Real Estate Case Law and Legislative Update ESTATE CASE LAW AND LEGISLATIVE UPDATE ... Construction Contracts/Disputes ... The case law in this summary is organized under topical references

© 2013SCOTT B. OSBORNE

1-1

CHAPTER 1

REAL ESTATE CASE LAW AND LEGISLATIVE UPDATE

SPRING 2013

Prepared for REAL PROPERTY PROBATE & TRUST SECTION

WASHINGTON STATE BAR ASSOCIATION

Mid-Year Meeting Pasco, Washington

June 6, 2013

Scott B. Osborne [email protected]

FOSTER PEPPER PLLC 1111 Third Avenue, Suite 3400

Seattle, Washington 98101

Scott B. Osborne is Of Counsel to Foster Pepper PLLC in Seattle. He received his undergraduate degree from Yale University in 1971 and graduated from the University of Washington School of Law in 1975. Mr. Osborne has been a lecturer at the University of Washington Law School, where he taught real property security. He is a past Chair of the Real Property, Probate & Trust Section of the Washington State Bar Association and is a member of the American College of Real Estate Lawyers and the Pacific Real Estate Institute.


1-2

TABLE OF CONTENTS

Page No.

Contents

CASE LAW UPDATE.......................................................................................................4

I. Interests in Land ................................................................................................4A. Conveyances/Estates............................................................................4B. Mining Claims......................................................................................5C. Fixtures.................................................................................................5

II. Purchase and Sale Transactions .......................................................................6A. Brokers/Brokerage Agreements...........................................................6B. Claims Against Buyers/Sellers.............................................................8C. Claims Against Third Parties .............................................................11

III. Title Insurance ..............................................................................................11IV. Real Property Lending Transactions ............................................................12

A. Usury..................................................................................................12B. Priority................................................................................................12C. Actions to Collect...............................................................................15D. Mortgage Insurance............................................................................18

V. Landlord Tenant.............................................................................................18VI. Easements/Covenants ...................................................................................28VII. Liens/Judgments/Attachments.....................................................................29VIII. Homeowners' Associations ........................................................................34IX. Landowner Tort Liability to Others/Insuring Real Property ........................35

A. Rules of Liability ...............................................................................35B. Insurance Coverage - Homeowners & Property ................................37

X. Legal Actions .................................................................................................42A. Trespass, Encroachment, Nuisance, Landslide & Water Runoff.......42B. Eminent Domain ................................................................................46C. Adverse Possession/Boundary Disputes ............................................48D. Slander of Title...................................................................................52E. Actions Between Partners...................................................................53F. Partition...............................................................................................53G. Quiet Title ..........................................................................................53H. Government Forfeitures .....................................................................53

XI. Construction Contracts/Disputes ..................................................................53XII. Building Permits and Platting Regulations .................................................62XIII. Land Use/SEPA .........................................................................................73


1-3

XIV. Governmental Regulation ..........................................................................85A. Hazardous Waste................................................................................85B. Water Rights.......................................................................................87C. Irrigation Districts ..............................................................................89D. Archeological Lands ..........................................................................89E. Mortgage Broker Practices/Appraisers...............................................89F. Forest Practices...................................................................................89

XV. Taxation.......................................................................................................90A. General Real Estate Taxes .................................................................90B. LID’s, Assessments & Utility Fees ....................................................90C. Excise Taxes.......................................................................................92

LEGISLATION………………………………………………………………………….94


1-4

CASE LAW AND LEGISLATIVE UPDATE – SPRING 2013

The case law in this summary is organized under topical references for the general area of law primarily discussed in the case. This review covers recent decisions by the Court of Appeals starting at Volume 158 through Volume 169 of Washington Appellate Reports (Wn.App.) and Supreme Court Decisions in Volume 173 through Volume 175 of Washington Second Reports (Wn.2d). A summary of new laws enacted during the 2013 Regular and Special Sessions of the Washington Legislature affecting real estate transactions and signed into law through May 24, 2013, follows the case law summary.

Citations to cases within the last five years that relate to the same general topic appear at the end of the topical categories, but are not summarized.

CASE LAW UPDATE

I. Interests in Land

A. Conveyances/Estates

Newport Yacht Basin Ass’n of Condo. Owners v. Supreme N.W., Inc., 168 Wn.App. 56 (2012)

Facts: Seattle Boat purchased property on Lake Washington in 2007 and sought to redevelop it as a new boat storage and sales facility. A neighboring subdivision, Newport Yacht Basin Association, opposed the development. NYBA presented a quit claim deed that had been recorded in 1981 that purportedly conveyed land to NYBA that was included in the land Seattle Boat intended to redevelop, and the City suspended processing the permit until the ownership issue was resolved. The NYBA property and the commercial property had been previously owned by Radovich and Keyes. In connection with the development of the property, they created 10 easements, three of which were identical to the legal descriptions contained in the 1981 deed. Ultimately, they sold the marina portion of the development to Seattle Boat’s predecessor in title, and that conveyance included the property that conveyance in 2004 included the property that was described in the previously recorded quit claim deed to NYBA. NYBA sued Seattle Boat seeking to quiet title and the trial court ruled that the 1981 quit claim deed was not intended to convey fee simple title and was unenforceable for a variety of legal and equitable reasons.

Holding: The Court of Appeals reversed the trial court’s interpretation of the deed, but affirmed a portion of the decision that Seattle Boat held title to a portion of the property through adverse possession. A deed is interpreted according to the intent of the parties and in general, that intent is determined from the language of the deed as a whole. Where the plain language of a deed is unambiguous, extrinsic evidence will not be considered to alter the terms of the deed. This rule reflects the practical consequence of the permanent nature of real property--unlike a contract for personal services or a sale of goods, the legal effect of a deed will outlast the lifetimes of both grantor and grantee, ensuring that evidence of the circumstances surrounding the transfer will become both increasingly unreliable and increasingly unobtainable with the


1-5

passage of time. Accordingly, the language of the written instrument was the best evidence of the intent of the original parties to a deed. The Court rejected Seattle Boat’s argument that the deed was ambiguous because it did not recite that it conveyed “all interest” of the grantor, which was the statutory form language in RCW 64.04.050. The operative words in the deed were “convey and quitclaim” and the deed was a valid quit claim deed. Although there was no presumption that a quit claim deed conveyed all of the interest of the grantor, the inclusion of a clause that conveyed all “after acquired title” negated the possibility that the grantor intended to convey anything less than the entire interest in the property. The trial court erred in considering extrinsic evidence to determine the intent of the parties that was in conflict with the plain language of the deed. The trial court also erred in concluding that since there was no compliance with the subdivision requirements of Chpt. 58.17 RCW with respect to the property conveyed, the deed was unenforceable. The remedies for non-compliance with the subdivision statute are with the grantee to rescind the transaction and do not include the right to void the transaction at the request of a third party. The fact that NYBA was an unincorporated association did not render the deed void. Similarly, the Court rejected the arguments that the failure of NYBA to amend its covenants to reflect the acquisition of the property, the enforcement of the deed was barred by laches and estoppel and the deed was not supported by consideration. The Court did affirm that trial court determination that a narrow strip of frontage and vault area had been acquired by adverse possession by Seattle Boat’s predecessor in interest. Substantial evidence considered by the trial court supported that ruling.

Edmonson v. Popchoi, 172 Wn.2d 272 (2011) – Breach of warranty of title. Erickson v. Chase, 156 Wn.App. 151 (2010) – Statute of limitations for claim on warranty deed. Estate of Borghi, 167 Wn.2d 480 (2009) – Conversion to community property. In re Deed to Camp Kilworth, 149 Wn.App. 82 (2009) – Fee simple determinable. Hosp. Dist. v. Hawe, 151 Wn.App. 660 (2009) – Fee simple determinable. Edmonson v. Popchoi, 155 Wn.App. 376 (2010) – Tender of defense under warranty deed.

B. Mining Claims

Saddle Mountain Minerals, LLC v. Santiago Homes, Inc., 146 Wn.App. 69 (2008) – Effect of zoning on claim for wrongful removal.

C. Fixtures

No reported cases within the last five years.

II. Purchase and Sale Transactions

A. Brokers/Brokerage Agreements

Hanks v. Grace, 167 Wn.App. 542 (2012)

Facts: On March 1, 2008, Hanks listed her house in Sammamish for sale for $538,000 with Grace and RE/MAX Eastside Brokers. Hanks told Grace that she would not entertain contingent offers. Grace presented Hanks with a written offer of $530,000 from Grimes. The


1-6

Grimeses expressly conditioned their offer upon a satisfactory inspection and their ability to obtain financing. Hanks accepted the Grimeses' offer. Apparently unbeknownst to Hanks, the Grimeses' offer was contingent on the sale of their house. The purchase fell through when the Grimeses could not sell their house and as a result could not obtain financing. Grace then offered to purchase Hanks's house. Grace asked Hanks to rescind the real estate purchase and sales agreement that she had entered into with the Grimeses. Grace prepared a rescission agreement that provided for the return of the Grimeses' earnest money to them and also contained an exculpatory clause, releasing Grace "from any and all present or future liability." In June, the sale to Grace fell through because Grace, like the Grimeses, could not obtain financing. Hanks terminated her listing agreement with Grace and retained a different listing agent. By that time, the real estate market had significantly declined, forcing Hanks to reduce her asking price several times. Hanks's house eventually sold in September 2009 for $380,000, $158,000 less than the original asking price. Hanks sued Grace, alleging professional negligence, legal malpractice, fraud, breach of contract, and a Consumer Protection Act violation. Following a jury trial, Hanks was awarded $195,000 in economic damages and $170,000 in non-economic damages. Grace appealed, contending that the rescission agreement and release barred any claim by Hanks.

Holding: The Court of Appeals affirmed the verdict. The release prepared by Grace violated public policy and was unenforceable. The Court analyzed the release under the criteria establishing in Wagenblast v. Odessa School District No. 105-157-166J, 110 Wn.2d 845 (1988) and concluded that the release prepared by Grace exhibited all six of the characteristics of an unenforceable exculpatory clause noted in that case. A real estate agent, who regularly deals with and is familiar with the standardized forms used in residential real estate transactions, clearly has a superior bargaining power over a typical seller, who lacks sophistication and much experience in the business of buying and selling houses. Additionally, Grace supplied the release as part of a standard form contract published by the Northwest Multiple Listing Service. The parties did not discuss the clause, and Grace did not present Hanks with the opportunity to change the document.

Prof’l Real Estate v. Young, 163 Wn.App. 800 (2011)

Facts: Young listed his home for sale with Prudential Almon Realty. The listing agreement had a “tail” provision that a commission would be owed if the house sold within 365 days of the expiration of the agreement “to any person . . . to whose attention the Property was brought through the signs, advertising, or any other action or effort of [Prudential] during the term of the agreement.” The property did not sell during the term of the listing agreement, but prior to the expiration of the agreement, Dr. Place noticed that the house was for sale and took a brochure about the house furnished by Prudential. Dr. Place showed the house to his brother-in-law, who eventually agreed to purchase the house after the listing agreement had expired. Prudential demanded a commission, which Young refused to pay. Prudential sued and the trial court dismissed the claim on a summary judgment because Prudential was not the procuring cause of the sale.

Holding: The Court of Appeals reversed. Under the procuring cause of sale doctrine,


1-7

when a party is employed to procure a purchaser and does procure a purchaser to whom a sale is eventually made, that party is entitled to a commission regardless of who makes the sale. A broker is a procuring cause of a sale if it sets in motion a series of events culminating in the sale and, in doing so, accomplishes what the broker undertook under the agreement. The doctrine provides a default standard for liability to pay a commission where the parties have not agreed on a different standard, or where the parties' agreement as to when a commission will be paid proves ineffective. Parties are free to contract for a different standard as to when a commission was due, and in this case, the “tail” provision of the listing agreement did provide a standard that did not require the broker to be the procuring cause. Prudential is entitled to a commission if the conditions specified in the “tail” were satisfied and there existed material questions of fact on that issue. The matter was remanded to the trial court for a determination of whether the property was brought to the attention of the buyer through Prudential’s activities.

Hickethier v. Dept. of Licensing, 159 Wn.App. 203 (2011)

Facts: Hickethier, a licensed real estate broker, represented Sumner in the purchase of a manufactured home. As a condition of the purchase, Sumner insisted that certain repairs be made. At the recommendation of Hickethier, Sumner hired Francis to do the work for the agreed price of $2,900. Francis was romantically involved with Hickethier, which was not disclosed to Sumner. The seller agreed to withhold $2,000 for the repairs, which was held by the escrow. The repairs were not made, a fact known to Hickethier, but was not disclosed to Sumner until after the closing occurred. Hickethier failed to promptly make keys to the home available to Sumner after the seller’s tenant left the property. After the closing, Hickethier had the $2,000 in escrow disbursed to herself. Sumner complained to the Department of Licensing about Hickethier’s conduct. An administrative law judge upheld three counts of unprofessional conduct and revoked Hickethier’s license for five years. The Director affirmed, and Hickethier appealed to the superior court, which also affirmed the ruling.

Holding: The Court of Appeals concluded that there was substantial evidence to support findings that: (1) the failure to hold the $2,000 of Sumner’s funds in trust was a violation of former WAC 308-124E-012; (2) cashing the $2,000 check constituted conversion and violation of former RCW 18.85.230(5); (3) Hickethier was negligent in not informing Sumner that the repairs had not been made prior to closing and her negligence constituted unprofessional conduct; (4) the failure to timely deliver keys to the home constituted unprofessional conduct; (5) Hickethier negligently allowed Francis, an unlicensed individual, to act as a rental agent, which was unprofessional conduct; and (6) the failure to provide Sumner with an invoice for the repairs performed violated RCW 18.86.030. The Court rejected various due process arguments raised by Hickethier, including a claim that a five year time span between the events and the hearing violated her constitutional rights.

Boguch v. The Landover Corporation, 153 Wn.App. 595 (2009) – Broker negligence. State v Kaiser, 161 Wn.App. 705 (2011) – Violation of Consumer Protection Act by non-disclosure.


1-8

B. Claims Against Buyers/Sellers

Jackowski v. Borchelt, 174 Wn.2d 720 (2012)

Facts: After a landslide damaged their home, the Jackowskis sued Borchelt, the seller of the home, seeking rescission or, in the alternative, damages for fraud, fraudulent concealment, negligent misrepresentation, and breach of contract. The Jackowskis also sued the sellers' broker and agent, alleging fraud, fraudulent concealment, negligent misrepresentation, and breach of common law fiduciary duties and sued their own broker and agent with a claim for breach of statutory fiduciary duties. The trial court entered summary judgment dismissing all of the homeowners' claims, except the fraudulent concealment claims against the sellers and the sellers' broker and agent regarding cracks in the concrete basement floor. The dismissal was based primarily upon the economic loss doctrine. The Court of Appeals affirmed that decision in part and reversed it in part with respect to the claims against the non-seller defendants and certain claims that the Court of Appeals found to be claims for breach of contract. Jackowski, Borchelt and the seller’s broker appealed.

Holding: The Court affirmed the Court of Appeals. The provisions of Chpt. 18.86 modified certain common law duties of real estate licensees and codified certain pre-existing duties. Under RCW 18.86.050(1)(c), the brokers representing Jackowski had a duty to refer them to qualified experts and this duty could be interpreted to require the licensees to refer the Jackowskis to a geotechnical expert in this situation. RCW 64.06.050 did not limit the buyers’ rights to seek common law rescission based on improper disclosures in the Form 17 delivered pursuant to the statute. Questions of fact were present as to the claims of fraudulent concealment based upon the Form 17 disclosures, and these claims were remanded back to trial court to be resolved. The dismissal of the negligent misrepresentation claims based on the economic loss doctrine was not, however, reversed by the Court.

Townsend v. Quadrant Corp., 173 Wn.2d 451 (2012)

Facts: Various homeowners filed suit against Quadrant seeking to recover damages in connection with alleged defects in new homes purchased from Quadrant. Each of the purchase agreements with Quadrant contained the following provision (or a provision which was substantively equivalent):

[a]ny controversy or claim arising out of or relating to this agreement, any claimed breach of this agreement, or any claimed defect relating to the property, including without limitation, any claim brought under the Washington State Consumer Protection Act [Ch. 19.86 RCW] (but excepting any request by Seller to quiet title to the Property) shall be determined by arbitration.

The trial court refused to stay the proceedings pending arbitration and held that there were issues of fact surrounding the whether the provision was negotiated or a contract of adhesion. Quadrant appealed and the Court of Appeals reversed the trial court and ordered arbitration.


1-9

Holding: The Court concluded that resolution of the controversy required a determination of whether the plaintiffs’ claims that the arbitration clause was procedurally unconscionable was to be resolved by the court or by the arbitrator. The Court largely adopted the rationale of the Court of Appeals. Since the plaintiffs did asserted that the contract as a whole was unconscionable, rather than specifically attacking the arbitration clause, the issue of procedural unconscionability was properly before the arbitrator. The Court also affirmed the decision that the separate claims of minor children were included within the issues to arbitrated. Five justices dissented from the portion of the ruling holding that the claims of the children were required to be arbitrated.

Newport Yacht Basin Ass’n of Condo. Owners v. Supreme N.W., Inc., 168 Wn.App. 86 (2012)

Facts: Bridges acquired property from Radovich in 2004 pursuant to a purchase and sale agreement with the conveyance made by warranty deed. Bridges sold property to Seattle Boat and conveyed title with a warranty deed in 2007. The trial court determined that as a matter of law, if the quit claim deed were valid, Radovich had breached the PSA and the terms of the warranty deed. However, the trial court subsequently determined that the quite claim deed was invalid, but awarded Bridges $376,000 in attorney fees against Radovich based upon (1) the prevailing party provision of the 2004 PSA, (2) the indemnity provision of the PSA, and (3) principles of equitable indemnity.

Holding: The award of fees was reversed and remanded. Court of Appeals affirmed the determination that the quit claim deed constituted a breach of the Radovich-Bridges PSA and warranty deed. However, since the trial court ultimately determined that the quit claim deed was invalid, the trial court erred in concluding that Bridges was entitled to recover attorney fees under the PSA. The language of the indemnity provision of the PSA applied to Seattle Boat’s claims against Bridges, but the trial court erred in awarding fees without a trial to determine the reasonable amount of those fees as damages for breach of the indemnity. The trial court also erred in applying the principles of equitable indemnity to award fees. Because the trial court determined that the quit claim deed was not enforceable, there was no wrongful act by Radovich that gave rise to the application of the doctrine of equitable indemnity. Bridges’ own actions in failing to discover the quit claim deed gave rise to the claims by Seattle Boat, which also negated the application of equitable indemnity. Finally, having bargained for a contractual indemnity provision, Bridges could not rely on principles of equitable indemnity to obtain consequential damages in the form of attorney fees independent of the contractual remedy. The matter was remanded for further proceedings.

Kofmehl v. Baseline Lake, LLC, 167 Wn.App. 677 (2012)

Facts: On March 9, 2007, Kofmehl executed a real estate purchase and sale agreement by which he offered Baseline $1.5 million for approximately 30 acres of property. The offer was subject to various contingencies. The parties finally agreed upon $1.65 million as the price. When the transaction was ready to close, the buyer refused because the final documents did not include all of the property that the buyer thought was being purchased. In the ensuing litigation,


1-10

the trial court determined that the agreement did not comply with the statute of frauds and dismissed Baseline’s claim for specific performance. The court also ordered restitution to Kofmehl plus attorneys fees and costs on a motion for summary judgment.

Holding: The judgment was reversed. The Court agreed that the agreement lacked a complete legal description and did not comply with the statute of frauds. However, a vendee under an agreement for the sale and purchase of property which does not satisfy the statute of frauds, cannot recover payments made upon the purchase price if the vendor has not repudiated the contract but is ready, willing, and able to perform in accordance with the agreement. The Court framed the issue as to whether Baseline was ready, willing and able to perform and who had the burden of proof to establish that condition. Kofmehl sought restitution and must therefore prove that Baseline is unjustly enriched by retaining the earnest money. Establishing that Baseline was not ready, willing, and able to perform as agreed was a necessary element of Mr. Kofmehl's claim. Issues of material fact existed on this issue and the summary judgment was improperly granted.

Geonerco v. Grand Ridge Properties IV, 159 Wn.App. 536 (2011)

Facts: Geonerco agreed to buy residential lots from Grand Ridge. Grand Ridge initially refused to close the transaction without an adjustment to the purchase price. Geonerco sued and obtained an order granting specific performance. Prior to closing, however, Geonerco contended that additional work was required to complete the lots and refused to close. Grand Ridge moved pursuant to CR 60(b) for relief from the prior judgment confirming that Grand Ridge had fully performed and Geonerco had no further interest in the property. The trial granted the requested relief and also entered a judgment against Geonerco for damages for refusal to close the transaction. Geonerco appealed.

Holding: The judgment for damages was reversed. Based on federal court decisions construing the corresponding federal rule of civil procedure, the Court concluded that the trial court did not have the authority under CR 60(b) to grant additional affirmative relief to Grand Ridge. It was possible that the trial court could invoke its equitable powers if it determined that Geonerco had proceeded in bad faith; however, such a finding would require notice and a hearing.

S. Tacoma Way LLC v. State, 169 Wn.2d 118 (2010) – Authority of state to convey. Blakely Commons v. Blakely Comm., 167 Wn.2d 781 (2009) – Compulsory binding arbitration. Torgerson v. One Lincoln Tower, 166 Wn.2d 510 (2009) – Non-refundable deposits. Pardee v. Jolly, 163 Wn.2d 558 (2008) – Enforcement of option to purchase. Endicott v. Saul, 142 Wn.App. 899 (2008) – Undue influence exerted by broker. Bloor v. Fritz, 143 Wn.App. 718 (2008) – Rescission for to disclose prior illegal use. Stieneke v. Russi, 145 Wn.App. 544 (2008) – Misrepresentation as to physical condition. Home Realty Lynnwood, Inc. v. Walsh, 146 Wn.App. 231 (2008) – Statute of frauds; lack of legal

description. Geonerco v. Grand Ridge Props. IV, LLC, 146 Wn.App. 459 (2008) – Statue of frauds; subsequently

inserted legal description. South Tacoma Way, LLC v. State of Washington, 146 Wn.App. 639 (2008) – Ultra vires sale by state. King v. Rice, 146 Wn.App. 662 (2008) – Claim for damage to personal property following sale.


1-11

Carlile v. Harbour Homes, Inc., 147 Wn.App. 193 (2008) – Ability to assign warranty of habitability and consumer protection act claims.

Jaeger v. Cleaver Constr., Inc., 148 Wn.App. 698 (2009) – Application of comparative negligence and duty to mitigate damages.

Cox v. O’Brien, 150 Wn.App. 24 (2009) – Economic loss doctrine. Jackowski v. Borchelt, 151 Wn.App. 1 (2009) – Economic loss doctrine and broker liability. Thompson v. Lennox, 151 Wn.App. 479 (2009) – Damages for failure to build within height restriction. Waters Edge Homeowners Assoc. v. Waters Edge Associates, 152 Wn.App. 572 (2009) – Reasonableness

of settlement of condominium defect claim. Townsend v. Quadrant, 153 Wn.App. 870 (2009) – Binding arbitration in single-family residential

construction agreements. Almanza v. Bowen, 155 Wn.App. 16 (2010) – Failure to deliver seller’s disclosure statement. Poulsbo Group v. Talon Dev., 155 Wn.App. 339 (2010) – Economic loss rule and misrepresentation. Borish v Russell, 155 Wn.App. 892 (2010) – Economic loss rule and misrepresentation. Renfro v. Kaur, 156 Wn.App. 655 (2010) – Failure to deliver seller’s disclosure statement. Cornish College Of The Arts V. 1000 Virginia Limited Partnership, 158 Wn.App. 203 (2010) – Breach of

option to purchase. The Marina Condominium Homeowners’ Ass’c v. The Stratford at the Marina LLC, 161 Wn.App. 249

(2011) – Breach of implied warranty on condo conversion. Kelly v. Ammex, 162 Wn.App. 825 (2011) – Enforcement of right of first offer. C. Claims Against Third Parties

No reported cases within the last five years.

III. Title Insurance

Chicago Title Insurance v. Office of the Ins. Commissioner, 166 Wn.App. 844 (2012)

Facts: Chicago Title underwrote title insurance policies Land Title of Kitsap County, which was an independent title insurance company. In 2007, the Office of the Insurance Commissioner investigated Land Title for violations of its anti-inducement regulation and found multiple violations. OIC then asked Chicago Title to sign an order (1) stipulating that Land Title's conduct violated the inducement regulation; (2) agreeing to pay a fine of $114,500 for Land Title's alleged violations; (3) submitting to a compliance plan, which included specific tracking and auditing provisions; and (4) declaring that Chicago Title had the authority to comply with the plan. Chicago Title refused to sign the order. In January 2008, OIC commenced a disciplinary action against Chicago Title. The administrative law judge dismissed the action, ruling the OIC did not have the authority to impose vicarious liability on Chicago Title for the violations of Land Title. OIC then appealed to the OIC hearings unit, which reversed the ALJ. Chicago Title appealed to the superior court, which affirmed the OIC judge.

Holding: The Court of Appeals reversed. Although the OIC had authority to enforce provisions of the insurance code and to make reasonable rules and regulations according to rulemaking procedure, the legislature did not authorize the OIC to declare one insurance company vicariously liable for another without a common law basis. No authority supported the OIC's argument that the insurance code eliminated the need for a case-by-case common law


1-12

analysis to establish vicarious liability. Under the terms of the agreement between Chicago Title and Land Title, Chicago Title did not have the ability to control the marketing activities of Land Title. Similarly, the Court rejected the OIC argument that Chicago Title had apparent authority to control Land Title. That analysis was inapplicable to a situation attempting to impose vicarious liability where there was no showing of reliance and there was no evidence that Chicago Title authorized Land Title to violate the anti-inducement regulations.

Campbell v. Ticor Title, 166 Wn.2d 466 (2009) – Exclusions for defects not revealed by public records and defects arising after the date of the policy.

Dave Robbins Construction v. First American Title, 158 Wn.App. 895 (2010) – Claim arising from location in historical district

IV. Real Property Lending Transactions

A. Usury

Mackey v. Maurer, 153 Wn.App. 107 (2009) – Common law vs. statutory usury.

B. Priority

Pac. Cont’l Bank v. Soundview 90, LLC, 167 Wn.App. 373 (2012)

Facts: In October 2007, the Bank committed to loan Soundview up to $10,300,000 to finance the purchase and construction of the Soundview Apartments. The Bank secured its loan with a construction deed of trust on the land and its improvements, recorded on October 29, 2007. VFC, a subcontractor, began work on the Soundview Apartments on June 23, 2008, and completed its work on June 26, 2009. On February 12, 2009, Soundview paid VFC $73,000.00. VFC recorded a $385,465.48 mechanic's lien on Soundview's property on August 5, 2009 for the unpaid contract balance. On August 13, VFC served the Bank with a stop notice for that amount according to RCW 60.04.221. Upon receiving the stop-notice, the Bank withheld $386,000 from the funds available for disbursement, although the Bank continued to make advances to Soundview. On November 1, 2009, the Bank declared Soundview in default on the past due loan. In December 2009, the Bank filed a complaint for monies due, judicial foreclosure of its deed of trust, and appointment of a receiver. The receiver moved to approve the sale of the Soundview property for $6.5 million, create a $400,000.00 escrow fund from the proceeds, and distribute the remainder to the Bank. The Bank had a deficiency of unpaid principal and interest totaling $3,074,328.91 after applying the distributed portion of the sale proceeds. On July 29, 2010, the receiver moved for summary judgment on behalf of the Bank, seeking an order declaring the validity and priority of the Bank's security interest in the $400,000.00 escrow fund and authorizing the distribution of those funds to the Bank. The trial court granted the receiver's summary judgment motion, found that the Bank's security interest took priority over VFC's mechanic's lien, extinguished VFC's interest in the escrowed funds, and ordered distribution of the $400,000.00 to the Bank.

Holding: The Court of Appeals reversed. The purpose of RCW 60.04.221 was to force the borrower to seek resolution of the payment dispute with the contractor by withholding


1-13

payments. If that did not occur, the lender can obtain a lien release bond for the benefit of the claimant in the amount of a stop notice claim received, the lender need not withhold any funds for that particular claim. The creation of a reserve did not satisfy the requirement of RCW 60.04.221(5) to "withhold from the next and subsequent draws the amount claimed to be due as stated in the notice." This provision required that upon receipt of a stop notice, the lender must withhold from the next and subsequent draws the amount claimed in the notice. The Bank had three options upon receiving the notice from VFC: (1) withhold the amount in arrears from the next and subsequent draws it issued, (2) require Soundview to post a bond for the amount of VFC's claim, or (3) suspend all further draws to Soundview and immediately foreclose on its deed of trust. It did none of these things. As a matter of law, the Bank failed to satisfy the requirements of RCW 60.04.221(5) and triggered subordination of its deed of trust under RCW 60.04.221(7). Because the Bank violated RCW 60.04.221's stop notice provision, the entire deed of trust is subordinated to the lien.

Summerhill Village Homeowners’ Assn. v. Roughley, 166 Wn.App. 625 (2012)

Facts: The Roughleys owned a condominium unit at Summerhill Village. They became delinquent on both their mortgage loan and their homeowners’ dues. The Summerhill HOA sued and obtained a default judgment for the unpaid dues. The unpaid dues were secured by a statutory lien and the HOA foreclosed the lien judicially by conducting a sheriff’s sale of the unit. After the sale, the mortgage lender intervened and asked the trial Court to either vacate the HOA’s judgment or allow it to redeem the property and to declare its lien priority as senior to the HOA’s lien. The trial Court allowed the lender to intervene, but refused to vacate the judgment and ruled that the lender could not redeem. The lender appealed.

Holding: Affirmed. The Court of Appeals interpreted RCW 64.34.364 as creating an exception to general lien priority rule of “first in time, first in right.” Specifically, the statute grants super-priority status to HOA liens for unpaid condominium assessments. Although the statute has limiting language that appears to limit the super-priority amount “to the extent of” the dues that would have come due “during the six months” before an HOA’s sheriff sale, the Court nonetheless held that the statute elevated the entire HOA lien to a higher priority than the lender’s prior mortgage lien. The consequence of this interpretation was that the mortgage lender’s lien was extinguished by the HOA’s foreclosure. The lender also could not redeem, because RCW 6.23.010 only permits redemption by a creditor whose lien is subsequent in time to that on which the property was sold. Because the lender’s lien was not subsequent in time to the HOA’s lien, but in fact was earlier in time, the lender was not a qualified redemptioner.

Columbia Community Bank v. Newman Park, LLC, 166 Wn.App. 634 (2012)

Facts: Sturtevant borrowed $1,500,000 from Columbia Community Bank. The loan was secured by a deed of trust on property owned by Newman Park LLC. Sturtevant was the manager of Newman Park and held an indirect interest in the LLC through Landmark Development Ventures, Inc., a corporation owned by Sturtevant. To ensure a first priority position, Columbia paid off Newman Park's existing loan from another bank, Hometown


1-14

National Bank, and delinquent property taxes on Newman Park's property. The operating agreement for Newman Park provided that no member could pledge company property to secure indebtedness over $50,000. When Sturtevant defaulted on the loan, the other members of Newman Park asserted that Sturtevant did not have the authority to pledge the Newman Park property as security. Columbia then sued Newman Park to enforce the loan security agreement or, in the alternative, to be equitably subrogated to Hometown's loan to Newman Park. On summary judgment, the trial court denied Columbia's claim that Newman Park was liable for the loan Sturtevant had obtained, but the court held that to prevent unjust enrichment, Newman Park was liable for the amount Columbia paid on the Hometown loan and the delinquent property taxes in a total amount of $491,000 plus interest. Both parties appealed.

Holding: The Court of Appeals affirmed the trial court. In the published part of the opinion, the Court considered Newman Park’s argument that the trial court erred by subrogating Columbia to Hometown's loan because Columbia acted as a "volunteer" in making its loan and the doctrine of equitable subrogation only applies to a dispute among creditors as to priority. The Court rejected this argument and found that equitable subrogation was necessary to prevent Newman Properties from receiving a windfall from the satisfaction of the Hometown Bank loan.

Haselwood v. Bremerton Ice Arena, 166 Wn.2d 489 (2009) – Lien arising from work commenced prior to recording deed of trust.

First American Title Ins. Co. v. Liberty Capital Starpoint Equity Fund LLC, 161 Wn.App. 474 (2011) – Equitable subrogation.

