris Gears sent the state Department of Commerce, Trade, and Economic Development (CTED) a letter expressing concern whether the WVII LOSS would be a “‘public sewer system‘” pursuant to
IV. PROCEDURAL HISTORY
But for the aforementioned delays, WVII asserts that the Woods View lots could have been available for sale as early as May 2008. As it is, by 2009, the real estate market had become unfavorable. The Woods View business loan went into default. On December 31, 2009, the Woods View property went into foreclosure. Piper herself went bankrupt in May 2010 and was discharged. WVII estimates that the delays cost WVII somewhere between $2.55 million and $4.37 million and personally cost Piper somewhere between $1.39 million and $1.56 million.
On October 14, 2009, WVII and Piper served a notice of claim12 on the County. On December 18, 2009, WVII and Piper filed a lawsuit in superior court asserting federal due process and takings claims as well as state law torts. The County removed the suit to the U.S. District Court for the Western District of Washington in Tacoma. There, the judge dismissed the federal constitutional claims with prejudice and dismissed the state claims without prejudice. A year later, the Ninth Circuit Court of Appeals affirmed this decision on different grounds. The Ninth Circuit disagreed with the ripeness analysis, but agreed with the each subsequent ruling. Specifically, the
On July 18, 2011, WVII refiled its comрlaint in state court alleging negligence, tortious interference, and unconstitutional takings and requesting a declaratory judgment and injunctive relief.13 The County filed a motion for summary judgment to dismiss all of WVII‘s claims, which the superior court denied.
In a second motion for summary judgment, the County requested dismissal of WVII‘s tortious interference and negligence claims. In a supplemental brief to the superior court, the County also requested dismissal of the takings claim. On December 12, 2012, the superior court dismissed all of WVII‘s claims. This appeal followed. The County raised a LUPA issue on cross appeal.
ANALYSIS
This case involves multiple theories of liability that apply to many of the same facts. We discuss procedural issues first. Then, we discuss the three substantive issues—negligence, tortious interference, and takings.
I. STANDARD OF REVIEW
A grant of summary judgment is reviewed de novo. Mohr v. Grantham, 172 Wn.2d 844, 859, 262 P.3d 490 (2011). We will affirm the summary judgment only if there is no genuine issue
On review of a summary judgment, the evidence is reviewеd in the light most favorable to the nonmoving party, and all reasonable inferences from that evidence are drawn in favor of the nonmoving party. Qwest, 161 Wn.2d at 358. If reasonable minds can differ on facts controlling the outcome of the litigation, then there is a genuine issue of material fact and summary judgment is improper. Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008). Summary judgment is also improper if the issue at bar requires the weighing of “competing, apparently competent evidence,” in which case this court will reverse and remand for a trial to resolve the factual issues. Larson v. Nelson, 118 Wn. App. 797, 810, 77 P.3d 671 (2003).
II. STATUTE OF LIMITATIONS
The County argues that WVII‘s claims for negligence and tortious interference are barred by the three-year statute of limitations. The County argues that it was required to issue a decision on the SDAP application and SEPA threshold decision by July 22, 2006, and that its failure to do so started the statute of limitations running, meaning that the statute of limitations expired on July 22, 2009. WVII argues that its tortious interference claim did not accrue until late October 2006 when it first became aware of the facts that would support a tortious interference claim. WVII further argues that its negligence and tortious interference claims arising out of the County‘s delаy did not accrue until December 2006 as the County‘s requests for further information extended the statutory deadline for the County to process its application and, thus, the time when the County
The statute of limitations for negligence and tortious interference is three years.
WVII bases its claims, in part, on the County‘s delay in issuing the SDAP and in affirming the SDAP issuance on appeal.16 As WVII points out, the County exceeded time limits imposed by its own ordinances. See former KCC 21.04.110(A)(4)(a) (1998). As Division One of this court has recognized, where a claim arises out of a permitting body‘s failure to comply with statutory time limits, the cause of action does not accrue until the time limit is actually exceeded. Birnbaum v. Pierce County, 167 Wn. App. 728, 734, 274 P.3d 1070 (2012), review denied, 175 Wn.2d 1018 (2012).
[a]ny period during which the applicant has been required by the county to correct plans, perform studies, or provide additional information. The period shall be calculated from the date the county notifies the applicant of the need for additional information to the earlier of either: (1) the date the county determines whether the additional information provided satisfies the request for information; or (2) fourteen days after the date the information has been provided to the county.
