Michael B. Gillett, Seattle Attorney at Law

Case Notes from the Washington Supreme Court

The U.S. Supreme Court decides cases where federal environmental laws and constitutional property rights are concerned. Click here for recent and pending decisions of the U.S. Supreme Court.

The Washington Supreme Court is the highest court in the State of Washington. It frequently decides cases involving important land use and real estate issues. The Court is composed of nine elected justices.

Recent Decisions

Land use, appeals - Trial court denial of permit previously granted by hearing examiner terminates time limits in the permit unless the permit is reinstated on appeal. In June 2005, a Chelan County hearing examiner approved a conditional use permit application that required, among other things, that the developers obtain all necessary approvals within two years. In May 2006, in a LUPA appeal, the trial court reversed the hearing examiner's decision and revoked the permit. The developers timely appealed but did not seek a stay of either the trial court's decision or the permit's time limit. After the two-year time period lapsed, the court of appeals held that the appeal was moot and dismissed the appeal without reaching the merits. A unanimous Supreme Court reversed. The Court held that the effect of the trial court's decision was to terminate the permit; therefore, the developers had no right to proceed with project. "The developers were not required to stay the two-year time limit because the time limit, along with the permit itself, effectively stopped existing the moment the superior court denied the permit. No rights legally existed that could be affected by a stay." The Court stated that if the developers are successful on review on the merits, the effect will be to reinstate the hearing examiner's decision. Kelly v. County of Chelan (Jan. 7, 2010).

Land use - Petitioners may challenge portions of updated comprehensive plans affected by GMA amendments adopted after the prior plan's adoption; hearings board may not apply bright-line rule when differentiating between urban and rural densities. In 1997, Whatcom County adopted its comprehensive plan under the Growth Management Act (GMA), which included policies and descriptors for designating areas of more intense development in its rural areas. Two months later, the GMA was amended to allow limited areas of more intensive rural development (LAMIRDs) to be included in a plan's rural element, and to provide specific statutory criteria for establishing appropriate areas of more intensive rural development. In 2005, Whatcom County adopted amendments to its comprehensive plan. The County did not consider it necessary to modify its pre-LAMIRD policies and descriptors for designating areas of more intense development in its rural areas; therefore, it did not adopt any revisions to its comprehensive plan or development regulations with respect to the 1997 LAMIRD amendments. The updated plan and development regulations were challenged before the Western Washington Growth Management Hearings Board, which determined that the County failed to comply with the GMA by adopting a policy allowing rural areas of more intensive development without applying the LAMIRD amendments strict critera for such areas. The Board also determned that, except for LAMIRDs, residential densities of greater than one dwelling unit per five acreas are not rural densities. The superior court reversed the Board, and the court of appeals reversed the superior court. A unanimous Supreme Court affirmed in part and reversed in part. The Court held that the petitioner could challenge the County's failure to conform the updated plan to the LAMIRD amendments to the GMA, which were adopted after Whatcom County adopted its initial comprehensive plan. The Court specifically rejected the argument that the doctrines of res judicata or collateral estoppel precluded the present challenge to compliance with the LAMIRD amendments: "Because [the earlier litigation] preceded the County's seven-year review, it did not (and could not) involve the same subject matter and issues as the present case." The Court reversed the court of appeals on the question of rural densities, holding that the Board had applied a bright-line rule when differentiating between urban and rural densities, which it may not do. Gold Star Resorts, Inc. v. Futurewise (Dec. 17, 2009).

Building code violations - Penalty enforcement not subject to LUPA review where local ordinance does not provide for administrative appeal of multiple daily penalties assessed after first penalty; due process violated. Post owned several properties in the City of Tacoma that the City found to be in violation of the Minimum Building and Structures Code. The City assessed civil penalties with respect to 24 of Post's properties that the City found were repeatedly in violation of the building code. Fines were imposed for each day of violation. Total accumulated penalties ranged from $4,000 to $84,000 per property. The Code provided for an administrative appeal of an initial penalty, but not for subseqent daily fines. Post brought an action in superior court asking for declaratory and injunctive relief on his claim that the fines were unconstitutional. The court dismissed on summary judgment, holding, among other things, that Post had failed to exhaust his administrative remedies under LUPA because he had not brought a LUPA petition within 21 days of a final land use decision and that the fines did not violate Post's due process rights. The court of appeals affirmed the superior court based on the LUPA issue. The Supreme Court reversed, holding that because Tacoma did not have any provisions for administrative review of multiple daily fines, other than the first fine, it did not have a comprehensive system of enforcing civil infractions, and therefore the district and municipal courts have jurisdiction over such infractions under RCW 7.80.010. Thus, the Court concluded, LUPA does not apply because there is no LUPA jurisdiction when a local jurisdiction is required by law to enforce an ordinance in a court of limited jurisdiction. The Court also held that the building code violated Post's due process rights because it provides no opportunity for a civil defendant to appeal any but the first of a series of related penalties. Post v. City of Tacoma (Oct. 15, 2009).

Land use - Development rights do not vest upon filing of a site plan application where the developer has not yet filed a complete building permit application. On September 13, 2005, Abbey Road Group, LLC submitted a site plan application to the City of Bonney Lake. Later that day, the City adopted an ordinance rezoning the subject property to a category that prohibited Abbey Road's contemplated project. Thereafter, the City notified Abbey Road that its project had not vested under the prior ordinance because Abbey Road had not filed a building permit application, and that its site plan application was denied under the new ordinance. Abbey Road had not filed a building permit application because it understood the building permit application form to require the inclusion of copies of an approved site plan. The City maintained that Abbey Road could have submitted a building permit application concurrently with a site plan application. Abbey Road appealed the denial of its site plan application to the City hearing examiner, arguing that the filing of the application vested its development rights under the old ordinance. The hearing examiner upheld the City's decision, agreeing with the City that an applicant must file a building permit application for its rights to vest. Abbey Road then filed a LUPA petition with the superior court, which reversed the hearing examiner's decision and held that Abbey Road's development rights vested when it filed the site plan application. The court of appeals reversed the superior court and affirmed the hearing examiner. The Supreme Court accepted review and affirmed the decision of the court of appeals. The Court relied primarily on its 1994 decision in Erickson & Assocs. v. McLerran, holding that under RCW 19.27.095(1) (the 1987 statute codifying the vested rights doctrine), rights vest only upon the filing of a complete building permit application. But Abbey Road also agued that the City violated its due process rights by requiring that the building permit application include copes of an approved site plan, thus impermissibly frustrating Abbey Road's ability to vest its rights at the time of its choosing. Abbey Road relied on the 1986 decision in West Main Assocs. v. City of Bellevue, where the Court held that the City of Bellevue could not prohibit the filing of a building permit application until after the applicant first completed a number of preliminary steps. A majority of five justices rejected Abbey Road's argument because the City argued that it did not prohibit Abbey Road from filing a building permit application concurrently with a site plan application; however, two members of the majority were skeptical of the City's position, and only voted with the majority because Abbey Road had not attempted to apply for the permits concurrently and thus could not show that the City would not accept the building permit application without copies of an approved site plan. Four dissenters would have applied the West Main rule to this case. The alignment of the justices on this issue suggests that due process concerns regarding the application of the vested rights doctrine remain a fertile area for litigation in the future, but that applicants who feel their due process rights have been violated will need to show that their ability to vest by filing a building permit application actually was frustrated by the permitting authority, and not rely upon an argument that filing the application would have been futile. Abbey Road, LLC v. City of Bonney Lake (Oct. 8, 2009).