C. Actions to Collect

Bain v. Metropolitan Mortgage Group, 175 Wn.2d 83 (2012)

Facts: The Mortgage Electronic Registration System, Inc., was the named beneficiary in two deeds of trust encumbering residences in King County, Washington. When the borrowers became delinquent on those mortgages, MERS instructed the trustee to non-judicially foreclose. The homeowners sought to enjoin the sales and the actions were removed to Federal District Court. The U.S. District Court judge certified three questions to the Washington Supreme Court:

1. Is Mortgage Electronic Registration Systems, Inc., a lawful " beneficiary" within the terms of Washington's Deed of Trust Act, Revised Code of Washington section 61.24.005(2), if it never held the promissory note secured by the deed of trust?

2. If so, what is the legal effect of Mortgage Electronic Registration Systems, Inc., acting as an unlawful beneficiary under the terms of Washington's Deed of Trust Act?

3. Does a homeowner possess a cause of action under Washington's Consumer Protection Act against Mortgage Electronic Registration Systems, Inc., if MERS acts as an unlawful beneficiary under the terms of Washington's Deed of Trust Act?

Holding: The Court answered the first question in the negative. Since 1998, the deed of


1-15

trust act has defined a " beneficiary" as " the holder of the instrument or document evidencing the obligations secured by the deed of trust, excluding persons holding the same as security for a different obligation." RCW 61.24.005(2). Thus, if MERS never " held the promissory note" then it is not a " lawful ‘ beneficiary.’ " The Court rejected the argument advanced by MERS that it was acting as the lawful agent of the actual owner of the note. The Court declined to answer the second certified question on the grounds that that record did not contain sufficient facts for a determination to be made. If the first word in the third question had been " may" instead of " does," the Court would have answered " yes." Instead, the Court answered the question with a qualified " yes," depending on whether the grantor of the deed of trust can produce evidence on each element required under Washington law to prove a CPA claim. However, the fact that MERS claimed to be a beneficiary, when under a plain reading of the statute it was not, presumptively meets the deception element of a CPA action

Albice v. Premier Mortgage Services of Washington, 174 Wn.2d 560 (2012)

Facts: In 2003, Albice and Tecca a, sisters, inherited waterfront property on valued at $607,000. Tecca borrowed $115,500 in 2003 secured by a deed of trust on the property. Tecca defaulted on the loan in 2006 and a nonjudicial foreclosure sale of the property was set for September 8, 2006. In July 2006, Tecca negotiated a forbearance agreement with the lender to cure the defaulted payments, which totaled $5,126.97 (including $1,733.79 in foreclosure fees). Tecca made all of the monthly payments, although the payments were late. The lender/servicer accepted all of the payments until the last payment. The last payment was rejected and the property was sold at a nonjudicial sale on February 16, 2007, to Dickinson (161 days after the date of the originally scheduled sale). In 2007, the property was valued at over $900,000. Some months later, Dickinson commenced an unlawful detainer action to evict Tecca and Tecca countersued to set aside the sale. The trial court confirmed the sale, holding that even though the sale occurred beyond the 120-day time period during which the sale could be continued, Dickinson was a bona fide purchaser for value. The Court of Appeals reversed and awarded Tecca fees and costs.

Holding: The Court affirmed the Court of Appeals. The trustee lost the authority to conduct the sale when 120 days expired following the date the originally scheduled for the sale. The failure of the trustee to act within that time period divested the trustee of authority to proceed. The Court rejected Dickinson’s argument that Tecca had waived her right to object to the sale by failing to seek a pre-sale restraint. The existence of the forbearance agreement meant that Tecca had no knowledge that the sale would proceed and the lender/servicer never provided any notice that Tecca had defaulted under the terms of the forbearance agreement. The Court also concluded that Dickinson was not a bona fide purchaser. Dickinson was a sophisticated buyer of foreclosed property; the small amount in default in the notice of sale ($1,228.03) gave him constructive notice of substantial equity in the property and possible irregularity of the sale proceeding; he kept track of the notices of continuances and knew the property was being sold five months after the original sale date – these facts combined to defeat his status as a BFP.


1-16

Boeing Employee Credit Union v. Burns, 167 Wn.App. 265 (2012)

Facts: In December 2004, Burns executed a promissory note in the face amount of $220,000.00 to Wells Fargo. The note was secured by a deed of trust dated December 7, 2004, that encumbered Burns’ residence. In October 2005, Burns executed another note payable to BECU in the face amount of $85,000.00, which was secured by a second deed of trust on the residence. Burns defaulted on the BECU note. BECU sued and obtained a judgment against Burns for $81,986.52 in April 2009. Burns declared bankruptcy and BECU was unable to collect any amount on its judgment. Burns also defaulted on the Wells Fargo note and the deed of trust was foreclosed in August 2010. At the trustee’s sale, there were net surplus funds of $100,648.42, which were deposited into the registry of the court. BECU asserted a right to the excess funds. Burns claimed that the BECU deed of trust was extinguished by the judgment and that the funds were payable to Burns as a homestead. A court commissioner ruled in favor of Burns and BECU moved for revision of the order. The superior court denied the motion.

Holding: The order was reversed. A note is a separate obligation than the deed of trust or mortgage that secures that note. Entry of judgment on a note did not necessarily affect the rights or remedies provided for a deed of trust or mortgage securing that note. Washington case law makes clear that the entry of a judgment on a promissory note secured by a real property security interest does not extinguish the lien of that security interest in the collateral. Specifically, the holder of the real property security interest has the option to sue on the note, obtain a judgment, and later foreclose the security interest to satisfy any unpaid obligation of the borrower on the note. Since the deed of trust is a merely a specie of mortgage, the same rules applied to the BECU deed of trust. The Court rejected Burns’ claims that the note and deed of trust merged into the judgment and that a suit on the note waives the security; those positions were not the law in Washington. Since the deed of trust was not extinguished, the homestead was ineffective to avoid BECU’s claim on the excess funds.

Silverhawk, LLC v. Keybank, NA, 165 Wn.App. 258 (2011)

Facts: In July 2001, Silverhawk obtained a 10-year variable rate loan from KeyBank, secured by a mortgage on Silverhawk's real property located in Auburn, Washington. Silverhawk and KeyBank also signed a confirmation of a separate swap agreement. The Auburn property served as collateral for the swap as well as for the loan. The confirmation was to be effective from August 1, 2001, to August 1, 2011. In 2008, Silverhawk contracted to sell the Auburn property. In order to obtain release of the collateral, Silverhawk had to pay the loan, terminate the swap, and pay some amount of money to KeyBank for terminating the swap early. When the sale closed on December 30, 2008, Silverhawk paid the loan balance of approximately $993,000 plus the swap termination cost of approximately $123,000. Silverhawk filed suit in July 2010 against KeyBank alleging that the swap fee was $20,000 over the applicable fee based on market quotations. The bank asserted that market quotes were not applicable to calculate the termination fee; when the parties agreed that the swap would be terminated by Silverhawk's payment of $123,167, this constituted an accord and satisfaction concerning an issue not provided for by contract. The trial court dismissed Silverhawk’s claim on summary judgment.


1-17

Holding: The dismissal was affirmed. Under the terms of the swap agreement, market prices were to be utilized if a “termination event” occurred. KeyBank could designate an early termination date if the loan was paid, but KeyBank did not do so. Because the parties had not previously agreed on terms that would control the calculation of the fee to be paid for terminating the swap before its maturity, Silverhawk's desire to terminate the swap early required them to reach a new agreement on that amount. This they did by agreeing to pay $123,167 to be released from the swap. This agreement was as a matter of law constituted an accord and satisfaction of a bona fide dispute.

In re Trustee’s Sale of Real Property of Brown, 161 Wn.App. 412 (2011)

Facts: The Browns’ company obtained a $200,000 SBA loan through Wells Fargo. They personally guaranteed the loan and granted a second-position deed of trust on their residence as additional security (though not clear from the opinion, the deed of trust apparently secured the guaranty—not the loan). The deed of trust included a waiver of the Browns’ homestead exemption. The business failed and the loan went into default. The Browns vacated the residence and moved to Florida and the first-position lender foreclosed on the residence. The foreclosure sale generated $116,377.85 in excess proceeds over the amount required to satisfy the first mortgage. The Browns and Wells Fargo asserted competing claims to the excess proceeds. The Browns relied on the homestead exemption of RCW 6.13.070 and Wells Fargo relied on its deed of trust. The trial court ruled that the Browns had abandoned the homestead and ordered the funds be disbursed to Wells Fargo. The Browns appealed. Holding: Affirmed. RCW 61.24.100(6) determines the respective priorities. Under the statute, a guarantor granting a deed of trust to secure its guaranty is subject to a deficiency judgment following a trustee’s sale of that deed of trust only in limited circumstance (waste and wrongful retention of rents). If the deed of trust encumbers the guarantor’s principal residence, the guarantor is entitled to receive from the sale proceeds an amount equal to the homestead exemption (currently $125,000). This is effectively a homestead “allowance payment” rather than an exemption, because the exemption applies in the context of an execution sale. The Browns interpreted the statute as allowing Wells Fargo to better its position by failing to act because, by not foreclosing and allowing the first-position mortgagee to foreclose instead, Wells Fargo would not have to make the homestead “allowance” payment described in the statute. The Browns’ interpretation effectively created the following hierarchy of priority: (1) first-position deed of trust, (2) homestead allowance payment and (3) second-position deed of trust. Wells Fargo argued that the entire statute was inapplicable because Wells Fargo’s deed of trust was never foreclosed and the statute refers to foreclosures sales under “that” deed of trust (i.e., the one securing the guranty). The Court accepted Brown’s interpretation of RCW 61.24.100(6), but found that the Browns could not assert the homestead because they had abandoned the residence.

McCurry v. Chevy Chase Bank, FSB, 169 Wn.2d 96 (2010) – Federal preemption. Alhadeff v. The Meridian on Bainbridge Island, LLC, 167 Wn.2d 601 (2009) – Alleged wrongful draw on

letter of credit.


1-18

Brown v. Household Realty Corp, 146 Wn.App. 157 (2008) – Foreclosure as bar to claims. CHD Inc. v. Taggart, 153 Wn.App. 94 (2009) – Evidence of amount owed. Freestone Capital v. MKA Real Estate, 155 Wn.App. 643 (2010) – Jurisdiction over guarantor. Westar Funding, Inc. v. Sorrels, 157 Wn.App. 777 (2010) – Statute of limitations. Albice v. Premier Mortgage Servs. of Washington, 157 Wn.App. 912 (2010) – Form of trustee’s deed. In Re Receivership of Tragopan Properties, LLC, 164 Wn.App. 268 (2011) – Acknowledgement of debt

after statute of limitations. The Bank of New York v. Hooper, 164 Wn.App. 295 (2011) – Application of RCW 7.28-300. Washington Federal Savings & Loan v. Alsager, 165 Wn.App. 10 (2011) – Duty to read loan documents. D. Mortgage Insurance

No cases in last five years. V. Landlord Tenant

Indigo Real Estate Services v. Wadsworth, 169 Wn.App. 412 (2012)

Facts: Wadsworth, who qualified for rental assistance under section 8 of the United States Housing Act of 1937, 42 U.S.C. 1437f, was served by her landlord, Indigo, with a 10-day notice to comply or vacate based upon the presence of a plywood panel on the balcony of her apartment unit. When Wadsworth failed to remove the plywood panel within the 10 days allotted, the landlord served her with a complaint for unlawful detainer. The panel was removed 14 days after the 10-day notice was served. At the show cause hearing that followed, Indigo stipulated that the sole cause for the eviction was the four-day delay in removing the panel. The trial court ruled that Wadsworth had unlawfully detained the premises without first determining whether her conduct gave rise to good cause to terminate her tenancy. Wadsworth appealed.

Holding: The trial court was reversed. Federal regulations stipulate that the landlord may not terminate a subsidized section 8 tenancy during the first year of the term except on the following grounds:

(1) Serious violation (including but not limited to failure to pay rent or other amounts due under the lease) or repeated violation of the terms and conditions of the lease; (2) Violation of federal, State, or local law that imposes obligations on the tenant in connection with the occupancy or use of the premises; or (3) Other good cause.

An addendum to the lease contained these same restrictions. The provisions of federal law were limitations on the state’s unlawful detainer statute. If a section 8 tenant has not committed a serious or repeated violation of the terms of the lease or otherwise engaged in conduct giving rise to good cause to terminate the tenancy the tenant is entitled to remain in possession of the property and a tenant entitled to possession unlawfully occupy the premises. The trial court erred by not determining whether the failure to remove the plywood panel within 10 days constituted " material noncompliance" with the terms of the lease. The Court rejected Indigo’s


1-19

argument that the lease was not terminated by the landlord, but rather by the operation of the unlawful detainer statute. The Court also rejected the claim that “termination” as referred to the lease addendum and federal statutes referred only to a termination at the end of the lease term or a decision not to renew a month-to-month tenancy. The matter was remanded for trial.

MHM&F, LLC v. Pryor, 168 Wn.App. 451 (2012)

Facts: Wellington converted the Thunderbird Mobile Home Park in Snohomish County, which contained 65 spaces, into a cooperative. This was accomplished by conveying the park to the Thunderbird Estates Mobile Home Association and then transferring all of the ownership interest in the Association to MHM&F. Tenants in the park purchased shares in the Association from MHM&F and received a 99 year lease. Each tenant paid “rent” that equaled a prorata share of operating expenses. Some tenants in the part were not members of the coop and they paid rent to a LLC that was the successor in interest to MHM&F. In October 1982, Pryor purchased from MHM&F 100 shares of stock in the Association for $22,995.00 pursuant to a written stock purchase agreement. The shares related to space 65 in the park. After a $1,500.00 down payment and a $3,000.00 discount, the balance to finance was $18,495.00, payable in 360 equal monthly installments of $190.24 beginning December 1, 1982. Pryor signed a pledge and trust agreement and a proprietary lease relating to space 65. The pledge and trust agreement pledged Pryor’s shares in the Association to the trustee, to be returned to Pryor upon full payment. Pryor’s son continued to occupy the unit following Pryor’s death. The son periodically was late in making the monthly payments. In 2010, after Wellington died, Welllington’s son transferred all of MHM&F’s assets to a successor LLC. The LLC asserted a claim against Pryor for past due rent and when the rent was not paid, commenced an unlawful detainer action. The trial court found that the earlier stock sale consummated after a prior default was valid, issued a writ of restitution and entered a judgment for attorney fees and past due rent against Pryor after giving credit to the 2008 judgment.

Holding: Pryor asserted that the summons issued by the LLC did not comply with the provisions of the RLTA and therefore the trial court did not have jurisdiction to hear the case. The Court rejected this argument. The trial court did not lack subject matter jurisdiction. The court's subject matter jurisdiction in cases involving the title or possession of real property is expressly granted by the state constitution. Because the trial court had jurisdiction and substantial evidence supported the trial court’s findings, the issuance of the writ of restitution was affirmed. The remainder of the opinion was not published.

Trinity Universal Ins. Co. of Kan. v. Cook, 168 Wn.App. 431 (2012)

Facts: Cook rented an apartment in the Regal Ridge Apartments in Spokane, Washington. The owner of the building insured it against fire with Trinity Universal Insurance Company of Kansas. Cook’s husband visited the apartment on May 13, 2009 and started a fire in the unit from a discarded cigarette. The fire damaged the entire building and cost more than $800,000 to repair. Trinity paid to repair the building and then sued Cook, claiming the right of subrogation to recover the amount paid for the loss. Cook moved for summary dismissal of the suit and


1-20

argued that she should be considered an additional insured under the policy and therefore Trinity was not entitled to subrogate its loss against her and the trial court dismissed Trinity's suit.

Holding: The dismissal was affirmed. This issue was recently examined in Community Association Underwriters of America, Inc. v. Kalles, 164 Wn. App. 30 (2011) and the Court adopted the reasoning in that opinion. There was no agreement express or implied that Cook would not be covered by the landlord's insurance policy. The presumption Kalles was is that Cook was covered by that policy and not subject to the insurer's subrogation claim. Similarly, Trinity had no claim against Cook’s husband. He had a right to be in the apartment and was covered by the same insurance policy as his wife.

Angelo Property v. Hafiz, 167 Wn.App. 789 (2012)

Facts: On December 19, 2005, Maged entered into a five-year lease agreement with Angelo to lease Suite 50 of Angelo's Cascade Village Center in Vancouver, Washington. Maged intended to operate a nightclub in the space. Maged invested approximately $500,000 in building improvements and business expenses and obtained the necessary operating permits. At some point after April 1, 2006, Maged took possession of the property and formally opened The Nile for business. On April 14, 2008, Angelo served Maged with a 30-day notice to comply with the lease agreement or to vacate the leased property and informing Maged that he had 30 days either to cure the alleged lease violations or to vacate the property, or he could be found liable for unlawful detainer of the property under chapter 59.12 RCW. On May 30, 2008, Angelo filed a complaint against Maged under RCW 59.12.030(4) and RCW 59.12.030(5) seeking a writ of restitution and attorney fees. Maged paid $6,834.95 into the registry of the court as payment for June rent. Maged then removed all property from the premises, gave the keys to the property manager and stopped paying rent. Maged contended that he had been constructively evicted from the premises as a result of racial harassment. Maged also answered the complaint and made various claims against Angelo and sought to have the action converted into an ordinary civil action. On August 15, 2008, the trial court entered an order that allowed Angelo to relet the premises, but also held that the issue of right to possession was not yet resolved. Thereafter, the trial court continued to enter various orders, culminating in a final order on May 14, 2010, which awarded Angelo various sums for past due rent, attorney fees and other damages that totaled $134,876.05, with 12 percent interest. Maged appealed all of the orders entered by the trial court.

Holding: In an unlawful detainer action, the court sits as a special statutory tribunal to summarily decide the issues authorized by statute and not as a court of general jurisdiction with the power to hear and determine other issues. The action is limited to the question of possession and related issues such as restitution of the premises and rent. If the issue of possession is not before the court, then the court must hear the matter in a general civil action. The ability of the court to hear counterclaims in such actions is very limited and the trial court lacked subject matter jurisdiction to consider Maged’s counterclaims in the unlawful detainer proceeding. Maged's return to Angelo of both actual and legal possession of the property resolved the "right to possession" and extinguished the trial court's narrow subject matter jurisdiction conferred by


1-21

the unlawful detainer statute; therefore, the trial court lacked authority to issue any additional orders, rulings, and factual determinations while the case remained an unlawful detainer action. The Court vacated that portion of the August 15, 2008, order that held that possession was still an issue and vacated all of the trial court orders entered after August 15, 2008, including the judgment against Maged and the dismissal of Maged’s counterclaims.

Speelman v. Bellingham/Whatcom County Hous. Auths., 167 Wn.App. 624 (2012)

Facts: Bellingham Housing Authority administers the Section 8 Housing Choice Voucher Program in Whatcom County. BHA has various rules concerning notifications when family members are absent from the premises and obtaining approval if other people occupy the premises. Speelman and her two minor children moved into a BHA-subsidized apartment in Bellingham. At the time the family moved in, BHA knew that Speelman was on probation. In March, Speelman asked the sentencing court to revoke her probation because she could not pay monthly probation fees. The trial court did so and sentenced her to 75 days in jail. Speelman arranged for someone to look after her children while she was in jail. She did not notify BHA that she was going to be absent from the apartment or that another person would be staying there looking after the children. BHA learned of these events and notified Speelman that her benefits would be terminated. Speelman requested a hearing when she was released from jail, but BHA rejected the request as untimely. Speelman sought an injunction to prevent eviction. The trial court dismissed the claim.

Holding: The Court of Appeals reversed. The Court agreed with Speelman that due process required that BHA send the termination to her in the Whatcom County jail. BHA knew that she was in jail and giving the notice to the apartment was not reasonably calculated to provide Speelman with notice and an opportunity to be heard. The failure to provide her adequate notice meant that she was unable to timely request a hearing, which prejudiced her rights.

Hawkins v. Diel, 166 Wn.App. 1 (2011)

Facts: In April 2006, Diel crashed her family's car into the apartment that the Hawkinses rented from DMC, creating an eight foot, floor-to-ceiling hole in the bedroom wall. The hole was covered with plywood by DMC, but there remained a gap at the bottom of the hole. Despite demand by Hawkins, no further repairs were made until July 2006, when DMC repaired the wall. In December 2006, the Hawkinses filed suit in district court against DMC and Diel, alleging (1) negligent infliction of emotional distress; (2) negligent violation of landlord duties under common law; (3) violation of the Washington Residential Landlord-Tenant Act; and (4) breach of contract. Diel admitted liability and reserved the issue of damages for trial. DMC sought to introduce evidence that Diel’s insurance adjuster delayed the repairs, but the court excluded all evidence of insurance. The court did dismiss the negligence claims against DMC based on the RLTA and the fact that no general damages were proven and Hawkins failed to mitigate. The jury awarded $2,356 in contract damages against DMC for reduced rental value and the court


1-22

awarded $20,000 in attorney fees. Hawkins and DMC both appealed to the superior court. The superior court reversed the verdict and ordered a new trial. Both parties appealed again.

Holding: The Court affirmed the district court verdict. The trial court correctly excluded reference to Diel’s insurance company delay as irrelevant to DMC’s contractual responsibilities. The existence of that delay had no impact on DMC’s duty to Hawkins. The lease allowed the award of attorney fees and through the application of RCW 4.84.330 an award to the prevailing party was mandatory. Hawkins prevailed on the contact claim and in the whole of the litigation was the only party that received relief. As such, it was the prevailing party. The negligence claim was properly dismissed. Hawkins offered no evidence of emotional distress that was corroborated by objective symptomatology. If the landlord takes excessive time to repair damage, a tenant may move out without further liability under the lease and the tenant may also recover diminution in rental value due to the defective condition; but a landlord cannot reasonably foresee that merely an unsuccessful effort to repair will cause the tenant to suffer severe emotional distress.

Recreational Equipment, Inc. v. World Wrapps NW, 165 Wn.App. 553 (2011)

Facts: REI and World Wrapps entered into a lease in 1995 pursuant to which World Wrapps operated a restaurant in REI’s Seattle store. The lease was for 5 years with two five year options. The first option was exercised. In 2005, REI and World Wrapps began negotiating an amendment to the lease to allow World Wrapps to remodel the space at a cost of $250,000, exercise the second option and obtain additional options to extend. The amendment incorrectly recited the ending date of the second extension period and as a result, World Wrapps did not give notice to extend for the third extension term on a timely basis. On January 8, 2010, REI notified World Wrapps that the right to exercise the third option had expired, and that the lease would terminate on May 25, 2010. Six days later, World Wrapps delivered written notice that it was exercising the third option. REI refused to honor this exercise of the option. World Wrapps did not vacate the premises on May 25, 2010. REI commenced an unlawful detainer action on July 1, 2010. The trial court granted World Wrapps an equitable grace period to exercise the third option and granted, in part, World Wrapps' request for attorney fees and costs. REI appealed

Holding: The judgment was affirmed. The trial court had the discretion to grant an equitable grace period. The Court utilized the criteria established in Wharf Rest., Inc. v. Port of Seattle, 24 Wn. App. 601 (1979) to determine whether equitable relief from the failure to timely exercise the option was appropriate:

1. The failure to give notice was purely inadvertent. 2. An inequitable forfeiture would have resulted had equity not intervened. 3. The lessor did not change its position in reliance of the failure to provide timely notice. 4. The lease was for a long term, not a short term. 5. There was no undue delay in the giving of notice by the lessee


1-23

REI conceded that Wrapps established factors 1, 3, and 4, but claimed that the trial court abused its discretion by deciding that World Wrapps would have suffered an inequitable forfeiture without a grace period and that no undue delay occurred in the giving notice. The trial court noted that World Wrapps would lose over a year of its current term, the income stream from the operation and the value of the investment it made in 2006 to remodel the space. These findings were all supported by substantial evidence and supported the trial court’s determination of inequitable forfeiture. Under the circumstances, World Wrapps did not unduly delay giving notice of exercise and the trial court was correct in concluding that REI contributed to the delay by inserting an incorrect termination date in the lease amendment.

In the Estate of Earls, 164 Wn.App. 447 (2011)

Facts: Stephen Earls was president of the Stephen Earls Corporation. On March 15, 2005, the Corporation, as tenant, and Bay West Design Center, LLC, as lessor, entered into a 10-year lease of premises at the Seattle Design Center. Earls signed a personal guaranty in which he guaranteed to the lessor and its successors and assigns "the full and timely performance and observance by Tenant of all the terms and conditions of the Lease to be performed and observed by Tenant." The guaranty provided that in the event of Earls' death, the guarantee would remain in full force and effect and be binding upon Earls' estate. Earls died on October 17, 2008. On October 24, 2008, the personal representative of the estate published a notice to creditors and, on October 30, 2008, sent the notice to Hines REIT, the successor in interest to Bay West, by certified mail. The period for filing creditor's claims expired on February 24, 2009. Hines did not file or present a creditor's claim before the filing period expired. In August 2009, the Corporation partially defaulted under the lease. In January 2010, Hines filed a petition under TEDRA seeking to enforce the personal guaranty. The Estate argued that Hines' petition was barred because Hines failed to timely file a creditor's claim. A superior court commissioner agreed with the Estate and entered an order dismissing Hines' petition with prejudice and awarding the Estate its reasonable attorney fees and costs. Hines moved for revision of the commissioner's ruling. The superior court denied Hines' motion and ordered Hines to pay the Estate's reasonable attorney fees and costs incurred in connection with the motion.

Holding: The Court of Appeals affirmed. The period for filing a claim against the Estate expired four months after the date of publication of notice and Hines was required to file a claim within that period even though that was at that time no default by the Corporation. Earls incurred the guaranty obligation during his lifetime and any liability arose under the guaranty and not as a result of any obligation incurred by the Estate. The failure of Hines to timely file a claim against the Estate barred any subsequent suit to recover against the Estate. The trial court had the authority to award attorney fees both under TEDRA and under the terms of the guaranty.

Seashore Villa Ass’n v. Hugglund Family Ltd. Partnership, 163 Wn.App. 531 (2011)

Facts: Emerald Properties operated a mobile home park in Olympia for individuals 55 years of age or older. PCF Management Services was the property manager. In 2000, PCF sent a letter to the tenants informing them that they would have to maintain the storage sheds and


1-24

carports on the property, unless the tenant did not assert an ownership right in these improvements, in which case the landlord would remove the structures. The tenants objected and sued in 2005, seeking an injunction restraining the landlord from removing any of the carports and storage sheds. Emerald Properties also filed a declaratory judgment action seeking to clarify its obligations with respect to the storage sheds and carports. The trial court found that Emerald had violated RCW 59.20.135 by seeking to transfer maintenance responsibilities to the tenants for permanent structures and the contract between the landlord and the tenants prohibited the removal of the sheds and carports.

Holding: The Court of Appeals affirmed in part and reversed in part. RCW 59.20.135 prohibited mobile home park owners from " transferring responsibility for the maintenance or care of permanent structures within the mobile home park to tenants of the park." It further provided: " A provision within a rental agreement or other document transferring responsibility for the maintenance or care of permanent structures within the mobile home park to the park tenants is void." By its plain language, the statute unambiguously prohibited the landlord from transferring responsibility to care for the park's permanent structures, including carports and storage sheds, to the park's tenants. By threatening to remove the structures if tenants declined to take ownership of the structures and to, thus, maintain the carports and storage sheds, the Park attempted to transfer its duty to maintain the permanent structures to the tenants. However, the Court could not find any evidence in the record that the landlord had agreed with the tenants to provide the sheds and carports in perpetuity. The landlord could remove the structures and the Court noted that nothing in RCW 59.20.135 prohibited the park owner from transferring responsibility to the tenants to maintain the structures at any of the request of the tenants.

Housing Authority of the City of Seattle v. Bin, 163 Wn.App. 367 (2011)

Facts: Bin rented an apartment from the Housing Authority. Her rent was reduced on the basis that her husband was absent. The Authority subsequently determined that Bin failed to timely report the return of her husband and billed her $5,867 for underpayments. When she did not pay, the Authority issued a 10-day notice to pay rent or vacate in July 2009. Bin was also informed that her lease would not be renewed with it expired on August 31, 2009. At a subsequent grievance hearing, Bin’s request for a continuance was denied as a result of an ex-parte conference between the grievance officer and the hearings coordinator. When the Authority proceeded with the unlawful detainer, Bin moved for summary judgment on the grounds that the grievance officer had committed error by not continuing the hearing. The trial court agreed with Bin, dismissed that action and awarded Bin approximately $8,500 in fees and costs. The Authority appealed, contending that an award of fees was improper when the unlawful detainer proceeding was dismissed because of procedural irregularities in the administrative proceeding.

Holding: The Court affirmed the award. The Authority based its argument on the holding in Hous. Auth. v. Kirby, 154 Wn.App. 842, 226 P.3d 222, review denied, 169 Wash.2d 1022, 238 P.3d 503 (2010), in which fees were denied after an unlawful detainer action was dismissed for lack of “subject matter jurisdiction.” The Court differentiated Kirby on the issue of


1-25

attorneys fees, because Bin’s lease had an attorney fees clause that awarded fees to the prevailing party. The Court also rejected the jurisdictional analysis in Kirby:

The Kirby court's premise was that the superior court does not " acquire" subject matter jurisdiction to hear an unlawful detainer action unless the action has been initiated in compliance with statutory requirements. . . . Division Two, on the other hand, recognizes that the state constitution vests the superior court with subject matter jurisdiction in unlawful detainer actions, and its jurisdiction remains constant regardless of procedural missteps by the parties. Tacoma Rescue Mission v. Stewart, 155 Wn.App. 250, 254 n. 9, 228 P.3d 1289 (2010). . . . Thus, a superior court has jurisdiction to determine whether an unlawful detainer action may go forward. See RCW 59.12.050. The proper terminology is that a party who files an action after improper notice may not maintain such action or avail itself of the superior court's jurisdiction. . . . The state constitution grants the superior court original jurisdiction in " all cases at law which involve the title or possession of real property" and " actions of forcible entry and detainer" as well as in " all cases and of all proceedings in which jurisdiction shall not have been by law vested exclusively in some other court." . . . Until a housing authority complies with the necessary procedures, it may not maintain an unlawful detainer action, and the tenant "is entitled to continue her tenancy." [citation omitted] For this reason, and not because of a lack of subject matter jurisdiction, the trial court properly granted Bin's motion to dismiss and moved on to decide her request for prevailing party attorney fees.

Dutch Village Mall vs. Pelletti, 162 Wn.App. 531 (2011)

Facts: Lei claimed to be the sole owner of Dutch Village Mall LLC, a limited liability company that owned a shopping mall in Whatcom County. Lei, who was not an attorney, filed a complaint against Pelletti, a tenant, on behalf of Dutch Village, asserting a claim for past due rent and damages from various alleged tortious acts. Pelletti, through his attorney, sought to have the pleadings struck because they were not signed by an attorney. The trial court ordered that the pleadings would be stricken unless, within 30 days, Dutch Village Mall obtained the signature of an attorney on the pleadings and awarded Pelletti $1000 in sanctions. The Court of Appeals granted a review of the order for the limited purpose of determining whether the trial court erred in ruling that Dutch Village had to be represented by an attorney and awarding sanctions.

Holding: The Court noted that corporations were required to be represented by an


1-26

attorney in legal proceedings. There was no reason why this rule should not be extended to single-member limited liability companies. Dutch Village Mall was created as a separate and artificial legal entity. As a matter of law, it is obligated to have its legal claims presented in court through a licensed attorney. At the time of the trial court hearing, it was not patently clear that Washington law prohibited lay representation of a single member LLC, so the imposition of sanctions under CR 11 was an abuse of the trial court discretion.

Columbia Park Golf Course, Inc. v. City of Kennewick, 160 Wn.App. 66 (2011)

Facts: The City of Kennewick entered into a sublease with Columbia Park Golf Course Inc. pursuant to which Columbia operated a golf course facility on land leased by the City from the federal government. Columbia and the City entered into discussions concerning the possible development of an old camp ground adjacent to the subleased property. Columbia proposed to develop the property into a recreational vehicle park. In August, 2005, Columbia and the City entered into a development option agreement. Thereafter, the City received another development proposal that it found more attractive and the development under the DOA was never consummated. Columbia sued the City claiming a breach of the DOA and the City’s duty of good faith and fair dealing. After a jury trial, Columbia was awarded $3 million in damages. The award was based upon the value of Columbia’s leasehold interest assuming that it had the right to develop the RV park. The City appealed, conceding the existence of a breach of contract, but contesting the measure of damages.