Here, the County made two such requests for additional information. First, on or prior to July 13, 2006, the County requested information about “two possible `depressions’ on the property which may have been protected streams.” CP at 1955. WVII provided the requested information on July 19, 2006. The County did not respond, so the time limit would have begun to run 14 days after July 19, 2006—that is, August 2, 2006.
But on July 31, 2006, the County again requested additional information. WVII provided the requested information on November 20, 2006. Again, the County did not respond, meаning that the time limit did not start running again until 14 days after November 20, 2006—that is, December 4, 2006.
Accordingly, the 78-day time limit on the County‘s permitting decisions began to run on or about May 5 and excluded the period between July 13, 2006 and August 2, 2006, as well as the period between July 31, 2006 and December 4, 2006. This calculation means that approximately 10 of the 78 days remained. Therefore, any claim for delay of the SDAP permit did not accrue
The County‘s only response to this argument is that it was not raised until the second supplemental brief in the superior court and contradicted WVII‘s earlier pleadings.17 But “[w]here evidence raising issues beyond the scope of the pleadings is admitted without objection, the pleadings will be deemed amended to conform to the proof.” Jensen v. Ledgett, 15 Wn. App. 552, 555, 550 P.2d 1175 (1976) (citing Robertson v. Bindel, 67 Wn.2d 172, 406 P.2d 779 (1965)). The County did not object to WVII‘s tolling argument and, thus, waived the issue.
WVII‘s negligence claim arising out of the delay on its SDAP application was not time barred. Because WVII‘s tortious interference claim arises in part from the delay, it also compliеs with the statute of limitations. We conclude that WVII‘s negligence and tortious interference claims are not barred by the statute of limitations.
III. STANDING
The County argues that Piper has no standing to litigate any harm WVII suffered because she was a mere shareholder and guarantor of the WVII LLC. We agree and, therefore, affirm the superior court‘s dismissal of Piper‘s claims.
Generally, a party can only litigate a claim if she has a “`present, substantial interest’ in its outcome and can show that she will be “`benefited by the relief granted.“’ State ex rel. Hays v. Wilson, 17 Wn.2d 670, 672, 137 P.2d 105 (1943) (quoting 39 AM. JUR. Parties § 10, at 860 (1942)).
Shareholders are usually not allowed to bring an individual direct cause of action for an injury inflicted upon the corporation or its property by a third party. United States v. Stonehill, 83 F.3d 1156, 1160 (9th Cir. 1996) (citing Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 548, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949); Sutter v. Gen. Petroleum Corp., 28 Cal. 2d 525, 530, 170 P.2d 898 (1946); Jones v. H.F. Ahmanson & Co., 1 Cal. 3d 93, 81 Cal. Rptr. 592, 597-99, 460 P.2d 464 (1969)), cert. denied, 519 U.S. 992 (1996). The exception to this rule occurs where the shareholder‘s claim arises from “something other than his shareholder status.” Sound Infiniti, Inc. v. Snyder, 145 Wn. App. 333, 352, 186 P.3d 1107 (2008) (emphasis omitted), aff‘d, 169 Wn.2d 199, 237 P.3d 241 (2010). Thus, Division One of this court recognizes two exceptions to the usual rule against shareholder standing: “(1) where there is a special duty, such as a contractual duty, between the wrongdoer аnd the shareholder; and (2) where the shareholder suffered an injury separate and distinct from that suffered by other shareholders.” Sabey v. Howard Johnson & Co., 101 Wn. App. 575, 584-85, 5 P.3d 730 (2000). Similarly, Division One has held that “a guarantor must show a distinct and different injury before an independent action can be maintained.” Miller v. U.S. Bank of Wash., N.A., 72 Wn. App. 416, 423, 865 P.2d 536 (1994) (citing Sparling v. Hoffman Constr. Co., 864 F.2d 635, 640 (9th Cir. 1988)).
The causes of action in this case arose out of WVII‘s relationships with regulatory agencies and potential business partners. Piper herself was not a party to any of these relationships, and the fact that she negotiated or executed contracts on behalf of WVII does not make her a party. Hunter v. Knight, Vale & Gregory, 18 Wn. App. 640, 644-45, 571 P.2d 212 (1977), review denied, 89 Wn.2d 1021 (1978).