Petition for private way of necessity - Original condemnee is not liable for alternate condemnee's attorneys fees if alternate condemnee was named by condemnor; but fee award to original condemnee may be reduced to account for actions that increase the cost of litigation. Fred and Faith Noble commenced a condemnation action for a private way of necessity against Safe Harbor Family Preservation Trust under RCW 8.24.030. Safe Harbor filed an answer which included the statutory defense that there is a feasible alternative route available to the Nobles. Safe Harbor did not specify the alleged feasible alternative route; however, the Nobles amended their petition to join Tillicum Beach, Inc. as an alternate condemnee. The trial court concluded that the least burdensome route was across Safe Harbor's property and granted a way of necessity to the Nobles. The trial court also ordered Safe Harbor to pay Tillicum Beach's attorneys fees under the statutory provision allowing a court to award reasonable attorneys fees to a condemnee, and reduced the fees awarded to Safe Harbor from the Nobles. The court of appeals affirmed. The Supreme Court reversed in part and affirmed in part. First, the Court held that where the alternative condemnee is brought into the litigation by the condemnor (as opposed to being brought in on a third-party claim by the original condemnee), the trial court lacks discretion to require the original condemnee to pay the alternate condemnee's fees, though it may require fees to be paid by the condemnor. Second, the Court held that the trial court acted within its discretion in reducing the fee award to Safe Harbor in consideration of Safe Harbor's actions in the case which the court concluded increased the cost of litigation. Noble v. Safe Harbor Family Preservation Trust (Sept. 24, 2009).

Land use, religious activities - A city may not refuse to accept and process a church's permit application to engage in a practice important or central to the church's exercise of its religious belief. In April 2006, the organizers of Tent City 4 asked the Northshore United Church of Christ, which is located in the R-1 zone, to host the encampment beginning the following month because its planned summer host had withdrawn. The Church submitted to the City a temporary use permit application, but the City declined to accept the application because of the moratorium. Concerned that the Church would host Tent City 4 even without a permit, the City sought a temporary restraining order. The superior court did not expressly rule on the City's TRO request, but sua sponte issued a TRO allowing the Church to host Tent City 4 on its property pending a full hearing. A hearing on the preliminary injunction was consolidated with trial on the merits (before a different judge), and the superior court issued a permanent injunction against the use of Church property for Tent City 4 without the necessary permit, and the court of appeals affirmed. The Supreme Court reversed, holding that under article I, section 11 of the Washington Constitution, the City could not apply a moratorium to refuse to consider a permit request from the church. The Washington Constitution guarantees "[a]bsolute freedome of conscience in all matters of religious sentiment, belief and worship" but does not preclude regulation of "practices inconsistent with the peace and safety of the state." This clause is more protective than the corresponding protections under the federal constitution. The Court held that a party challenging a governmental action under article I, section 11 must show that the religious belief is sincere and that the government action burdens the exercise of religion. If this burden is met, the government must then show that it has a narrow means for achieving a compelling goal. In this case, there was no dispute as to the sincerity of the belief, nor was there evidence that the government sought to achieve a compelling goal. Therefore, the only issue was whether the City's actions substantially burdened the free exercise of the church's religious sentiment, belief or worship. The Court held that refusal to process a permit, even where a moratorium was in effect, constituted such a substantial burden. Although the City may be entitled to condition a permit in order to address concerns for such things as safety, noise and crime, it could not absolutely deny consideration of permitting. City of Woodinville v. Northshore United Church of Christ (July 16, 2009).

Title insurance - Although title search might reveal easement granted as part of prior subdivision, if the easement did not affect the insured property coverage is excluded. In 1995, Frank and Rita Vickery legally subdivided a parcel of land located on Deer Lake in Stevens County into three lots, designated as lots A, B, and C. In 1996, the Vickerys granted a pedestrian easement benefiting lot C and burdening lot B to enable lot C to have access to a dock on Deer Lake. In 2001, the Campbells purchased lot A, obtaining title insurance from Ticor. In 2002, a survey showed that the easement through lot B ran through a house on the lot, and therefore was unusable. Thereafter, Jerry Edwards purchased lot C, thinking there was a pedestrian easement to the lake. When he learned otherwise, he brought a lawsuit against a number of individuals, including the Campbells, seeking reformation of deeds to redraw the easement across the Campbell's lot A. The Campbells tendered defense of the suit to Ticor. Ticor denied coverage and refused to defend, asserting that two policy exclusions applied, one excluding encumbrances not revealed by public records, and the other excluding encumbrances attaching or created after issuance of the policy. The trial court granted Ticor's motion for summary judgment, which the court of appeals affirmed. A unanimous Supreme Court affirmed. With respect to the first asserted exclusion, the Court agreed with the Campbells that it is reasonable to expect that the title search would include a review of the subdivision records, which would have turned up the easement, but held that the exclusion applies because the easement never affected lot A. The Court held that the second asserted exclusion applies as well because if Edward's reformation claim is successful it will be because of what the later-conducted survey revealed, not because of anything revealed in the public record at the time the policy was issued. Campbell v. Ticor Title Ins. Co. (June 18, 2009).

Permitting - Where a code includes more than one method of satisfying a provision, a provision that an applicant must meet "all requirements" of the code does not require compliance with the first or most restrictive method, but may be satisfied by meeting any of the alternative methods. Jeff Griffin submitted an on-site sewage system (OSS) application for a small lot to the Thurston County Board of Health, addressing six components applicable to the location of an OSS. A health officer approved the permit, but, on appeal brought by Griffin's neighbors, a hearing examiner reversed the health officer and denied the permit. The Board affirmed the hearing examiner, concluding that a small-lot applicant could did not meet "all requirements" of the Code, as required for a small-lot OSS, if the applicant used waivers, setback adjustments or other modifications of the rules. The superior court reversed, and was itself reversed by the court of appeals. The Supreme Court held that where the Code explicitly provides more than one method of satisfying a provision, the scope of the term "all requirements" is not limited to the first or most restrictive method. For example, where the Code provides for a 10-foot setback from a building foundation, but allows a health officer to grant a 2-foot setback if the foundation is upgradient of the OSS, the requirement is met by achieving either the 10-foot setback or obtaining the health officer's approval for a lesser setback. However, the Court affirmed the court of appeals because it determined that Griffin failed to meet one of the six components. Griffin v. Thurston County (Nov. 20, 2008).