Holding: The judgment was affirmed. The Court of Appeals concluded that the DOA was an enforceable contract to negotiate. Substantial evidence supported the jury determination that the City breached the DOA. The Court rejected the City’s claim that Columbia’s damages were limited to reliance damages incurred in connection with the DOA. Conceding that this issue had not previously been resolved in Washington, the Court concluded that there was not reason not to apply the standard measure of contract damages. The Court also held that the trial court did not err in refusing to give instructions related to damages associated with new businesses. The damages presented by Columbia were based upon the value of the sublease arrangement assuming that no breach had occurred and was therefore not subject to the “new business” rule.

Optimer Intern., Inc. v. RP Bellevue LLC, 170 Wn.2d 768 (2011) – Arbitration clause. Eastwood v. Horse Harbor Foundation, Inc., 170 Wn.2d 380 (2010) – Action for waste. Little Mountain Estates Tenants Ass’n v. Little Mountain Estates MHC, LLC, 169 Wn.2d 265 (2010) –

Mobile Home Landlord Tenant Act. Christensen v. Ellsworth, 162 Wn.2d 365 (2007) – Computation of 3-day notice. Resident Action Council v. Seattle Housing Authority, 162 Wn.2d 773 (2008) – Right of housing authority

to control use. Lake Union Drydock Co, Inc. v. State, 143 Wn. App. 644 (2008) – Rent determination for aquatic lands. West v. Port of Olympia, 146 Wn.App. 108 (2008) – Public disclosure of Port lease negotiations. Laffranchi v. Lim, 146 Wn.App. 376 (2008) – Party in possession as necessary party. Little Mountain Estates Tenants Ass’n v. Little Mountain Estates MHC, LLC, 146 Wn.App. 546 (2008) –

Enforcement of waivers under MHLTA. Kaintz v. PLG, Inc., 147 Wn.App. 782 (2008) – Enforcement of mutual attorney fee clause. Commonwealth Real Estate v. Padilla, 149 Wn.App. 757 (2009) – Acceptance of rent following default.


1-27

Leda v. Whisnand, 150 Wn.App. 69 (2009) – Tender of rent following expiration of lease term. Indigo Real Est. Serv. v. Rousey, 151 Wn.App. 941 (2009) – Right to remove identity from eviction

pleadings. Optimer International Inc v. RP Bellevue, 151 Wn.App. 954 (2009) – Enforcement of arbitration provision

in lease. Dill v. Michelson Realty Co., 152 Wn.App. 815 (2009) – Award for landlord damage to property. Hous. Auth. v. Kirby, 154 Wn.App. 842 (2010) – Improper form of summons. Tacoma Rescue Mission v. Steward, 155 Wn.App. 250 (2010) – Termination notice. Losh Family, LLC v. Kertsman, 155 Wn.App. 458 (2010) – Assignment and assumption. Ledaura, LLC v. Gould, 155 Wn.App. 786 (2010) – Lease and option to purchase. Lamar Outdoor Advertising v. Harwood, 162 Wn.App. 385 (2011) – Right to terminate lease on sale of

property.

VI. Easements/Covenants

Greenbank Beach and Boat Club, Inc. v. Bunney, 168 Wn.App. 517 (2012)

Facts: Bunney acquired a lot in the Plat of Holmes Harbor Estates in Island County in 2004. The property was subject to a height limitation of 15 feet. Bunney submitted construction plans for a new house in 2007 and in July 2007, the two associations created in connection with the plat, Greenbank Beach and Boat Club Inc. and Holmes Harbor Water Company Inc., rejected the plans because the house would exceed the height limit by six feet. Bunney could not be dissuaded from building the house and when construction was completed the home in November 2008. In May 2008, the associations sued Bunney asserting the height violation. After a trial in October 2010, the trial court found that Bunney had not made a good faith effort to resolve the associations’ concerns and, even though some of the homes in the subdivision exceeded the height limitation, the restriction had not been abandoned. The trial court ordered a modification of the home to comply with the restriction and, finding Bunney acted in bad faith, ordered Bunney to pay the associations’ attorney fees of $74,000.

Holding: The Court affirmed the trial court order to modify the house. Under the covenants, the height restriction was not enforceable against a noncompliant homeowner unless a "suit to enjoin the construction" was commenced before the work is completed. The associations filed their action before the construction was completed, but the action was styled as a “declaratory judgment” action. The Court rejected as overly technical Bunney’s argument that a lawsuit was not a "suit to enjoin the construction" because it did not contain words "injunction" and "enjoin." In the third item of requested relief, the court was asked to determine "that the residence . . . should be modified," which was functionally similar to asking for injunctive relief. The Court reversed the award of attorney fees. The trial court based the award on the “bad faith” prelitigation conduct of Bunney. Prelitigation bad faith can give rise to a claim for attorneys in two circumstances: (i) misconduct of a party amounting to contempt of court that caused the opposing party to incur counsel fees, or (ii) the retention of possession of property after a judicial determination of the wrongful character of his possession, thus forcing the party wronged to the expense of further proceedings to recover possession or otherwise enforce his rights. Neither of those situations was present in this case and since there was no other basis to support the award of fees, the trial court was in error to do so.


1-28

Jones v. Town of Hunts Point, 166 Wn.App. 452 (2012)

Facts: The Hunts Point Park Addition subdivision was approved by King County in December 1951. At the time, it consisted of 22 lots in block 1 and 16 lots in block 2. Jones owned lot 11 in block 2, with 24,045 square feet. In 2009, Jones completed a preapplication form to subdivide lot 11 into two roughly equal lots. The town engineer informed Jones that the town would not accept a short subdivision application because subdivision was prohibited by a restriction on the face of the plat:

No lot or portion of a lot in this plat shall be divided and sold or resold, or ownership changed or transferred, whereby the ownership of any portion of this plat shall be less than the area shown on the face of this plat.

This decision was affirmed, first by the town hearing examiner and then by the superior court.

Holding: The Court affirmed the decision. The Court rejected Jones’ argument that the restriction was a private covenant and that the town did not have the authority to enforce the covenant. The Town must conform to the state platting statutes and 58.17.170 provided that a subdivision "shall be governed by the terms of approval of the final plat." Necessarily, then, the town must enforce restrictions imposed upon a subdivision as a term or condition of approval. Jones also contended that the restriction was not applicable until such time as the lot was divided and sold; the Court found that interpretation strained and deferred to the interpretation of the town engineer. There was no indication that the restriction was intended to regulate septic tank development rather than overall density within the plat. All of the prior boundary revisions within the plat had the effect of reducing the number of lots as opposed to increasing the density. There was no evidence that the Town abandoned the covenant. The Town was also entitled to recover its reasonable attorney fees under RCW 4.84.370.

Gold Creek North L.P. v. Gold Creek Umbrella Association, 143 Wn.App. 191 (2008) – Enforcement of agreement to create easement.

Mack v. Armstrong, 147 Wn.App. 522 (2008) – Height restriction. Ross v. Bennett, 148 Wn.App. 40 (2009) – Residential use restriction. Deep Water Brewing, LLC v. Fairway Resources Limited, 152 Wn.App. 229 (2009) – Violation of view

easement. Kalich v. Clark, 152 Wn.App. 544 (2009) – Action to recover maintenance expenses for joint easement. Snyder v. Haynes, 152 Wn.App. 774 (2009) – Restrictions on use of access easement. Maier v. Giske, 154 Wn.App. 6 (2010) – Statute of frauds. Bloome v. Haverly, 154 Wn.App. 129 (2010) – Declaratory judgment action. Lakewood Racquet Club v. Jensen, 156 Wn.App. 256 (2010) – Right to enforce covenant. Rainier View Court Homeowners Ass'n, Inc. v. Zenker, 157 Wn.App. 710 (2010) – Ambiguous

dedication. Wilson & Son Ranch, LLC v. Hintz, 162 Wn. App. 297 (2011) – Change in scope. Jensen v. Lake Jane Estates, 165 Wn. App. 100 (2011) – Restriction on subdivision.


1-29

VII. Liens/Judgments/Attachments

Lauer v. Pierce County, 173 Wn.2d 242 (2012)

Facts: The Garrisons owned waterfront property in Pierce County upon which they wanted to build a second dwelling. They applied for and obtained a building permit in 2004, but their permit application materials failed to disclose a watercourse or related buffer area running through the property. The County ordered the Garrisons to stop work on the construction project and to apply for a fish and wildlife variance. The Garrisons appealed the stop work order, and a hearing examiner upheld the order. The Garrisons then filed a LUPA petition in Superior Court, but then withdrew the petition. Three years later, they applied for the fish and wildlife variance. The plaintiffs owned neighboring property and argued that newer regulations should apply to the permit application. A hearing examiner granted the variance and the plaintiffs then filed a LUPA petition challenging the variance. The Superior Court reversed the grant, holding that the new regulations applied. The Garrisons appealed and the Court of Appeals reinstated the hearing examiners ruling. The plaintiffs then sought and obtained discretionary review from the Supreme Court.

Holding: Reversed. The Garrisons rights did not vest under the 2004 regulations because their building permit application materials contained material misrepresentation or omission of fact and failed to disclose the watercourse and related buffer. The permit application was also not “fully complete” as required by statute because the variance application was due prior to or at the time of the building permit application. The plaintiffs, as adjacent land owners, had standing to challenge the variance.

Bank of America v. Owens, 173 Wn.2d 40 (2011)

Facts: Owens and Trieger, who were married, separated on June 1, 2000. Their marriage was dissolved in 2002, but a final property division was deferred until the couple’s bankruptcy proceeding was resolved. Between the date of separate and dissolution, Owens purchased a house in Maplewood. This property was ultimately determined to be community property. In 2006, the court in connection with the division of the couple’s property entered various orders:

Supplemental Decree dividing the couple’s property and awarding Trieger one-half of the equity in the Maplewood house and which included an award of $27,501.42 to Trieger that incorporated other awards included in documents #1370 and #1371;

Order on Motion for Attorney Fees awarding Trieger $16,018 in attorney fees (document #1373);

Order on Show Cause awarding Trieger $5,778 based on Owen’s failure to execute certain documents to facilitate the sale of the Maplewood house (document #1374);

Order Requiring Appellant to File Complete Report awarding Trieger $3,750 in attorney fees (document #1375);


1-30

Order Regarding Closing, authorizing Trieger to sell the Maplewood house and awarding him additional attorney fees and costs (document #1376).

Trieger recorded document nos. 1370, 1371, 1373, 1374, 1375, 1376 and the Supplemental Decree on October 27, 2006, with the King County Auditor. In July 2006, Bank of America sued Owens to collect a debt she had guaranteed. On December 14, 2006, the Bank obtained a prejudgment writ of attachment on Owens’ interest in the Maplewood house. The Bank obtained a judgment against Owens for $593,519.24 in December 2007. The house was sold in May 2007, and the proceeds of $1.14 million were deposited into a trust account pending a resolution of the various claims against these funds. The Bank filed a declaratory judgment action seeking a division of the proceeds. The trial court ruled that the payment of various amounts to Trieger owed under documents 1373, 1374 and the Supplemental Decree were to be paid prior to the Bank’s judgment, but the Bank’s judgment was to be paid prior to the division of the net sale proceeds from the house and prior to the amounts awarded Trieger under documents 1375 and 1376. Trieger appealed, and the Court of Appeals reversed the trial court on the issue of the priority of Trieger’s lien, holding that the Supplemental Decree established an equitable lien on the property in favor of Trieger, which was prior to the Bank’s attachment lien and also held that amounts awarded under document 1376 were a judgment with priority over the Bank’s interest. The Bank appealed.

Holding: The Court affirmed the ruling by the Court of Appeals for the most part. The Bank conceded in the proceedings that the Supplemental Decree constituted a judgment and created a lien upon Owen’s real property in the amount of $27,501, which was the amount awarded Trieger in the Supplemental Decree. The Supplemental Decree also created an equitable lien on the Maplewood property in favor of Trieger, and the lien was prior in time to the date of the Bank’s attachment interest. The Court rejected the Bank’s argument that the various orders awarding Trieger fees were not judgments because the orders lacked summaries required under RCW 4.64.030, which provides in part that “a judgment does not take effect, until the judgment has a summary in compliance with this section.”

Thus, when RCW 4.64.030(3) states that a "clerk may not enter a judgment, and a judgment does not take effect, until the judgment has a summary in compliance with this section," we read this together with RCW 4.64.030(1) to mean that a clerk may not enter a judgment in the execution docket, and the judgment does not take effect for purposes of the execution docket, until a proper summary exists.

Even though the orders in documents #1375 and 1376 did not include summaries and were not entered in the execution docket, they were nevertheless valid judgments and created statutory liens on Owens’ property with priority over the Bank’s attachment interest and the trial court and Court of Appeals were reversed on this issue.

Casterline v. Roberts, 168 Wn.App. 376 (2012)

Facts: Roberts used money from her mother's trust, of which Roberts was a trustee, to purchase property and build a home in Kelso for herself and her husband. Her mother was


1-31

suffering from dementia and resided in a nursing home. Roberts asserted that she intended the Kelso home to be used for the care of her mother. When the court appointed a guardian to investigate her mother's assets, Roberts transferred her interest in the Kelso property to her husband without consideration; she also transferred property in California to her brother-in-law without consideration. The guardian sued to set aside the Kelso property transfer and to impose an equitable lien on the property for $153,000, money Roberts took from the trust and used for the purchase of the Kelso property. The trial court ruled in favor of the guardian. Roberts and her husband appealed, arguing that (1) the trial court erred by imposing an equitable lien on the Kelso property because Roberts had discretion to use trust funds for her mother’s care, maintenance, and support; (2) the court erred in finding Roberts’ property transfer to be fraudulent; and (3) the homestead exemption protected their interest in the property.

Holding: The trial court was affirmed. Substantial evidence supported the trial court finding that the money taken by Roberts from the trust was not used for the benefit of Roberts’ mother. This constituted a breach of fiduciary duty. The Court rejected the argument that since the house was homestead property, it could not be subject to the Uniform Fraudulent Transfer Act, Chpt. 19.40 RCW. There was no consideration for the transfer of the house to Roberts’ husband and the transfer fell within the UFTA. The homestead protection did not extend to equitable liens imposed when the homestead claimant purchased the homestead property with wrongfully obtained funds.

Blue Diamond Group, Inc. v. KB Seattle 1, Inc., 163 Wn.App. 449 (2011)

Facts: Kudo Beans Seattle 1, Inc. signed a lease with WEA Southcenter for a kiosk space in the Westfield Southcenter Mall on May 1, 2008. KB Seattle commenced construction of its coffee stand sometime in May 2008. Subsequently, on July 3, 2008, KB Franchisors entered into a contract with Blue Diamond Group, a New York corporation, to manage the construction of the KB Seattle coffee kiosk. Following the completion of the coffee stand, Blue Diamond did not receive payment for its work under the construction management contract. Blue Diamond recorded a lien against the improved property in early October 2008, for the unpaid balance of the contract, $77,615.62. Blue Diamond sued KB Seattle, KB Franchisors, the personal guarantors of those corporate entities, and WEA Southcenter to foreclose the lien it claimed in the October 2008 recording. WEA Southcenter moved for summary judgment. The trial court granted the motion on two bases: Blue Diamond (1) did not register as a contractor; and (2) has no lien rights under Washington law. The trial court also awarded WEA Southcenter its reasonable attorney fees.

Holding: The Court of Appeals affirmed. As a construction manager, Blue Diamond did not perform any services or supply any material that gave rise to lien rights. Management and coordination services do not fall within the statutory definition of “labor” for purposes of the lien statute, absent some showing that labor was provided at the improved property. Similarly, these services do not constitute “professional services” as defined by RCW 60.04.011(13).


1-32

Zervas Group Architects V. Whidbey Island Bank, 161 Wn.App. 322 (2011)

Facts: In August, 2005, Zervas commenced rendering architectural services Bay View Tower LLC for a potential condominium development in Bellingham. In August, 2006, Whidbey Island Bank made a development loan to Bay View, but did not confirm that all of the prior debts of Bay View had been paid. Zervas continued work on the project and was owed over $200,000 by November, 2006. Work continued while Bay View sought additional financing. Zervas filed a lien for unpaid services on July 31, 2007, and asserted priority over the Whidbey Island loan. The trial court agreed.

Holding: The Court of Appeals affirmed. RCW 60.04.061 provided that liens for labor and materials supplied to improve property relate back to the date that the services were first provided. Because professional services such as those provided by Zervas, are often not discernible by physical inspection, the provider must file a formal, pre-lien notice and if the notice is not filed “the lien claimed shall be subordinate to the interest of any subsequent mortgagee ... if the mortgagee ... acts in good faith and for a valuable consideration acquires an improvement . . . without notice of the professional services being provided.” RCW 60.04.031(5). Although Zervas did not file the pre-lien notice, the Bank had actual knowledge that architectural services had been provided. The Court rejected the Bank’s argument that notice referred to in the statute meant the form of recorded notice, since that interpretation of the statute would mean the language was redundant and meaningless. Since the Bank had notice of the services, the trial court properly ruled that the date of priority of the lien related back to 2005 prior to the recording of the Bank’s deed of trust.

Business Servs. of Am. v. WaferTech, LLC, 159 Wn.App. 591 (2011)

Facts: Nakin/Scott filed a mechanics lien against property owned by WaferTech. The lien was dismissed, but the Court of Appeals reversed the dismissal in 2004 and remanded the case in February, 2005. No action was taken in the case for four years. In 2006, the trial court returned all exhibits. Nakin/Scott assigned the lien to BSA in 2008. In June, 2009, counsel for BSA filed a notice to set a trial date. WaferTech then moved for dismissal for want of prosecution. In August, 2009, the trial court ruled in favor of WaferTech, dismissed the case and awarded over $50,000 in attorney fees to WaferTech.

Holding: The Court of Appeals reversed. CR41(b)(1) prohibited granting a motion for dismissal for want of prosecution if the case has been noted for trial prior to the hearing of the motion. The Court rejected the argument that the rule did not apply to a case after trial and appellate remand. While the trial court has inherent authority to dismiss cases for want of prosecution, the rule acts to limit that power once the case had been noted for trial.

Williams v. Athletic Field, Inc., 172 Wn.2d 683 (2011) – Form of claim of lien. Thompson v. Hanson, 167 Wn.2d 414 (2009) – Uniform Fraudulent Transfer Act. Van Wolvelaeres v. Weathervane Window Co., 143 Wn.App. 400 (2008) – Failure to timely commence

foreclosure. Campbell Crane & Rigging Servs., Inc. v. Dynamic Int’l AK, Inc., 145 Wn.App. 718 (2008) – Pre-lien

notice requirement.


1-33

Douglas v. Hill, 148 Wn.App. 760 (2009) – Transfer in fraud of creditors. Marriage of Baker, 149 Wn.App. 208 (2009) – Property constituting homestead. Bank of America v. Owens, 153 Wn.App. 115 (2009) – Effect of divorce decree. Williams v. Athletic Field, Inc., 155 Wn.App. 434 (2010) – Form of claim of lien. Sherron Associates Loan Fund V (Mars Hotel) LLC v. Saucier, 157 Wn.App. 357 (2010) – Extension of

judgment. Colorado Structures, Inc. dba CSI Construction Company v. Blue Mountain Plaza, LLC, 159 Wn.App.

654 (2011) – Requirement that owner request work. Gray v. Bourgette Construction, LLC, 160 Wn.App. 334 (2011) – Owner’s agent and frivolous claim. Stonewood Design, Inc. v. Heritage Homes, Inc., 165 Wn.App. 720 (2011) – Claim against release bond.

VIII. Homeowners' Associations

Roats v. Blakely Island Maintenance Com’n, 169 Wn.App. 243 (2012)

Facts: The Blakely Island Maintenance Commission was incorporated in 1961 as the owners association for San Juan Aviation Estates, a residential subdivision on Blakely Island in San Juan County. Roats owned two lots in the subdivision. In November 2005, the Commission held a special meeting of its members to consider leasing marina facilities from Blakely Island Marina, which had announced it would cease operating certain facilities located on the island. At the meeting, a majority of the members authorized the Board to lease portions of the marina so that the members could continue to use the marina's vehicle and boat fueling systems, barge ramp, water taxi landing dock, boat ramp, marina store, public restrooms, parking lot and BBQ shed. In 2009, the Commission mailed its annual assessment to its members and it included a $1,123.70 per lot assessment related to marina expenses. Roats refused to pay and, after the Commission threatened to file a lien, commenced an declaratory judgment action claiming that the Commission did not have the authority to lease the marina facilities and that the Commission had violated the open meeting provisions of RCW 64.38.035. The trial court ruled in favor of the Commission and awarded the Commission $13,000 in attorneys fees, which was the amount incurred up to the time that Roats deposited the contested assessments into the registry of the court. The trial court also found that the Commission had violated the open meetings statute by providing inadequate notice of 18 separate meetings, but made no award in connection with those violations. Roats appealed and the Commission cross appealed seeking approximately $200,000 in additional fees.

Holding: The Court of Appeals affirmed the trial court. In determining the authority of the Commission, the Court reviewed the articles of incorporation, bylaws and recorded covenants applicable to the Commission and subdivision as correlated documents to be construed together. Construing all of these documents together, the Court concluded that the Board, after obtaining the approval of a majority of the Commission's members had the authority "to acquire and own real or personal property" and to levy assessments against the owners of assessed lots for necessary costs so long as the property was reasonably necessary for the Commissions use and benefit. The " use and benefit" provided by the Association's operation of the marina facilities was obvious to the Court — the San Juan Aviation Estates, located on Blakely Island, was not serviced ferries and the members reasonably sought to have the Commission maintain


1-34

their access to amenities provided by the marina facilities. The Court refused to award additional attorney fees, since the only attorney fee provision applicable to the litigation related to actions to collect delinquent assessments. Once the assessments were deposited in the registry of the court, the focus of the case shifted from an action to collect to an action contesting the authority of the Commission.

Lake v. Woodcreek Homeowners’ Association, 168 Wn.2d 694 (2010) – Building in common area airspace.

Bogomolov v. Lake Villa Condo. Ass’n., 131 Wn.App. 353 (2006) – Amendment to bylaws. Lake v. Woodcreek Homeowners Association, 142 Wn.App. 356 (2007) – Authority of board to authorize

improvements. Serrano on Cal. Condo. Homeowners Ass’n v. First Pac. Dev., Ltd., 143 Wn.App. 521 (2008) – Effect of

dissolution of developer. Fawn Lake Maint. Comm’n v. Abers, 149 Wn.App. 318 (2009) – Allocations of assessments.

IX. Landowner Tort Liability to Others/Insuring Real Property

A. Rules of Liability

Cregan v. Fourth Memorial Church, 175 Wn.2d 279 (2012)

Facts: Riverview Bible Camp is privately owned by Fourth Memorial Church, a nonprofit organization. The Camp charged rental and admission fees. In 2008, Riverview allowed an organization named " Beats & Rhythms" to use the facility at no charge under a rental and indemnity agreement. It was the only group granted a fee waiver in 2008 and 2009. During Beats & Rhythms' stay at Riverview, Cregan, who was the group's volunteer nurse, suffered fractures of his leg and ankle while sliding on a burlap bag down a multilane slide originally built for the Spokane Expo '74 world's fair. Cregan sued Fourth Memorial, asserting premises liability. Fourth Memorial asserted that the recreational use immunity statute, RCW 4.24.200-210, shielded it from liability. The trial court struck the defense. The Supreme Court granted discretionary review on an interlocutory appeal.

Holding: The Court affirmed the trial court ruling. Fourth Memorial operated a commercial recreational facility. To be immune under RCW 4.24.210(1) the landowner must establish that the use (1) was open to members of the public (2) for recreational purposes and (3) no fee of any kind was charged. The camp was not open to the public. The rental policy restricted the users based on their religious affiliation and only secular or Christian groups were allowed to use the camp and generally these groups were charged for access. All other members of the public were excluded. Beats & Rhythms used the camp as a private group and the fact that no charge was made did not turn the group into a public user. Because Fourth Memorial failed to establish Riverview was open to the public, the defense provided by recreational use immunity statute was available.


1-35

Hymas v. UAP Distribution, Inc., 167 Wn.App. 136 (2012)

Facts: UAP contracted with several contractors to construct fertilizer mixing plant in Plymouth, Washington. There was no general contractor. Narum Concrete Construction Inc. was hired to perform the excavation and concrete work. The contract with Narum was a standard form AIA Document A107--1997, the "Abbreviated Standard Form of Agreement Between Owner and Contractor for Construction Projects of Limited Scope where the basis of payment is a STIPULATED SUM." During the work, Hymas, an employee of Narum, fell into a trench and seriously injured his leg. Hymas sued UAP claiming that UAP failed to maintain the trench and violated WISHA requirements. The trial court granted UAP’s motion for summary judgment dismissing the claim.

Holding: The dismissal was affirmed. The potential liability of UAP turned on whether UAP owed a duty of care to Hymas. That, in turn, depended upon whether UAP retained control of the job site to the extent that it had a duty to insure that all WISHA requirement were met. The contract provision that Narum would cooperate with the owner did not mean that the owner retained control of the manner of work performed by Narum. The retention of the right to inspect the work by the owner was not sufficient control to impose liability on UAP. Whether a jobsite owner owes a statutory duty to an independent contractor's employee turns exclusively on whether the owner assumed the type of control that removes the owner from the general rule of nonliability at common law. UAP did not retain that control over Narum. UAP did not have liability to Hymas as an invitee. The obvious nature of the trench and the dangers in presented negated any duty by UAP to warn Hymas or take additional measures to protect Hymas.

Smith v. Stockdale, 166 Wn.App. 557 (2012)

Facts: Vantage owned the Vantage Riverstone Resort near Vantage, Washington. The operations are located on lot 23 and include a campground, restroom facilities with showers, and boat moorage. Vantage also owned lot 22, which was located immediately to the north of lot 23 and unimproved. A strip of land owned by the Grant County PUD separated the Vantage property from the river. Vantage had a permit to use the PUD property adjacent to Lot 22, but not the strip adjacent to Lot 23. Vantage charged a fee for the use of its resort property, but was not allowed to charge a fee for access to the PUD property adjacent to Lot 23. The PUD property adjacent to Lot 23 was a cliff. Smith, while attending a concert at the Gorge Amphitheatre, visited the resort and paid $5.00 as an entrance fee. She then crossed a fence to the cliff, where she jumped into the water. The cliff was approximately 65 feet high. After jumping, Smith complained of injuries. She subsequently sued Vantage, alleging a violation of the Consumer Protection Act and premises liability. The trial court dismissed the claim.

Holding: Smith claimed that the CPA violation occurred because Vantage charged her $5 to jump from the cliff, which Vantage did not have the right to do. However, when Smith paid the fee, she was in the fee area and there was nothing deceptive about demanding that she pay. In Washington, a property owner does not have a duty to protect visitors from dangers on adjacent property. Vantage did not owe a duty of care to Ms. Smith to warn her of the dangers at


1-36

the cliff. And Vantage did not have a duty to protect visitors from the dangers on the adjacent PUD property. The dismissal was affirmed.

Mavis v. King County Hosp. Dist. No. 2, 159 Wn.App. 639 (2011)

Facts: Mavis tripped over a steel bar protruding from the concrete floor of a parking garage owned by Evergreen Hospital (King County Hospital District No. 2). She sent a claim for damages to Evergreen by certified mail with return receipt requested. An Evergreen employee signed the return receipt on Saturday, January 31, 2009. Evergreen contended that the claim was not "presented" until the following Monday, February 2. The trial court agreed and dismissed Mavis's lawsuit with prejudice because she had commenced her lawsuit one day early, precisely on the 60th day, thus failing to comply with the 60-day waiting period under RCW 4.96.020(4) and the statute of limitations for filing the claim had passed.

Holding: The Court of Appeals reversed. Evergreen failed to comply with RCW 4.96.020 in recording notice of the identity and location of its designated agent for receipt of claims. Because of this violation, Evergreen was precluded from raising a defense under the statute.

Curtis v. Lein, 169 Wn.2d 884 (2010) – Application of res ipsa loquitur. Nunez v. Am. Bldg. Maint. Co. West, 144 Wn.App. 345 (2008) – Slip and fall with indemnification. Sourakli v. Kyriakos, Inc., 144 Wn.App. 501 (2008) – Criminal assault in parking lot. Swinehart v. City of Spokane, 145 Wn.App. 836 (2008) – Recreational use statute. Wilson v. City of Seattle, 146 Wn.App. 737 (2008) – Municipality duty to maintain. Van Scoik v. Dept’t of Natural Res., 149 Wn.App. 328 (2009) – Immunity under recreational land statute. Curtis v. Lein, 150 Wn.App. 96 (2009) – Duty owed to invitee. Wirtz v. Grillogly, 152 Wn.App. 1 (2009) – Assumption of risk. Gates v. Port of Kalama, 152 Wn.App. 82 (2009) – Requirements for claims against municipality. Neil vs. NWCC Investment V, LLC, 155 Wn.App. 119 (2010) – Owner control of jobsite for purposes of

imposition of duty to provide safe worksite. B. Insurance Coverage - Homeowners & Property

Lake Chelan Shores Homeowners Ass’n v. St. Paul Fire & Marine Ins. Co., 167 Wn.App. 28 (2012)

Facts: The LCS condominiums were built between 1980 and 1994. LCS first discovered a problem with rot in mid-2006. LCS tendered its claim to its insurer, St. Paul, on July 5, 2007. St. Paul had insured the property under three annual policies, effective from August 3, 1996 to August 3, 1999. Each of those policies provided coverage for "collapse" that occurred during the policy period:

Collapse coverage. We'll insure covered property against the risk of direct physical loss or damage involving collapse of a building or any part of a building. The collapse must be due to any of the following causes of loss: . . . .


1-37

hidden decay.

The policies contained the following exclusions from coverage:

Exclusions -- Losses We Won't Cover . . . . Collapse. We won't cover loss resulting from collapse other than that described in the collapse coverage under the Covered Causes Of Loss section. . . . . Wear -- tear -- deterioration -- animals. We won't cover loss caused or made worse by: wear and tear; deterioration, mold, wet or dry rot, rust or corrosion including fungal or bacterial contamination.

LCS sued St. Paul on August 30, 2007, asserting a claim for $303,424, which it claimed was the loss that was incurred during the policy period. After reviewing the expert reports prepared on behalf of LCS, St. Paul moved for summary judgment. St. Paul claimed that the LCS experts had no generally accepted scientific basis on which to link the current building decay to a state of "collapse" during the St. Paul policy periods. The trial court agreed and dismissed the claim.

Holding: LCS contended that the conflicting opinions of the experts required a trial, rather than resolving the issues on summary judgment. LCS also contended that the trial court weighed the evidence rather than construing the evidence most favorably to LCS, the non-moving party. The only evidence purporting to show a state of collapse from hidden decay during the St. Paul policy periods came in the form of two opinions from LCS's experts. One of the experts applied a formula to calculate the progression of the rot; the formula was obtained from the expert’s colleague and the expert had not knowledge of the accuracy of the formula. LCS second expert was unable to identify any scientific support for the accuracy of the formula. None of the expert testimony addressed whether the use of such formulas to backdate to the time when the collapse condition began, was generally accepted in the scientific community. LCS failed to respond to the deficiency in evidence pointed out by St. Paul and the trial court properly dismissed the action.

Baldwin v. Silver, 165 Wn.App. 463 (2011)

Facts: Following a grease fire in 2006 that caused damage to a deck, Silver filed an insurance claim with its insurer, Farmers. Farmers paid various expenses and repair costs. Initially, Farmers paid Silver funds that were owed to Silver’s contractor. Silver did not pay the contractor, but kept the funds and Farmers ultimately had to pay the contractors directly. Silver then sued Farmers alleging bad faith and breach of contract. The trial court initially dismissed the claims based on a failure to disclose the claims in Silver’s bankruptcy proceeding, but that decision was reversed by the Court of Appeals. On remand, the trial court again dismissed all of Silver’s claims based on the lack of any damages established by Silver. Silver appealed.