WVII argues that Piper suffered a separate and distinct injury because the failure of the Woods View project resulted in a nonjudicial foreclosure that extinguished WVII‘s liability but preserved the right to pursue a deficiency judgment against Piper as guarantor. WVII further points to debts that Piper personally guaranteed in Norpac Construction, LLC‘s favor, which also went into default because the Woods View project failed. Finally, WVII points to various creditors who filed suit against Norpac and Piper, but not WVII.
But these facts are properly analyzed as consequential damages that would not have happened but for the primary harm to WVII. A shareholder does not have standing to recover consequential damages that result from the harm to her corporation. Stonehill, 83 F.3d at 1160. The fact that Piper was the sole shareholder of WVII does not change our analysis: a sole shareholder, by necessity, cannot show “an injury distinct from that to other shareholders.” Sparling, 864 F.2d at 641.
Piper has not established an exception to the shareholder standing rule. Therefore, she lacks standing.18
On cross appeal, the County argues that its permitting actions can be challenged only through a LUPA appeal and that WVII‘s failure to bring an action under LUPA bars any damages actions arising from its permitting activity.19 WVII argues that LUPA does not bar its action because it is seeking monetary compensation rather than a modification of a land use decision, and its action is not a superior court review of an administrative decision. We agree with WVII. LUPA dоes not bar this action.
LUPA is normally the exclusive remedy for land use decisions.
This case is not like Asche nor James, however. WVII is not challenging the actual land use decisions below because it received all of the permits it asked for nor is it challenging any conditions imposed. Instead, this case is analogous to Lakey v. Puget Sound Energy, Inc., 176 Wn.2d 909, 296 P.3d 860 (2013). There, the Supreme Court ruled that the appellants were not required to file a LUPA petition to pursue their claims for damages where the appellants were only seeking money compensation rather than a reversal or modification of a land use decision. Further, the Supreme Court held that because LUPA providеs for judicial review of a local jurisdiction‘s land use decision and the appellants were making a claim that they could not raise before the hearing examiner, appellants were not invoking the superior court‘s appellate jurisdiction and LUPA did not govern their claim. Lakey, 176 Wn.2d at 927-28.
Similarly, all WVII seeks is damages for the delay in rendering those decisions. In such a case, LUPA is not a bar to the plaintiff‘s claims. Libera v. City of Port Angeles, 178 Wn. App. 669, 675 n.6, 316 P.3d 1064 (2013). LUPA does not bar WVII‘s claims here and we reject the County‘s LUPA cross appeal.
V. NEGLIGENCE / PUBLIC DUTY DOCTRINE
WVII argues that the County‘s delay in processing its SDAP and issuing the MDNS fell short of the standard of care for municipalities in the course of their permitting responsibilities. We agree with the County‘s public duty doctrine arguments and affirm the summary judgment as to WVII‘s negligence claim.
Every negligence action requires a showing of “a duty of care running from the defendant to the plaintiff.” Honcoop v. State, 111 Wn.2d 182, 188, 759 P.2d 1188 (1988). Where the defendant is a government entity,
the public duty doctrine provides that a plaintiff must show the duty breached was owed to him or her in particular, and was not the breach of an obligation owed to the public in general, i.e., a duty owed to all is a duty owed to none.
There are four exceptions to the public duty doctrine: (1) legislative intent, (2) failure to enforcе, (3) the rescue doctrine, and (4) a special relationship. Munich, 175 Wn.2d at 879 (citing Cummins v. Lewis County, 156 Wn.2d 844, 853, 133 P.3d 458 (2006)). If any one of the exceptions applies, then the government owes the plaintiff a duty as a matter of law. Munich, 175 Wn.2d at 879. Here, WVII argues only the failure to enforce and special relationship exceptions are at issue, but we conclude neither exception applies.
A. FAILURE TO ENFORCE
The failure to enforce exception applies when “[(1)] governmental agents responsible for enforcing statutory requirements [(2)] possess actual knowledge of a statutory violation, fail to take corrective action despite a statutory duty to do so, and [(3)] the plaintiff is within the class the statute intended to protect.” Bailey v. Town of Forks, 108 Wn.2d 262, 268, 737 P.2d 1257, 735 P.2d 523 (1987). This exception is narrowly construed, so as to respect the policy of Taylor v. Stevens County, 111 Wn.2d 159, 165, 759 P.2d 447 (1988). Atherton Condo. Apartment-Owners Ass‘n Bd. of Dirs. v. Blume Dev. Co., 115 Wn.2d 506, 531, 799 P.2d 250 (1990).