Energy facility siting - Governor's decision to preempt county land use regulations in approving site certification for location of wind turbine project was proper. In January 2003, Horizon Wind Energy, LLC applied to the state Energy Facility Site Evaluation Council (EFSEC) for site certification of the Kittitas Valley Wind Power Project, a proposal to construct up to 121 wind turbine generators along Highway 97, halfway between Ellensburg and Cle Elum. In May 2003, EFSEC determined that Horizon's application was not consistent with a recently-enacted Kittitas County ordinance requiring a county-approved permit for any wind farm location. Over the next three years, Horizon and the County engaged in efforts to permit the facility on terms acceptable to the County. Ultimately, these efforts were unsuccessful, with the main point of difference being the setback requirements of the turbines from non-participating parties. After the County formally denied Horizon's permit application, in June 2006, Horizon requested of EFSEC that the State preempt Kittitas County under RCW 80.50.110(2), which provides that "[t]he state hereby preempts the regulation and certification of the location, construction, and operational conditions of certification of the energy facilities under RCW 80.50.060 as now or hereafter amended." Under EFSEC regulations, Horizon's request for preemption was required to address four issues: (1) that Horizon demonstrated a good faith effort to resolve the issues; (2) that Horizon and the County are unable to reach an agreement resolving the issues; (3) that alternate locations within the county have been reviewed and have been found unacceptable; and (4) the interests of the state. EFSEC determined that Horizon adequately addressed these issues and voted to recommend to the governor that the site certification be approved. The governor directed EFSEC to reconsider whether additional setbacks are achieveable while allowing the project to remain economically viable. EFSEC avoided inquiry into economic viability because it is beyond the Council's statutory authority to provide environmental and ecological guidelines; however, it sent the recommendation back to the governor with a proposal for additional setback mitigation. The governor approved the site certification agreement. The County, and other project opponents filed a petition for review in Thurston County Superior Court. Under a statutory procedure unique to the energy facility siting statute, EFSEC filed a motion to certify the petitions to the Supreme Court. The project opponents opposed certification and claimed certain procedural irregularities. The superior court allowed the parties to supplement the record with declarations and depositions regarding these allegations, then determined that certification to the Supreme Court was warranted under the statute. The Supreme Court accepted review and affirmed the governor's decision. The Court rejected the project opponent's argument that the Court lacked jurisdiction because the statute's certification procedure violated the state constitution's limits on the Supreme Court's original jurisdiction. The Court held that as the matter involved the review of an administrative decision, it invoked the superior court's - and thus the Supreme Court's - appellate jurisdiction to review administrative actions; therefore, the Court held that it had jurisdiction. The Court held that the legislature lacks the authority to require the Court to accept review, but decided to exercise its discretion to accept review. The Court then turned to five areas of substantive challenge brought by the project opponents. First, the Court held that the energy siting law applied to wind energy projects because the statute expressly applies to an "energy facility that exclusively uses alternative energy resources", which resources are defined to include wind. The Court was unswayed by the fact that the definition of "energy facility" was limited to thermal power plants or facilities that use natural gas or petroleum, holding that to read the statute so narrowly would render meaningless the legislature's inclusion of wind as an alternative energy resource. Second, the Court held that the statute's preemption language either prevails over or is an exception to the Growth Management Act's requirement that state agencies comply with GMA comprehensive plans and development regulations, noting that the siting law is the more specific enactment and pre-existed the GMA. Third, the Court held that the final enviornmental impact statement for the project was not rendered inadequate merely because it did not analyze specific setback distances as a mitigation measure for visual impacts, observing that the FEIS presented the decisionmakers with a reasonably thorough discussion of the issue of visual impact. Also, the Court held that the FEIS was not rendered deficient because the mitigation measures proposed by EFSEC were not specifically discussed in the FEIS. Fourth, the Court rejected the opponents challenge that the participation of two state agencies (DNR and CTED) on EFSEC violated the appearance of fairness doctrine because one had a financial interest and the other was a party intervenor. The Court noted that the appearance of fairness doctrine is not of constitutional origin, and that because the agencies' participation on EFSEC was statutorily-mandated, EFSEC would have no authority to remove them. The Court also rejected an appearance of fairness challenge to EFSEC's chairman, whom the opponents charged was biased and prejudiced, finding that the opponents had presented no evidence in the administrative record of violations of the doctrine, although the superior court had afforded them an opportunity to supplement the record before certifying the petition to the Supreme Court. Finally, the Court held that substantial evidence existed to support EFSEC's decision to recommend preemption. Residents Opposed to Kittitas Turbines v. EFSEC (Nov. 20, 2008).

Land use, agricultural lands - A county may rely upon anecdotal evidence and evidence obtained at the request of an interested landowner. In September 2003, the Snohomish County Council amended the county comprehensive plan to add 110.5 acres north of Arlington to the Arlington Urban Growth Area, redesignating the land from Riverway Commercial Farmland and Rural Freeway Service to Urban Commercial. The Council also rezoned the land from Agricultural-10 and Rural Freeway Service to General Commercial. Among other things, the Council concluded that the land is not agricultural land of long term commercial significance, relying in part upon testimony from the former owner of a dairy farm in the area who testified that locating and expanding I-5 in the area put their dairy farm out of business, andl also relying upon an analysis presented by a consultant hired by a landowner in the area. Review was sought before the Central Puget Sound Growth Management Hearings Board, which held the County's action to be non-compliant with the GMA. The court of appeals reversed the Board, holding that the Board failed to consider evidence in the record that supported the Council's decision, and that, in light of the improperly dismissed evidence, the County's action redesignating the land was not clearly erroneous. The Supreme Court affirmed the court of appeals, adopting the court's opinion as its own. City of Arlington v. Central Puget Sound Growth Management Hearings Board (Oct. 9, 2008).

Trespass, eminent domain - In executing search warrant, government may be liable for trespass, but not taking, if police intentionally or negligently do an act not reasonably necessary to execution of the warrant and thereby damage the property. A search warrant was issued for property owned by Leo Brutsche on probable cause that Leo's adult son, James, was using the property to manufacture methamphetamine. When the police arrived at the property, James attempted to barricade himself inside a building. The police broke through a glass door to search James. Fearing that other drug users may be in buildings on the property, and might destroy evidence, the police decided to break down the doors on those structures. Leo Brutsche, who was present, offered the keys to the buildings, or to open the doors himself. The police declined, and broke down the doors. Brutsche brought an action in the superior court seeking damages and/or just compensation for taking. On summary judgment, the superior court denied Brutsche's claim, and the court of appeals affirmed. The Supreme Court affirmed. The Court held that there may be liability for trespass where it is claimed that the police, in executing a search warrant, intentionally or negligently committed an act that a reasonable person would not regard as necessary to execute the warrant and thereby damaged the property, because, under these circumstances, the police exceed the scope of their privilege to be on the land (adopting Restatement (Second) of Torts 214). In this case, however, the Court affirmed the summary judgment dismissal, holding that, on the evidence submitted, the police did not exceed the scope of their privilege. The Court also held that there is no taking requiring just compensation where property is damaged in connection with the execution of a search warrant because the warrant is executed under the government's police power, not power of eminent domain. Brutsche v. City of Kent (Oct. 2, 2008).

Unjust enrichment, improvements to real estate - Measure of recovery is entire value of the benefit received. From 1998 to 2002, Jim and Shannon Young lived on and made substantial improvements to property owned by Jim's aunt, Judith Young, at a cost to them of $501,866. Jim and Judith were not professional contractors, but the improvements were done in a workmanlike manner. The improvements were done with Judith's agreement and for her benefit, and would have cost Judith $760,382 had she employed a third-party professional contractor. The improvements increased the value of the property by $750,000 to $1,050,000. In 2003, Judith brought an action to eject Jim and Shannon from the property. Jim and Shannon counterclaimed, claiming Judith was unjustly enriched by the improvements. The superior court awarded Jim and Judith $501,866 - corresponding, it appears, with the market value of the improvements ($760,382), less a professional contractor's costs ($258,516). The court of appeals held that Jim and Shannon should have been awarded the reasonable value of the improvements ($760,382). The Supreme Court affirmed the decision of the court of appeals. The Court noted that the measure of recovery for unjust enrichment for improvements to land by a faultless claimant ranges from how much it would have cost the defendant to purchase the improvements to how much the improvement enhanced the value of the property. Within this range, the trial court has tremendous discretion to fashion a remedy. The remedy of unjust enrichment focuses on the receiver of the benefit, not the provider. Therefore, consideration generally is not given to the claimant's circumstances, at least where the claimant was not at fault. In other words, under these circumstances, the defendant must disgorge the entire value of the benefit received, as determined by either the fair market value of the services rendered or the amount the improvements enhanced the value of the property. Young v. Young (Sept. 11, 2008).