1-38

Holding: The dismissal was affirmed. Silver present no evidence of damage other than unsupported statements in an affidavit. The claim that Farmers caused damage by failing to defend Silver against a suit by one of the contractors was properly rejected. Silver never explicitly tendered defense of the claim and the suit arose because Silver refused to pay the contractor from the funds received from Farmers. The fact that Silver lost or could not find all of the checks mailed by Farmers for reimbursement of expenses did not create a claim for damages. Farmers properly refused to compensate Silver for any damages resulting from removal of the deck, since removal was not the result of damage but at the insistence of another insurer. Finally, no damages resulted from Farmers cancellation of Silver’s policy after Silver refused to pay the contractor with Farmers’ funds. The policy provided that Farmers could cancel coverage for any reason.

Certain Underwriters at Lloyds’ London v. Travelers Property Cas. Co. of America, 161 Wn.App. 265 (2011)

Facts: Evergreen Health Care leased a facility in Centralia. Under the terms of the lease, EHC was required to maintain property insurance and toward that end, EHC procured a policy from Travelers that covered the Centralia location and other properties operated by EHC. The Traveler’s policy excluded flood damage, but EHC purchased a FEMA national flood policy ($500,000 of coverage) and an endorsement to the Travelers policy that provided $1 million of coverage for the Centralia location. In addition, an excess policy was obtained from Lloyds that provided an additional $10 million of coverage on top of the FEMA and Travelers limits. After suffering extensive damage in a flood in December 2007, EHC collected the proceeds of the FEMA policy and Travelers agreed to advance the full limits of $1 million. Lloyds, however, refused to advance any funds, contending that it had no obligation to do so until Travelers additional limit of $10 million relating to law and ordinance coverage had been exhausted. Lloyds filed a declaratory judgment action to confirm its interpretation of its policy and the trial court ruled in favor of Lloyds.

Holding: The Court of Appeals reversed. The Lloyds policy unambiguously provided that it attaches when Travelers admits liability for $1 million. The Travelers’ policy was unambiguous in limiting its coverage relating to flood damage to $1 million. The Lloyds policy provided that it applied with the limit of insurance as shown in the supplemental coverage declarations was reached, and that limit for the Travelers’ policy was $1 million.

Unigard Ins. Co. v. Mutual of Enumclaw Ins. Co., 160 Wn.App. 912 (2011)

Facts: Engleman sold property to Newmarket in the early 1980s. The property was the site of a former dry cleaning facility. DOE notified Newmarket in 1996 that the site was potentially contaminated. In 2001, Newmarket sued Engleman and others seeking contribution for remediation expenses. Engleman tendered the claim to Mutual of Enumclaw, who had issued a homeowner’s policy to Engleman. MOE denied coverage. Engleman then settled with Newmarket for $20,000 plus an assignment of rights against MOE. Newmarket then assigned its rights to its insurer, Unigard, which then sued MOE for breach of contract and bad faith. On


1-39

summary judgment, MOE was held liable. Following a jury trial on damages, Unigard was awarded a judgment in excess of $2 million, representing the entire cost of the remediation. MOE asserted that the judgment should be reduced to reflect the actual payment by Engleman and the contribution obligations of other defendants.

Holding: The judgment was affirmed. MOE failed to object to rulings of the trial court that submitted the issue of damages to the jury. As a result, the jury considered the potential liability of Engleman for the entire remediation effort. The judgment was within the scope of evidence presented, and the failure of MOE to object to the trial court rulings waived MOE’s right to challenge the verdict.

McClammy v. Cole, 158 Wn.App. 769 (2010)

Facts: McClammy bought a house in Goldendale in 1994 and obtained a homeowner’s policy from Cole, a State Farm agent. McClammy bought a second home in 1995 and obtained another policy from Cole and State Farm. Over the years, McClammy remodeled the house and had various discussions with Cole concerning coverage and premium expense. In 2005, the house was completely destroyed by fire. The total liability under the then existing policy was $366,000 and the cost to rebuild the home was over $580,000, leaving a substantial uninsured loss. McClammy sued Cole and State Farm. The trial court dismissed McClammy’s claims on summary judgment.

Holding: The dismissal was affirmed. Ordinarily, Cole did not have a duty to advise McClammy as to the adequacy of their insurance policy coverage. However, it there were a special relationship between the Cole and McClammy, the duty could arise. Absent this special relationship, "an insurance agent has no obligation to recommend . . . liability limits higher than those selected by the insured."

A special relationship exists if (1) the agent holds himself out as an insurance specialist and receives additional compensation for consulting and advice, or (2) there is a long-standing relationship, some type of interaction on the question of coverage, and the insured relied on the agent's expertise to the insured's detriment.

Although the record showed that McClammy and Mr. Cole had a long-standing relationship, no evidence was presented that McClammy ever specifically consulted with Cole concerning the adequacy of coverage and Cole never gave any specific recommendations concerning the adequacy of coverage. In the absence of such evidence, no special relationship existed.

Sprague v. Safeco, 158 Wn.App. 336 (2010)

Facts: Sprague purchased a home in 1987 and insured it continuously with Safeco since 1992. In 2008, Sprague discovered rot in the supports for the decks attached to the house and filed a claim with Safeco. An expert hired by Safeco concluded that the decay was caused by improper construction methods and that the defective conditions existed prior to 2003, which was the year that Safeco changed its policy forms to limit coverage for “prospective” collapse.


1-40

The Safeco policy excluded losses arising from construction defects, and Safeco denied the claim. Sprague sued, claiming that the loss was covered under the “ensuing loss” provisions of the policy. The trial court dismissed the claim on summary judgment.

Holding: The Court of Appeals reversed the trial court. The policy forms issued by Safeco prior to 2003 were “all-risk” policies that did not exclude collapse as a covered peril. The policies did exclude losses arising from rot and construction defects, but in each instance, the policy also provided coverage for any “ensuing loss not excluded or excepted from this policy” arising from those excluded perils. The reports of Safeco’s experts concluded:

“It appears from my review of the [Pacific] report that the conditions of significant structural impairment and imminent collapse existed prior to the point in time that the Safeco policy forms changed and defined the term collapse. Will await coverage counsel's recommendation, but I suspect that this loss will be covered."

For purposes of the pre-2003 policies, the findings of Safeco’s own experts established that the building was in a state of imminent collapse and that there was substantial impairment to the structure of the building which was sufficient to establish collapse as a cause of loss.

Vision One Llc V Rsui, 158 Wn.App. 91 (2010)

Facts: Vision began developing a condominium complex in Tacoma in 2005. Vision contracted with D&D for the concrete work and D&D contracted with Berg for shoring equipment to temporarily support the poured concrete slabs. On October 1, 2005, D&D poured a concrete slab and the shoring structure collapsed. Vision filed a claim under its property damage insurance policy with Philadelphia Indemnity. After investigating the claim, Philadelphia denied coverage on the grounds that the loss was caused by faulty design of the shoring system and faulty installation of the slab. The Philadelphia policy covered all direct loss to the property, but excluded losses arising from defective design and loss caused by faulty workmanship. Vision sued Philadelphia, claiming breach of contract, bad faith and violation of the CPA. The trial court held that the loss was covered by the policy and entered judgment against Philadelphia. A jury awarded damages against Philadelphia in the amount of $1.1 million, plus $50,000 for CPA violations and $1.9 million in attorney fees. Prior to the entry of the judgment, Vision settled with Berg and D&D.

Holding: The Court affirmed the trial court’s ruling that Philadelphia was precluded from asserting any damages against Vision under the theory that Vision interfered with its rights to recover from D&D and Berg. Since Philadelphia denied coverage to Vision, the insurance company was estopped from claiming that the insured breached the policy by impairing the insurer’s recovery rights by settling with some of the defendants. The Court held that the doctrine of efficient proximate cause was a legal doctrine used to determine whether a loss was caused by an excluded event. The Court concluded that the trial court had inappropriately interpreted the doctrine of efficient proximate cause and in so doing determined as a matter of law the cause of the loss. The cause of the loss was a question of fact that should have been


1-41

resolved by the jury. The trial court also erroneously interpreted the resulting loss clause in the policy to conclude that any loss caused by the concrete collapse was covered by the policy. The policy covered a loss caused by any of the covered causes of loss resulting from faulty workmanship, but does not cover losses directly caused by faulty workmanship. The case was remanded for a determination of the cause of loss with instructions that if faulty workmanship caused the concrete slab to collapse, the resulting loss clause does not apply to provide coverage.

Holden v. Farmers Ins. Co. of Wash., 169 Wn.2d 750 (2010) – Actual cash value. Am. Best Food, Inc. v. Alea London, 168 Wn.2d 398 (2010) – Duty to defend. Mut. of Enumclaw Ins. Co. v. USF Ins. Co., 164 Wn.2d 411 (2008) – Application of selective tender and

late tender rules. Holden v. Farmers Ins. Co. of Wash., 142 Wn.App. 745 (2008) – Definition of actual cash value excluding

sales taxes. Polygon Northwest Co. v. American National Fire Insurance Co., 143 Wash. App. 753 (2008) – Multiple

insurers for construction defects. Baldwin v. Silver, 147 Wn.App. 531 (2008) – Judicial estoppel as bar to claim. Walla Walla Coll. v. Ohio Cas. Ins., 149 Wn.App. 726 (2009) – Loss outside policy period. Ledcor Indus. v. Mut. Of Enumclaw, 150 Wn.App. 1 (2009) – Recoverable damages from bad faith refusal

to defend. Peterson v. Big Bend Ins. Agency, 150 Wn.App. 504 (2009) – Breach of duty of care by insurance agent. NW Bedding v. Nat’l Fire Ins., 154 Wn.App. 787 (2010) – Flood exclusion. Underwriters v. Valiant Ins. Co., 155 Wn.App. 469 (2010) – Definition of occurrence. Cedell v. Farmers Ins. Co. of Washington, 157 Wn.App. 267 (2010) – Bad faith litigation. No Boundaries, Ltd. v. Pacific Indemnity Company, 160 Wn.App. 951 (2011) – Applicable ordinance for

application of law and ordinance endorsement. Allemand v. State Farm Ins. Cos., 160 Wn.App. 365 (2011) – Law and ordinance coverage. Community Association Underwriters of America, Inc. v. Kalles, 164 Wn.App. 30 (2011) – Tenant as

implied co-insured in connection with subrogation claim.

X. Legal Actions

A. Trespass, Encroachment, Nuisance, Landslide & Water Runoff

Broughton Lumber v. BNSF Ry. Co., 174 Wn.2d 619 (2012)

Facts: Broughton Lumber sued BNSF and Hasbro after a fire was started during a grinding operation on BNSF tracks adjacent to Broughton’s property. The fire spread and destroyed Broughton’s trees. The action was commenced in the Oregon Federal District Court, and the Court certified the following question to the Washington Supreme Court:

Can a plaintiff recover damages under [former] RCW 64.12.030 for trees damaged by a fire that spreads from a defendant’s neighboring parcel, where the alleged acts or omissions of the defendant were not directed at plaintiff’s property, and did not occur on plaintiff’s property?

Holding: This case was a companion case to Jongeward and the statutory analysis used by the Court was the same as in that case. The plaintiff was no entitled to recover damages when the defendant commits an indirect act or omission that causes collateral injury, but the plaintiff


1-42

may recover damages a defendant commits a direct trespass causing immediate injury to the plaintiff’s trees, even if the defendant is not present on the plaintiff’s property. Thus, the answer to the certified question was “no.”

Jongeward v. BNSF Ry. Co., 174 Wn.2d 586 (2012)

Facts: In August 2007, a fire broke out at several points along the BNSF right of way southwest of Spokane. The fire spread to adjoining property and destroyed 4,000 trees on the Jongeward property. Jongeward sued in Federal District Court and the court determined that BNSF negligently caused the fire. In response to the claim by Jongeward that he was entitled to damages under the timber trespass statute, the court certified three questions to the Washington Supreme Court:

1. Does a Defendant who negligently causes a fire that spreads onto Plaintiff’s property, and damages or destroys Plaintiff’s trees, “otherwise injure” trees, timber or shrubs for purposes of [former] RCW 64.12.030?

2. Can a Plaintiff recover damages under [former] RCW 64.12.030 for trees damaged or destroyed by a Defendant who never has been physically present on Plaintiff’s property?

3. Must damages awarded under [former] RCW 64.12.030 be reasonable in relation to the value of the underlying property?

Holding: Former RCW 64.12.030 provided, "Whenever any person shall cut down, girdle or otherwise injure, or carry off any tree, timber or shrub on the land of another person, ... without lawful authority, in an action by such person, ... against the persons committing such trespasses," the prevailing plaintiff is entitled to treble damages. After reviewing the history of the timber trespass statute, the Court concluded that the statute applied only in those cases when a defendant commits an act of trespass causing immediate injury to trees, shrubs or timber. The phrase “otherwise injure” described a direct trespass comparable to cutting down, girdling and carrying off trees or timber. The statute would apply when a defendant commits a direct trespass that causes immediate, not collateral, injury to a plaintiff's timber, trees, or shrubs, even if the defendant is not physically present on a plaintiff's property. The Court refused to answer the third question, since the issue of damages was not properly before the Court. As to the first question the Court answered, “no;” as to the second question, the Court answered, “yes;” and as to the third question, the Court declined to answer because the timber trespass statute did not apply in this case.

Crystal Lotus Enterprises v. City of Shoreline, 167 Wn.App. 501(2012)

Facts: King County installed a stormwater system sometime before 1962. Upon its incorporation in 1995, the city of Shoreline took over operation of the system. In 2004, Crystal Lotus acquired two lots (Lots 6 and 7) in Lake Forest Park, near the Shoreline-Lake Forest Park border. A pipe from the Shoreline stormwater system discharged stormwater onto an adjacent lot (Lot 8). Crystal Lotus alleged that stormwater released on Lot 8 converted the land into marsh, rendering it unusable and unmarketable. Crystal Lotus requested money damages for inverse


1-43

condemnation of the property, an order enjoining the cities from continued trespass, or money damages for loss of use of the property and for the cost of restoration. The trial court dismissed the inverse condemnation claim as time barred and dismissed the trespass claim as barred as a matter of law.

Holding: The dismissal was affirmed. Any alleged taking of the Crystal Lotus property occurred prior to the time the lots were acquired in 2004. A property owner generally may sue only for a taking that occurs during his or her ownership because the price of property is deemed to reflect its condition at the time of the sale, including any injury because of government interference. The claim for continuous trespass was property dismissed. Injunctive relief was precluded because Crystal Lotus did not allege that either Shoreline or Lake Forest Park engaged in an intentional act regarding the stormwater system since Crystal Lotus acquired its property. Crystal Lotus presented no evidence of actual or substantial damages occurring in the past three years: no expert testimony about diminution of property value, no government property tax assessments, no photos or descriptions of physical deterioration. Rather, Crystal Lotus merely asserted the property was unmarketable. This bare allegation did not suffice to defend a motion for summary judgment. With respect to Lake Forest Park, the appeal was deemed frivolous and attorney fees were awarded to that defendant.

Lord v. Pierce County, 166 Wn.App. 812 (2012)

Facts: Following significant flooding of the Puyallup River in January 2009, Lord sought to protect his property for the upcoming 2009-2010 flood season by constructing an earthen levee. No permits were obtained and the levee work was ultimately “red-tagged” by Pierce County. Lord appealed from an order to remove the levee and the hearing examiner confirmed the order. Lord filed a LUPA petition with the Pierce County Superior Court, which also affirmed the County’s order to remove the levee.

Holding: The Court of Appeals affirmed the removal order. Lord contended that the application of the common enemy doctrine justified the construction of the levee. As interpreted by Washington courts, the common enemy doctrine is a defense to liability and did not create an affirmative right to construct improvements without legally required permits. The permit regulations were not “repugnant” to the common law doctrine and were enforceable to require Lord to obtain appropriate permits for the work prior to construction.

Marshall v. Thurston County, 165 Wn.App. 346 (2011)

Facts: Marshall purchased property in Lacey, Washington in 1992. The property flooded three times from 1996 through 1999. In 2000, Marshall learned that the County had installed a storm water diversion device that possibly directed water onto the Marshall property. Marshall filed a claim with the County for compensation, which was denied. He then sued the County in 2003, alleging negligence, trespass and inverse condemnation. The case was settled for $8,812, Marshall executed a release in favor of the County and the complaint dismissed with prejudice. The property flooded again in 2009 and Marshall sued the County again. The County asserted


1-44

that the complaint was barred by the statute of limitations, the terms of the release and the doctrine of res judicata. The trial court dismissed the claim on summary judgment.

Holding: The Court of Appeals reviewed the County’s arguments relating to the effect of the release and res judicata. The Court found the terms of the release ambiguous as to its scope; the language was possible of alternative interpretations limiting the release to the earlier floods or making it applicable to any event relating to the water diversion device. Because of the ambiguity, summary judgment based on the release was inappropriate. However, the doctrine of res judicata barred the claim. The Court rejected Marshall’s argument that the cases differed in subject matter and were different causes of action. The subject matter of the 2003 complaint included the alleged permanent diminution in value of the Marshalls' land caused by the diversion device's installation. Both of the Marshalls' lawsuits sought the same recovery based on the same underlying facts, making the cases identical in subject matter. The installation of the device was the transaction that gave rise to the claims in both actions. The 2009 claim was therefore based on the same cause of action as the prior suit.

McCoy v. Kent Nursery, Inc., 163 Wn.App. 744 (2011)

Facts: The McCoys filed suit against Kent Nursery and Pierce County for damage caused by the failure of a clay tile pipe drainage system that runs under the Nursery’s property to a catch basin in a County right-of-way area and west under a road to the McCoy's property, ultimately discharging into a creek through the submerged end of the pipe. Drainage pipes had been installed on the McCoy property for some years, although there was no formal easement. McCoy was aware that drainage pipes from the Nursery ran under the property before the property was purchased in 1998. After experiencing excessive water runoff and a general failure of the drainage pipes, McCoy sued the Nursery and County under a variety of theories, including trespass and improper diversion of water. Conflicting expert testimony was presented to a jury concerning the cause of the drainage problems experienced by the McCoys and the jury returned a verdict in favor of the Nursery and the County. Following the trial, based on interviews with jurors conducted by the McCoys’ attorneys, the trial court vacated the verdict and ordered a new trial on the grounds of juror misconduct and failure of certain jurors to disclose information during voir dire.

Holding: The Court of Appeals reversed. None of the information that was allegedly not disclosed during the voir dire would have formed a basis to challenge the jurors for cause. It was also not clear from the record that any of the information allegedly withheld was responsive to any question asked during voir dire. The statements of the jurors that were introduced to show misconduct were improperly considered by the trial court; these statements reflected the internal thought processes of the jurors and, as such, inhered in the verdict.

Pope v. Douglas County PUD, 158 Wn.App. 23 (2010)

Facts: In September 2006, The Douglas County Public Utility District No. 1 (PUD) had been restoring power-to-power lines that had been downed by a fallen tree when the fire started south of orchard property owned by Pope and Hanson. A fire fighter, who worked for two fire


1-45

districts fighting the fire, started a backfire to check the advancing fire. The backfire spread to Pope and Hanson’s property, causing damage. The landowners filed a claim for damages against the Fire Districts. They then sued the Fire Districts and the PUD for negligence. The trial court entered a summary judgment dismissing the claim.

Holding: The dismissal was affirmed. The fire districts were governmental entities, and a governmental entity is not liable in negligence unless a plaintiff can show that the entity breached a duty that was owed to the plaintiff individually rather than the public in general. No exception to the public duty doctrine was applicable in this case. The Court rejected the Landowners' argument that the public duty doctrine should not apply because the district’s acts or omissions were operational rather than policy. The plaintiffs failed to show an individualized duty owed by the districts and summary dismissal of the claim was appropriate.

Fitzpatrick v. Okanogan County, 143 Wash. App. 288 (2008) – Inverse condemnation action for redirecting river flow.

Rosengren v. City of Seattle, 149 Wn.App. 567 (2009) – Duty of care to maintain trees. Trotzer v. Vig, 149 Wn.App. 594 (2009) – Statute of limitations and proof of willful trespass. Vance v. XXXL Dev., LLC, 150 Wn.App. 39 (2009) – Effect of sale of property on right to maintain

nuisance action. Grundy v. Brack Family Trust, 151 Wn.App. 557 (2009) – Proof of intentional trespass. Cogdell v. 1999 O'Ravez Family, LLC, 153 Wn.App. 384 (2009) – Necessity of remedy for encroachment. Clipse v. Michaels Pipeline Constr., 154 Wn.App. 573 (2010) – Elements of statutory trespass under RCW

4.24.630. B. Eminent Domain

Ruvalcaba v. Kwang Ho Baek, 175 Wn.2d 1 (2012)

Facts: In July 1965, the Ruvalcabas purchased a parcel of land in Seattle, Washington. At the time, the land was a contiguous parcel providing the Ruvalcabas with access to 42nd Avenue NE. In 1971, the Ruvalcabas sold the eastern portion of the parcel to Desmereaux. By retaining the western portion of the parcel without reserving an easement, the Ruvalcabas left themselves without access to a public thoroughfare. When the Ruvalcabas discovered in 2005 that the retained parcel was a buildable lot, they sought to condemn a private way of necessity over property owned by the Day Group of owners. The trial court granted summary judgment to the Day Group, holding that because Ruvalcabas voluntarily created the landlocked parcel, the element of “reasonable necessity” that was required to establish a private way of necessity was not present. The Court of Appeals reversed and held that the Ruvalcabas decision to landlock their parcel was only one factor to be considered to determine the reasonable need for a way of necessity.

Holding: The Supreme Court reversed the Court of Appeals and reinstated the trial court dismissal. RCW 8.24.010, which establishes the procedure to establish a private way of necessity, did not establish an absolute right. Noting that whether the voluntary landlocking of a parcel barred any subsequent claim to establish a private way of necessity was an issue of first impression, the Court held that by voluntarily creating the landlocked parcel and then waiting 35


1-46

years to bring the condemnation action precluded any reasonable trier of fact from finding that there was a “reasonable necessity” for the right of access:

The Ruvalcabas are essentially turning our stated public policy goal on its head. They are making a sophisticated, yet convoluted, legal argument regarding financial impracticability to manufacture a cloud on title and, thus, tie up the Day Group Petitioners' right to use and convey their land. This strategy was also employed approximately 35 years after the Ruvalcabas voluntarily landlocked their own parcel. Such a flagrant abuse of the reasonable necessity doctrine will not be tolerated because it erodes the protections for private property found in article I, section 16 of the Washington Constitution.

City of Puyallup v. Hogan, 168 Wn.App. 406 (2012)

Facts: Hogan leased space in a shopping center to Borders in 2000. The lease had an extensive provision relating to the division of condemnation awards, including a right of termination by Borders under certain circumstances. In 2005, In 2005, Puyallup exercised its powers of eminent domain and began a condemnation proceeding to take a portion of the Center in order to extend 39th Avenue SE. This construction will eliminate the Center's primary entrance and, thus, decrease access to the Center. At a trial in 2007 to determine the award, Hogan was awarded $5,150,000 for the taking. Puyallup satisfied its judgment in full and Hogan paid $936,835 into the trial court registry for apportionment among the Center's tenants. Subsequently, Borders, who did not terminate the lease, filed a claim to share in the proceeds. Hogan asserted that Borders waived its right to apportion the award in the lease, but the trial court refused to grant a summary judgment to Hogan on this issue. Following a trial, Borders was awarded $711,602 as its portion of the award, plus a share of prejudgment interest and fees, for a total award of $918,129.18.

Holding: Hogan contended that the lease provision contained a waiver of Borders’ right to share in any condemnation award except upon termination of the lease. The Court of Appeals rejected this argument. Unless a landlord and tenant agree otherwise, a tenant has the right to share in a condemnation award to the landlord. Nothing in the condemnation provision in the lease clearly waived Borders’ right to share in condemnation awards. At most, the language of the lease the right to share in a condemnation award if (1) Borders terminated the lease under article 22(a) or (2) Borders had unamortized tenant improvement expenses at the time of condemnation for which the expropriating authority made a specific condemnation award, and if the expropriating authority made that specific condemnation award for Borders' unamortized expenditures for buildings Borders owned. Neither of those events occurred. The trial court correctly applied the formula for apportioning the award between Hogan and Borders set forth in State v. Spencer, 90 Wn.2d 415 (1978) and substantial evidence supported the trial courts conclusion. The Court also rejected Hogan’s contention that Borders had the duty to mitigate its damages by not exercising any of its options to extend to that the length of the lease for valuation purposes should not include all option period. The trial court did err, however, in refusing to allow postjudgment interest pending the appeal and Borders was entitled to interest on its portion


1-47

of the award until paid in full. Borders was also properly awarded attorney fees under the terms of its lease.

Goldmark v. McKenna, 172 Wn.2d 568 (2011) – Condemnation of school lands. Union Elevator & Warehouse Co. v. State ex rel. Dep't of Transp., 171 Wn.2d 54 (2011) – Interest on

condemnation award. Fitzpatrick v. Okanogan County, 169 Wn.2d 598 (2010) – Inverse condemnation. Noble v. Safe Harbor Family Pres. Trust, 167 Wn.2d 11 (2009) – Right to attorneys fees. Public Utility District No. 2 of Grant County v. North American Foreign Trade Zone Industries, LLC,

159 Wn.2d 555 (2007) – Adequacy of notice of taking. HTK Management, L.L.C. v. Rokan Partners, 139 Wn.App. 772 (2007) – Abandonment by condemning

authority. Galvis v. State Dept. of Transp., 140 Wn.App. 693 (2007) – Designation under Highway Access

Management Act. King County v. Seawest Inv. Assocs., LLC, 141 Wn.App. 304 (2007) – Reasonableness of attorney fees. Cowlitz County v. Martin, 142 Wn.App. 860 (2008) – Taking in excess of authorized resolution. Spokane Airports v. RMA, Inc., 149 Wn.App. 930 (2009) – Improper delegation of authority to condemn. Union Elevator v. State of Washington, 152 Wn.App. 199 (2009) – Calculation of interest and attorney

fees under Washington Relocation Assistance Act. Ruvalcaba v. Kwang Ho Baek, 159 Wn.App. 702 (2011) – Private way of necessity. Tom v. State, 164 Wn.App. 609 (2011) – Inverse condemnation.

C. Adverse Possession/Boundary Disputes

Gorman v. City of Woodinville, 175 Wn.2d 68 (2012)

Facts: A private owner dedicated property known as Tract Y to the city of Woodinville in December 2005 for a roadway improvement project. Gorman owned property adjacent to Tract Y. On July 10, 2007, Gorman filed an action to quiet title claiming he acquired Tract Y through a 10-year period of adverse possession that transpired while the land was still in private ownership. The City moved to dismiss under CR 12(b)(6), arguing Gorman's claim is prohibited by RCW 4.16.160, which provides in part “[N]o claim of right predicated upon the lapse of time shall ever be asserted against the state.” The trial court granted the City's motion and dismissed Gorman's claim. The Court of Appeals reversed and remanded for trial. It held Gorman's claim was not barred because it is alleged the statute of limitations ran while the subject land was privately owned.

Holding: The Supreme Court affirmed the reversal of the trial court. While it was true that RCW 4.16.160 prevented any claim of adverse possession being asserted during the state ownership of property, the issue of whether the government was subject to previously perfected claims of adverse possession while the property was owned by a private party was an issue of first impression. RCW 4.16.160 did not prevent the statute of limitations from running against the prior private owner before the land was dedicated to the City. The grantor conveyed to the City only the interest owned at the time of the dedication. If the dedicator's title had been extinguished by adverse possession prior to the dedication, there was nothing to convey. Title acquired through adverse possession cannot be divested by acts other than those required to transfer a title acquired by deed. The effect of the City’s interpretation of the statute would be


1-48

that anyone who had lost title to property through adverse possession could reverse the process by simply conveying the property to a municipality. This was not the intent of the statute.

Kiely v. Graves, 173 Wn.2d 926 (2012)

Facts: Kiely and Graves owned adjacent properties in Port Townsend. An alley, dedicated to the city in 1908, separated the two parcels, with the Kiely parcel on the north side of the alley and the Graves parcel on the south side. A fence ran along the south boundary of the alley and a cottage on the Kiely parcel encroached onto the alley, so in effect the fence incorporated the alley into the Kiely parcel. In 2008, Graves requested that the alley be vacated, and the city passed a vacation ordinance in 2009. Kiely sued shortly thereafter, asserting ownership of the entire alley through adverse possession. The trial court, based upon the ruling in Erickson Bushling, Inc. v. Manke Lumber Co., 77 Wn.App. 495 (1995), held in favor of Kiely.

Holding: The Court, after accepting direct review, reversed the trial court. The interest acquired by the city in the alley was an easement, so in theory Graves held an underlying fee interest in the alley that was possible of acquisition through adverse possession. However, RCW 7.28.090 provides that a claim of adverse possession shall not apply to “lands or tenements owned by the United States or this state, nor to school lands, nor to lands held for any public purpose. An easement dedicated for public thoroughfare constituted “lands held for any public purpose” and Kiely could not assert a claim of adverse possession affecting the alley. The Court indicated that the ruling in Erickson, supra, did not reflect an accurate statement of Washington law.

Herrin v. O’Hern, 168 Wn.App. 305 (2012)

Facts: Rothenbuhler owned two adjacent parcels in Acme, Washington. In 1993, by deed of gift, Rothenbuhler conveyed one of the parcels to Herrin on which was located a farmhouse. O’Hern, Rothenbuhler’s daughter, received the remainder of the property from her father’s estate in 2003. Part of O’Hern’s property consisted of a garage and surrounding land within a fence that had always been used by the owners of the farmhouse that Herrin owned. In May 2009, after obtaining a survey that showed the encroachment, Herrin commenced a quiet title action claiming that he had acquired title through adverse possession. O’Hern counterclaimed to quiet title. O’Hern claimed that Herrin’s use had been permissive, since he began using the garage when he was acting as a caretaker for Rothenbuhler in 1988. The permissive nature of the use continued until Rothenbuhler’s death, which was less than ten years from the date Herrin commenced the quiet title action. The trial court agreed with O’Hern and dismissed the adverse possession claim on summary judgment.

Holding: The Court of Appeals reversed. A genuine issue of material fact existed as to whether permission to use the garage was revoked by Rothenbuhler in 1993 when the farmhouse property was conveyed to Herrin. There was a presumption that the Herrins's use of the disputed property continued with the Rothenbuhlers's permission. In this case, there was no evidence that Rothenbuhler distinguished between the farmhouse property and the disputed property on which the garage was located. The evidence that was presented was that no one knew that the record


1-49

title line divided them. Thus, the finder of fact could conclude, on the basis of the December 2003 deed as well as other evidence that may be developed for trial, that Rothenbuhler also revoked permissive use of the disputed property in December 1993. This would have begun the hostile use necessary to establish adverse possession.

Karlberg v. Otten, 167 Wn.App. 522 (2012)

Facts: A fence was recognized from at least the early 1940s as the boundary between two neighboring properties in the countryside near Bellingham. Karlberg bought the western property in 1975. He constructed a shop building about 80 feet west of the fence. A survey done in 1994 at the request of the owners of the eastern property showed the property line between the two properties was actually 82 feet west of the fence. It ran through Karlberg's shop and cut across the driveway leading to the shop. Otten acquired the eastern parcel in 1996 and litigation ensued between the two owners. That litigation resulted in confirmation of Karlberg’s title to a strip of land 45 east of the actual property line. In 2009, Karlberg commenced another action seeking to quiet title to the remainder of the property west of the fence line. On August 13, 2010, summary judgment was granted to Karlberg. Otten appealed both judgments.

Holding: The Court of Appeals affirmed the first judgment. The trial court properly refused to allow Otten to amend his claim to assert his own adverse possession claim against Karlberg with respect to the property the had been adversely possess by Karlberg. However, the second judgment was reversed by application of the doctrine of res judicata. Where judgment in the first action determines the boundary line between two adjoining properties, the judgment is preclusive of future attempts to move the boundary line in one direction or another.

Nickell v. Southview Homeowners Ass’n, 167 Wn.App. 42 (2012)

Facts: Nickell purchases a house in March or April of 1989. Nickell maintained existing landscaping believed to be on property’s eastern boundary. When these bushes died in the mid to late 1990s, Nickell installed an underground sprinkling system and replanted the same area with arborvitae hedges. In 1993, Nickell’s neighbor applied to subdivide the adjacent property. As a condition of approving the Southview plat, the hearing examiner required that a 25-foot buffer be maintained on the line property line between the plat and the Nickell property. Chopp, who purchased the Southview property, removed a portion of Nickell’s landscaping and allegedly installed a septic system for one of the intended lots. The final plat for Southview was approved n 2005. In 2008, a resident in the Southview plat informed Nickell that a portion of the landscaping on the boundary that Nickell had maintained was within the plat’s greenbelt. Nickell brought a quiet title action; Southview Homeowners Association contended that the doctrine of adverse possession did not apply since the disputed property was vacant land with a presumption of permissive use and Nickell was estopped from asserting ownership since no notice of claim was given during the platting process. The trial court dismissed Nickell’s claim on summary judgment.

