Mercer Enterprises, Inc. v. City of Bremerton ( 1980 )

Dolliver, J.

In February 1975, the Bremerton City Council enacted ordinance No. 3210. The ordinance amended the Bremerton zoning code to require that all dwelling units in R-l districts be provided with 4,800 square feet of land area. Prior to the passage of the ordinance, only 1- and 2-family dwellings had been allowed in R-l districts. The ordinance is referred to as the "nine units per acre" ordinance because the maximum permissible density was 9.075 dwelling units per acre of land.

Mercer Enterprises, Inc., intended to build a large condominium project on a 49-acre site adjacent to Lake Kitsap and located in an R-l district in Bremerton. Mercer applied for a building permit for the project on September 3, 1976. Three months later, December 8, 1976, before any action had been taken on the permit application, the Bremerton City Council placed a moratorium on processing of all permits applied for under ordinance No. 3210. On January 6, 1977, Mercer submitted a modification of its project plans to reduce the number of units in the project. Mercer filed an additional submittal to the Building Department on March 24, 1977. On March 23, 1977, the City repealed ordinance No. 3210.

Mercer's original proposal called for construction of 408 multifamily units on 30.81 acres and 35 single-family residences on 18.5 acres, for a total density for the entire project of approximately 9 units per acre. The September application was for Phase 1 of the project, consisting of 196 units in 11 buildings on 12.31 acres, which exceeded the maximum density permissible under the ordinance. The application was accompanied by a site plan for the entire project. This site plan was required under the zoning ordinance to be filed as a covenant running with the land, binding the site upon the issuance of the building permit to the form of development shown. The site plan showed the projected location of 25 buildings to house multifamily units and outlined the lots on which the single-family residences would be constructed. The entire project thus encompassed single- and multiple-family uses and used open spaces and lower densities in Phase 2 to satisfy density requirements otherwise applicable to each building located within the Phase 1 portion of the project.

After ordinance No. 3210 was repealed, Mercer brought this action against the City seeking a writ of mandamus to compel the City to process the permit application under that ordinance. The trial court entered judgment for plaintiffs after finding that Mercer's rights had vested at the time of the September 3, 1976, application. Kitsap Lake Environmental Association was allowed to intervene in order to appeal the trial court's decision.

The heart of the argument of the Kitsap Lake Environ- " mental Association and the key question before us is whether the September 3, 1976, building permit application was sufficient at the time of its original submission to vest rights in a building permit to Mercer Enterprises. We hold it was.

The majority rule is that a zoning regulation has retroactive effect as to applications made prior to the time the regulation was changed. Thus, most jurisdictions hold that an applicant has no vested right to have its application considered under an amended or repealed zoning ordinance. However, an applicant will be held to have such a vested right if it has made a substantial change in position in reliance on the existing zoning, or if the municipality is estopped from denying the permit by virtue of its bad faith conduct. See Annot., Retroactive Effect of Zoning Regulation, in Absence of Saving Clause, on Pending Application for Building Permit, 50 A.L.R.3d 596 (1973).

Washington, however, has adopted a minority rule which also has been embraced by Florida, Indiana and Ohio. The Washington rule states that, under the old ordinance, an applicant's rights vest at the time of application as long as the project conforms to existing codes and regulations. In Hull v. Hunt, 53 Wn.2d 125, 130, 331 P.2d 856 (1958), we said:

Notwithstanding the weight of authority, we prefer to have a date certain upon which the right vests to construct in accordance with the building permit. We prefer not to adopt a rule which forces the court to search through (to quote from State ex rel. Ogden v. Bellevue [45 Wn.2d 492, 275 P.2d 899 (1954)]) "the moves and countermoves of . . . parties ... by way of passing ordinances and bringing actions for injunctions" — to which may be added the stalling or acceleration of administrative action in the issuance, of permits — to find that date upon which the substantial change of position is made which finally vests the right. The more practical rule to administer, we feel, is that the right vests when the party, property owner or not, applies for his building permit, if that permit is thereafter issued. This rule, of course, assumes that the permit applied for and granted be consistent with the zoning ordinances and building codes in force at the time of application for the permit.

(Italics ours.)

A careful examination of the record shows substantial— indeed overwhelming — evidence to support the finding of the trial court that the September 1976 application was believed by the responsible city officials to be in compliance with existing codes, ordinances and procedures and that this belief was communicated by these officials to Mercer prior to, at the time of, and subsequent to the permit application.

Furthermore, our independent review of the City's procedures, the requirements of ordinance No. 3210, and the permit application convinces us the September 1976 application was consistent with existing law.

Ordinance No. 3210 requires a site plan to be submitted to the Bremerton Planning Department upon application for a building permit in R-l districts. The site plan binds the property to the form of development shown thereon. It is subject to removal or modification only upon application and approval of the Planning Commission and the City Council of the City of Bremerton.