Land use, plan revisions - Challenges to preexisting provisions of a GMA plan that are retained in an update to the plan may not be challenged unless they relate to new or recently amended GMA provisions. The Growth Management Act (GMA) requires counties to review, and if needed, revise their comprehensive plans every seven years; and requires urban growth area (UGA) designations to be updated every ten years. in accordance with a statutorily-mandated schedule. Thurston County elected to conduct both updates simultaneously in 2004. The County's 2004 update was challenged before the Western Washington Growth Management Board. The petitioners broadly challenged the updated plan, including components that had not been modified from the original plan. The County argued that to allow review of all existing components violates the GMA's 60-day limitation period for appealing local GMA actions as well as state policy favoring finality in land use decisions. The Board disagreed, deciding that all provisions in a comprehensive plan are subject to review in connection with an update, even those that have not changed. The Board also decided: the County's updated UGA designations failed to comply with the GMA because they provided 38 percent more land than needed based on population projections, exceeding a bright-line "market factor" of 25 percent deemed acceptable by the Board and the County had not explicitly identified a market factor or justified the excessive land supply; and the County had failed to provide for a variety of rural densities as required under the GMA, in part because the Board applied a bright-line rule that densities greater than one unit per five acres are not rural in nature, and in part because the County had not proven that its innovative techniques for achieving a variety of rural densities would actually work. The court of appeals affirmed the Board on each of these issues, except the latter. The Supreme Court held that a petition for review of an updated plan may not challenge all aspects of the plan, but only those provisions that are directly affected by GMA provisions related to mandatory plan elements that have been adopted or substantively amended since the previous plan adoption or update. With respect to updated UGA designations, the Court held that the Board has no policy-making authority and may not adopt a bright-line rule as to the amount of land may be designated in excess of that amount strictly needed to meet projected population densities, but must determine whether the petitioner has shwon that the designation is unreasonable and clearly erroneous based on all the facts in the record. Similarly, the Court held that the Board may not adopt a bright-line rule as to what constitutes rural densities, but must consider all the the County's rural density provisions in light of relevant local circumstances. The Court also held that the Board may not require the County to demonstrate the efficacy of its innovative techniques to achieve a variety of rural densities, because that would be inconsistent with the presumption of validity of the local action, but must consider local conditions. Thurston County v. Western Washington Growth Management Hearings Board (Aug. 14, 2008).

Land use, shorelines - Critical areas within shorelines are governed exclusively by shoreline managment programs, but questions remain as to effect of existing critical area ordinances adopted under GMA until new SMPs are approved. In 2003, the Central Puget Sound Growth Management Hearings Board decided that the Growth Management Act (GMA) applied to critical areas located inside shoreline management areas. The Legislature responded immediately by adopting ESHB 1933, providing that critical areas within a shoreline management area shall be governed exclusively by the Shoreline Management Act (SMA). In 2005, the City of Anacortes (whose shoreline management plan (SMP) was last amended and approved in 2000) adopted a stand-alone critical areas ordinance (CAO) which included provisions for marine shorelines critical areas. The ordinance was challenged before the Western Washington Growth Management Board. The City argued that the Board lacked jurisdiction over the shoreline component of the ordinance because ESHB 1933 transferred protection of critical areas in shorelines to local SMPs, including, according to the City, the Anacortes SMP last amended in 2000. The petitioners, while agreeing that ESHB 1933 provides that critical areas located inside shoreline management areas shall be governed exclusively under SMPs, argued that the statute applies only to SMPs adopted or amended after its enactment. The Board decided that the provisions in the ordinance governing critical areas in the shorelines constitute an amendment to the City's SMP and must be reviewed by the Department of Ecology consistent with ESHB 1933. The superior court reversed the Board, holding that ESHB 1933 applies prospectively only - that is, after the next amendment to a jurisidiction's SMP is adopted and approved. The Supreme Court reversed the superior court and reinstated the decision of the Board. However, the effect of the Court's decision is difficult to discern. Five justices voted to reinstate the Board's decision, but only four of them joined in the opinion which applied ESHB 1933 retroactively to apply to any jurisdiction that has an approved SMP. Justice Madsen concurred in the result only (i.e., reinstatement of the Board's decision). The four dissenters would apply ESHB 1933 prospectively only. There is a significant ongoing debate as to whether the Court's decision means that existing CAOs do not apply within shorelines. It seems likely that, unless the Legislature resolves this question, the answer will await future litigation. Futurewise v. Western Washington Growth Management Hearings Board (July 31, 2008).

Option to purchase property - Optionee who misses deadline to exercise option to purchase real estate may be entitled to equitable grace period. Willis Jolly sold Gary Pardee an option to purchase dilapted property in Buckley, Washington, which Pardee occupied and extensively improved at a cost to Pardee of $20,669.58 and over 2,500 hours of labor. The contract required that the option would terminate unless Pardee notified Jolly in writing at the time Pardee makes the last option payment that he is exercising his option to purchase. On November 10, 2004, Pardee made the last option payment, and the two individuals discussed Pardee's desire to purchase the property but no written notice was provided. Jolly had failed to deposit two prior option payments which were dishonored by the bank because they were stale; however, Pardee replaced one check on December 21, 2004 and the other a couple of weeks later. On January 14, 2005, Pardee sent to Jolly a notice of intent to exercise his option. Jolly refused to sell, claiming that the option expired when Pardee failed to notify Jolly of his intent to exercise the option at the time of his last option payment. The trial court ruled that the notice of intent was contemporaneous with the last option payment because Jolly did not cash the last check until about the same time as the notice was postmarked. The court of appeals reversed, holding that the notice of intent was not contemporaneous with the last payment, whether that was the November 10, 2004 payment or the late-cashed checks in early January 2005. The Supreme Court agreed with the trial court that the last payment occured a couple of weeks after December 21, 2004 because Pardee remained obligated to make the payments even after the checks were dishonored by the bank; however, the Court affirmed the court of appeals that the notice was not provided at the same time as the last payment. The Court held that option contracts are to be strictly construed and time is of the essence. A notice provided more than a week after the last payment is not made at the same time as the last payment. However, under the unique facts of this case, the Court found that the contract was a hybrid of a lease with an option to purchase and a pure option contract, and that the equitable principles regarding forfeiture apply. The Court held that an equitable grace period might be appropriate to avoid the harshness of a forfeiture, and remanded the case to the trial court to determine whether Pardee is entitled to an equitable grace period considering the equities of the case. Pardee v. Jolly (May 8, 2008).