Holding: The dismissal was reversed. Nickell presented evidence that, as of November 2008, the disputed strip had been landscaped and maintained at its present location for 23 years.


1-50

As part of the preliminary plat application, Southview's predecessors in interest had conducted a survey in 1993, which should have put the owners on notice of Nickell’s landscaping improvement encroaching over the common boundary. Construing these facts and the reasonable inferences from them in the light most favorable to Nickell, the Court concluded that Nickell satisfied the elements of adverse possession, including the element of hostility. The Court rejected Southview’s argument that RCW 36.70A.165 barred the claim of adverse possession. The statute, which barred adverse possession of greenbelt areas, was not enacted until 1997 and the statute did not apply retroactively. The area was not designated as a greenbelt until 2005. Southview failed to establish the elements of estoppel; no showing of reliance on any act of Nickell was shown. Chopp’s actions may have put Nickell on notice of the boundary dispute, but the approval of the plat had not legal significance on Nickell’s claim of ownership.

Imrie v. Kelly, 160 Wn.App. 1 (2010)

Facts: Imrie owned property in Klickitat County that was accessed by a road that crossed property owned by Gaines, BLM and DNR. From 1951 through 1961, Imrie neither asked Gaines permission to use the road and Gaines did not grant permission to Imrie. There were gates to road and the Gaines property was completely fenced. In 1965, Gaines put a lock on the gates and Imrie was provided a key. The use of the road by Imrie changed over the years, but use continued until Kelley, who had rights to use the Gaines property, installed a new lock to prevent Imrie’s use of the road. In 2007, Imrie sued Kelley claiming a prescriptive easement over the road and sought an injunction to prevent Kelley from interfering with Imrie’s use. The trial court held that Imrie’s use from 195 through 1961 established a prescriptive use, but Imrie could not use the road for hunting purposes, since that use did not exist during the 10-year prescriptive period. Kelley appealed.

Holding: The Court of Appeals reversed. The court noted that in the case of developed property, such as the Gains property, an inference of permissive use applied if it can be reasonably inferred that use was allowed by neighborly sufferance or accommodation. Although Imrie never asked permission to use the road, Gaines also used the road. No evidence was presented that at any time from 1951 through 1961 did Imrie use the road in a manner that was inconsistent with the wishes of the owner. In the absence of that evidence, the element of adversity was not established and instead the use supported the inference of neighborly accommodation. Since with use was deemed to be permissive, it could not ripen into a prescriptive easement.

Proctor v. Huntington, 169 Wn.2d 491 (2010) – Equitable remedy ordering sale. Merriman v. Cokeley, 168 Wn.2d 627 (2010) – Mutual recognition and acquiescence. Draszt v. Naccarato, 146 Wash. App. 536 (2008) – Mutual recognition and acquiescence. Proctor v. Huntington, 146 Wash. App. 836 (2008) – Remedies for structure encroachment. Green v. Hooper, 149 Wn.App. 627 (2009) – Doctrine of mutual recognition and acceptance. Smale v. Noretep, 150 Wn.App. 476 (2009) – Effect of sale of property during trial. Merriman v. Cokeley, 152 Wn.App. 115 (2009) – Mutual recognition and acquiescence. Teel v. Stading, 155 Wn.App. 390 (2010) – Permissive use. Gorman v. City of Woodinville, 160 Wn.App. 759 (2011) – Claim against municipal property.


1-51

D. Slander of Title

Lane v. Skamania County, 164 Wn.App. 590 (2011)

Facts: On March 26, 2003, the Lanes petitioned for review under LUPA, seeking, in part, to enforce a restrictive covenant and to permanently enjoin the L'Hommedieus from installing an additional septic system while constructing a second house on their property. The trial court, after issuing a preliminary injunction, determined that the covenant was not enforceable against the L’Hommedieus on a motion for summary judgment. The Court of Appeals reversed and remanded the case for trial. After the remand, on June 14, 2006, the Lanes filed a lis pendens against the L’Hommedieus property. After a trial in February 2007, the trial court again found for the L’Hommedieus, but found that the Lanes had not acted in bad faith and there was no substantial damage sustained by the L’Hommedieus as a result of the preliminary injunction, but awarded attorney fees to the L’Hommedieus. The trial court was affirmed by the Court of Appeals except for the attorney fee award, which was reversed since there was no finding of bad faith. The mandate on the second appeal was issued on January 12, 2010 and on January 21, 2010, the L’Hommedieus sought to amend their pleadings to assert a claim against the Lanes for wrongful filing of the lis pendens. The trial court denied the motion to amend under CR 13(f). L’Hommedieus appealed.

Holding: The Court of Appeals affirmed the trial court denial of the motion to amend. The trial court erred in considering the motion to amend under CR 13(f) and should have considered the motion under CR 13(e). Although the final dismissal of the Lanes claim may have resolved the merits of the underlying case, the L’Hommedieus knew that the lis pendens was filed in 2006 and any adverse affect from the filing occurred when the L’Hommedieus tried to sell their house at that time. Thus, the claim matured in 2006, which was well before the trial in 2007 and well after the mandate in 2010. Applying the criteria of CR 13(e), the Court concluded that the motion to amend was untimely.

No other reported cases in last five years.

E. Actions Between Partners

Humphrey Indus., LTD. v Clay St. Assocs., LLC, 170 Wn.2d 495 (2010) – Dissenter’s rights upon merger. Simpson v. Thorslund, 151 Wn.App. 276 (2009) – Final accounting as condition for action between

partners.

F. Partition

No reported cases in last five years.

G. Quiet Title

Young v. Young, 164 Wn.2d 477 (2008) – Division based on unjust enrichment. City of Spokane Valley v. Spokane County, 145 Wn.App. 825 (2008) – Reversion of highway and road

easements.


1-52

In re Estate of Frank, 146 Wn.App. 309 (2008) – Reversion to estate and lack of remedy. Tae T Choi vs. Sung, 154 Wn.App. 303 (2010) – Church authority to convey. Smith v. Monson, 157 Wn.App. 443 (2010) – Equitable claim of ownership.

H. Government Forfeitures

Task Force v. Real Property, 150 Wn.App. 387 (2009) – Sufficiency of notice of claim of ownership. Regional Task Force v. Real Prop., 151 Wn.App. 743 (2009) – Rights of heirs in forfeited property.

XI. Construction Contracts/Disputes

Elcon Construction v. Eastern Washington University, 174 Wn.2d 157 (2012)

Facts: In 2003, EWU contracted with Elcon to refurbish two water wells to increase their individual yields. Elcon was the successful bidder on the project. During the bid process, EWU did not provide to Elcon a copy of a study, the Golder Report, prepared in 2000, that contained information about the regional hydrology and made recommendations concerning future wells. Shortly after commencing work, it was determined that the work would require a drilling depth significantly greater than that specified in the contract. Elcon requested additional payment and EWU terminated the contract for convenience. Subsequently EWU determined that Elcon had damaged an existing well during its work and attempted to convert the termination for convenience to a termination for cause. EWU sent a copy of the termination for cause notice to Elcon’s bonding company in October 2004. Elcon sued EWU for contract and tort damages. The trial court stayed proceedings pending arbitration of the contract claim, which was resolved in December 2005 with an award to Elcon of $1.8 million. The arbitrator declined to award interest. Elcon then pursued its tort claims for intentional interference with contractual relationships (based on EWU’s sending a copy of termination for cause to the bonding company) and fraudulent inducement (based on the failure to supply the Golder Report to Elcon). The trial court dismissed both claims finding the intentional interference claim factually insufficient and the fraudulent inducement claim barred under the economic loss doctrine. The Court of Appeals affirmed, holding all of the tort claims were barred under the economic loss doctrine.

Holding: The Court affirmed the Court of Appeals on different grounds. The Court observed that the Court of Appeals misapplied the economic loss/independent duty doctrine. However, the facts failed to support the claim of fraudulent inducement so the dismissal was affirmed. The Golder Report was found to be irrelevant to the refurbishment project and related to areas different from those involved in the project. Elcon was required under the bidding instructions to take the steps necessary to evaluate the nature and location of the drilling, but Elcon undertook virtually no independent investigation. Since the report was irrelevant, evidence of Elcon’s reasonable reliance on the information otherwise provided to Elcon to its detriment was lacking and the claim was properly dismissed. Similarly, the claim for intentional interference with contractual relationships was properly dismissed. Sending the termination letter to the bonding company did not evidence any improper motive on the part of EWU. The issue of prejudgment interest should have been presented to the arbitrator prior to the final award and the trial court properly refused to modify the award to include this amount.


1-53

Realm, Inc., v. City of Olympia, 168 Wn.App. 1 (2012)

Facts: On June 18, 2008, the city of Olympia awarded Realm a contract to build a fish tunnel. Realm began work on the project, but the City ordered Realm to stop all work on September 9, due to work deficiencies alleged by the City. On September 30, the City terminated the contract. On December 29, Realm submitted a claim to the City for work performed on the project, seeking $1,109,418.75. The City employed an auditing firm that determined the City owed Realm $535,852. After Realm refused to sign a change order agreeing to that amount, the City unilaterally issued the change order and issued a check to Realm. Realm cashed the check. Realm sued the City, alleging breach of contract for the City's failure to pay Realm the full amount Realm had claimed. The City moved for summary judgment, arguing that Realm had waived its claim by failing to comply with the contract's notice provisions and that Realm's acceptance of payment constituted an accord and satisfaction. The trial court granted summary judgment to the City. Realm appealed.

Holding: The dismissal was affirmed. The city terminated the contract under a provision that authorized it to terminate the contract "for public convenience" if it determined "that such termination is in the best interests of the [city]." Under the contract, on termination for public convenience, the contractor shall submit "a request for costs associated with the termination." The contract also had provisions for resolving disputes concerning the invoices submitted by the contractor. On termination for public convenience, Realm was required to give notice of any disputes regarding both the costs associated with termination and the payment for actual work performed under the contract. Realm filed a formal claim for its costs on termination, but never gave notice of any dispute during or after the contract, including the costs associated with termination and the amount due for the actual work performed, as required by the contract. The Court rejected Realm’s claim that the contract provisions were conflicting as to the required notice. Since Realm did not provide the notices required under the contract regarding its dispute of termination costs, the payment for actual work and the final change order setting the termination payment, Realm could not maintain the action for additional amounts due under the contract.

River House Dev., Inc. v. Integrus Architecture, PS, 167 Wn.App. 221 (2012)

Facts: River House Development Inc. engaged Integrus Architecture PS to provide architectural services for a condominium project, using an American Institute of Architects standard form agreement. The contract included alternative dispute resolution provisions providing for mediation, and then arbitration, of disputes arising out of or related to the agreement. Disputes did develop. In February 2010, River House sent a six-page demand letter to Integrus, outlining its claims and an estimated $3.2 million in resulting damages, and stating its intent to pursue mediation and arbitration. When Integrus would not sign a tolling agreement, River House filed a lawsuit and some limited discovery was conducted. River House filed a motion to compel arbitration. The trial court held that River House had waived its right to arbitrate and denied the motion.


1-54

Holding: The Court rejected the contention by River House that the arbitrator was the person who decided whether there had been a waiver of the right to arbitrate. Evidence was presented that the conduct of River House in the litigation was inconsistent with any intention other than to forego the right to arbitrate. In light of that evidence, the trial court was correct in refusing to order the arbitration.

Mark Brotherton, et ux v. Kralman Steel Structures Inc., 165 Wn.App. 727 (2011)

Facts: In late 2007, the Brothertons contracted with Kralman Steel to build a garage for their home. The contract warranted that all work was to be done in a “workman like manner with a quality recognized by the construction industry standards as good to excellent.” There were construction issues with the driveway and sidewalk that were part of the project. Brotherton sued Kralman, a subcontractor and Kralman’s surety claiming damages for breach of contract. The trial court determined that the work was defective and awarded damages based on the cost of removal and replacement. These costs exceeded the amount of the surety’s $12,000 bond. The trial court also awarded attorney fees under RCW 18.27.040(6). Kralman appealed.

Holding: The Court of Appeals affirmed the trial court’s determination that Kralman breached the construction contract. The evidence supported the finding that there was a defect in the construction and the cost of replacement did not include a “betterment” to the work originally installed. Washington has adopted Restatement (Second) of Contracts, §348 which provides that the injured party can usually recover damages based on the cost to remedy the construction defects, as a "sensible and workable approach to measuring damages in construction contract cases," even though that recovery might be greater than the measure of the loss of value. The trial court erred, however, in awarding attorney fees. Brotherton had argued that a 2007 amendment to RCW 18.27.040(6) that clarified that an action can be maintained against a deposit made in lieu of a bond altered the result announced in Cosmopolitan Engineering Group, Inc. v. Ondeo Degremont, Inc., 159 Wn.2d 292 (2006). Ondeo held that the statute did not create a general right to recover attorney fees against the contractor in actions on the bond. The Court disagreed with that interpretation and held that Ondeo remained controlling authority concerning interpretation of the statute and the award of attorneys’ fees was not authorized.

Spradlin Rock Products v. P.U.D. No.1 of Grays Harbor County, 164 Wn.App. 641 (2011)

Facts: Spradlin was a contractor that hauled rocks and built roads in Grays Harbor County. Spradlin performed work for the Grays Harbor PUD since 2000 and had a small works contract limited to $200,000 in effect with the PUD at the end of 2006. On December 2, 2007, a massive windstorm struck Grays Harbor County and the PUD requested that Spradlin begin work clearing roads to provide repair crews access to damaged power lines. The parties did not specify Spradlin's compensation, but the PUD orally agreed to cover Spradlin's expenses plus a reasonable profit. Spradlin had already reached its $200,000 limit for small works projects before this December 2007 storm. Ultimately, the work was authorized by the PUD declaring an emergency under RCW 39.04.280, which allowed the PUD to bypass notice and competitive bidding requirements. Spradlin prepared invoices to the PUD that were revised at the PUD


1-55

request so that they would conform to FEMA requirements. Ultimately, after several revisions, the PUD paid invoices totaling $1,578,051.12. There was no objection to Spradlin’s labor rates, equipment rates, fuel surcharges or operating surcharges listed on the invoices. FEMA refused to reimburse the PUD for the expenses and the PUD then terminated Spradlin on April 3, 2008 and refused to pay any additional invoices. Spradlin sued. The trial court entered a summary judgment in favor of Spradlin finding the existence of a valid oral contract and refused to allow the PUD to challenge the labor rates and other rates in the paid invoices as the rates applicable to the unpaid work. Spradlin was awarded $4,162,500 by a jury and the trial court awarded $$659,149.60 in prejudgment interest and $25,000 in attorney fees. The PUD appealed, claiming that the summary judgment was in error and no prejudgment interest was due.

Holding: The judgment was affirmed. The PUD asserted that the terms of the small works contract should have controlled the interpretation of the oral contract. The parties did not dispute the existence of an oral contract and that contract provided that Spradlin would perform road work in exchange for the PUD paying Spradlin’s costs plus a reasonable profit. The parties then performed the contract, Spradlin did the road work and the PUD paid four invoices without challenging Spradlin's rates or charges detailed on the paid invoices, acts by both parties that were in reliance on their agreement and an objective manifestation of the substance of their agreement. The PUD's conduct in paying Spradlin's invoices on their third submission manifested its assent to be bound by the clearly displayed rates and charges in Spradlin's invoices and the paid invoices became part of the parties' contract. The trial court did not err in instructing the jury that those rates were applicable to portion of the work that was unpaid. The sums upon which prejudgment interest was awarded were liquidated amounts, even though disputed by the PUD, and the award of interest was affirmed.

Donatelli v. D.R. Strong Consulting Engineers, Inc., 163 Wn.App. 436 (2011)

Facts: Donatelli entered into a contract with D.R. Strong for engineering services related to two short plats of property the Donatelli intended to develop. King County issued its five-year preliminary approval for the project in October 2002, but the Project was not completed within this time frame, and the preliminary approval expired in October 2007. D.R. Strong assisted Donatelli in obtaining a new preliminary approval for the plats, but the real estate market crashed in 2008, before the Donatellis could obtain final plat approval and finish the project. Ultimately, Donatelli ran out of money and lost the property to foreclosure. Donatelli sued D.R. Strong, alleging breach of contract, Consumer Protection Act violations, negligence, and negligent misrepresentation. D.R. Strong moved for partial summary judgment on the CPA, negligence, and negligent misrepresentation claims. It argued that the negligence and negligent misrepresentation tort claims were barred by the economic loss rule. The trial court granted summary judgment on the CPA claim, but denied summary judgment on the two negligence claims. The trial court also denied D.R. Strong's motion for reconsideration of the denial of its motion for partial summary judgment on these latter claims. Strong petitioned this court for discretionary review, which was granted in August 2010.

Holding: Shortly after the Court accepted discretionary review, the Supreme Court


1-56

issued opinions in Eastwood v. Horse Harbor Foundation, Inc., 170 Wn.2d 380 (2010) and Affiliated FM Ins. Co. v. LTK Consulting Serv., Inc., 170 Wn.2d 442 (2010). The lead opinion in Eastwood concluded that the term “economic loss” doctrine was a misnomer and renamed it the " independent duty" doctrine. The opinion held that under the newly named doctrine “[a]n injury is remediable in tort if it traces back to the breach of a tort duty arising independently of the terms of the contract." The plurality opinion agreed with this characterization:

In the Affiliated case, which also had multiple opinions, presented a straight-forward case of professional negligence and the economic loss/independent duty doctrine was not implicated:

Carefully reading together these two opinions, we conclude that a majority of the supreme court in Affiliated held that professional engineers owe a tort duty of reasonable care to their clients. This is consistent with prior Washington law. Moreover, this duty arises despite the existence of a contract between such engineers and their clients. That the plurality opinion did not embrace the application of the independent duty doctrine is irrelevant to this conclusion.

Based on these cases, the Court concluded that the independent duty doctrine did not bar the negligence claims against D. R. Strong and remanded the matter for trial.

Cummings v. Budget Tank Removal & Environmental Services, LLC, 163, Wn.App. 379 (2011)

Facts: Dougherty wanted to build a commercial building on the site of an old gas station. Budget contracted to remove the old petroleum tanks and to remove soil contaminated with petroleum at an estimated total cost of $21,545. After completing the work, Budget invoiced Dougherty for $638,997.88. Dougherty paid $100,000 and refused to pay any more. The contract contained an agreement to arbitrate any disputes. Budget initiated arbitration against Dougherty in July 2008 to recover the unpaid balance. Daugherty counterclaimed and had the arbitration consolidated with another proceeding initiated by another customer that claimed Budget gave the customer an estimate of $43,344 and billed $364,523.90 for the work.

The arbitrator awarded Dougherty $1,042,301, inclusive of pre-award interest and including damages under the Consumer Protection Act, $500,000 in attorney fees and additional costs, for a total award of $1,598,939.60. Budget moved to vacate the award, and the trial court refused to do so and confirmed the award.

Holding: The Court of Appeals affirmed the award. The Court rejected Budget’s claim that the two matters were improperly consolidated. Given the similarity of the claims and the identical contracts, the consolidation of the proceedings was not in error and the trial court correctly concluded that the proceedings arose from a “series of related transactions” and no abuse of discretion was shown. After reviewing the 42-page decision by the arbitrator, the Court agreed that none of the errors claimed by Budget were reviewable. All of Budget’s claimed


1-57

errors related to contract interpretation and proper measure of damages, none of which were errors that appeared on the face of the award.

Harmony at Madrona Park Owners Assn. v. Madison Harmony Development, Inc., 160 Wn.App. 728 (2011)

Facts: Serock was a subcontractor to Ledcor on a 25-building condominium project in Bellevue. In a prior case, Harmony at Madrona Park Owners Ass’n v. Madison Harmony Development Inc., 143 Wn.App. 345 (2008), the Court of Appeal affirmed a trial determination concerning the allocation of damages arising from defective construction. The Court reversed part of the trial court award dealing with an alleged breach of contract, but noted that Ledcor could recover damages under an alternative claim arising under an indemnity agreement between Serock and Ledcor. On remand, the trial court rejected Serock’s assertion that its liability under the indemnity arrangement should be reduced by offsets and entered judgment for an additional $127,500 plus fees and costs incurred on the remand. Serock appealed.

Holding: The Court of Appeals affirmed the judgment. Serock attempted to rely on the discussion in the prior decision to support its claim of offset arising from various settlement agreements with other subcontractors. However, Serock presented no evidence relating to those agreements to the trial court and there was nothing in the prior opinion concerning the scope of those settlement agreements and what work was covered. Absent this information, it was not possible to determine what effect, if any, the settlement agreements had on the liability of Serock. The burden was on Serock to establish any offset, and Serock failed to present any evidence to satisfy that burden.

Bird v. Best Plumbing, 161 Wn.App. 510 (2011)

Facts: In April 2005, Best Plumbing, while performing repairs at a neighboring residence, entered onto Bird’s property on Perkins Lane in Seattle without permission and cut Bird’s pressurized sewer line in three places. Bird’s property suffered substantial damage as a result of Best’s actions and Bird sued Best. Farmers, Best’s liability insurer, defended the action. As the case neared trial, the owner of Best became concerned that the liability to Bird might exceed the Farmers policy limits. Utilizing separate counsel, Best settled with Bird for $3.75 million, with a covenant not to execute against Best and an assignment of Best’s claims against Farmers. Over the objections of Farmer’s, the trial court found the settlement to be reasonable. Farmers appealed.

Holding: The Court affirmed the trial court. The Court rejected Farmers claims that the trial court erred in not submitting the issue of “reasonableness” to a jury. The reasonableness hearing was equitable in nature and Farmers had no right to a jury. The amount of the settlement was supported by substantial evidence presented to the trial court, including the determination that Best was potentially liable for treble damages for intentional trespass.


1-58

Verbeek Props. v. Greenco Envtl., Inc., 159 Wn.App. 82 (2010)

Facts: Verbeek contracted with Greenco for remediation services to clean up a contaminated wrecking yard. The contract had an arbitration provision to resolve disputes. After paying $900,000 to Greenco, Verbeek became dissatisfied and stopped payments. Greenco filed a lien to secure payment of additional amounts claimed to be due and Verbeek commenced an action to discharge the lien and for declaratory judgment concerning a breach of the contract by Greenco. Verbeek then moved to stay proceeds pending arbitration. The trial court denied the motion, ruling that Verbeek had waived the right to arbitration.

Holding: The Court of Appeals reversed. Whether Verbeek properly commenced an arbitration was in issue for the arbitrator, not the trial court. The argument that the right to arbitration was waived when it was not claimed in Verbreek’s pleadings was rejected. Omitting the demand was not an affirmative waiver of the right to arbitrate. The attempt to discharge the lien through judicial proceedings was not inconsistent with a demand to arbitrate the underlying dispute. The fact that Verbeek was seeking declaratory relief as to the enforceability of the contract did not bar the arbitrator from rendering a decision on the dispute.

Jackson v. City of Seattle, 158 Wn.App. 647 (2010)

Facts: Otakie, who owned a house in Seattle, contracted with QPS to repair a leaking water line in 2006. QPS recommended that the line be replaced, and Trenchless Construction drilled a tunnel 160 feet long up a hill to the location of the City water main. QPS then connected the line to the City system and to Otakie’s house. In November 2006, Otakie sold the house to Jackson. Following heavy rains in December 2006, water burst from a sinkhole and caused a landslide 15 feet wide and 4 to 5 feet deep that followed the path of waterline installed by Trenchless. The landslide caused damage to Jackson’s house. Jackson sued QPS, Trenchless and the City of Seattle. The City and Jackson settled. QPS and Trenchless were dismissed on summary judgment after the trial court found that there was no duty owed to Jackson by these contractors.

Holding: The Court of Appeals reversed. The Court rejected Jackson’s claims that the City stormwater code created a statutory duty of care owed by the contractors to Jackson. However, applying the principles established in Davis v. Baugh Industrial Contractors, 159 Wn.2d 413 (2007), the Court found that the contractors were potentially liable for injury or damage to a third person as a result of negligent work, even after completion and acceptance of that work, when it was reasonably foreseeable that a third person would be injured due to that negligence.

“Viewed in the light most favorable to Jackson, the evidence establishes that the installation of the waterline created a dangerous condition on the hillside land above the residence. The land had previously been designated as a potential landslide area by the city of Seattle, and it was reasonably foreseeable that drilling and connecting the new waterline would cause damage to third persons if done


1-59

without sufficient attention to compacting the disturbed soil or stabilizing the newly bored waterline”

The Court rejected the argument that the economic loss rule barred Jackson’s claim. If the claimed damage had been to the water line, then the economic loss rule would have been applicable, but when the defective product or condition causes personal injury or damages other property, then application of the doctrine is inappropriate and tort remedies apply.

Ahten v. Barnes, 158 Wn.App. 343 (2010)

Facts: Ahten owned a home in Bellevue and contracted with Barnes, a licensed contractor, for a remodeling project in 2007. After completing some work, a dispute developed and Barnes was terminated. Ahten commenced a breach of contract suit in June, 2008, against Barnes and Western Surety Company to recover against Barnes’ contractor’s bond. Service of process was completed through service on the Department of Labor & Industries as provided in RCW 18.27.040(3), which requires that actions against the contractor and the bond be commenced by service of process on the Department. Barnes was never personally served. When no answer was filed, Ahten had an order of default entered. Western Surety paid the $12,000 bond to Ahten and a default judgment for breach of contract was entered against Barnes for $250,000 on September 4, 2008. Barnes learned of the judgment in October, 2008, and moved to set aside the judgment on August 25, 2009. The trial court granted the motion as to that portion of the default judgment that did not involve the bond. Ahten appealed.

Holding: The trial court was affirmed. RCW 18.27.040(3) provided in part: "Service of process in an action filed under this chapter against the contractor and the contractor's bond or the deposit shall be exclusively by service upon the department." This provision refers to an action filed against the contractor and contractor's bond or deposit, but limits the provision's application to actions filed under the contractor registration act. After reviewing three prior decisions construing this statute, the Court concluded that the service of process provision applied only to actions seeking recovery against the bond. The statute did not authorize service on the Department for breach of contract actions against the contractor in excess of the bond amount. The contractor was a necessary party to any action on the bond, since a prerequisite for recovery on the bond was establishing a breach of contract. Barnes requested attorney fees under RCW 18.27.040(6), authorizing the prevailing party in a suit under the registration of contractors act to attorney fees. The Court rejected that argument since the claim at issue on appeal was not one under chapter 18.27 RCW to recover against a bond, but a judgment against Barnes for breach of contract.

Michaels v. CH2M Hill, Inc., 171 Wn.2d 587 (2011) – Application of immunity statute for engineers. Affiliated FM Ins. Co. v. LTK Consulting Services, 170 Wn.2d 442 (2010) – Action against engineers for

negligence. McGuire v. Bates, 169 Wn.2d 185 (2010) – Scope of settlement of dispute. Cambridge Townhomes, LLC v. Pac. Star, 166 Wn.2d 475 (2009) – Successor liability for construction

defects. Owners Ass’n v. FHC, LLC, 166 Wn.2d 178 (2009) – Effect of dissolution of company.


1-60

Mut. of Enumclaw v. T&G Constr., Inc., 165 Wn.2d 255 (2008) – Collateral attack on matters considered in reasonableness hearing.

D.W. Close Co. v. Labor & Industries, 142 Wn.App. 177 (2008) – Wage and hour act. Harmony at Madrona Park Owners Ass’n v. Madison Harmony Development, 143 Wn. App. 345 (2008)

– Application of statute of repose. Matia Contractors, Inc. v. City of Bellingham, 144 Wn.App. 445 (2008) – Notice of claim as condition

precedent to action against city. Bordeaux, Inc. v. Am. Safety Ins. Co., 145 Wn.App. 687 (2008) – Obligation to pay self-insured retention. Heights at Issaquah Ridge Owners Ass’n v. Wakefield I, LLC, 145 Wn.App. 698 (2008) – Reasonableness

of settlement. Hartford Ins. Co. v. Ohio Cas. Ins. Co., 145 Wn.App. 765 (2008) – Effect of dissolution of insured. Westlake View Condo. Ass’n v. Sixth Ave. View Partners, LLC, 146 Wn.App. 760 (2008) – Scope of

implied warranty of habitability. McGuire v. Bates, 147 Wn.App. 751 (2008) – Effect of offer of settlement. Owners Ass’n v. Burton Landscape, 148 Wn.App. 400 (2009) – Authority of arbitrator. S. D. Deacon Corp. v. Gaston Bros., 150 Wn.App. 87 (2009) – Application of frivolous lien claim statute. S&S Constr., Inc., v. ADC Props., Inc., 151 Wn.App. 247 (2009) – Challenge to arbitration award. AWR Construction, Inc. d/b/a Comet Roofing v. Washington State Department Of Labor & Industries,

152 Wn.App. 479 (2009) – Violation of RCW 18.27.114(1). Carpenter v. Remtech, Inc., 154 Wn.App. 619 (2010) – Right of contribution under payment bond. Underwriters v. Valiant Ins. Co., 155 Wn.App. 469 (2010) – Water damage as single or multiple

occurrences. Aecon Bldgs. v. Vandermolen Constr, 155 Wn.App. 733 (2009) – No duty to inform insurer of suit against

its insured. Hosea v. Griffin, 156 Wn.App. 263 (2010) – Multiple claims on contractor bond. Chul Mo Kim v. Mofffett, 156 Wn.App. 689 (2010) – Proper parties to contract. Mattingly v. Palmer Ridge Homes LLC, 157 Wn.App. 376 (2010) – Breach of contractor’s warranty on

residential construction.

XII. Building Permits and Platting Regulations

Lauer v. Pierce County, 173 Wn.2d 242 (2011)

Facts: Garrison purchased a waterfront parcel in Gig Harbor in 2002. Lauer and de Tienne were neighbors on the east and west side of the Garrison property. A stream ran across the southwest portion of the Garrison property. Garrison made several attempts to build a new house on the property, all of which were frustrated by the various violations of setback requirements related to the stream. In 2004, Garrison submitted a building permit application that had various inaccuracies on the site plan. The application was approved, however, but construction was suspended because a portion of the structure was within the drainage buffer for the stream. In 2005, the County changed its buffer ordinances to increase the setback requirement to 65 feet from 35 feet. In 2007, Garrison again sought a building permit and asserted that he was vested under the 2004 permit application to the setback then in effect. The hearing examiner agreed and granted a variance to allow construction. Lauer and de Tienne appealed to Pierce County Superior Court, filing a LUPA action. The trial court reversed the hearing examiner and found Garrison’s 2004 application to be incomplete. The Court of Appeal reversed the ruling, finding that under RCW 36.70B.070(4)(a), the application was deemed to be complete because of any lack of objection by the municipality.


1-61

Holding: The Court reversed the Court of Appeals and reinstated the trial court verdict. The Court found the neighbors to have standing to challenge the permit application and that the LUPA petition had been timely filed. RCW 19.27.095 grants vesting to completed building permit applications. The Court found that the 2004 application was not complete. The Court also rejected the argument that RCW 36.70B.070 precluded a finding that the application was incomplete. That statute provided in part that “if the local government does not provide a written determination to the applicant that the application is incomplete" within 28 days of receipt.” The requirements of RCW 19.27.095 required more than just a “complete” application; the application had to be “valid” and “permitted under the zoning . . . in effect on the date of application.” The Court held that the inaccuracies in the site plan and deficiencies in the application rendered it invalid:

It is hard to conceive of any meaning of the term "valid" that would include knowing misrepresentations. By way of comparison, this court has previously required governments to act in good faith and not subvert the legitimate efforts of a developer to vest his or her rights.