In Taylor, our Supreme Court held that “building codes impose duties that are owed to the public at large.” 111 Wn.2d at 165. That is, “building codes are designed to protect the public safety, health and welfare, not to protect individuals from economic loss caused by public officials while carrying on public duties.” Taylor, 111 Wn.2d at 169 (emphasis added). Taylor purposely drew the sсope of the public duty narrowly in order to avoid “dissuad[ing] public officials from
WVII admits that no reported case has applied the failure to enforce exception in a case like this. Indeed, WVII raises the unusual theory that the statutory requirement that the County failed to enforce was its own mandate to issue a timely permit. We found no Washington case that has applied the failure-to-enforce exception where the defendant government entity fails to take corrective action against itself. Rather, the failure to enforce exception envisions a situation in which a regulator knowingly approves “inherently dangerous and hazardous conditions,” Pepper v. J.J. Welcome Constr. Co., 73 Wn. App. 523, 533-34, 871 P.2d 601, abrogated by Phillips v. King County, 87 Wn. App. 468, 943 P.2d 306 (1997), review denied, 124 Wn.2d 1029 (1994), or where a police officer fails to take an intoxicated driver into custody, Bailey, 108 Wn.2d at 264.
Also missing is any “mandatory duty to take specific action” to correct a violation. Forest v. State, 62 Wn. App. 363, 369, 814 P.2d 1181 (1991). While former
The special relationship exception applies when “(1) there is direct contact or privity between the public official and the injured plaintiff which sets the latter apart from the general public, and (2) there are express assurances given by a public official, which (3) gives rise to justifiable reliance on the part of the plaintiff.” Taylor, 111 Wn.2d at 166.
The first element, privity, is defined broadly—it refers to the relationship between a government agency and any reasonably foreseeable plaintiff. Chambers-Castanes v. King County, 100 Wn.2d 275, 286, 669 P.2d 451 (1983). Drawing all factual inferences in WVII‘s favor, we hold that WVII was a reasonably foreseeable plaintiff.
The second element requires that “a direct inquiry is made by an individual and incorrect information is clearly set forth by the government, the government intends that it be relied upon and it is relied upon by the individual to his detriment.” Meaney v. Dodd, 111 Wn.2d 174, 180, 759 P.2d 455 (1988). An assurance is express only if it promises that a government official “would act in a specific manner.” Babcock, 144 Wn.2d at 791. Furthermore, any express assurance must be unequivocal. Meaney, 111 Wn.2d at 180.
The third element—justifiable reliance—is a “question of fact generally not amenable to summary judgment.” Babcock, 144 Wn.2d at 792.
WVII points to the County‘s statement that “it would process the application as a vested permit request, meaning that [WVII] should receive the permit under the land use requirements in place at that time.” CP at 602-03. This may be an assurance that WVII would receive the SDAP permit, which it did. But it was not an assurance that WVII would receive the permit within a specific timeframe. Perhaps WVII had a reasonable expectancy that the SDAP permit would issue
C. CONCLUSION
Because neither of the asserted exceptions to the public duty doctrine (failure to enforce or special relationship) applies, the public duty doctrine bars negligence liability as a matter of law. WVII fails to establish that the County‘s duty to timely issue SDAPs was owed to WVII in particular rather than the public in general. As such, WVII‘s negligence claim fails at the outset, and summary judgment on the negligence claim was proper. As to WVII‘s negligence claim, we affirm the superior court‘s summary dismissal.
VI. TORTIOUS INTERFERENCE
WVII argues that the County interfered with its business expectancies and contracts when it suspended the processing of WVII‘s SDAP application, caused KCSD to withdraw from its contract to manage the LOSS for WVII, communicated with DOH regarding WVII‘s pending LOSS permit, and delayed the approval process for the project. We disagree.
Tortious interference has five elements: (1) Business relationship/expectancy, (2) defendant‘s knowledge of relationship, (3) intentional interference resulting in termination of relationship, (4) improper purpose/means, and (5) damages. Pac. Nw. Shooting Park Ass‘n v. City of Sequim, 158 Wn.2d 342, 351, 144 P.3d 276 (2006). These elements are described in detail below.