Land use, shorelines - In order to penalize the holder of a building permit for violations under the Shoreline Management Act, Ecology must first challenge the building permits under LUPA. Twin Bridge Marine Park owns 11 acres near the Swinomish Channel in Skagit County. In 1982, it obtained from the County two substantial development permits under the Shorelines Management Act for the development of an office and warehouse of the property. Later, it decided to convert the business to a dry-storage marina. In 2000, it obtained from the County two building permits for that purpose. The City of Anacortes appealed the County's issuance of building permits under LUPA. The Department of Ecology, though aware of the permits and the appeal, did not intervene or join in the appeal; however, wehn construction began, it issued a stop work order and ordered Twin Bridge to obtain a new substantial development permit. Twin Bridge did not stop work, and Ecology issued a $17,000 penalty. Then the county hearing examiner suspended the two building permits on the grounds that the County decided to require a new substantial development permit, in response to which Twin Bridge stopped work. Twin Bridge reached a settlement with Ecology under which the penalty was withdrawn, and a settlement of the LUPA appeal with the City of Anacortes. In 2003, the County reissued the suspended building permits. Although Twin Bridge applied for a new shoreline development permit, the County appears not to have acted on that permit application. The County notified Ecology of its actions. Ecology did not file a LUPA petition or otherwise appeal the reinstatement of the building permits. Ecology refused to recognize the County permits. It issued a new penalty of $17,000 and reinstated the previous $17,000 penalty. When Twin Bridge completed construction and opened for business, Ecology issued an additional $25,000. Twin Bridge appealed to the Shoreline Hearings Board, which upheld the penalties. The superior court reversed the Board for the reason, among others, that Ecology could not penalize projects with valid county permits without first filing a LUPA petition. The court of appeals affirmed the superior court. The Supreme Court affirmed the court of appeals, holding that Ecology must challenge valid county building permits under LUPA and it may not impose penalties based on compliance with those permits. Twin Bridge Marine Park, L.L.C. v. Dep't of Ecology (Jan. 24, 2008).

Land use - Land Use Petition Act does not grant the superior court jurisdiction to consider a challenge to a site-specific rezone's compliance with the GMA. The prospective developers of land in Kittitas County zoned forest and range (which allows 20-acre lots) obtained a rezone from the county to rural-3 (which allows 3-acre lots). Woods, an adjoining landowner, filed a LUPA challenge to the rezone in superior court, arguing, among other things, that the rezone was inconsistent with GMA because it allows urban development in a rural area. The developers argued that the superior court had no jurisdiction because Woods' challenge was to the use of the rural-3 zone throughout the county. The superior court disagreed, holding that Woods was challenging a site-specific rezone, over which it has jurisdiction. Finding that the rezone was inconsistent with the GMA, it reversed the rezone decision. The court of appeals reversed, holding that a challenge alleging that a site-specific rezone is inconsistent with the GMA is within the exclusive jurisdiction of the growth management hearings board. The Supreme Court affirmed the court of appeals, holding that "a challenge to a site-specific land use decision can be only for violations of the comprehensive plan and/or development regulations, but not violations of the GMA." The court said that if a proposed project is consistent with the applicable comprehensive plan, the only way the project could violate the GMA would be if the comprehensive plan violates the GMA; therefore, any challenge that a site-specific project does not comply with the GMA is a disguised challenge to the adequacy of the plan itself - which is within the exclusive jurisdiction of the growth management hearings boards, not the superior court. Woods v. Kittitas County (Dec. 20, 2007).

Landlord and tenant, unlawful detainer - Saturdays, Sundays, and holidays are included in computation of the time in which a tenant may comply with a notice to pay rent or vacate. RCW 59.12.030(3) requires that a tenant in default is guilty of unlawful detainer if, after receiving a notice to pay rent or vacate, the tenant remains in default for a period of three days after service of the notice (four days if the notice is served by mail). On Friday, July 3, 1998, Christensen served his tenant, Ellsworth, with a notice to pay rent or vacate. On Wednesday, July 8, 1998, Christensen filed an unlawful detainer action. In computing the wait time required under the statute, the superior court applied CR 6(a), which excludes the day of the act, event, or default, and excludes Saturdays, Sundays, and holidays. Concluding that Christensen had not waited the statutorily prescribed period before commencing the action for unlawful detainer, the court granted Ellsworth's motion to dismiss. The court of appeals affirmed. The Supreme Court reversed, holding that CR 6(a) does not apply to the computation of time under RCW 59.12.030(3). The Court held that the plain meaning of the term "day" in the statute is "a 24 hour period beginning at midnight" an includes weekends and holidays. Although the civil rules apply to unlawful detainer proceedings, the Court held that the notice is not a proceeding, but is an element of the defeinition of unlawful detainer (that is, a tenant is guilty of unlawful detainer if the tenant fails to cure a default within the applicable number of days after receiving a notice). Finally, the Court views the time period in the statute as a waiting period during which no action is required, whereas the provisions of CR 6(a) apply to the calculation of time for deadlines in which to act. Christensen v. Ellsworth (Dec. 6, 2007).

Land use, shorelines - City may not impose a moratorium on shoreline development. The City of Bainbridge Island adopted various ordinances imposing a moratorium on certain shoreline development, including the construction of piers, docks, floats, bulkheads and revetments. State law authorizes cities to adopt development moratoria as part of their zoning and growth management powers, but there is no such authority expressly authorized under the Shoreline Management Act (SMA). On a motion for summary judgment, the superior court held that the city had no authority to issue moratorium on shoreline development. The court of appeals affirmed. The Supreme Court affirmed, holding that the ordinances violated article XVII, section 1 of the state constitution which declares shorelines are owned by the state and are subject only to state regulation. Nor does local government have any implied police power under which it may prohibit development along state shorelines. Such a prohibition, said the Court, would be inconsistent with the limited powers granted local government to regulate shoreline development under the SMA. The Court also held that the Growth Management Act does not supplant the SMA with respect to the framework for shoreline development. Biggers v. City of Bainbridge Island (Oct. 11, 2007).

Land use, agricultural lands - Protection of critical fish habitat does not require enhancement to remedy past degradation. In 2003, Skagit County adopted an ordinance that contained a "no harm" standard for protection of anadromous fish habitat in agricultural areas, requiring that farmers conduct agricultural operations in a manner that does not cause harm or degradation to existing functional values, but not requiring enhancement of already degraded conditions. The Western Washington Growth Management Hearings Board (Board) upheld that "no harm" standard under the Growth Management Act (GMA), but held that certain provisions, including monitoring and adaptive management provisions were inadequate. The Swinomish Indian Tribal Community (Tribe) and the Washington Environmental Council (WEC) appealed to the superior court. The appeals were transferred to the court of appeals for direct review. In 2004, the County adopted another ordinance in an effort to address the Board's concerns about monitoring and adaptive management. The Board held that these provisions remained non-compliant with the GMA because the monitoring program did not include benchmarks needed to compare the data, and the adaptive management process was not capable of responding to harm once detected. The county petitioned for direct review by the court of appeals, which accepted direct review and consolidated the appeal with the pending appeals by the Tribe and the WEC. Thereafter, the Supreme Court took direct appeal of the consolidated appeals. The Supreme Court upheld the Board. First, it held that the "no harm" standard meets the requirements of the GMA to protect critical areas because the GMA does not impose a duty to enhance existing conditions in order to address prior lawful degradation of those conditions. Second, it held that, without benchmarks, the County's monitoring program was essentially meaningless because it is not possible to detect a harm unless there is a benchmark by which to define harm in the first place. The Court did not consider it necessary to further analyze the County's adaptive management program because, it concluded, an inadequate monitoring program itself renders any adaptive management program incapable of working properly, "as the county cannot adequately adapt its management of critical areas if it is unable to adequately detect changes to them." Finally, the Court upheld the Board's 2004 decision against certain procedural challenges, holding that the Board may consult ex parte with technical experts, and that the use of non-record material to assist in the interpretation of a technical term does not transform those materials into evidence. Swinomish Indian Tribal Community. v. Western Washington Growth Management Hearings Board (Sept. 13, 2007).