Throughout all the negotiations between Mercer and the City, the 49-acre project was considered as a complete whole. The only reference to construction phases was contained in the building permit application. The site plan was submitted to the Planning Department at the same time as the building permit application was submitted to the Building Department. The Planning Department circulated both documents to other departments, requesting comments and conditions to be attached to approval of the project. Under these circumstances, it is only appropriate that we view the proposed development in a similar context.

Hull v. Hunt, supra, does not detail what specific information must be included in the application; only that what is contained in the application be consistent with the codes and ordinances then in force. While it may be that in other situations a different type of application would be required by a city ordinance, here the requirements of the ordinance were met.

The trial court also found — and its finding is unchallenged by the Kitsap Lake Environmental Association— that the approach taken by Mercer in its application and the action taken by the Building Department was "a reasonable approach to be taken in [the] situation" and that "for some period of time the City was concurring in this approach, the Building Department particularly, and for good reason." See Richland Homeowner's Preservation Ass'n v. Young, 18 Wn. App. 405, 414, 568 P.2d 818 (1977).

No intimation was given to Mercer that this approach was not to be accepted by the City until a letter dated December 29, 1976, from the Bremerton Planning Director was received by Mercer. It stated:

This is to inform you that the proposed development on the Bruce Harlow property cannot be approved for a permit until such time as the multifamily portion of the proposal is redesigned to accommodate 9 units per acre rather than the 408 units (12.6 du/a). Although your original proposal conforms to the letter of the law, it is the opinion of many people, including Planning Commission members and City Councilmen, that it was the intent of the ordinance, as it applies to your proposal, that the 9 units per acre provision means that the entire area be apartments with common open space. Therefore, the lots along the water proposed for single family residences do not fit this intent and must be considered as separate property.

(Italics ours.) Mercer responded on January 6, 1977, by modifying the site plan so as to include only 276 multifamily units on the 30-acre tract.

Kitsap Lake Environmental Association contends our holding in Mercer Island v. Kaltenbach, 60 Wn.2d 105, 371 P.2d 1009 (1962), makes irrelevant the question of the reasonableness of the procedures adopted by the City and the assurances that the application would meet the requirements of the applicable ordinances. In Kaltenbach, the property owner received a permit to construct "a residence and private conservatory." Subsequent to construction, the building was turned into an establishment wherein instruction in music, dancing and other arts was given to members of the public as a commercial enterprise. Kaltenbach contended that assurances had been given by county officials that the permit authorized such a use. We said:

The ultimate question is whether the use is authorized by the ordinance, and this must be determined as a matter of law by the courts and not by informal opinions of county administrative officials.

Kaltenbach, at 107. Kaltenbach and this case are not in conflict. In the former, the question was the type of use allegedly approved by the local officials; here we are concerned with assurances given by City officials as to the appropriateness and validity of procedures to be used in a permit application — a far different matter. No formal processing procedures had been adopted by the City and Mercer had no choice other than to rely on the assurances from City officials. See Richland Homeowner's Preservation Ass'n v. Young, supra.

The intervenors next assert Eastlake Community Council v. Roanoke Assocs., Inc., 82 Wn.2d 475, 513 P.2d 36, 76 A.L.R.3d 360 (1973), controls. It does not. In Eastlake, the trial court found the building permit was issued contrary to the provisions of the Seattle building code. We specifically did not decide whether the application was also defective or if a defective application could be cured prior to the issuance of the permit. Here, we agree with the trial court that the September 3, 1976, permit application was valid, even if it did require some further information to complete the processing before a permit could be issued. Cases subsequent to Eastlake have spoken to this situation. Parkridge v. Seattle, 89 Wn.2d 454, 573 P.2d 359 (1978); Richland Homeowner's Preservation Ass'n v. Young, supra.

In Parkridge, following the permit application, which was consistent with the ordinances then in effect, a number of changes were made and incorporated in revised drawings following discussions between Parkridge and city officials. Further detailed plans were ready to be forwarded to the City but the City canceled the permit application prior to delivery. We upheld the finding of the trial court that Parkridge had been diligent in its efforts to obtain a permit; that the City had frustrated those efforts; and that the City should be required to process the Parkridge building permit application "promptly, diligently and in good faith". Parkridge, at 466.

Here the unchallenged finding is that Mercer acted in good faith and with diligence and that its efforts were frustrated by the City. Since the initial application was in conformity with existing ordinances, since the procedures followed by Mercer were consonant with the instructions of the City, and since Mercer diligently and in good faith cooperated with the City to meet any requirements following its application, it cannot now be successfully argued that the failure of Mercer to supply information will defeat its vested rights under the doctrine of Hull v. Hunt, supra.

The City required Mercer to commit itself in advance to a particular size, density and concept. Just as the City was entitled to rely on the representations made by Mercer in the site plan, so Mercer acquired a vested right to build its project according to the plan as long as it complied with zoning ordinances at the time it applied for the building permit.

The trial court is affirmed.

Wright, Horowitz, and Hicks, JJ., and Hamilton, J. Pro Tern., concur.