A. ELEMENTS OF TORTIOUS INTERFERENCE
1. BUSINESS RELATIONSHIP OR EXPECTANCY
A developer has a protected business expectancy in its projects, which can give rise to a tortious interference claim. Westmark Dev. Corp. v. City of Burien, 140 Wn. App. 540, 557-58, 166 P.3d 813 (2007), review denied, 163 Wn.2d 1055 (2008). WVII‘s expectancy in its Woods View project satisfies the first element. Furthermore, WVII had business relationships with its prospective LOSS manager, KCSD, and its prospective lender, Legacy. Both KCSD and Legacy made an initial commitment to work with WVII. Drawing all factual inferences in favor of WVII, the nonmoving party, we hold that the first element of tortious interference is satisfied.
2. KNOWLEDGE OF RELATIONSHIP
The knowledge element is satisfied when the defendant knows of “facts giving rise to the existence of the relationship.” Calbom v. Knudtzon, 65 Wn.2d 157, 165, 396 P.2d 148 (1964). This element does not require specific knowledge, only awareness of “some kind of business arrangement.” Topline Equip., Inc. v. Stan Witty Land, Inc., 31 Wn. App. 86, 93, 639 P.2d 825, review denied, 97 Wn.2d 1015 (1982). Here, the County was certainly aware of WVII‘s business plans for the Woods View development. The County was also aware of WVII‘s business
3. INTENTIONAL INTERFERENCE RESULTING IN TERMINATION OF RELATIONSHIP
a. KCSD
WVII alleges that the County interfered with WVII‘s business relationships with both KCSD and Legacy, as well as WVII‘s business expectancy in the Woods View project in general. It is true that the County communicated with both KCSD and Legacy, and it is true that both KCSD and Legacy terminated their business relationships with WVII. The question is whether the County‘s communications caused those business relationships to end. Even drawing all factual inferences in WVII‘s favor, a reasonable finder of fact could not find that the County caused the termination of WVII‘s relationships with KCSD and Legacy.
The County contacted KCSD in June 2007 to voice its concerns over the legality of the Woods View project. By that time, WVII had already decided of its own volition to abandon its relationship with KCSD and “move forward with using a DOH approved private management entity.” CP at 135; see also CP at 139 (“[M]y client has not concluded a maintenance agreement with [KCSD] and at this point does not intend to do so.“). Accordingly, whether or not KCSD acted on the basis of the County‘s legal arguments, it was not KCSD that ended the relationshiр with WVII but rather WVII itself. There is no genuine issue of material fact as to whether the County tortiously interfered with WVII‘s relationship with KCSD.
b. LEGACY
WVII‘s arguments with respect to Legacy are similarly unavailing. It is true that Legacy declined to fund WVII‘s loan after a conference call with the County. However, according to
c. WOODS VIEW BUSINESS EXPECTANCY
WVII argues that the County‘s own delay, as well as delay that the County caused DOH to incur, caused the Woods View project to fail. Even assuming without deciding that WVII establishes intentional interference resulting in termination of relationship, WVII fails to establish a genuine dispute as to prong (4) improper purpose/means. Accordingly, we need not analyze further whether the County‘s interference resulted in termination of the project.
4. IMPROPER PURPOSE OR MEANS
The fourth element may be satisfied by proving either that the defendant had an improper purpose or that the defendant used improper means. The terms are not synonymous: this court has recognized that
in government delay cases, proving improper purpose requires showing that the defendant delayed plaintiff with the purpose of improperly preventing plaintiff‘s land development, and proving improper means requires showing that the defendant arbitrarily singled out for delay a particular plaintiff or type of plaintiff.
a. IMPROPER MEANS
WVII‘s argument with regard to improper means is threefold. Attempting to draw analogies to Westmark, WVII takes issue with (1) the additional delay caused by the County‘s suspension of the application process while it waited for the state to respond to one of its inquiries, (2) the County‘s interference with KCSD, which caused KCSD to terminate its relationship with WVII, and (3) the delay caused by the County‘s correspondence with DOH, including its repeated representations that the development did not comply with the GMA and the County‘s comprehensive plan.
In the permitting context, one example of an improper means is imposing an extraordinary delay. Westmark, 140 Wn. App. at 560. WVII relies heavily on Westmark, an instructive decision, but one that is nevertheless distinguishable from the facts here. In Westmark, a plaintiff in unincorporated King County applied to King County for a permit to build an apartment complex. 140 Wn. App. at 543-44. While the application was pending and when King County was nearly ready to make a decision on the developer‘s permit, the city of Burien incorporated the area and assumed permitting responsibility. 140 Wn. App. at 544. The city then delayed
The evidence revealed that Burien had incorporated in part to stop the development of apartment buildings and that the specific development at issue was one of only a few proposed projects that Burien took over when there were as many as 100 others pending in the area. Westmark, 140 Wn. App. at 559. The Westmark court found that Burien had employed improper means to delay the permitting process. 140 Wn. App. at 560.