Real estate financing, trustee sale - A nonjudicial sale of real estate by a senior lienholder does not extinguish junior lienholders' right to collect on debt as an unsecured party. The Sariches encumbered their property with three deeds of trust. After they defaulted on all three, the senior lienholder, Washington Mutual Bank, foreclosed and conducted a nonjudicial sale of the property. The assignee of the junior lienholder, Beal Bank, sought to enforce the promissory notes as unsecured obligations. On the Sariches motion for summary judgment, the superior court dismissed Beal Bank's claims, holding that the Sarichs' obligations to all lienholders on the property were extinguished by the nonjudicial sale. The Supreme Court took direct review, and reversed, holding that the junior lienholders lose their security interest in the property, but not their right to enforce the promissory notes as unsecured obligations. Beal Bank, SSB v. Sarich (Sept. 13, 2007).

Landlords and tenants - City may require residential landlords to conduct private health and safety inspections of rental premises and certify compliance with health and safety standards as a condition of their business license. In response to concerns that some landlords in the city were renting out apartments that were dilapidated and presented health and safety problems, the City of Pasco adopted an ordinance requiring residential landlords, as a condition of receiving a business license, to obtain, once every other year, a certificate of inspection showing that the dwelling units meet the housing code and certain other health and safety standards. The landlord was allowed to obtain the certificate from either government inspectors or qualified private inspectors. The Shaws, who owned several apartment buildings in the city, notified the City that some of their tenants refused to consent to an inspection of their premises, thereby preventing them from conducting the inspections. The City refused to renew the landlords' business license, and brought suit seeking an injunction barring the landlords from engaging in the rental business without a valid business license. On summary judgment, the trial court ruled in favor of the City. The court of appeals affirmed. The Supreme Court affirmed. First, the Court held that the Fourth Amendment to the U.S. Constitution, prohibiting warrantless searches, and article I, section 7 of the Washington State Constitution, protecting persons' privacy and homes absent authority of law, do not apply where no state action is involved. In this case, the Court viewed as decisive that "under the Pasco ordinance a landlord can engage private inspectors in order to further the private objective of obtaining a certification needed to maintain a business license." Therefore, the Court concluded, the private inspectors are not state officials, and neither the federal nor state constitutional provisions are violated. In addition, the Court turned away a challenge that the language of the ordinance is unconstitutionally vague. The ordinance lists nine habitability criteria that the landlords must certify, including one that no conditions exist that constitute "violations of other applicable codes, rules or regulations." The Court held that, in light of the fact that this criterion is found in the context of a list of specific habitability criteria, and is limited to "applicable" codes, it does not allow an inspector to arbitrarily choose and apply unspecified standards. City of Pasco v. Shaw (Sept. 13, 2007).

Real estate contract - Bankruptcy does not discharge claim for specific performance of contract to convey real estate. David Pitts entered into a contract with Glen Cloninger to lease 160 acres of land in Spokane County with an option to purchase. Under the contract, Pitts agreed to execute a quitclaim deed with respect to an adjacent 9.83-acre parcel, which deed was to be held in trust. If Pitts did not exercise this purchase option before the lease expired, or if he defaulted, the deed was to be delivered to Cloniger. Pitts neither executed the deed nor placed it in trust. The lease expired without Pitts having exercised the purchase option. Cloniger's successors-in-interest, Gordon and Jaymie Crafts, filed an action against Pitts in the superior court of Spokane County for specific performance of his obligation to quitclaim his interest in the adjacent 9.83 acres. Pitts filed for chapter 7 bankruptcy and the federal bankruptcy court entered an order discharging his debts and liabilities. Thereupon, the Crafts filed for summary judgment in the superior court seeking specific performance. The superior court granted their motion, and the court of appeals affirmed. In a unanimous decision, the Supreme Court affirmed. Relying on the bankruptcy code's provision that an action seeking equitable relief for a breach of contract is discharged only if the breach gives rise to a right to payment, the court held that a debtor's liability for specific performance of a contract to convey real property is not discharged in bankruptcy if money damages will not remedy the breach as well as specific performance. The fact that the non-breaching party has the right to elect money damages instead of specific performance does not convert the election of specific performance into a dischargeable claim. Otherwise, the Court said, all claims for specific performance would be discharged. "The question," said the Court, "is always whether money damages would equally compensate the injured party - not merely whether they are available." Crafts v. Pitts (July 19, 2007).

Real estate financing, refinancing - In refinancing a mortgage, the new lender steps into the original lender’s priority lien position even if there is a junior lienholder as to whom the new lender has knowledge. Washington Mutual had a first-priority lien on Sakae Sugihara's personal residence, while Bank of America had a second-priority lien. Sugihara refinanced the loan through Wells Fargo Bank West, which paid off the debt to Washington Mutual. Wells Fargo Bank West had knowledge of Bank of America's interest in the property. Nevertheless, it seeks to be equitably subrogated to Washington Mutual's first-priority lien position. The trial court ruled that under the doctrine of equitable subrogation, as set forth in the Restatement (Third) Property: Mortgages § 7.3 (1997), Wells Fargo stepped into Washington Mutual’s priority position, notwithstanding that it had notice of the Bank of America loans; however, the court of appeals reversed. The Supreme Court reversed the court of appeals and adopted the Restatement position. According to the Court: "Equitable subrogation preserves the proper priorities by keeping the first mortgage first and the second mortgage second." Also, the Court noted the practice of lower-priority mortgagees obtaining more favorable loan terms (e.g., higher interest rates) to offset the higher risk of being in a lower priority position, observing that it would be unfair to allow a second-priority mortgagee to have the benefit of a higher priority while keeping the favorable loan conditions. Bank of America, N.A. v. Prestance Corp. (June 7, 2007).

Real estate financing, trustee sale - In a nonjudicial sale, once the auctioneer accepts the high bid, the trustee may not refuse to convey title to property merely because its auctioneer mistakenly accepted a bid lower than the minimum opening bid authorized by the trustee. After the borrowers defaulted on their home loan, the lender, U.S. Bancorp, directed the trustee, T.D. Escrow Services, to conduct a nonjudicial foreclosure sale of the property. T.D. hired ABC Legal Services to sell the property, instructing it to accept an opening bid of not less than $159,421.20. However, ABC mistakenly listed the property's opening bid at $59,421.20. William Udall made the only bid, for one dollar more, and the auctioneer declared the property sold. Udall tendered payment, and was provided with a receipt. Thereafter, before delivering the deed, T.D. discovered the error. It declined to deliver the deed, returned Udall's funds, and explained that it had not been authorized to open the bidding at $59,421.20. Udall rejected the refund and brought an action to quiet title. On cross motions for summary judgment, the trial court entered judgment in favor of Udall. The court of appeals reversed, holding that under the Deed of Trust Act the purchaser acquires no rights to the property until delivery of the deed has occurred, and that the trustee was under no duty to convey because its agent, the auctioneer, had neither actual nor apparent authority to sell at a mistakenly low price. The Supreme Court reversed the court of appeals. The Supreme Court held that once a bid is accepted, as when the auctioneer declares the property sold, delivery of the deed is a non-discretionary ministerial action, unless there is an express reservation announced prior to the sale or a procedural irregularity that renders the sale void. Insufficiency of the purchase price may be the result of a mistake, but it is not a procedural irregularity that voids the sale. As for the auctioneer's authority, the Supreme Court agreed that it did not have actual authority to sell the property at the mistakenly low price. However, it held that ABC had apparent authority because T.D.'s objective manifestations (placing ABC in charge of the auction and issuing the notice of trustee's sale) caused Udall to to actually, or subjectively, believe that the auctioneer had authority to act for the trustee, and Udall's actual, subjective belief is objectively reasonable. Moreover, the Court held that because T.D. had vested ABC with general authority to conduct a nonjudicial sale, Udall (an arm's length third party) had no duty to inquire into whether there were unknown limits on that authority. The Court also held that, absent some unfairness to the borrower, insufficient sale price alone does not justify equity setting aside the sale. Nor does the trustee's fiduciary duty to the borrower justify it repudiating the sale since the borrower is not injured - its debt to the lender being discharged in any event. Nor is the lender injured, since it has the ability to bring a negligence claim against the trustee. Udall v. T.D. Escrow Services, Inc. (Mar. 29, 2007).