Ferguson v. City of Dayton, 168 Wn.App. 591(2012)

Facts: The city of Dayton issued a building permit to Goddard to allowed the construction of a 36-foot by 30-foot pole building on his property. The building was 5 feet from the property line of his neighbor, Ferguson, and only 8 feet from her house. The permit issued August 14, 2009. The City's planner advised Goddard that the roof could not exceed 10 feet in height because of its proximity to the property line. Ferguson requested that the city staff review the planned height of the building. At a City council meeting on October 12, 2009, the mayor announced that the building permit was valid. An attorney for Ferguson contacted the City and challenged the interpretation of the height requirement under Dayton Municipal Code (DMC) 5-12.120. A LUPA petition was filed October 27, 2009. The City moved to dismiss the petition on the basis that Ferguson had not exhausted her administrative remedies by appealing to the Board of Adjustment. The City subsequently realized that there was no Board of Adjustment; it also admitted that the planning committee that had considered Ferguson's initial challenge was not the Planning Commission that was assigned the task of hearing appeals of administrative land use decisions. The parties agreed to stay superior court proceedings while the matter was remanded to the Planning Commission for review under the municipal code. The Planning Commission conducted a public hearing on June 21, 2010. After finding the code provision ambiguous, the commission ultimately affirmed the planner's interpretation that building height was measured only to the top of the wall plate lines. Written findings and conclusions were issued on July 21, 2010. Ferguson filed a second amended LUPA petition on August 9. The City moved to dismiss, arguing that the building permit was the final land use decision that had triggered the 21-day appeal period. The trial court ruled that the August 14, 2009 building permit was the final land use decision and dismissed the petition as untimely.

Holding: The Court of Appeals reversed. Because the building permit was subject to an administrative appeal process, the time for filing a LUPA petition began to run with the final


1-62

ruling in that administrative process. The City provided for an administrative process to review the building permit and Ferguson could not initiate a LUPA petition until that process had been exhausted. The Court differentiated the result in Asche v. Bloomquist, 132 Wn. App. 784 (2006), which held that the issuance of the building permit triggered the commencement of the 21-day petition period; in that case there was no administrative appeal process to challenge the issuance of the permit. The Court also noted that if the issuance of the permit triggered the commencement of the period, a municipality could insulate itself from any challenges by simply making the administrative process last longer than 21-days.

Dept. of Ecology v. City of Spokane Valley, 167 Wn.App. 952 (2012)

Facts: The developer of Coyote Rock Acres developed 30 lots abutting the Spokane River. The developer sought a permit to construct a dock for each of the lots. The developer asserted that the proposal did not require a substantial development permit under the SMA under the exemption for docks for pleasure boats serving a residence. When the City issued a permit for one of the docks, DOE filed a LUPA petition to challenge the action. The superior court rejected DOE’s challenge.

Holding: DOE asserted that the exemption for residential docks provided by RCW 90.58.030(3)(e)(vii) did not apply to spec docks built for resale. The exemption applied only to “noncommercial” docks, and spec docks, by their nature were commercial endeavors. The Court noted that the ruling did not mean that the developer could not build any docks; only that the docks must be subject to a permit review under SMA prior to construction.

Birnbaum v. Pierce County, 167 Wn.App. 728 (2012)

Facts: On February 23, 2005, Birnbaum filed an application with Pierce County for a conditional use permit to build a recreational vehicle park and campground. The hearing examiner concluded that insufficient information had been presented to make a determination. On December 8, 2006, Birnbaum submitted a revised plan and requested a new hearing. For unknown reasons, the public hearing was not actually held until December 16, 2009. On March 15, 2010, the hearing examiner approved the permit. Thirty days after the decision, Birnbaum sued the County for failing to act within the time required by law. The County moved to dismiss the action; the trial court dismissed the claim, holding that the issuance of the permit was adequate relief.

Holding: The dismissal was affirmed. RCW 64.40.020(1) grants permit applicants a limited cause of action for damages to obtain (1) "relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority," or (2) "relief from a failure to act within time limits established by law." But, a cause of action arises only when there is an "act" that is either (1) "a final decision by an agency which places requirements, limitations, or conditions upon the use of real property in excess of those allowed by applicable regulations," or (2) "the failure of an agency to act within time limits established by law." RCW 64.40.010(6). Any action "shall be commenced only within thirty days after all administrative remedies have been exhausted." The County had regulations consistent with RCW 36.70B.080 that requires a


1-63

permit decision within 120 days of application. In this case, the hearing examiner approved the permit on March 15, 2010. Birnbaum knew the 120 day time limit had been exceeded far longer than 30 days when she filed her complaint against the County on April 14, 2010. Her claim was time barred and properly dismissed. Insofar as Birnbaum's claims were based upon arbitrary and capricious requests for more information and delay prior to the final decision, the claim sought damages not recoverable under the statute.

Catsiff v. McCarty, 167 Wn.App. 698 (2012)

Facts: Catsiff owned a toy store in Walla Walla. The City adopted a sign ordinance as part of a downtown revitalization plan. In late April 2010, Catsiff painted a wall sign depicting an octopus hiding behind a rainbow over the rear entrance of the store. He did not apply for a permit before painting it. In September Catsiff painted on the store front an octopus hiding behind several buildings with a rainbow above the buildings; the front sign exceeds the city's height and width limits. The City cited Catsiff for violating the sign ordinance and a hearing examiner upheld the violations. Catsiff appealed to the superior court, asserting that the signs were protected under the First Amendment. The trial court rejected the claim.

Holding: The Court of Appeals affirmed. The signs constituted commercial speech. The City showed the restrictions in the sign ordinance were content neutral, reasonable, and supported by a legitimate regulatory interest. The City met its burden of showing the ordinances were lawfully justified. The Court also rejected Catsiff’s claims that the ordinance was unconstitutionally vague and overbroad.

Cradduck v. Yakima County, 166 Wn.App. 435 (2012)

Facts: In 2009, FEMA completed a revised map of the flood plain for the Naches River in Yakima County. The revised map included Sun-Tides Mobile Home Park, owned by Cradduck. One of the mobile homes in the park was abandoned and fell into disrepair. Cradduck had the unit destroyed in 2009 and the lot upon which it was located was then vacant. When an application was made for a permit to install a new mobile home on the lot, the County building department concluded that since the lot was in the floodplain, no new residential construction was permitted. Placement of a manufactured home was considered new construction and the application for the permit was denied. Cradduck petitioned the Yakima Superior Court to review the denial under LUPA. The trial court reversed the denial on the grounds of denial of substantive due process and that the County should have determined that Cradduck had vested rights or a valid non-conforming use for the property.

Holding: The trial court was reversed. To evaluate the claim that Cradduck’s substantive due process rights were violated, the Court used a three-prong test:

1. Was the regulation is aimed at achieving a legitimate public purpose; 2. Did the regulation use means that were reasonably necessary to achieve that purpose. 3. Was the regulation unduly oppressive on the land owner.


1-64

The purpose of the floodplain regulations was to promote health, safety and welfare of the public by minimizing flood damage. This was a legitimate public purpose. In this case the statutes and county ordinances solved the problem of recurring damage to private property and the attendant health and safety risks by limiting construction in the floodplain. The periodic revision of floodplain maps to reflect current conditions minimizes the impact on property not affected by recurring floods. These procedures were reasonably necessary to achieve the purpose of the regulation. Weighing various factors, the Court concluded that prohibiting the installation of a new unit on the lot was not unduly oppressive to the landowner. The property had other uses and it could continue to be utilized as part of the mobile home park, which could continue to operate. Cradduck’s income was slightly decreased, but the use of the remainder of the park could continue indefinitely.

Rosema v. City of Seattle, 166 Wn.App. 293 (2012)

Facts: In 1956, the city of Seattle allowed a single-family residence near the University of Washington to be converted into a duplex. The following year, the City changed the neighborhood zoning to single-family residence. The property retained a legal nonconforming use status as a duplex. In 1991, Nelson purchased the property, which by then had been used illegally as a triplex and had three kitchens. Nelson lived there for 18 years as a single family residence. At some point, Nelson sought to change the designation to single-family residence, but City officials refused to make the change unless the electrical junction box that serviced the second stove was removed. Nelson did not do so because of the expense, and so continued to pay separate bills for the electric meters associated with each house number. They also paid for two garbage collection containers because the second kitchen in their basement made the basement a possible rental unit. They did not remove the appliances in the second kitchen. In 2009 Nelson sold the property as a single family residence to Yu, who applied for a permit to establish the record use of the property as a duplex. Rosema, a neighbor, objected and requested a formal interpretation of the SMC, contending that the nonconforming use as a legal duplex had lapsed during the Nelson's ownership. The City Department of Planning and Development Services issued a formal Interpretation of the director determining that the property retained its legal nonconforming use status as a duplex. Rosema filed a LUPA petition challenging the DPD determination and the trial court reversed.

Holding: A legal nonconforming use constituted a vested right. The right may be lost by abandonment or discontinuance, which is normally a question of fact requiring two concurring factors: (a) the intention to abandon; and (b) some overt act, or failure to act, which carried the implication that the owner does not claim or retain any interest in the right to the nonconforming use. The SMC provided that a legal nonconforming use is discontinued if the structure was not being used for the use allowed by the most recent permit for a period of more than 12 consecutive months. The most recent permit issued for the house was Nelson's 1993 permit for home improvements, which noted the property was a duplex. DPD determined the evidence was equivocal as to whether the right to the nonconforming use had been abandoned – Nelson never utilized the basement as a separate unit, but also never made any structural alterations to abandon


1-65

the use. Given that ambiguity and given the heavy burden to prove lapse of nonconforming use, DPD ruled the nonconforming use did not lapse. The Court of Appeals agreed and held that Rosema had failed to carry the burden of proof to establish abandonment.

Applewood Estates Homeowners’ Ass’n v. City of Richland, 166 Wn.App. 161 (2012)

Facts: In June 2005, a proposed planned unit development was submitted to the City of Richland that proposed the phased construction of 365 housing units for those who were 55 and older, including for-sale single family residences, rental duplexes, attached town homes, and apartments, and an assisted living care facility, with associated access improvements. The proposal was ultimately approved and thereafter the developer amended the PUD several times. On June 16, 2010, the City planning director provided a written decision administratively approving the minor amendment requested by the developer allowing 177 non-age-restricted apartment units. On August 4, the City confirmed approved the change as a minor amendment to the PUD. On September 20, the City issued building permits to construct the apartment buildings. Several neighbors filed a LUPA petition on October 4, 1021, challenging the City's June 16 decision that the modifications to the PUD were minor. The developer asserted that the LUPA petition was untimely. The trial court rejected the developer’s position and the neighbors prevailed at trial. The developer appealed.

Holding: The Court of Appeals reversed. Under RCW 36.70C.040(3), a petition for review must be filed with the superior court within 21 days of the date a land use decision is issued. The planning director’s written decision was a public record, administratively approving the minor amendment was issued on June 16, 2010. On August 4, the City confirmed the developer's application constituted a minor amendment. Taken together, these actions were a "memorialization sufficient to identify the scope and terms of the decision," which under applicable law started the running of the 21-day petition period. The neighbors appeal, filed almost 4 months after the Jun 16th decision, was untimely.

KS Tacoma Holdings, LLC v. Shorelines Hearing Bd., 166 Wn.App. 117 (2012)

Facts: On February 9, 2007, the City of Tacoma approved a shoreline substantial development permit authorizing the construction of a 120,000 square foot mixed-use building that included 100 hotel rooms, 22 residential units, and retail/commercial uses on vacant property located on the Foss Waterway. The permit was revised several times increasing the number of hotel rooms and decreasing the number of residential units. In January 2010, KS, the owner of a nearby hotel, sought review by the Hearings Board of the latest revision that increased the number of hotel units to 256 as inconsistent with SMA and the City’s shoreline master plan. The Board dismissed the petition in a summary proceeding based on lack of standing and failure to provide any evidence of harm; KS appealed and direct review was granted by the Court of Appeals.

Holding: The Board was affirmed. Under RCW 34.05.530, to qualify as an "aggrieved" person for purposes of establishing its standing under the SMA, KS had to demonstrate the following:


1-66

(1) The agency action prejudiced or was likely to prejudice KS; (2) The asserted interests of KS were among those that the agency was required to consider when it engaged in the agency action challenged; and (3) A judgment in favor of KS would substantially eliminate or redress the prejudice to KS caused or likely to be caused by the agency action.

KS contended that the land use, aesthetic, and view impacts of the latest revision established that it will suffer an injury-in-fact sufficient to demonstrate its standing to challenge the 2009 revision. These impacts were speculative. KS did not present factual support for its assertion that the 2009 revision's elimination of residential units and the increase in the number of hotel rooms negatively affected future development in the area. Revoking the 2009 revision would not have any impact on the aesthetic impacts created by the original 2007 approval, to which KS did not object. Similarly, the view impacts from the 2009 revision were also present in the 2007 proposal. KS also asserted “associational” standing to object based on the interests of its members, employees and guests. Although the Court did not reach the issue of whether KS could in fact assert associational standing, it concluded that no injury in fact had been demonstrated for any of the persons KS claimed to represent.

City of Seattle v. Sisley, 164 Wn.App. 261 (2011)

Facts: The City of Seattle filed an action against Sisley in municipal court for housing code violations. The court entered judgments against Sisley in the amount of $247,000 and $368,000. Sisley appealed. The violations were affirmed, but the superior court reduced the penalties to $75,000, holding that RCW 3.66.020, which limited district court jurisdiction to claims not exceeding $75,000, applied to municipal courts, reasoning that because municipal courts have concurrent jurisdiction with district courts under RCW 35.20.250, they are subject to the district court monetary jurisdictional limitation. The City appealed.

Holding: The trial court was reversed and the judgments were reinstated. RCW 35.20.030 granted municipal courts jurisdiction to try all violations of municipal ordinances. The statute imposed a limit on criminal fines, but placed no limit on penalties in cases arising under city ordinances. RCW 35.20.250 granted municipal courts concurrent jurisdiction with district courts for civil and criminal matters within the jurisdiction of district courts. RCW 3.66.020 provided that district courts have no jurisdiction if a claim exceeds $75,000 and a municipal court exercising its concurrent jurisdiction under RCW 35.20.250 was subject to the $75,000 jurisdictional claim limit under RCW 3.66.020. Contrary to the contention of Sisley, the municipal court was not subject to that jurisdictional limit when it exercised its exclusive jurisdiction to decide municipal code violations. There was no statutory intent to impose the district court monetary limit upon a municipal court exercising its original jurisdiction to determine municipal code violations and the legislative history and language of the statutes indicated otherwise.


1-67

Pierce v. Yakima County, 161 Wn.App. 791 (2011)

Facts: Pierce applied for permits and contracted for the installation of a liquid propane tank and piping outside of his house. The permits were issued in August 2007 by Yakima County and the tank was installed. After the County inspected the work and indicated to Pierce that it was “good to go,” Pierce was working on the system in October 2007 and when he attempted to ignite the furnace, the system exploded as a result of an uncapped gas line in the attic. The House was destroyed and Pierce was injured. Pierce sued the sellers of the house, the installer and the County for damages. After the other parties settled, the County moved for dismissal, which the trial court granted on a summary judgment. Pierce appealed, claiming that the public duty doctrine did not apply.

Holding: The dismissal was affirmed. Generally, governments are shielded from liability in the conduct of their general governmental responsibilities. Four circumstances, referred to as " exceptions" exist to the public duty doctrine: (1) where there is a " legislative intent" to impose such a duty, (2) where the state is guilty of a " failure to enforce" a statutory duty, (3) where the government has engaged in " volunteer rescue" efforts, and (4) where a " special relationship" exists between the plaintiff and the state. Pierce claimed that exceptions 2 and 4 applied in this situation. As to legislative intent, the statute relied upon by Pierce did not create a special directive as to what the inspector was to do, but simply vested discretion for the inspector to act. As to the “special relationship,” at most the inspector gave a general approval of the system and made no specific inquiry as to the adequacy of the interior piping. The record was silent on the interior piping permitting process, but that was not part of the tank and exterior pipes inspected by the County.

Vogel v. City of Richland, 161 Wn.App. 770 (2011)

Facts: Bauder sought to construct a portion of Meadow Hills Drive, a street in the plat of Crested Hills in Richland, as a private street. Vogel, who had an interest in having Meadow Hills Drive relieve traffic volumes on the street where Vogel lived, objected and attended a city council meeting on June 10, 2008 to oppose the action. At the meeting, the council received a memo detailing the planning department’s reasoning for allowing the development as a private street. Another memo reaching the same conclusion was prepared on June 17th. On July 9, 2008, Bauder received an entrance gate detail permit that approved the construction of a gate to the street, which was shown as a private road. Vogel filed a LUPA petition on July 29th that challenged the permit. The trial court dismissed the action as untimely, holding that the 21-day LUPA appeal period commenced, at the latest, on June 17th.

Holding: The Court of Appeals reversed. The June 10 and 17 memorandum were not final land use “determinations,” since they did not regulate any improvement or modification of real property. The earliest that a final land use decision was made that allowed the substitution of a private road for a public road was the July 9th permit, which was the first public record that finalized the change. The LUPA petition was filed timely after that date.


1-68

Julian v. City of Vancouver, 161 Wn.App. 614 (2011)

Facts: In January 2008, Monroe filed an application with the City of Vancouver to short plat a parcel that was slightly less than one acre into four building lots. As part of the development plan, Monroe applied for and was granted a hydraulic permit to relocate a watercourse/drainage channel that ran through the property. Julian, an adjacent property owner, opposed the short plat. The hearing examiner approved the short plat with certain conditions. Julian filed a LUPA petition contending that the hearing examiner should have applied the standards for riparian buffers established in a 2005 city ordinance, rather than the 2007 version and that the hearing examiner incorrectly determined that the watercourse was completely functionally isolated for purpose of imposing buffers. The trial court dismissed the petition.

Holding: On appeal, the decision was affirmed. Julian had the burden of establishing that the hearing examiner erred under at least one of LUPA's six standards of review under RCW 36.70C.130(1), which she failed to do. The hearing examiner did not err in applying the standard in the 2007 ordinance, which was the ordinance in effect at the time Monroe filed the short plat application. Since Monroe prevailed in obtaining approval of the short plat, Julian was responsible for the payment of attorney fees under RCW 4.84.370(1).

McMilian v. King County, 161 Wn.App. 581 (2011)

Facts: McMilian owned two adjacent parcels of property in south King County on which he operated an automobile wrecking yard. He acquired the north parcel in 2002 and the south parcel several months later. The north parcel had been used as a wrecking yard since prior to 1958, which was the year King County ordinances were amended to prohibit a wrecking yard use. The operation continued as a non-conforming use. Over the years, the operation gradually encroached on the southern parcel, but the parcels were not owned by the same person until McMilian acquired them. In 2005, McMilian cleared the southern parcel of vegetation, which was the first time the wrecking operation was clearly visible on the parcel. In response to complaints, in 2007, King County ordered the abatement of the wrecking yard on the south parcel. McMilian appealed to the hearing examiner, contending that the use on the south parcel was a prior non-conforming use even though it had been conducted by operators that had not owned the property. The examiner ruled that as a matter of law that since the prior operations constituted a trespass on the south parcel, it could not be a legal non-conforming use. McMilian filed a LUPA petition and the King County Superior Court reversed the hearing examiner.

Holding: The Court of Appeals reversed the trial court and remanded the matter for further proceedings. The Court noted that this was an issue of first impression in Washington. After reviewing various decisions from other states, the Court concluded that holding that a trespasser could not establish a “legal” non-conforming use was consistent with the purpose underlying the continuance of nonconforming uses, which was to avoid potential constitutional due process challenges to zoning legislation arising from deprivations of property rights. However, the hearing examiner erred by assuming that the use of the south parcel constituted a trespass. Because the southern parcel was vacant, open, unenclosed, and unimproved, the


1-69

presumption that the southern parcel owner acquiesced in the use as a wrecking yard applied and if McMilian were able to establish that the southern parcel was being used by the operators of the wrecking yard prior to 1958, then McMilian would be entitled to the presumption that the operators of the wrecking yard were using the southern parcel with permission. The matter was remanded to the hearing examiner for resolution of this issue.

Fishburn v. Pierce County Planning and Land Services Dept., 161 Wn.App. 452 (2011)

Facts: Fishburn purchased a house on Lake Taps in Pierce County in 2007 for $1.6 million. The house was served by a septic tank that had been installed with a permit from Tacoma-Pierce County Health Department. After buying the house, Fishburn experience drainage issues and concluded that the house had been constructed below the water level of the lake. Fishburn attempted to correct the drainage issues and was cited by the Pierce County Planning and Land Services Department for undertaking work without proper permits. Discussion between Fishburn and PALS continued about corrective work that could be undertaken, but the discussions were inconclusive. Ultimately, TPCHD determined that the septic system had failed and the property was uninhabitable. In 2009, the property was assessed at a $2,000 valuation. Fishburn sued TPCHD an PALS under various theories, including claims based on alleged negligence in inspection and permitting the house and septic tank and actions that interfered with Fishburn’s right to use the property. The trial court dismissed all claims based on the public duty doctrine.

Holding: The Court of Appeals affirmed. Fishburn was not able to establish TPCHD and PALS owed any special duty apart from the duty owed to the general public. The statutes cited by Fishburn, Chpt. 70.188 RCW and PCC 8.36, did not create any special duty to Fishburn as an owner of property with a septic tank, but rather established duties to the general public. Similarly, the failure of TPCHD to enforce septic regulations against Fishburn’s predecessor in interest did not create any private right of action by Fishburn against TPCHD. Finally, there existed no special relationship between Fishburn and PALS relating to the issuance of permits for corrective action and Fishburn was unable to demonstrate how any work that PALS could authorize would have resulted in a different outcome with respect to the habitability of the property.

City of Federal Way v. Town and Country Real Estate, 161 Wn.App. 17 (2011)

Facts: Town & Country owned 9.22 acres within the City of Tacoma's jurisdictional boundaries and sought Tacoma's approval of its " Scarsella Preliminary Plat," proposal to subdivide its 9.22 acres into 51 single-family residential lots. The project abutted the City of Federal Way, and Federal Way expressed concerns about the traffic impact of the development. Following various studies, Tacoma issued a MDNS under SEPA that conditioned approval upon construction of certain traffic improvements or payment of $266,344 to Federal Way. T&C appealed this condition and the Tacoma hearing examiner struck it after conducting a hearing. In November, 2008, Federal Way filed a LUPA petition to review the hearing examiner’s decision. The trial court reversed the decision and re-imposed the payment condition, finding that the


1-70

payment complied with RCW 82.02.020 as reasonably necessary to mitigate a direct impact of the project.

Holding: The trial court was affirmed. The hearing examiner had jurisdiction to rule on whether Tacoma had the statutory authority to impose the mitigation payment. When T & C appealed Tacoma's issuance of the MDNS, it was contesting a DNS and the correct standard of review for the hearing examiner to have applied was whether the mitigation payment condition of the MDNS was " clearly erroneous in view of the public policy of [SEPA]." TMC 13.12.680(4)(e)(iv). Accordingly, hearing examiner erred as a matter of law in applying the a standard of review based on whether the action was “outside of the legal authority” of Tacoma. Although the hearing examiner was correct in concluding that RCW 82.02.020 required some determination of proportionality of the impact, the hearing examiner erred in concluding that the impact fee did not represent the proportional impact of the proposed development, based on the evidence presented by Federal Way and Tacoma.

Brotherton v. Jefferson County, 160 Wn.App. 699 (2011)

Facts: The Brothertons purchased an RV to accommodate overnight guests to their 6-acre Jefferson County home. They installed a holding tank to collect waste water generated from the RV. In 2008, the County informed the Brothertons that the holding tank violated state and local sewage regulations and ordered them to correct the violation. The Brothertons sought a waiver of the County requirements, which was refused by the County health officer and that decision was affirmed by the County Health Board. The Brothertons sued the County in 2009, claiming that the County ordinance conflicted with state law and was discriminatory. The trial court dismissed the claims on summary judgment.

Holding: On appeal, the County asserted for the first time that the Brothertons’ complaint was untimely under LUPA. The Court concluded that this issue could be raised on appeal since it was jurisdictional in nature. The Jefferson County Health Board affirmed the health officer’s denial of a waiver relating to the holding tank. The Board’s decision was a final determination as to the enforcement of ordinances relating to the use of real property and was therefore a “land use decision” within the meaning of LUPA, RCW 36.70C.020(1)(c). Since the Brothertons did not appeal the Board order within the time limits imposed by LUPA, the action was properly dismissed.

Knight v. City of Yelm, 173 Wn.2d 325 (2011) – Standing to challenge municipal code. Segaline v. State, Dept. of Labor and Industries, 169 Wn.2d 467 (2010) – Immunity from claims. Lawson v. City of Pasco, 168 Wn.2d 675 (2010) – State preemption of local ordinance. Kelly v. Chelan County, 167 Wn.2d 867 (2010) – Time limit under building permit. Post v. City of Tacoma, 167 Wn.2d 300 (2009) – Due process challenge to fines. Abbey Road Group, LLC v. City of Bonney Lake, 167 Wn.2d 242 (2009) – Vested rights doctrine. City of Woodinville v. Church, 166 Wn.2d 633 (2009) – Building restrictions applied to church. Griffin v. Thurston County Bd. of Health, 165 Wn.2d 50 (2009) – Septic requirements for small lots. Am. Legion Post No. 149 v. Dept. of Health, 164 Wn.2d 570 (2008) – Non-smoking areas. Keep Watson Cutoff Rural v. Kittitas County, 145 Wn.App. 31 (2008) – Appeal of conditional use permit. Kelly v. Chelan County, 145 Wn.App. 166 (2008) – Litigation delay affecting time duration of permit.


1-71

Milestone Homes, Inc. v. City of Bonney Lake, 145 Wn.App. 118 (2008) – Density requirements for plats. Humbert v. Walla Walla County, 145 Wn.App. 185 (2008) – Invited error doctrine. First Pioneer Trading v. Pierce County, 146 Wn.App. 606 (2008) – Non-conforming use. Heller Building, LLC v. City of Bellevue, 147 Wn.App. 46 (2008) – Appeal of revocation of permit. Isla Verde Int’l Holdings, Ltd. v. City of Camas, 147 Wn.App. 454 (2008) – Unlawful imposition under

RCW 82.02.020. Bonneville v. Pierce County, 148 Wn.App. 500 (2008) – Violation of conditional use permit. Sylvester v. Pierce County, 148 Wn.App. 813 (2009) – Reasonable use exception to wetlands regulation. Gig Harbor v. N. Pac. Design, 149 Wn.App. 159 (2009) – Open space requirement for conditional use

permit. Belleau Woods v. Bellingham, 150 Wn.App. 228 (2009) – Change in impact fees following building permit

application. Stanzel v. Pierce County, 150 Wn.App. 835 (2009) – Administrative appeal of water service application. Fire Dist v. Whatcom County, 151 Wn.App. 601 (2009) – Adequate fire service. Harlan Claire Stientjes Family Trust v. Via-Fourre, 152 Wn.App. 616 (2009) – Attempt to appeal non-

final order. Hoggart v. Flores, 152 Wn.App. 862 (2009) – Cure for illegal subdivision. Citizens v. Yakima County, 152 Wn.App. 914 (2009) – Land exchange with city. Nickum v. City Of Bainbridge Island, 153 Wn.App. 366 (2009) – Challenge to communications tower. Conner v. City Of Seattle, 153 Wn.App. 673 (2009) – Challenge to landmark designation. Woodfield Homeowner’s Ass’n v. Graziano, 154 Wn.App. 1 (2010) – Necessary party to action. Phoenix Dev. v. Woodinville, 154 Wn.App. 492 (2009) – Rezone application. West v. Stahley, 155 Wn.App. 691 (2010) – Exhaustion of remedies. Curhan v. Chelan County, 156 Wn.App. 30 (2010) – Setback requirement. Tobin v Worden, 156 Wn.App. 507 (2010) – Public records request. Friends of Cedar Park v. Seattle, 156 Wn.App. 633 (2010) – Substantial evidence supporting hearing

examiner. Deer Creek Developers, LLC v. Spokane County, 157 Wn.App. 1 (2010) – Permit vesting. Holiday v. City of Moses Lake, 157 Wn.App. 347 (2010) – City code violations. Kelly v. County of Chelan, 157 Wn.App. 417 (2010) – Vested rights. Pacific Topsoils, Inc. v. The Washington State Dept. of Ecology, 157 Wn.App. 629 (2010) – Wetlands

regulation. Lauer v. Pierce County, 157 Wn.App. 693 (2010) – LUPA appeal. Thun v. City of Bonney Lake, 164 Wn.App. 755 (2011) – Exhaustion of remedies.

XIII. Land Use/SEPA

Stafne v. Snohomish County, 174 Wn.2d 24 (2012)

Facts: In June 2008, Stafne sought to have the Snohomish County Comprehensive Plan amended to change the designation of his property from commercial forest land to forest transition area. The Snohomish County Council refused to do so. Stafne sued on July 18, 2008, under LUPA and later sought a statutory writ of review, writ of mandamus, writ of prohibition or a writ of certiorari as well as a declaration that his land did not meet the definition of forest land under the GMA. The trial court dismissed all of the claims on summary judgment. The Court of Appeals affirmed, although it held that Stafne was not required to exhaust his administrative remedies prior to filing the LUPA action.

Holding: The dismissal was affirmed. A request to amend the comprehensive plan is not a land use decision; it is a request for legislative action. The Court of Appeals erroneously held


1-72

that Stafne had access for a review of this action under LUPA. The property remedy for Stafne was to appeal to under GMA to the Growth Management Hearings Board.

Yakima County v. E. Wash. Growth Mgmt. Hearings Bd, 168 Wn.App. 680 (2012)

Facts: In 2004, Yakima County began hearings on amendments to its critical area ordinances. The process ended with the enactment of Ordinance 13-2007 that included a new critical area ordinance; a new comprehensive plan and zoning code were adopted in Ordinance 15-2007. Various public interest groups sought review of the ordinances under GMA by the Eastern Washington Growth Management Hearings Board. In March, 2010, the Board conducted hearings on the challenges and issued a 96-page decision in April 2010. Included in the decision were the conclusions: (1) the County's decision not to designate and regulate type 5 ephemeral streams under the critical areas ordinance failed to comply with GMA; (2) the County's standard stream buffers were not supported by the best available science, (3) the County's standard wetland buffers were within the range of the best available science, and (4) the allowed minimum adjustments to the stream and wetland buffers failed to comply with the GMA. The Count and Farm Bureau appealed these decisions and the superior court reversed the finding that the stream buffers violated GMA.

Holding: The Board concluded the adopted standard stream buffer widths set forth in the ordinance violated the GMA because they were not supported by the best available science and the County provided no reasoned justification for departing from the best available science. Consistently, the GMHB concluded any further buffer reductions to minimum buffers by administrative adjustment were not supported by the best available science. These conclusions were supported by substantial evidence. The Board’s conclusion that the provisions of the ordinance that allowed an administrative reduction of the wetland buffer areas to 25 feet was clearly a violation of GMA and the ordinance permitted significant degradation of wetlands. With respect to the regulation of ephemeral streams (streams that have a flow of 30 days or less each year) the County apparently concluded that ephemeral streams did not serve as significant fish and wildlife habitat and had a limited effect on the functions and values of other streams in the stream corridor system. The County further concluded those ephemeral stream functions recognized as somewhat valuable to the stream corridor system--sediment and large woody debris dispersal--would be protected by other development regulations. Accordingly, the County chose not to regulate ephemeral streams under the critical areas ordinance but under other land use ordinances. This decision, choosing among multiple planning choices for protecting the functions and values of ephemeral streams, was the result of a reasoned process. The Board failed to defer to the County's reasoned justification for refusing to designate ephemeral streams as critical areas subject to critical areas regulations and the superior court was correct in reversing that portion of the Board’s decision.

Yakima County v. E. Wash. Growth Mgmt. Hearings Bd, 168 Wn.App. 680 (2012)

Facts: In 2004, Yakima County began hearings on amendments to its critical area ordinances. The process ended with the enactment of Ordinance 13-2007 that included a new


1-73

critical area ordinance; a new comprehensive plan and zoning code were adopted in Ordinance 15-2007. Various public interest groups sought review of the ordinances under GMA by the Eastern Washington Growth Management Hearings Board. In March, 2010, the Board conducted hearings on the challenges and issued a 96-page decision in April 2010. Included in the decision were the conclusions: (1) the County's decision not to designate and regulate type 5 ephemeral streams under the critical areas ordinance failed to comply with GMA; (2) the County's standard stream buffers were not supported by the best available science, (3) the County's standard wetland buffers were within the range of the best available science, and (4) the allowed minimum adjustments to the stream and wetland buffers failed to comply with the GMA. The Count and Farm Bureau appealed these decisions and the superior court reversed the finding that the stream buffers violated GMA.