Specifically, the city‘s SEPA decision took more than 3 years when ordinarily it should take between 30 and 120 days. Westmark, 140 Wn. App. at 561. City employees made decisions that resulted in additional delay without ever having reviewed the project‘s files. Westmark, 140 Wn. App. at 559. And despite the fact that the developer immediately provided any requested information, Burien would not provide straight answers. Westmark, 140 Wn. App. at 560-61.
Here, the County took 19 months to issue a SDAP when, by ordinance, the decision should take no more than 78 days. Former
The County wrote a letter to the governor in which it recognized the conflict that arose where (as here) a sewer system designed for urban use was nevertheless permitted to serve a rural area by virtue of the fact that those areas involved “pre-GMA vested lot[s].” CP at 901. Understandably, the County was hesitant to proceed with the WVII permitting process because it
Moreover, WVII‘s allegation that the County improperly injected itself into dealings between KCSD and WVII, causing the relationship to dеteriorate, is unpersuasive. WVII is correct that the County expressed its displeasure with the notion that KCSD would serve as the owner or operator of the LOSS for WVII. But again, the County did so because it was of the opinion that the controlling statutes and regulations did not permit an entity like KCSD to manage the LOSS. The County also stated unequivocally that despite its position, it could not prevent KCSD from reaching an agreement with WVII should it decide to. Furthermore, by the time the County expressed its sentiment to KCSD, WVII had already indicated that it had decided to use a “DOH approved private management entity” instead. CP at 135. WVII again fails to show that the County interfered using “improper means.”
Finally, WVII alleges that the County interfered with the development in part by “falsely” telling DOH that the development did not comply with applicable land use designations. But in context, the County simply relayed its concern that the project appeared inconsistent with the GMA and in potential violation of the State‘s duty to ensure that approved projects are consistent with local planning mandates. And again, the County expressly reminded DOH that the County had no authority tо deny the project. Furthermore, the County‘s position that the LOSS did not comply with the GMA was accurate. The GMA endeavors to prohibit the extension of urban services to
Another example of an improper means is singling out a project by imposing additional requirements not contained in the applicable statute. Pleas, 112 Wn.2d at 796-97. But here, the County did not and could not impose the single ownership condition. That decision rested with the DOH.
b. IMPROPER PURPOSE
While improper purpose and improper means are separate inquiries, “impropriety may be more easily found if the means of interference was wrongful.” Pleas, 112 Wn.2d at 806. Where
In Pleas, our Supreme Court identified an improper purpose for the sake of a tortious interference claim where the city of Seattle actively obstructed an apartment complex project specifically to gain the favor of politically active and influential organizations. Pleas, 112 Wn.2d at 805. The city consistently delayed processing the application to correspond with a group of concerned citizens, defied court orders to continue to process the project‘s application, encouraged the citizen‘s group to petition for a favorable rezone to block the project, and otherwise bypassed ordinary procedures to appease its constituents. Pleas, 112 Wn.2d at 796-800. And in Westmark, Burien obstructed the apartment building in part to please a state representative who lived near the proposed site and actively opposed the development. 140 Wn. App at 560.
Here, although there was considerable community opposition to the WVII development, this fact alone does not indicate that the County intentionally caused delay for the sole purpose of placating its constituents. Commissioner Bauer did tell a constituent that the “County staff and elected officials believe that they have actively worked to find ways within the law to deny this project.” CP at 436. But this statement was only a small portion of an otherwise lengthy e-mail sent to a concerned citizen to explain why the County could not prevent the project from going forward, and simultaneously to express agreement that the project was not “good for the area or consistent with current land use standards.” CP at 436. Importantly, the commissioner said that his understanding was that the County had worked to find ways within the law to deny the project. While improper purpose is not synonymous with “illegal” purpose, it follows logically that a
In summation, to avoid summary judgment, WVII must show that a genuine dispute exists or that they have established all five elements of tortious interference. Here, WVII fails to establish a genuine issue of material fact as to the improper purpose or improper means element. Thus, summary judgment is properly granted as to WVII‘s intentional tortious interference claim. Consequently, we decline to examine the issues of damages or causation.20
VII. TAKINGS
WVII makes three arguments to support its takings claim. It argues (1) that a permanent and substantial reduction in property value is sufficient to state a successful takings claim, (2) the County compelled DOH to require WVII to burden its property with a covenant prohibiting the transfer of individual lots in the development, and (3) the County engaged in “a set of guerilla [sic] tactics unreasonably intended to hold up and prevent construction of a project,” thus effecting a
Under these controlling legal principles, WVII fails to show that a taking occurred.