Land use - Developed land means a lawful building site ready for sale or use. The City of Lacey had an ordinance requiring a permit for land clearing activities, including the removal of trees from undeveloped or partially developed land. The ordinance did not define the terms undeveloped or partially developed. Stephen and Barbara Sleasman removed 18 trees from the property in Lacey on which their home is located without first obtaining a permit. Taking the position that the Sleasman's land is partially developed because it potentially could be developed differently than the present development, the City imposed a fine on the Sleasmans. The Sleasmans appealed to the superior court under LUPA, claiming among other things that the City's tree removal ordinance was unconstitutionally vague or was applied in their case in a manner that violated due process. The superior court upheld the city's action, holding that the city's definition of partially developed is entitled to deference. The court of appeals affirmed the trial court, but on the grounds that the plain meaning of the term partially developed supports the City's position. In an en banc decision, the Supreme Court reversed, holding that the plain meaning of developed property is property that "is a lawful building site ready for sale or use." "To be 'partially' developed," according to the Court, "property must either be an area where part is raw land that is unsuitable for building or where the area as a whole is not yet finally developed so it is not yet a lawful building site." The Court took care to distinguish "developed" with "improved." "After land is developed it may then be improved. An improvement is generally understood as adding any structure to the land." Sleasman v. City of Lacey (Feb. 8, 2007).

Climate change - Seattle City Light may not use ratepayer dollars to reduce greenhouse gases emitted by others. Seattle City Light adopted a voluntary program to reduce greenhouse gases to achieve the equivalent of zero emissions. Under the program, it not only reduces emissions at its own facilities, but also at third parties' facilities, taking credit for the third parties' reductions. A class action brought on behalf of City Light ratepayers challenged City Light's authority to pay for third parties' emission reductions. On summary judgment, the superior court upheld the City Light program. The Supreme Court reversed. Noting that the City did not argue that there was an express legislative authorization for municipal utilities to purchase greenhouse offsets, the Court turned to a consideration of whether an offset program is necessarily or fairly implied or incident to municipal utilities' express powers. In analyzing this question, the Court distinguishes between powers that are governmental or proprietary in nature, giving more leeway to proprietary undertakings. The Court said that an electric utility's action is proprietary only if it part of the production and sale of electricity, and is for the comfort and use of individual customers paying only for their own usage, not for general public use. Therefore, it concluded that purchasing greenhouse emission offsets is a governmental, not proprietary, purpose because the program is not part of the services for which individual customers are billed. Finally, the Court considered whether the program is within the purpose and object of the enabling statute, that is, whether the offset program bears a sufficiently close nexus to City Light's statutory purpose of supplying electricity to its customers. The Court said that a close nexus exists when the action benefits the utility and its customers, but not when it benefits the general public. This question, according to the Court, largely mirrors the question of whether an action is proprietary or general - that is, it comes down to whether a utility action serves the individually billed customer or the general public. Having already answered that question by concluding that the offset program serves the general public, the Court concluded that a sufficiently close nexus does not exist. Okeson v. City of Seattle (Jan. 18, 2007).

Trespass, statute of limitations - Damages for a continuing trespass may be awarded for a period beginning three years before the filing of a lawsuit through the date of trial. Myrtle Woldson was awarded damages against her neighbor, John Woodhead, for a continuing trespass that had been occurring for many years. She filed the complaint on July 7, 2000. Under the statute of limitations, she is entitled to damages for the three years prior to the lawsuit -- that is, for the period from July 7, 1997 to July 7, 2000. The trial court also awarded her damages for the trespass through the date of judgment. The court of appeals reversed as to damages, holding that damages for periods after the three years preceding the lawsuit must be sought in successive actions. The Supreme Court held that damages for a continuing trespass may be awarded for the period through trial. Woldson v. Woodhead (Dec. 21, 2006).

Land use - Local ordinance may not be subject to local referendum. In 2004, King County adopted three ordinances (addressing, respectively, critical areas, stormwater, and clearing and grading) amending its comprehensive plan under the GMA. Shortly thereafter, Rodney McFarland began collecting signatures to call for referenda on the three ordinances. King County and 1000 Friends of Washington (an advocacy group now known as Futurewise) sought declaratory relief from the superior court that the ordinances are not subject to referenda. The superior court granted summary judgment to King County. The Supreme Court granted direct review, and affirmed the decision of the superior court. A four-justice plurality declined McFarland's explicit invitation to overrule the Court's 1994 decision in Whatcom County v. Brisbane, which held that a critical areas ordinance adopted by a home-rule county is not subject to repeal by a local citizen referendum. The Court distinguished the sovereign power of the people of the State, which under the state constitution is the source of all political power, from the sovereign power of the people of local areas, which is derivative of the power of the people of the whole state. Applying Brisbane to the two non-critical areas ordinances in question, the Court held that whether or not a specific ordinance is subject to local referendum must be decided on a case-by-case basis, considering the scope of the statutory scheme underlying the ordinance, and whether the ordinance was necessary to or passed for the purpose of implementing that statutory scheme. Deference is given to the expressed legislative intent of the legislative body enacting the ordinance, and if that intent is clear, the challenger must show that the ordinance is outside the scope of the statutory scheme. The Court plurality held that the King County ordinances in question are not subject to referenda. Three justices concurred in the result, agreeing with the plurality that Brisbane is controlling. 1000 Friends of Washington v. McFarland (Dec. 21, 2006).