Holding: The Board concluded the adopted standard stream buffer widths set forth in the ordinance violated the GMA because they were not supported by the best available science and the County provided no reasoned justification for departing from the best available science. Consistently, the GMHB concluded any further buffer reductions to minimum buffers by administrative adjustment were not supported by the best available science. These conclusions were supported by substantial evidence. The Board’s conclusion that the provisions of the ordinance that allowed an administrative reduction of the wetland buffer areas to 25 feet was clearly a violation of GMA and the ordinance permitted significant degradation of wetlands. With respect to the regulation of ephemeral streams (streams that have a flow of 30 days or less each year) the County apparently concluded that ephemeral streams did not serve as significant fish and wildlife habitat and had a limited effect on the functions and values of other streams in the stream corridor system. The County further concluded those ephemeral stream functions recognized as somewhat valuable to the stream corridor system--sediment and large woody debris dispersal--would be protected by other development regulations. Accordingly, the County chose not to regulate ephemeral streams under the critical areas ordinance but under other land use ordinances. This decision, choosing among multiple planning choices for protecting the functions and values of ephemeral streams, was the result of a reasoned process. The Board failed to defer to the County's reasoned justification for refusing to designate ephemeral streams as critical areas subject to critical areas regulations and the superior court was correct in reversing that portion of the Board’s decision.

Olympic Stewardship Found. v. W. Wash. Growth Mgmt. Hearings Bd., 166 Wn.App. 172 (2012)

Facts: In 2009, Jefferson County enacted a critical areas regulation requiring property owners to retain all vegetation located in "high-risk" channel migration zones for five of the County's rivers. The regulation defined "high-risk CMZs" as those portions of the five rivers' channels that are "likely to migrate" during the next 50 years. Olympic Stewardship Foundation challenged the vegetation regulation, arguing that it violated (1) the Growth Management Act's "best available science" requirement, RCW 36.70A.172(1), and (2) RCW 82.02.020's "constitutional nexus and rough proportionality" requirements. Additionally, the Foundation claimed that the legislature's 2010 amendment to RCW 36.70A.480 invalidated the County's


1-74

nonconforming use regulation for critical areas. The Foundation raised these objections to the Western Washington Growth Management Hearings Board following the adoption of the regulations by the County. The Board rejected the claims.

Holding: The Court affirmed the Board. The Court gave deference to the determinations made by the Board. The County relied upon the best available science in formulating the regulations and it was not necessary for the County to specify exactly what portions of the scientific studies it relied upon. The vegetation regulations did not violate RCW 82.02.020, which prohibits taxes on development. As the Board stated, the vegetation at issue has a "significant role in erosion control, bank stabilization, bank protection, and bank accretion." No property owner was required to provide the public with a benefit not immediately related to ensuring the continued function of that vegetation, so the appropriate nexus existed between the regulation and the imposition on the property owner. The Court declined to consider the Foundations arguments concerning non-conforming uses, since these claims were not presented to the Board.

BD Lawson Partners v. Hearings Bd., 165 Wn.App. 677 (2011)

Facts: In 2009, the City of Black Diamond adopted a new comprehensive plan and development regulations. Part of the plan included designation of large areas as Master Planned Developments. BD Lawson sought approval to build two MPDs and the City approved the developments. Total Responsible Development objected to the plans and filed challenges as a LUPA action and with the Growth Management Hearing Board under GMA. The Board determined that the ordinances were subarea plans or development regulations, that it had jurisdiction over the MPD ordinances, and that the City's approval process did not properly follow its adopted public participation procedures for GMA amendments. The Board then remanded the ordinances approving the MPDs back to the City with instructions to "take legislative action to achieve compliance with the GMA pursuant to this Order." BD Lawson appealed to the superior court and the Court of Appeals ultimately accepted direct review.

Holding: The developer contended that the Board’s action constituted a collateral attack on a previously approved comprehensive plan. The Court determined that if the challenged ordinances amended development regulations or the City's comprehensive plan, the Board would properly have exercised its jurisdiction under the GMA. If, on the other hand, the approval ordinances were permit approvals or site-specific land use decisions, then they would fall outside the scope of the Board's jurisdiction and would be properly challengeable only in a LUPA petition to the superior court. The fact that the MPDs covered large areas did not convert the action into an amendment of the comprehensive plan. The Court determined that the approvals were project permit approvals and the Board lacked jurisdiction to review the permits.

Stevens County v. Hearings Bd., 163 Wn.App. 680 (2011)

Facts: In 2007, Stevens County enacted numerous development regulations Various citizens, including Wagenman, petitioned the Hearings Board to review the regulations for compliance with GMA. After various proceedings, the Board concluded that certain provisions


1-75

relating to short subdivisions failed to protect the functions and values of critical areas as set forth in RCW 36.70A.020(10), .060(2) and .172. The County petitioned the Stevens County Superior Court for review. The Board declined to participate in the judicial review, although Wagenman responded to the appeal. The trial court affirmed the Board and refused to dismiss Wagenman from the appeal. The County appealed.

Holding: The Court of Appeals affirmed the trial court and the Board. Wagenman, having participated in the legislative process of the review of the regulations had standing to participate in the appeal. The County was unable to establish that the Board failed to give the County appropriate deference and substantial evidence supported the Board’s determination that the subdivision code did not protect critical areas. The Court also rejected the County’s claim that the Board’s suggestion that some percentage limitation be established for impervious surfaces constituted an illegal tax.

Irondale Community Action Neighbors v. Western Washington Growth Management Hearings Bd., 163 Wn.App. 513 (2011)

Facts: Irondale Community Action Neighbors opposed Jefferson County’s plan to designate the Hadlock/Irondale area as a non-municipal urban growth area. The County’s initial designation of this area was rejected by the Western Washington Growth Management Hearings Board after ICAN and others raised objections. In March, 2009, the County adopted various ordinances intended to bring the UGA plans into compliance with GMA. ICAN again objected to the Hearings Board, which rejected the majority of ICAN’s claims. After further revisions, the Western Washington Growth Management Hearings Board found that the County had largely come into compliance with the GMA. ICAN again objected, raising the same arguments that the Hearings Board had previously considered. The Hearings Board concluded that it had authority to apply collateral estoppel and res judicata, and ruled that ICAN's new petition was barred by res judicata. ICAN appealed.

Holding: The Court affirmed the Hearings Board. ICAN argued that the Hearings Board exceeded its authority by applying the equitable doctrine of res judicata. In order to prevail on this argument, ICAN had to establish that the Hearings Board's action was " outside the statutory authority or jurisdiction of the agency conferred by any provision of law." RCW 34.05.570(3)(b). The Court concluded that it was necessary for the growth boards to apply res judicata and collateral estoppel in order to carry out their statutorily delegated authority and that the growth boards therefore have implied statutory authority to apply these doctrines.

Olympic Stewardship Foundation V Western Wa Growth Mgt Hearings Bd., 163 Wn.App. 12 (2011)

Facts: Jefferson County enacted a critical areas ordinance in 2008 in response to GMA. Olympic Stewardship Foundation raised certain objections to the ordinance leading to a determination by the WWGMHB that the ordinance failed to comply with GMA in certain respects relating to critical areas within the potential migration zones of rivers located in the County. In 2009, the County enacted another ordinance in response to the WWGMHB that


1-76

required property owners to retain all vegetation located in " high-risk" channel migration zones (CMZs) [1] for five of the County's rivers. The regulation defined " high-risk CMZs" as those portions of the five rivers' channels that are " likely to migrate" during the next 50 years. The Foundation appealed again, but the WWGMHB affirmed the County ordinance. The Foundation appealed the validity of the vegetation regulation.

Holding: The principal arguments advanced by the Foundation against the vegetation regulation were that it violated (1) the GMA’s " best available science" requirement, RCW 36.70A.172(1); (2) RCW 82.02.020's and/or the Fifth Amendment's " constitutional nexus and rough proportionality" requirements; and (3) the legislature's 2010 amendment to RCW 36.70A.480 invalidated the County's nonconforming use regulation for critical areas. These arguments were all rejected by the Court. The actions of the County were not clearly erroneous. The requirement to utilize the “best available science” did not require that the County create a record demonstrating that it evaluated the best available science in developing its regulations. The Fifth Amendment challenge was not ripe for consideration by the Court. The Foundation failed to preserve its claim with respect to the nonconforming use ordinance because it did not include that issue in its appeal of the Board’s decision to the superior court.

Clallam County V. Dry Creek Coalition, 161 Wn.App. 366 (2011)

Facts: In 2007, after completing a required GMA review, Clallam County adopted a resolution providing that its Comprehensive Plan and Urban Growth Areas remained compliant with the GMA and needed no amendments. Futurewise appealed to the Western Washington Growth Management Hearings Board. Futurewise claimed that the County failed to review and revise parts of its Plan and UGAs that were noncompliant with the GMA and challenged the adequacy of the non-municipal Carlsborg UGA's capital facilities plan and the use of two zoning density designations in rural areas. The Growth Board ruled that the Carlsborg UGA's capital facilities plan did not comply with the GMA, in part because it failed to adequately plan for sewer services. The Growth Board also invalidated the use of two rural housing density zoning designations because they established nonrural housing densities on rural lands. The County appealed to the Clallam County Superior Court, which reversed the Growth Board's decisions, ruling that the Growth Board (1) did not have jurisdiction to review the capital facilities plan's compliance with the GMA and (2) failed to identify a clear error that the County made when it established the R2 and RW2 housing density zoning designations. Futurewise appealed the superior court's decision to this court.

Holding: Subsequent proceedings between the County and the Growth Board rendered the appeal concerning the R2 and RW2 housing density moot. Although the legislature passed a bill amending the relevant statute in this case (Laws of 2002, ch. 154, 2) that gave the Growth Board jurisdiction to review the capital facilities plan, under the statute's plain language, the statutory change is not enforceable in the absence of state funding because of a " null and void" funding clause. The Court remanded the issue to the Growth Board to determine whether the 2002 bill affecting the capital facilities plan has ever been funded sufficiently to render the provision enforceable. The Court rejected the argument by Futurewise that changes in


1-77

population projections allow a challenge to capital facilities plans that were not amended.

Clark County v. Western Wash. Growth Mgmt Hearings Bd., 161 Wn.App. 204 (2011)

Facts: In 2005, Clark County began a review of its comprehensive plan culminating in the September 25, 2007 passage of Ordinance No.2007-09-13. The Ordinance made many revisions to the County's comprehensive plan that de-designated 19 parcels of land (a total of 4,351 acres) from agricultural lands of long-term commercial significance status and simultaneous added these lands to the urban growth area boundaries of the Battle Ground, Camas, La Center, Ridgefield, Vancouver, and Washougal. On November 16, 2007, Karpinski petitioned the Growth Management Hearings Board, challenging the County's de-designation of the 19 parcels and their addition into the various UGAs. The Board reversed the County’s decision with respect to 11 parcels as being in clear error under GMA. The County appealed to Clark County Superior Court, which affirmed the Board’s decision in part and remand the decision back to the Board for further consideration. Karpinski then appealed.

Holding: The Court of Appeals considered the appeal to be directly from the Board and the County had the burden to prove the propriety of its decisions. The annexation of several of the parcels by cities did not deprive the Board of jurisdiction to determine whether the parcels had been properly designated. The County’s redesignation of several of the parcels to ALLTCS status following the Board decision made any issue relating to those parcels moot. As to the other parcels, the Court affirmed the Board as to three parcels, but remanded for further proceedings the designation of three other parcels based on the Board’s erroneous determination as to whether these parcels were “characterized by urban growth.”

Spokane County v. Eastern Washington Growth Management Hearings Bd., 160 Wn.App. 274 (2011)

Facts: McGlades, LLC owned s a 4.2 acre in Spokane County. McGlades applied for a conditional use permit to expand its on-site market and deli operation, but the County denied the application. McGlades then submitted concurrent requests to the County: (1) to amend the comprehensive plan designation from urban reserve to limited development area commercial; and (2) to amend the County zoning map designation from an urban reserve zone to a limited development area-commercial zone. The County approved these amendments as part of its annual review of its comprehensive plan. Neighboring landowners appealed the amendments to the Eastern Washington Growth Management Hearings Board, naming only the County. McGlades intervened in that proceeding. The EWGMHB invalidated the amendments, ruling that they violated the GMA as a non-site specific rezone and that the amendments also violated SEPA and County’s own development regulations. McGlades appealed to the Superior Court, which reversed the EWGMHB, ruling that the amendments were quasi-judicial in nature affecting a specific property and not within the jurisdiction of the EWGMHB. The neighboring owners appealed.

Holding: The Court of Appeals reversed. RCW 36.70A.280(1)(a) gave the Hearings Board jurisdiction over petitions alleging that the County’s comprehensive plan did not comply


1-78

with the GMA. The GMA required that challenges to comprehensive plan amendments be brought before the hearings boards. The issue of whether the change was site specific was not determinative, since the issue is whether the action was a change in the comprehensive plan, which it clearly was. The challenged action was in fact legislative and the Hearings Board had subject matter jurisdiction to consider the comprehensive plan amendment. The fact that McGlades was not named in the appeal to the EWGMHB did not violate any due process rights.

Kitsap Alliance of Property Owners v. Central Puget Sound Growth Management Hearings Bd., 160 Wn.App. 250 (2011)

Facts: In updating its critical area ordinance, Kitsap County imposed a 50-foot buffer zone in urban shoreline areas. This requirement was challenged by various citizen and property owner groups as being both too restrictive and not restrictive enough. In 2009, based on the result in Futurewise v. Western Washington Growth Management Hearings Board, 164 Wn.2d 242 (2008), the Court of Appeals reversed the Kitsap County action and directed that the amendment to the CAO be pursued under the Shoreline Management Act. The legislature amended applicable state law to make it clear that GMA controlled the process of amending the CAO. The Supreme Court accepted review of the Kitsap appeal and then remanded the case to the Court of Appeals to determine the effect of the legislative amendments.

Holding: The Court of Appeals gave effect to the retroactive effect of the amending legislation and upheld the CAO amendments enacted pursuant to the GMA. The Court held that the amendments to the statute were to be given retroactive effect because the legislation was clearly intended to be retroactive. The legislation did not violate the doctrine of separation of powers since the original Futurewise opinion was a 4 – 4 decision and there was no controlling opinion construing the statute signed by a majority of the justices of the Supreme Court. In the absence of controlling authority, the legislature was free to retroactively amend the statute to clarify ambiguous provisions. The Court also rejected claims that the amendments violated the prohibition on ex post facto laws and the vested rights of property owners.

Davidson Serles v. City of Kirkland, 159 Wn.App. 616 (2011)

Facts: The City of Kirkland approved several ordinances allowing taller buildings to be constructed on property adjacent to a site owned by Davidson. Davidson filed a declaratory judgment action challenging the legal sufficiency of the EIS relied upon by the City in passing the ordinances. The superior court dismissed the claim based on a lack of jurisdiction.

Holding: The trial court correctly dismissed the challenge to the adequacy of the EIS, since the Central Puget Sound Hearings Board had exclusive jurisdiction to hear a challenge to the EIS since it was in effect a challenge to the City’s comprehensive plan. The Court of Appeals rejected Davidson’s claims of a right of review under article IV, section 6 of the State Constitution and the Uniform Declaratory Judgments Act. The SEPA challenge to the City’s “planned action” ordinance was also proper, since there was no requirement for an EIS to be prepared in connection with that ordinance.


1-79

Brinnon Group v. Jefferson County, 159 Wn.App. 446 (2011)

Facts: The Brinnon Group sought changes to a master planned resort development near Brinnon in Jefferson County. The development contemplated a golf course, marina, resort units and permanent housing. In January 2008, the Jefferson County Board of County Commissioners enacted an ordinance amending the County comprehensive plan to approve the project. The Brinnon Group filed a constitutional writ action in Clallam County Superior Court in February, 2008, and filed a petition for review with the Growth Management Hearings Board. The Board affirmed the County’s actions, holding that the County complied with the GMA in approving the project. The Brinnon Group appealed the Board’s decision to Thurston County Superior Court, which affirmed the Board in June, 2009. In March, 2009, in response to a motion by the developer, the Clallam County Superior Court dismissed the constitutional writ action, holding that the procedure before the Board and subsequent appeal provided the Brinnon Group with an adequate remedy at law. Brinnon Group appealed both superior court dismissals.

Holding: The Court of Appeals affirmed both decisions. The decision of the Board did not contain an error in interpreting the law and that the amendment of the text of the comprehensive plan by the BOCC did not require prior approval of the Jefferson County planning commission. The Court also concluded that the final EIS sufficiently considered alternative actions to the proposed development. Because the Board had jurisdiction to consider Brinnon Group's arguments that the County violated RCW 36.70.400 and .430 as part of its broader GMA review, the Board fully assessed Brinnon Group's claims that the County's comprehensive plan amendment did not comply with these provisions. Likewise, Thurston County Superior Court's review of the Board's order under the relevant APA standards provided Brinnon Group with an adequate remedy. Consequently, Brinnon Group had another adequate remedy at law and the Clallam County Superior Court did not err by dismissing Brinnon Group's complaint for a constitutional writ.

Davidson Serles & Associates v. Cent. Puget Sound Hearings Bd., 159 Wn.App. 148 (2010)

Facts: Davidson filed a petition with the Central Puget Sound Hearings Board challenging the approval of several rezone ordinances enacted by Kirkland affecting adjacent property. The effect of the ordinances was to allow taller buildings on the adjacent site. Although the CPSHB found that the city had failed to comply with SEPA, the rezones were not invalidated. The matter was remanded for the preparation of an adequate SEPA analysis. Davidson appealed, contending that the CPSHB was required to invalidate the ordinances once it determined that the city had improperly amended its comprehensive plan.

Holding: The Court of Appeals heard the appeal under provisions allowing a direct review under emergency circumstances. The Court affirmed the CPSHB. The GMA granted hearings board the authority to fashion appropriate remedies for comprehensive plans that violated the GMA. On the appropriate facts, the Board could find that failure to properly conduct the required environmental review for a city or county action interfered with fulfillment of the GMA's environmental goal, and, upon such a finding, could invalidate the relevant


1-80

ordinance. There was no such finding in this case and in fact, the Board observed that an ordinance had never been invalidated for the sole reason of non-compliance with SEPA.

Bayfield Res. Co., v. W.Wash. Growth Mgmt Hearings Bd., 158 Wn.App 866 (2010)

Facts: In August, 2007, Thurston County adopted various amendments to its zoning code in response to direction from the WWGMHB. The amendments included changes to the critical area ordinance. Bayfield, who owned 700 acres near Gull Harbor and Boston Harbor road in Thurston County, objected to certain provisions in the amended ordinances and the process utilized by the County in adopting the measures. Bayfield appealed to the GMHB. The Board rejected Bayfield’s arguments in August 2008. Bayfield then appealed to Thurston County Superior Court under the APA, Chpt. 34.05 RCW, raising various arguments, including a claim that the process denied Bayfield substantive due process. The trial court dismissed Bayfield’s claims.

Holding: The Court of Appeals affirmed the trial court. The density reductions in the critical area ordinances were not unduly oppressive and therefore did not violate Bayfield’s right to substantive due process. The amendment had the effect of assisting the County in achieving a variety of rural densities as required under GMA. Nothing in the amendments prevented Bayfield from pursuing the subdivision of its property and the findings of the GMHB relating to Bayfield’s challenge of the amendments were supported by substantial evidence.

Thurston County v. WWGMHB, 158 Wn.App. 263 (2010)

Facts: In 2006, Thurston County updated its population projections for Yelm, but did not revise the urban growth area. Futurewise objected to the finding, contending that the Yelm urban growth area was too large. The Western Washington Growth Management Hearings Board affirmed the Futurewise objection on the grounds that nothing in the record supported the conclusion that the supply of land was required to accommodate growth in the Yelm area. Thurston County appealed to the Thurston County Superior Court, which reversed the Hearings Board.

Holding: The Court of Appeals affirmed the trial court. The dispute was whether the County must reduce the size of the Yelm urban growth area to conform to the outdated population projections. The comprehensive plan adopted by the County controlled the size of the Yelm urban growth area. The County updated the population projections in the comprehensive plan and the Western Board previously ruled that all of the County's urban growth areas, including Yelm, complied with the GMA based on those updated population projections. Accordingly, the issue of whether the Yelm urban growth area was previously appropriately sized has been resolved and was moot

Spokane County v. Miotke, 158 Wn.App. 62 (2010)

Facts: Spokane County amended its comprehensive plan to add additional property to its Urban Growth Area (UGA). The Eastern Washington Growth Management Hearings Board


1-81

found the amendments did not comply with the GMA and the County rescinded the amendments. In March 2007, the Board found that the County was then in compliance with GMA and Ms. Miotke appealed that holding to Thurston County Superior Court. Prior to receiving a decision from the superior court, Miotke filed a second petition with the Board alleging that the County action was still in violation of GMA. The Board ruled on this petition and found the County to be in violation of the GMA. The Thurston County Superior Court then issued an order directing the Board to reconcile its decisions, but that order was stayed while the County appealed the Boards decision in Spokane County Superior Court. The Spokane Court reversed the Board and held that the Miotke appeal was barred under the doctrine of res judicata. Miotke appealed.

Holding: The dismissal was affirmed. The issue of whether the County’s action was consistent with the GMA comprehensive plan requirements was squarely before the Board in Ms. Miotke's first petition, and decided. Miotke then appealed that decision in Thurston County. While that appeal was pending, she filed a second petition with the Board. When an appeal is pending, the doctrine of res judicata bars a party from starting a new action to litigate the same issue in the hope of obtaining a different result. The Court noted that the issues between Miotke and the County had been the subject of numerous appeals and rejected Miotke’s claim that she had been denied her day in court by dismissal of her second appeal.

Citizens for Rational Shoreline Planning v. Whatcom County, 172 Wn.2d 384 (2011) – Challenge to SMA ordinance as tax.

Feil v. E. Wash. Growth Mgmt. Hearings Bd., 172 Wn.2d 367 (2011) – Jurisdiction of hearings board. Mellish v. Frog Mountain Pet Care, 172 Wn.2d 208 (2011) – Time period for filing LUPA action. Kittitas County v. E. Wash. Growth Mgmt. Hearings Bd., 172 Wn.2d 144 (2011) – Challenge to county

growth management plan. Phoenix Dev., Inc. v. City of Woodinville, 171 Wn.2d 820 (2011) – Application for rezone. Whatcom County Fire Dist. No. 21 v. Whatcom County, 171 Wn.2d 421 (2011) – Fire protection

concurrency. Advocates for Responsible Development v. Western Washington Growth Management Hearings Bd., 170

Wn.2d 577 (2011) – Frivolous appeal. Gold Star Resorts, Inc. v. Futurewise, 167 Wn.2d 723 (2009) – Restriction on rural development. Residents Opposed to Kittitas Turbines v. State Energy Facility Site Evaluation Council, 165 Wn.2d 275

(2009) – Pre-emption by Energy Facilities Site Location Act. City of Arlington v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 164 Wn.2d 768 (2008) – Challenge

to amendment to comprehensive plan under GMA. Thurston County v. Bldg. Indus. Ass’n of Wash., 164 Wn.2d 329 (2008) – Challenge to update of urban

growth area boundary. Futurewise v. W. Wash. Growth Mgmt. Hearings Bd., 164 Wn.2d 242 (2008) – Jurisdiction of SMA

versus GMA. Twin Bridge Marine Park, LLC v. Dept. of Ecology, 162 Wash.2d 825 (2008) – County versus DOE

enforcement of SMA. J.L. Storedahl & Sons, Inc. v. Clark County, 143 Wn. App. 920 (2008) – Challenge to rezone approval

under LUPA. Gebbers v. Okanogan County Pub. Util. Dist. No. 1, 144 Wn. App. 371 (2008) – Cumulative impact

analysis under FEIS. Coffey v. City of Walla Walla, 145 Wn.App. 435 (2008) – Jurisdiction of superior court versus grow

managements hearings board. Stevens County v. Loon Lake Prop. Owners Ass’n, 146 Wn.App. 124 (2008) – Designation of critical

areas.


1-82

Stevens County v. Futurewise, 146 Wn.App. 493 (2008) – Designation of critical habitat areas. Yakima County v. Hearings Bd., 146 Wn.App. 679 (2008) – Re-designation of agricultural lands. Spokane County v. City of Spokane, 148 Wn.App. 120 (2009) – Challenge to GMA Hearings Board ruling. Samson v. City of Bainbridge Island, 148 Wn.App. 952 (2009) – Restriction on dock construction. Herman v. Shoreline Hearings Bd., 149 Wn.App. 444 (2009) – Penalties for violation of SMA. Cmty. Ass’n v. Ecology, 149 Wn.App. 830 (2009) – NPDES permit for animal waste. KAPO V Central Puget Sound Growth Mgmt Hrgs Board, 152 Wn.App. 190 (2009) – SMA conflict with

GMA for shoreline buffers. Kailin v. Clallam County, 152 Wn.App. 974 (2009) – Jurisdiction of GMA hearings board. Robertson v. May, 153 Wn.App. 61 (2009) – Permit for dock construction. Feil v. Eastern Washington Growth Management Hearings Board, 153 Wn.App. 394 (2009) –

Recreational use overlay district. Mellish vs. Frog Mountain Pet Care, 154 Wn.App. 395 (2010) – Final decision for LUPA. Lanzce G. Douglass v. Spokane Valley, 154 Wn.App. 408 (2010) – SEPA threshold determination. Planning Council v. Seattle, 155 Wn.App. 305 (2010) – Applicability of SEPA. Advocates v. Hearings Bd., 155 Wn.App. 479 (2010) – Standing to challenge. Citizens For Rational Shoreline Planning V. Whatcom County, 155 Wn.App. 937 (2010) – Shoreline

management plan. Chuckanut Conservancy v. Natural Res., 156 Wn.App. 274 (2010) – DNR management plan. Mercer Island Citizens v. Tent City, 156 Wn.App. 393 (2010) – LUPA appeal. Stafne v. Snohomish County, 156 Wn.App. 667 (2010) – Timeliness of LUPA appeal. Suquamish Tribe v. Hearings Bd., 156 Wn.App. 743 (2010) – Comprehensive plan. Chinn v. City of Spokane, 157 Wn.App. 294 (2010) – Rezone. Shaw Family LLC v. Advocates For Responsible Development, 157 Wn.App. 364 (2010) – Jurisdiction of

hearings board. Spokane County v. Eastern Washington Growth Management Hearings Board, 160 Wn.App. 274 (2011)

– Jurisdiction of hearings board. City of Federal Way v. Town & Country Real Estate, LLC, 161 Wn.App. 17 (2011) – Traffic mitigation

fee. Julian v. City of Vancouver, 161 Wn.App. 614 (2011) – Application of vested rights doctrine to establish

buffer areas. McMillan v. King County, 161 Wn.App. 581 (2011) – Non-conforming use.

XIV. Governmental Regulation

A. Hazardous Waste

Dep’t of Ecology v. Tiger Oil Corp., 166 Wn.App. 720 (2012)

Facts: Tiger owned a parcel in Yakima that had been operated as a gas station and convenience store. Located on the parcel were four underground gasoline tanks. Tiger and DOE entered into a consent decree entered resolving litigation arising out of gasoline spills in Yakima during the late 1970s and early 1980s. A dispute arose as to whether Tiger complied with the remediation efforts under the consent decree. After several procedural steps, the trial court concluded that Tiger was in contempt of the consent decree and ordered it to complete and operate an Interim Soil Vapor Extraction System on its property. Tiger appealed the contempt order.


1-83

Holding: The trial court was for the most part affirmed. The Court of Appeals, after reviewing the procedural history of the controversy, determined that DOE’s recommended remediation action was appropriate, including a require to use “best available technology.” The Court reversed that part of the contempt order that required the operation of the Interim SVE system, since it was not clear in the consent decree that Tiger had the operational responsibility to install and operate the system.

Skagit County v. Skagit Hill Recycling, 162 Wn.App. 308 (2011)

Facts: In 2006, Skagit Hill acquired landfill property on State Route 9 just north of Sedro-Wooley. The site was used as a sand and gravel facility, a recycling facility, and was permitted as an inert waste landfill since 2001. At Skagit Hill's request, Skagit County transferred a preexisting inert waste landfill permit from the prior property owner to Skagit Hill Various inspections conducted by the county revealed that the landfill was accepting construction waste and other materials not allowed under the existing permit. Based on these violations, the Health Department denied a renewal of the inert landfill permit when it expired in 2007. Skagit Hill appealed the denial to the Skagit County Health Officer, who also denied the permit. Skagit Hill then appealed to the PCHB, who affirmed the denial on a motion for summary judgment. An appeal to Thurston County Superior Court followed and the trial court reversed the PCHB and ordered an evidentiary hearing. The Health Department sought discretionary review from the Court of Appeals.

Holding: The Court of Appeals reversed the trial court and reinstated the denial. The Court rejected Skagit Hill’s argument that the County was estopped from asserting certain of its practices violated the permit. The central issue was whether a permit violation occurred prior to the expiration of the permit in 2007 and there was uncontroverted evidence that Skagit Hill violated the permit by accepting roofing material, insulation, plastics, fabrics, and other miscellaneous items. There was no evidence presented creating any issue of material fact and PCHB’s order on summary judgment was appropriate.

Hulbert v. Port of Everett, 159 Wn.App. 389 (2011)

Facts: Hulbert sold a 30-acre site to the Port of Everett in 1991 for $9.5 million purchase price. The site was previously used for various industrial activities and had some contamination issues. As part of the sale, Hulbert indemnified the Port for a three-year period from any losses and clean up costs associated with the site. In 2006, DOE required the Port to perform additional remediation activities on the site. The Port asserted a claim for contribution under MCTA against Hulbert. Hulbert filed a declaratory judgment action seeking to bar the claim on the grounds that the 3-year indemnity period had expired. The trial court dismissed the action, ruling that the indemnity agreement did not preclude a claim under MCTA.

Holding: The Court of Appeals affirmed. Although the parties were free to allocate liability under MCTA between themselves, the indemnity agreement did not manifest a mutual intent that Hulbert, after the termination of the three-year period, would be released from all environmental liability, including under the MTCA or any other statute. Instead, the indemnity


1-84

guaranteed the Port that Hulbert would be responsible for any costs or expenses related to the presence of hazardous substances on the Property for three years following the sale. Upon the expiration of the three-year period, the protections provided by indemnity ended, and the Port could no longer seek indemnification pursuant to the indemnity agreement. In the absence of any language indicating that the Port agreed to release or waive any other rights it might have in the future, the indemnity did not preclude a statutory MTCA contribution action after the three years expired.

Grey v. Leach, 158 Wn.App. 837 (2010)

Facts: Grey bought a house from Leach in 2000. The house was built in 1924 and Leach had owned the house since 1966. In 2004, Grey remodeled the house and decommissioned a 720 gallon oil tank as part of a conversion to natural gas. In 2007, Grey discovered a return line to the tank had leaked over time. Grey claimed that he incurred more than $200,000 in remediating the soil and sued Leach for equitable contribution under RCW 70.105D.080 (MCTA). Both parties sought discretionary review after the trial court denied their respective motions for summary judgment.

Holding: The Court of Appeals held that Grey was entitled to a summary judgment holding that Leach was not entitled to the “innocent owner” or “domestic purpose” defense under MCTA and that the purchase agreement between Leach and Grey did not bar the action for contribution. MCTA provides that a past owner of a facility is not liable if the owner can

establish by a preponderance of the evidence that at the time the facility was acquired by the person, the person had no knowledge or reason to know that any hazardous substance, the release or threatened release of which has resulted in or contributed to the need for the remedial action, was released or disposed of on, in, or at the facility. RCW 70.105D.040(3)(b).

The “innocent owner” exclusion did not apply to any owner who caused or contributed to the release by any act or omission. The Court rejected Leach’s argument that the limitation on the exclusion required a showing of intentional or negligent action on the part of the owner. By operating the heating system, the Leach’s caused the release. Intent or negligent operation was not required for the limitation on the exclusion to apply. Similarly, the “domestic purpose” exception did not apply. This exception applied to any natural person if that person

uses a hazardous substance lawfully and without negligence for any personal or domestic purpose in or near a dwelling or accessory structure when that person is: (i) A resident of the dwelling; (ii) a person who, without compensation, assists the resident in the use of the substance; or (iii) a person who is employed by the resident, but who is not an independent contractor. RCW 70.105D.040(c)(3)

The lawful use for a domestic purpose did not include leaking fuel oil from faulty pipes. Although the purchase agreement for the house contained an inspection clause, the agreement did not allocate the risk of loss for leaks from the oil tank to Grey. The contents of the


1-85

inspection clauses in the agreement did not create an issue of fact as to the allocation of risk and the trial court correctly entered summary judgment in favor of Grey on this issue.