A. A PERMANENT AND SUBSTANTIAL REDUCTION IN PROPERTY VALUE
Relying on Borden v. City of Olympia, 113 Wn. App. 359, 374, 53 P.3d 1020 (2002), review denied, 149 Wn.2d 1021 (2003), WVII claims that a permanent and substantial reduction in property value is sufficient to state a takings claim. But in Borden, the court found that no taking had occurred based on a flooding incident, and WVII does not explain how Borden supports its position in any respect. WVII also relies on Lambier v. City of Kennewick, 56 Wn. App. 275, 279, 783 P.2d 596 (1989), review denied, 114 Wn.2d 1016 (1990).
In Lambier, due to the city‘s design and construction of a road, up to 12 vehicles ended up crashing in the Lambiers’ yard over time, causing the resale value of their home to plummet to nearly half its value. 56 Wn. App at 277. The court noted that the city affirmatively undertook the construction project that resulted in the Lambiers’ damages. Lambier, 56 Wn. App. at 280. WVII argues summarily that a taking is established so long as it can show a “subsequent decline in market value” resulting from the regulation. Lambier, 56 Wn. App. at 279 (citing Martin v. Port of Seattle, 64 Wn.2d 309, 320, 391 P.2d 540 (1964), cert. denied, 379 U.S. 989 (1965)). But we note that both Borden and Lambier are distinguishable because the plaintiffs there alleged a (1)
Perhaps more to the point, neither Lucas nor Guimont v. Clarke, 121 Wn.2d 586, 854 P.2d 1 (1993), cert. denied, 510 U.S. 1176 (1994), upon which WVII relies, suggest that a reduction in property value alone constitutes some sort of per se taking. As just noted, Lucas held that a taking occurs when a regulation eliminates all economically viable use of one‘s property. 505 U.S. at 1019. Our Supreme Court incorporated this rule into its threshold test in determining whether a regulation has worked a taking. Guimont, 121 Wn.2d at 600. We recognize that this appeal does not challenge a regulation as did the appeals in Lucas and Guimont. Nonetheless, WVII‘s apparent position that any substantial loss of property value alone is a taking is at odds with the rationales underlying both these decisions. If the loss of some economically viable use is not per se a taking, then neither is the loss of some property value.
B. FUNDAMENTAL ATTRIBUTE OF PROPERTY OWNERSHIP
Citing Manufactured Housing, WVII next argues that a property owner has the unrestricted right to dispose of it and anything that destroys that right without compensation constitutes a taking. WVII claims that the County compelled DOH to require WVII to burden its property with a covenant prohibiting the trаnsfer of individual lots and these actions by the County constitute a taking. This argument fails.
C. TAKING BY DELAY
Finally, WVII argues that the County engaged in “a set of guerilla [sic] tactics unreasonably intended to hold up and prevent construction of a project,” thus effecting a taking. Reply Br. of Appellant at 29. WVII cites to no authority, and we have found none, for the position that government delay can constitute a taking. “‘Where no authorities are cited in support of a proposition, the court is not required to search out authorities, but may assume that counsel, after diligent search, has found none.‘” Nguyen v. City of Seattle, 179 Wn. App. 155, 171, 317 P.3d 518 (2014) (internal quotation marks omitted) (quoting State v. Logan, 102 Wn. App. 907, 911 n.1, 10 P.3d 504 (2000)).
Accordingly, the County‘s actions do not constitute a taking as a matter of law. The superior court did not err in granting summary judgment on WVII‘s takings claim and we affirm.23
We reject the County‘s LUPA and statute of limitations arguments. Regarding the superior court‘s grant of summary judgment on the issues of standing, negligence, takings, and tortious interference, we affirm.24
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record in accordance with
JOHANSON, C.J.
We concur:
BJORGEN, J.
MELNICK, J.