Real estate financing - An equitable lien may not be imposed on a person's property in order to satisfy a judgment against a third person. Throughout the 1980s, Ken Pyeatt dodged creditors through a series of conveyances of real property, back and forth, with his longtime friend Carole Sorenson. In 1990, he conveyed to Sorenson certain property on Lummi Island by quitclaim deed. The deed was recorded, and Sorenson maintained record ownership of the property thereafter. In 1998, Pyeatt's wife, Barbara Pyeatt, began an extensive fraudulent borrowing and financing scheme, which included forging Sorenson's signature on quitclaim deeds purporting to convey the Lummi Island property to Barbara. Sorenson had no knowledge of this. The Pyeatts then engaged in several loan transactions with various lenders, using the Lummi Island property as collateral for the loans. Sorenson brought a quiet title action against Barbara Pyeatt and the lenders. The lenders answered, seeking to enforce the deeds of trust on the property. The trial court held Sorenson to be the record owner of the property and nullified the deeds of trust. However, it entered a money judgment for the lenders against the Pyeatts, and imposed an equitable lien against the property in partial satisfaction of that judgment and authorized the lenders to foreclose. It reasoned that Sorenson was culpuble in failing to exercise a reasonable degree of oversight over the property, thereby helping to facilitate the Pyeatt's fraud and serving as a cause-in-fact of the lenders' losses. The court also held that, in the event its decision were overturned, Sorenson would be equitably estopped from denying that Ken Pyeatt is the actual or beneficial owner of the property, and the deeds of trust could be enforced directly against him in order to prevent an injustice. The court of appeals reversed, holding that the necessary elements for imposing an equitable lien, as set forth in Falconer v. Stevenson, 184 Wash. 438 (1935), are not present in this case. Falconer v. Stevenson held that the right to an equitable lien arises when "a party at the request of another advances him money to be applied and which is applied to the discharge of a legal obligation of that other, but when, owning to the disability of the person to whom the money is advanced, no valid contract is made for its repayment." A unanimous Supreme Court affirmed the court of appeals. The court reaffirmed Falconer v. Stevenson, holding that the equitable lien doctrine has prescribed boundaries which are not met in this case for the following reasons: (1) Barbara Pyeatt forged the deeds, and had no power to grant a valid security interest in the property; therefore, the deeds of trust do not effectively encumber the property against which the trial court imposed the lien. (2) Nothing in the record demonstrates any invalidity in the promissory notes signed by Barbara Pyeatt. (3) Neither Barbara Pyeatt's financial difficulties, nor the lenders' inability to enforce the deeds of trust, is a "disability" within the meaning of Falconer. The court declined to expand on Falconer, noting that an equitable lien is a remedy for a debt determined to be owed in law, and is imposed only upon property or interest owned by the debtor. Finally, The court held that the imposition of an equitable lien involves a mixed question of law and fact that is reviewable on appeal for an error of law. The Supreme Court also rejected the trial court's alternative holding that the lenders could foreclose under the deed of trust on the grounds that Sorenson is equitably estopped from denying that Ken Pyeatt is the actual or beneficial owner of the property. The court noted that Sorenson was not aware of and did not sanction Barbara Pyeatt's forgery of the deeds; therefore, Sorenson's actions did not induce the lenders to advance funds to Pyeatt. Furthermore, the court acknowledged that Sorenson engaged in inequitable conduct in participating in Ken Pyeatt's schemes in the 1980s; however, it noted that the present lenders are wholly separate from the creditors deceived by the 1980s conduct. Thus, the court found there was no nexus between Sorenson's prior inequitable conduct and the lenders' financial harm in this case. Sorenson v. Pyeatt (Nov. 9, 2006).

Land use, agricultural lands - In designating agricultural lands under the Growth Management Act, a county need not designate all lands physically capable of being used for agriculture, but also may consider the long-term commercial significance of the land. The GMA requires counties to designate "[a]gricultural lands that are not already characterized by urban growth and that have long-term significance for the commercial production of food or other agricultural products." Lewis County designated agricultural lands based on its determination of the projected needs of the county’s agricultural industry, including the exclusion from designated agricultural lands of 5-acre "farm center" and farm homes (thus allowing non-agricultural development of these lands) based on the county's conclusion that farmers need certain "on farm non-farm" income. The growth management hearings board invalidated the county’s ordinance because it concluded that the designation must be based solely on the physical characteristics of the land, with no consideration given to the needs or circumstances of the agricultural industry. The Supreme Court held that neither the county's nor the board's definition of agricultural lands complied with the GMA. Instead, the court held that, under the plain language of the Act, "agricultural land is land: (a) not already characterized by urban growth (b) that is primarily devoted to the commercial production of agricultural products enumerated in RCW 36.70A.030(2), including land in areas used or capable of being used for production based on land characteristics, and (c) that has long-term commercial significance for agricultural production, as indicated by soil, growing capacity, productivity, and whether it is near population areas or vulnerable to more intense uses." Furthermore, the court held that counties "may consider the development-related factors enumerated in [DCTED regulation] WAC 365-190-050(1) in determining which lands have long-term commercial significance." (There may be constitutional dimensions to this issue. In dictum, the majority states: "If the State wants to conserve all land that is capable of being farmed without regard to its commercial viability, it may buy the land.") On the preceding points, the court was unanimous. A six-justice majority also held that in designating agricultural lands, the GMA does not permit a county to consider farmers' "non-farm" economic needs "because it is a goal in and of itself, not a characteristic of farmland to be evaluated in determining whether such land has long-term commercial significance." According to the majority: "A farmer's presumed need for 'non-farm' income does not necessarily relate to soil, productivity or growing capacity under [the GMA], nor to proximity to population areas or the possibility of more intense uses of land. It has to do only with the farmer's bottom line." Therefore, it upheld the board's invalidation of the exclusion of 5-acre "farm centers" and farm homes from agricultural designations. The court remanded the case to the board to apply this definition. Once a county designates agricultural lands, the GMA requires that it adopt development regulations "to assure the conservation of" those lands. Lewis County adopted development regulations that permit certain non-agricultural uses within designated agricultural lands. The growth management hearings board invalidated these regulations because it concluded that the county failed to limit the non-agricultural uses in ways that would ensure they do not impact resource lands and activities negatively. The court majority upheld the board. Lewis County v. Western Washington Growth Management Hearings Board (Aug. 10, 2006).

Easements - A recorded access easement is not abandoned merely because it has not been opened and the easement holder has used an alternate access route for several decades. Deborah Heg owns property on Whidbey Island that is benefited by an express easement for ingress and egress over adjacent property owned by Ralph and Claudia Alldredge. Although the easement deed was recorded more than 40 years ago, the easement has never been opened. Instead, Heg and her predecessors have used an alternate access route that was initially constructed before the easement deed was granted. Heg brought a quiet title action against the Alldredges (and other neighbors not parties to the appeal). The trial court granted Heg's motion for summary judgment, but the court of appeals reversed key parts of the trial court's ruling, holding that there was evidence sufficient to find that Heg or her predecessors had abandoned the easement. The Supreme Court reversed, holding that mere nonuse of a recorded easement coupled with the use of an alternate access route does not, by itself, support a finding of abandonment. According to the court, "[a]cts evidencing abandonment of an easement must be unequivocal and decisive and inconsistent with the continued existence of the easement." The court distinguished this case from those where, subsequent to creation of the easement, an access road is built in different location and is used for a long period of time, viewing the latter as merely constituting a change in the location of the easement rather than an attempt to extinguish the easement. Heg v. Alldredge (June 22, 2006).

Upcoming Decisions

Some Washington Supreme Court cases we are watching:

Eminent domain, inverse condemnation, common enemy doctrine. Does common enemy rule preclude holding Okanogan County liable in inverse condemnation for damage to private property allegedly caused by a dike that blocked natural side channels that would have diverted the flow of flood waters from the Methow River? On May 26, 2009, the Supreme Court heard oral argument in Fitzpatrick v. Okanogan County (No. 81257-8). A decision is pending.

Adjoining landowners, encroachment, boundary adjustment. In an action to eject an adjoining landowner who mistakenly built improvements on the plaintiff's property, may the trial court quiet title in the adjoining landowner and order him to pay the plaintiff for a boundary adjustment? On January 12, 2010, the Supreme Court heared oral argument in Proctor v. Huntington (No. 82326-0). A decision is pending.