State v. Douma, 147 Wn.App. 143 (2008) – Dairy waste as pollutant.

B. Water Rights

Five Corners Family v. State, 173 Wn.2d 296 (2011)

Facts: Several environmental groups and property owners challenged the right of Easterday to withdraw more than 5,000 gallons of water a day in connection with a 30,000 head feedlot in Franklin County without a water permit. Easterday, with the approval of DOE, drilled a well into the Grande Ronde aquifer and began withdrawing water to supplement an existing water right allowing 282,000 gallons per day. Easterday’s total requirement was between 450,000 and 600,000 gallons per day. The Franklin County Superior Court entered a summary judgment in favor to Easterday, holding that water withdrawn for stock watering purposes was exempt from any permit requirement.

Holding: The Court affirmed the trial court. RCW 90.44.050 provided that:

After June 6, 1945, no withdrawal of public groundwaters of the state shall be begun, nor shall any well or other works for such withdrawal be constructed, unless an application to appropriate such waters has been made to the department and a permit has been granted by it as herein provided: EXCEPT, HOWEVER, That any withdrawal of public groundwaters for stock-watering purposes, or for the watering of a lawn or of a noncommercial garden not exceeding one-half acre in area, or for single or group domestic uses in an amount not exceeding five thousand gallons a day, or as provided in RCW 90.44.052, or for an industrial purpose in an amount not exceeding five thousand gallons a day, is and shall be exempt from the provisions of this section, but, to the extent that it is regularly used beneficially, shall be entitled to a right equal to that established by a permit issued under the provisions of this chapter . . .

The Court interpreted this language to create four distinct exemptions from the requirement to obtain a water permit:

Withdrawal of public groundwaters 1. for stock-watering purposes, or 2. for the watering of a lawn or of a noncommercial garden not exceeding one-half acre in area, or 3. for single or group domestic uses in an amount not exceeding five thousand gallons a day, or as provided in RCW 90.44.052, or 4. for an industrial purpose in an amount not exceeding five thousand gallons a day.


1-86

The Court rejected the argument that the 5,000 gallon daily limit be applied to stock-watering purposes. The Court noted that although there was no limitation in this statute on the right to withdraw water for stock-watering, other statutory provisions granted DOE the right to regulate the activity and that the right could not impair senior granted water rights.

Hanson Indus. v. Kutschkau, 158 Wn.App. 278 (2010)

Facts: Kutschkau filed an application for a water permit in connection with a business operated in Moses Lake. No permit was ever issued based on this application. In 1995, Kutschkau transferred the business and all of its assets to Hanson, who had loaned money to Kutschkau. Hanson subsequently sold the property. After several owners, Central Terminals acquired the property 2001. In 2006, Kutschkau attempted to assign the water permit application. Hanson sued to confirm his ownership of the permit application and Central Terminals and Kutschkau responded by asserting that each of them owned the application. The trial court granted a partial summary judgment holding that the 1995 settlement agreement transferred the application to Hanson.

Holding: The trial court was affirmed. The settlement agreement transferred to Hanson:

. . . any right over, title to, or interest in or related to the Property, including, but not limited to, water and mineral rights, and any lease, commercial agreement, . . .

and “Property” was defined as:

. . . real estate, which real estate is more fully described in Exhibit " A" to the Quit Claim Deed, Attachment 1 hereto, and buildings, structures, goods, equipment, crops, water rights, minerals, raw materials, . . .

Until the water permit is granted, the application served to hold a place in line for the applicant to obtain a permit based on the original application filing date, so the application was a “right” associated with water rights, which in turn, was part of the “Property.” The transfers to Hanson under the settlement agreement included the permit application in the phrase “any right over, title to, or interest in or related to the Property.” The owner of the property, Central Terminals, was not the owner of the permit application. Permit applications and permits were personal property and must be separately assigned or transferred. Once the water right was perfected and a certificate issued, the water rights would attach to the property and be transferred with the ownership of the property. Until that occurred, Hanson remained the owner of the application.

Lummi Indian Nation v. State, 170 Wn.2d 247 (2010) – Challenge to amendment to Chpt. 90.03 RCW. City of Union Gap v. Ecology, 148 Wn.App. 519 (2008) – Expiration for non-use. Pac. Land Partners v. Ecology, 150 Wn.App. 740 (2009) – Non-use following foreclosure.

C. Irrigation Districts

No reported cases in last five years.


1-87

D. Archeological Lands

No reported cases in last five years. E. Mortgage Broker Practices/Appraisers

Ameriquest Mortgage Co. v. Washington State Office of Atty. Gen., 170 Wn.2d 418 (2010) – Disclosure of mortgage application files.

Ameriquest Mortgage v. Attorney Gen., 148 Wn.App. 145 (2009) – Disclosure of mortgage files.

F. Forest Practices

Dept. of Natural Res. v. Browning, 148 Wn.App. 8 (2008) – Failure to appeal violation orders.

XV. Taxation

A. General Real Estate Taxes

Harley H. Hoppe & Associates, v. King County, 162 Wn.App. 40 (2011)

Facts: Hoppe sought disclosure under the Public Records Act from King County of the “tax ratio audits” which the Department of Revenue calculates showing the ration of personal and real property taxes in the county against the valuation of property in the state. The County informed DOR and tax payers included in the audit of the request and DOR and the taxpayers objected. DOR informed the County that disclosure was legally prohibited. Hoppe, contending that the audits would show favoritism to certain taxpayers, sued to compel disclosure. The trial court dismissed the action.

Holding: The Court of Appeals affirmed. The interpretation of the PRA by DOR of the legality of the request was given deference by the Court. DOR correctly determined that the information requested would reveal certain confidential information about the taxpayers’ businesses, and RCW 42.56.230 and 84.08.210 specifically prohibit disclosure of information that would result in unfair competitive disadvantage to the taxpayer.

Washington Beef v. County of Yakima, 143 Wn.App. 165 (2008) – Appeal of assessor’s determination of value.

Citizens’ Alliance for Property Rights v. Sims, 145 Wn.App. 649 (2008) – Application of RCW 82.02.020. Homeowners Solutions v. Nguyen, 148 Wn.App. 545 (2009) – Failure to give property notice of

foreclosure. Stephenson v. Pleger, 150 Wn.App. 659 (2009) – Right to excess sale proceeds. Grays Harbor Energy v. County, 151 Wn.App. 550 (2009) – Assessed valuation of power company

property. Tiger Oil v. Yakima County, 158 Wn.App. 553 (2010) – Effect of contamination on value.


1-88

B. LID’s, Assessments & Utility Fees

City of Tacoma v. City of Bonney Lake, 173 Wn.2d 584 (2012)

Facts: Tacoma entered into franchise agreements with various municipalities required Tacoma to provide water service. This allowed Tacoma to enjoy the benefits of a larger ratepayer base. Following the decision in Lane v. City of Seattle, 164 Wn.2d 875 (2008), which held that that the Seattle public utility could not charge ratepayers a hydrant fee, Tacoma changed its billing practices and began to charge the municipalities for the cost of installing hydrants. The municipalities refused to pay, and Tacoma filed a declaratory judgment action to determine the responsibility for the costs. The trial court ruled in favor of the municipalities and Tacoma appealed.

Holding: The course of dealing between the parties established that Tacoma agreed to provide hydrants as part of the water service provided to the municipalities. Tacoma agreed to provide a water system, and hydrants were required as part of that system. The Court rejected, however, that portion of the trial court ruling that held that a broad indemnification clause requiring Tacoma to indemnify the municipalities from claims associated with the water system barred Tacoma’s action. However, this ruling did not alter the holding that Tacoma was responsible for the cost of the hydrants.

Shoulberg v. Public Utility Dist. No. 1 of Jefferson County, 169 Wn.App. 491 (2012)

Facts: The PUD was a county-wide utility that includes the city of Port Townsend. The PUD provided water and sewer services to citizens outside of he City. The City operated its own water and sewer utilities. The PUD was developing electrical and telecommunications services for the entire service area. In 1996, the PUD began an annual property tax levied on all property within its jurisdiction, including the City. The PUD maintains two funds – the utility fund, funded by utility customer fees, and the general fund, funded almost exclusively by the District's property tax. The PUD used the general fund to pay for watershed planning functions; community involvement and education; general and administrative costs, such as a percentage of the insurance cost, utilities, and accounting services; percentages of personnel and benefit costs; and expenses related to water and sewer studies. In 2005, the District purchased property including Peterson Lake with funds from the general. Shoulberg and other plaintiffs owned property in the City and brought a class action suit against the District to obtain a declaratory judgment and injunctive relief, declaring that the District's tax levy violated RCW 54.04.030, which prohibits assessments for duplicative utilities. The trial court dismissed the action on a motion for summary judgment.

Holding: The Court affirmed the dismissal. In order to prevail, the plaintiffs were required to demonstrate that some of the funds raised by the PUD property tax were used activities that duplicated the City’s utility service, thus violating the prohibition in RCW 54.04.030 from taxing for "any utility, or part thereof, of like character” to that provided by the City. The lake's aquifer-protecting functions did not make it part of the PUD’s water utility that duplicates any City utility function since none of the water in the lake was provided to City


1-89

residents. Similarly, watershed planning and conservation activities do not fall within a narrow definition of a water utility and costs related to studies for potential future sewer systems and for onsite sewage disposal system inspections do not constitute provision of a utility service. The plaintiffs failed to show that the payments from the general fund duplicated any City-provided utilities.

Hook v. Lincoln County Noxious Weed Control Bd., 166 Wn.App. 145 (2012)

Facts: Lincoln County activated a noxious weed control board in 1970 pursuant to Chpt. 17.10 RCW. In August 2006, the Board recorded a notice of lien on property owned by Hook for $1,066.22, which was the cost of labor and material incurred in controlling weeds on Hook’s property. Hook contested the lien by filing an action contending that the original action establishing the Board was invalid since it was an exercise of police power and the 10 days' prior notice required under RCW 36.32.120(7) had not been given in 1970. In 2010, the trial court granted a summary judgment motion dismissing the claim.

Holding: The dismissal was affirmed. Hook argued that the ordinance activating the Board in effect adopted Chpt. 17.10 RCW as local law. The County conceded that this action was taken with only 5 days prior notice, as opposed to the 10-day requirement for enactment of ordinances exercising the police power of the municipality. The Court rejected Hook’s argument; the County did not “adopt” the statute but merely made a finding that resulted in activation of the Board created by state statute.

Carey v. Mason County, 173 Wn.2d 697 (2012) – Invalidity of assessment. Carlisle v. Columbia Irrigation Dist., 168 Wn.2d 555 (2010) – Annexation and LID formation as inverse

condemnation. Storedahl Props., LLC v. Clark County, 143 Wn. App. 489 (2008) – Clean water fee as a regulatory fee

versus tax. Palermo at Lakeland, LLC v. City of Bonney Lake, 147 Wn. App. 64 (2008) – Connection charge as a tax. Parrell-Sisters MHC, LLC v. Spokane County, 147 Wn.App. 356 (2008) – Sewer capital facilities charges

applied to mobile home parks. Cary v. Mason County, 152 Wn.App. 959 (2009) – Per acre water quality assessment. C. Excise Taxes

State, Dept. of Revenue v. Nord Northwest Corp, 164 Wn.App. 215 (2011)

Facts: On February 8, 1999, Nord entered into a purchase and sale agreement for a Stanwood property owned by Baron Development Group. On April 29, 1999, Nord entered into a purchase and sale agreement with Western Resource Group to purchase a Bellingham property. Both properties were acquired for development of condominium projects. To facilitate development, two LLCs were formed with other investors. Nord was to be the general contractor and receive a fee of 10% of the construction cost from the sale of units. Nord treated itself as a speculative builder under WAC 458-20-170 even though the LLCs held legal title to the real property. As a result, Nord paid no retailing business and occupation tax and neither charged nor collected retail sales tax on the construction services it rendered to the LLCs.


1-90

Following an audit by the Dept. of Revenue, the projects were characterized as “retail construction” and sales and excise taxes were assessed. Nord appealed and the Board of Tax Appeals ruled in favor of Nord. DOR appealed to the Thurston County Superior Court, which reversed the Board and imposed the tax. Nord appealed.

Holding: The Court affirmed the reversal of the Board’s decision. The distinction between a prime contractor and a speculative builder turns on whether the person performing the construction owns the real property on which the construction is performed. No dispute existed that the LLCs, not Nord, held legal title to the real property on which the condominiums were built. Nord contended that it held the “attributes of ownership” set forth in WAC 458-20-170(2)(a):

As used herein the term "speculative builder" means one who constructs buildings for sale or rental upon real estate owned by him. The attributes of ownership of real estate for purposes of this rule include but are not limited to the following: (i) The intentions of the parties in the transaction under which the land was acquired; (ii) the person who paid for the land; (iii) the person who paid for improvements to the land; (iv) the manner in which all parties, including financiers, dealt with the land. The terms "sells" or "contracts to sell" include any agreement whereby an immediate right to possession or title to the property vests in the purchaser.

The Board found, that Nord qualified as a speculative builder because it satisfied the “attributes of ownership” rather than focusing on the actual ownership of the property. The Board erred when it interpreted and applied the attributes of ownership in the face of overwhelming undisputed evidence of who owned the real property--the LLCs. The attributes of ownership factors listed in WAC 458-20-170(2)(a) were relevant only when necessary to distinguish actual ownership from a mortgage or similar security interest.

Homestreet, Inc. v. Dep't of Revenue, 166 Wn.2d 444 (2009) – Taxation of mortgage servicing fees.


1-91

STATUTORY UPDATE The 2013 Regular Session of the State Legislature ended on April 28, 2013. The session failed to produce a budget and a special session that started on May 13, 2013. The regular session was dominated by the budget and that emphasis is expected to continue into the special session. There were, however, numerous measures enacted that potentially affect real estate transactions, development and ownership. Below is a brief summary of the legislation signed by the Governor as of May 15, 2012. Unless otherwise noted, all measures are effective July 28, 2013. The exact language of the bill should be consulted to determine the effect of the legislation.

Laws of 2013, ch. 13 (SB 5541): Redemption Rights. Redemption rights under RCW 6.23.010 are granted to all junior lien holders. Amendment reverses the outcome in Summerhill Village Homeowners’ Association v. Roughley, 166 Wn.App. 625 (2012).

Laws of 2013, ch. 16 (SHB 1074): Plat Approvals. The time provisions in Chpt. 58.17 RCW for submitting and approval of final plats and governing lots in final plats are modified. Generally, the time period for approval is extended from nine to ten years from preliminary plat approval and lots within approved plats are deemed valid uses for ten (rather than nine) years after plat approval notwithstanding subsequent zoning changes.

Laws of 2013, ch. 28 (SB 5186): Contractor Bonds. The provisions of RCW 39.08.030 are amended to allow water districts to require that contractor bonds be payable to the district rather than the state.

Laws of 2013, ch. 29 (SB 5207): Consumer Loan Act. The CLA, Chpt. 31.04 RCW is amended. Persons designated as borrowers under the CLA include those who consult with licensees concerning residential loan modifications and charges must be refunded if a loan is made by a person who was required to be licensed under the CLA but failed to do so.

Laws of 2013, ch. 30 (SSB 5210): Mortgage Brokers. Various provisions in Ch. 19.146 RCW, which regulates mortgage brokers, are amended, including the provisions relating to the exemption granted attorneys from registration, record keeping and the time period for suit on the bond posted by the broker.

Laws of 2013, ch. 35 (ESHB 1647): Landlord Tenant – Keys. RCW 59.18.160 is amended to require that landlords maintain and safeguard master keys and any duplicate fees to a dwelling unit.

Laws of 2013, ch. 53 (SB 5558): Housing Commission. The powers of the Commission stated in RCW 43.180.050 are amended to include the power to make loans for down payment assistance in furtherance of other Commission programs.

Laws of 2013, ch. 54 (SSB 5568): Tenant Screening. The provisions of RCW 59.18.580 are amended to prohibit tenant screening services from disclosing the tenant’s status as a victim or domestic violence, sexual assault or stalking or from disclosing that the tenant previously


1-92

terminated a tenancy as a result of these crimes.

Laws of 2013, ch. 58 (SSB 5352): Real Estate Brokers. Various provisions of the Real Estate Agency Act, Chpt. 18.86 RCW, are amended to conform definitions set forth in the Act. The duties of imposed by the statute are statutory duties and supersede all common law duties, including any fiduciary duties.

Laws of 2013, ch. 64 (SHB 1034): Escrow Agent Registration Act. Various provisions of the Escrow Agent Registration Act (Chpt. 18.44 RCW) and the Consumer Loan Act (Chpt. 31.04 RCW) are amended to (i) change the definition of "escrow" to the collection and processing of payments and the performance of related services by a third party on seller-financed loans secured by a lien on real or personal property but excludes vessel transfers; (ii) exempt persons licensed under the EARA from regulation under the CLA; (iii) provide the director of DFI greater authority to protect consumers; and (iv) increase the fidelity bond requirement applicable to escrow agents to $1 million.

Laws of 2013, ch. 65(HB 1035): Title Insurance Premiums. A statistical agent is appointed to gather information to assist in the setting of title insurance rates. The cost of the agent is to be paid by the title insurance industry.

Laws of 2013, ch. 70 (HB 1146): Water Rights Examiners. The bonding requirements applicable to water rights examiners under RCW 90.03.665 are amended to eliminate specific bond amounts and substitute the requirement that evidence of insurance or financial responsibility be provided.

Laws of 2013, ch. 90 (SHB 1012): Appraisal Management Companies. The bonding requirements for appraisal management companies established in RCW 18.310.040 are increased from $25,000 to $100,000. The director is authorized to accept cash or other security in lieu of a bond.

Laws of 2013, ch. 108 (SHB 1370): Homeowner Association Meetings. Provisions in RCW 64.38.035 relating to notice of meetings are modified to allow electronic notices with the consent of the member.

Laws of 2013, ch. 114 (SHB 1435): Deed of Trust Reconveyances. RCW 61.24.110 is amended to provide an alternative procedure for obtaining a reconveyance of a deed of trust if the trustee fails to record the reconveyance within 60-days following payment in full.

Laws of 2013, ch. 115 (SHB 1115): UCC. Various amendments to the UCC are made, including the provisions of RCW 62A.9A-502 and 503 relating to the identification of the debtor in a mortgage that is also intended to act as a financing statement.

Laws of 2013, ch. 117 (HB 1036): Service Contracts. A new section is added to Chpt. 48.110 RCW allowing service contracts to cover residential water, sewer or similar systems and sharing revenues with local governments.


1-93

Laws of 2013, ch. 120 (HB 1277): Conservation Easements. The provisions of RCW 64.04.130 are amended to allow federally recognized tribes to acquire and hold a conservation easement or similar future interests in land.

Laws of 2013, ch. 177 (2SHB 1416): Irrigation Districts. Various amendments are made to the statutes governing irrigation districts authorizing LIDs to be comprised of noncontiguous property, removing provisions allowing farm and agricultural land to be exempt from special benefit assessments, defining LID bonds as not part of the general indebtedness of the district and prohibiting indemnification of the United States for damages caused by the federal government without express authorization in state law.

Laws of 2013, ch. 198 (EHB 1493): Mobile Home Property Tax. Mobile home park owners are allowed to petition for the removal of tax liens from abandoned mobile homes if the assessed valuation of the mobile home is less than $8,000.00.

Laws of 2013, ch. 207 (SHB 1853): Real Estate Brokers. Licensed real estate brokers,managing brokers, and designated brokers are exempted from overtime requirementsunlessabrokerisdesignatedasanemployeeinhisorhercontractwitharealestatefirm. Laws of 2013, ch. 221 (EHB 1421): Disposition of Proceeds from Tax Sales. Various statutes are amended to provide that proceeds from the sale of property acquired by a county at a property tax foreclosure sale to be first applied to reimburse the county and then pay the amount of deferred property taxes owned the state. Laws of 2013, ch. 228 (ESSB 5082): Exchange Facilitators. The regulations of exchange facilitators in Chpt. 19.310 RCW is amended to require certain notices to be given by the facilitator, funds to be deposited into identifiable separate accounts and “dishonesty” is further defined. Laws of 2013, ch. 235 (ESB 5444): Leasehold Property Taxes. The requirement for the assessor to determine the value of all publicly owned property is eliminated and leasehold excise tax credits are eliminated for certain leasehold interests where the credit exceeds the applicable property tax if the property were privately owned. Laws of 2013, ch. 236 (SB 5593): Property Tax Exemptions. Landowners applying for property tax exemption under RCW 84.36.255 relating to improvements that benefit fish and wildlife habitat must file a claim for exemption by October 31st and each subsequent filing year, the claim must contain certain certifications. Laws of 2013, ch. 243 (ESHB 1717): Fees for Environmental Planning. Various statutes are amended to allow local governments to recover reasonable expenses incurred in the preparation of nonproject environmental impact statements certain activities that are categorically exempt from requirements of SEPA.


1-94

Laws of 2013, ch. 240 (SB 5806): Timber Property Tax Credit. The property tax credit for taxes paid on privately owned timber standing on public lands as stated in RCW 84.33.077 is repealed. Laws of 2013, ch. 269 (SB 5113): HOA Enforcement of Speed Limits. RCW 46.61.419 is amended to allow condominium and apartment associations to enforce to enforce speed limits.

Laws of 2013, ch. 275 (SSB 5399): Growth Management Act Penalties. The ability of state agencies and other governing boards to penalize jurisdictions for non-compliance with GMA requirements is restricted and certain financial assistance for projects required under GMA is provided. Laws of 2013, ch. 333 (SB 5417): Annexation Procedures. The “Annexation of Unincorporated Islands” method of annexation is restricted in use for code cities to areas less than 175 acres or areas where at least 80% of the area’s boundaries are contiguous with the city.


1-95

TABLE OF CASES

A

Ahtenv.Barnes,158Wn.App.343(2010),61Albicev.PremierMortgageServicesofWashington,

174Wn.2d560(2012),15AngeloPropertyv.Hafiz,167Wn.App.789(2012),20ApplewoodEstatesHomeowners’Ass’nv.Cityof

Richland,166Wn.App.161(2012),67

B

Bainv.MetropolitanMortgageGroup,175Wn.2d83(2012),15

Baldwinv.Silver,165Wn.App.463(2011),38BankofAmericav.Owens,173Wn.2d40(2011),30BayfieldRes.Co.,v.W.Wash.GrowthMgmtHearings

Bd.,158Wn.App866(2010),82BDLawsonPartnersv.HearingsBd.,165Wn.App.

677(2011),76Birdv.BestPlumbing,161Wn.App.510(2011),59Birnbaumv.PierceCounty,167Wn.App.728(2012),

64BlueDiamondGroup,Inc.v.KBSeattle1,Inc.,163

Wn.App.449(2011),32BoeingEmployeeCreditUnionv.Burns,167Wn.App.

265(2012),16BrinnonGroupv.JeffersonCounty,159Wn.App.446

(2011),81Brothertonv.JeffersonCounty,160Wn.App.699

(2011),72BroughtonLumberv.BNSFRy.Co.,174Wn.2d619

(2012),42BusinessServs.ofAm.v.WaferTech,LLC,159

Wn.App.591(2011),33

C

Casterlinev.Roberts,168Wn.App.376(2012),31Catsiffv.McCarty,167Wn.App.698(2012),65CertainUnderwritersatLloyds’Londonv.Travelers

PropertyCas.Co.ofAmerica,161Wn.App.265(2011),39

ChicagoTitleInsurancev.OfficeoftheIns.Commissioner,166Wn.App.844(2012),11

CityofFederalWayv.TownandCountryRealEstate,161Wn.App.17(2011),72

CityofPuyallupv.Hogan,168Wn.App.406(2012),47

CityofSeattlev.Sisley,164Wn.App.261(2011),68CityofTacomav.CityofBonneyLake,173Wn.2d584

(2012),91

ClallamCountyV.DryCreekCoalition,161Wn.App.366(2011),79

ClarkCountyv.WesternWash.GrowthMgmtHearingsBd.,161Wn.App.204(2011),79

ColumbiaCommunityBankv.NewmanPark,LLC,166Wn.App.634(2012),14

ColumbiaParkGolfCourse,Inc.v.CityofKennewick,160Wn.App.66(2011),26

Cradduckv.YakimaCounty,166Wn.App.435(2012),65

Creganv.FourthMemorialChurch,175Wn.2d279(2012),35

CrystalLotusEnterprisesv.CityofShoreline,167Wn.App.501(2012),44

Cummingsv.BudgetTankRemoval&EnvironmentalServices,LLC,163,Wn.App.379(2011),58

D

DavidsonSerles&Associatesv.Cent.PugetSoundHearingsBd.,159Wn.App.148(2010),82

DavidsonSerlesv.CityofKirkland,159Wn.App.616(2011),81

Dep’tofEcologyv.TigerOilCorp.,166Wn.App.720(2012),85

Dept. of Ecology v. City of Spokane Valley, 167 Wn.App. 952 (2012),64

Donatelliv.D.R.StrongConsultingEngineers,Inc.,163Wn.App.436(2011),57

DutchVillageMallvs.Pelletti,162Wn.App.531(2011),26

E

ElconConstructionv.EasternWashingtonUniversity,174Wn.2d157(2012),53

F

Fergusonv.CityofDayton,168Wn.App.591(2012),63

Fishburnv.PierceCountyPlanningandLandServicesDept.,161Wn.App.452(2011),71

FiveCornersFamilyv.State,173Wn.2d296(2011),88

G

Geonercov.GrandRidgePropertiesIV,159Wn.App.536(2011),10

Gormanv.CityofWoodinville,175Wn.2d68(2012),48


1-96

GreenbankBeachandBoatClub,Inc.v.Bunney,168Wn.App.517(2012),28

Greyv.Leach,158Wn.App.837(2010),87

H

Hanksv.Grace,167Wn.App.542(2012),6HansonIndus.v.Kutschkau,158Wn.App.278

(2010),89HarleyH.Hoppe&Associates,v.KingCounty,162

Wn.App.40(2011),90HarmonyatMadronaParkOwnersAssn.v.Madison

HarmonyDevelopment,Inc.,160Wn.App.728(2011),59

Hawkinsv.Diel,166Wn.App.1(2011),22Herrinv.O’Hern,168Wn.App.305(2012),50Hickethierv.Dept.ofLicensing,159Wn.App.203

(2011),7Hookv.LincolnCountyNoxiousWeedControlBd.,166

Wn.App.145(2012),92HousingAuthorityoftheCityofSeattlev.Bin,163

Wn.App.367(2011),25Hulbertv.PortofEverett,159Wn.App.389(2011),

86Hymas v. UAP Distribution,Inc.,167Wn.App.136

(2012),35

I

Imriev.Kelly,160Wn.App.1(2010),51InreTrustee’sSaleofRealPropertyofBrown,161

Wn.App.412(2011),17IntheEstateofEarls,164Wn.App.447(2011),23IndigoRealEstateServicesv.Wadsworth,169

Wn.App.412(2012),18IrondaleCommunityActionNeighborsv.Western

WashingtonGrowthManagementHearingsBd.,163Wn.App.513(2011),77

J

Jackowskiv.Borchelt,174Wn.2d720(2012),8Jacksonv.CityofSeattle,158Wn.App.647(2010),60Jonesv.TownofHuntsPoint,166Wn.App.452

(2012),28Jongewardv.BNSFRy.Co.,174Wn.2d586(2012),43Julianv.CityofVancouver,161Wn.App.614(2011),

70

K

Karlbergv.Otten,167Wn.App.522(2012),50Kielyv.Graves,173Wn.2d926(2012),49

KitsapAllianceofPropertyOwnersv.CentralPugetSoundGrowthManagementHearingsBd.,160Wn.App.250(2011),80

Kofmehlv.BaselineLake,LLC,167Wn.App.677(2012),10

KSTacomaHoldings,LLCv.ShorelinesHearingBd.,166Wn.App.117(2012),67

L

LakeChelanShoresHomeownersAss’nv.St.PaulFire&MarineIns.Co.,167Wn.App.28(2012),37

Lanev.SkamaniaCounty,164Wn.App.590(2011),52

Lauerv.PierceCounty,173Wn.2d242(2011),62Lauerv.PierceCounty,173Wn.2d242(2012),29Lordv.PierceCounty,166Wn.App.812(2012),44

M

MarkBrotherton,etuxv.KralmanSteelStructuresInc.,165Wn.App.727(2011),55

Marshallv.ThurstonCounty,165Wn.App.346(2011),45

Mavisv.KingCountyHosp.Dist.No.2,159Wn.App.639(2011),37

McClammyv.Cole,158Wn.App.769(2010),40McCoyv.KentNursery,Inc.,163Wn.App.744(2011),

45McMilianv.KingCounty,161Wn.App.581(2011),70MHM&F,LLCv.Pryor,168Wn.App.451(2012),19

N

NewportYachtBasinAss’nofCondo.Ownersv.SupremeN.W.,Inc.,168Wn.App.56(2012),4

NewportYachtBasinAss’nofCondo.Ownersv.SupremeN.W.,Inc.,168Wn.App.86(2012),9

Nickellv.SouthviewHomeownersAss’n,167Wn.App.42(2012),51

O

OlympicStewardshipFound.v.W.Wash.GrowthMgmt.HearingsBd.,166Wn.App.172(2012),76

OlympicStewardshipFoundationVWesternWaGrowthMgtHearingsBd.,163Wn.App.12(2011),78

P

Piercev.YakimaCounty,161Wn.App.791(2011),69


1-97

Popev.DouglasCountyPUD,158Wn.App.23(2010),46

Prof’lRealEstatev.Young,163Wn.App.800(2011),6

R

Realm,Inc.,v.CityofOlympia,168Wn.App.1(2012),54

RecreationalEquipment,Inc.v.WorldWrappsNW,165Wn.App.553(2011),23

River House Dev., Inc. v. Integrus Architecture, PS, 167 Wn.App. 221 (2012),55

Roatsv.BlakelyIslandMaintenanceCom’n,169Wn.App.243(2012),34

Rosemav.CityofSeattle,166Wn.App.293(2012),66Ruvalcabav.KwangHoBaek,175Wn.2d1(2012),

46

S

SeashoreVillaAss’nv.HugglundFamilyLtd.Partnership,163Wn.App.531(2011),24

Shoulbergv.PublicUtilityDist.No.1ofJeffersonCounty,169Wn.App.491(2012),91

Silverhawk,LLCv.Keybank,NA,165Wn.App.258(2011),17

SkagitCountyv.SkagitHillRecycling,162Wn.App.308(2011),86

Smithv.Stockdale,166Wn.App.557(2012),36Speelmanv.Bellingham/WhatcomCountyHous.

Auths.,167Wn.App.624(2012),21SpokaneCountyv.EasternWashingtonGrowth

ManagementHearingsBd.,160Wn.App.274(2011),80

SpokaneCountyv.Miotke,158Wn.App.62(2010),83

SpradlinRockProductsv.P.U.D.No.1ofGraysHarborCounty,164Wn.App.641(2011),56

Spraguev.Safeco,158Wn.App.336(2010),40Stafnev.SnohomishCounty,174Wn.2d24(2012),

74

State,Dept.ofRevenuev.NordNorthwestCorp,164Wn.App.215(2011),92

StevensCountyv.HearingsBd.,163Wn.App.680(2011),77

SummerhillVillageHomeowners’Assn.v.Roughley,166Wn.App.625(2012),13

T

ThurstonCountyv.WWGMHB,158Wn.App.263(2010),83

Townsendv.QuadrantCorp.,173Wn.2d451(2012),8

TrinityUniversalIns.Co.ofKan.v.Cook,168Wn.App.431(2012),20

U

UnigardIns.Co.v.MutualofEnumclawIns.Co.,160Wn.App.912(2011),39

V

VerbeekProps.v.GreencoEnvtl.,Inc.,159Wn.App.82(2010),60

VisionOneLlcVRsui,158Wn.App.91(2010),41Vogelv.CityofRichland,161Wn.App.770(2011),69

Y

YakimaCountyv.E.Wash.GrowthMgmt.HearingsBd,168Wn.App.680(2012),74,75

Z

ZervasGroupArchitectsV.WhidbeyIslandBank,161Wn.App.322(2011),32

Documents

Real Estate Case Law and Legislative Update ESTATE CASE LAW AND LEGISLATIVE UPDATE ... Construction Contracts/Disputes ... The case law in this summary is organized under topical references