Sparks v. Douglas County , 127 Wash. 2d 901 ( 1995 )

Smith, J.

Petitioner Douglas County seeks review of a decision by the Court of Appeals, Division Three, reversing a ruling of the Douglas County Superior Court which upheld action of the Board of Commissioners of Douglas County conditioning approval of short plat applications by Respondents Herschel and Elizabeth Sparks upon dedication of rights-of-way for road improvements. We granted review. We reverse.

Question Presented

The question presented in this case is whether the action by Douglas County conditioning approval of the Sparkses’ short plat applications upon dedication of rights-of-way for road improvements was arbitrary and capricious and constitutes an unconstitutional taking of property.

Statement of Facts

On March 29, 1990, Herschel and Elizabeth Sparks (Sparkses) filed four short plat applications with the Douglas County Planning Office, designated as plats 2, 3, 4 and 5.¹ Plat 2 covers 9.19 acres located East of Empire Avenue and North of Thirtieth Street Northwest in unincorporated Douglas County near East Wenatchee (Sparks 2). Plat 3 is located immediately South of Plat 2, East of Empire Avenue and North of Twenty-Ninth Street Northwest, covering 9.5 acres (Sparks 3). Plat 4 consists of 6.72 acres between Empire Avenue and Fir Street Northwest, north of Thirty-Second Street Northwest (Sparks 4). Plat 5 is located on 5.6 acres between Empire Avenue and Fir Street Northwest and adjacent to Thirty-Second Street Northwest on the south (Sparks 5). Each of the proposed short plats contains four residential lots.

The planning director reviewed the plat applications and determined the streets bordering the plats were deficient in right-of-way width by county standards and thus would not accommodate future construction of street improvements.² The director also determined that Thirty-Second Street did not meet fire code requirements for safe access.³

The matter was referred to the Subdivision Review Committee, which met on June 21, 1990. Its findings were consistent with those of the planning director.⁴ It approved the short plat applications subject to certain conditions, which included dedication of rights-of-way for future improvements along the public roads bordering the plats. The committee specifically required a ten-foot right-of-way along the portion of plat 2 bordering Empire Avenue; a ten-foot right-of-way along the portion of plat 3 bordering Empire Avenue and a five-foot right-of-way along the portion of that plat adjacent to Twenty-Ninth Street; a twenty-five-foot right-of-way along the portion of plat 4 abutting Fir Street; and dedication of twenty-five-foot rights-of-way along the portions of plat 5 bordering Fir Street and Thirty-Second Street.

Respondents Sparks appealed the decision of the Subdivision Review Committee to the Douglas County Regional Planning Commission, which held a hearing on August 22, 1990. The Commission upheld the conditional approval of plats 2 and 3, but disapproved plats 4 and 5 based upon noncompliance with fire code provisions for adequate roadway.⁵

Respondents then appealed the decision of the Planning Commission to the Douglas County Board of County Commissioners during a hearing on April 1, 1991. The Commissioners, reinstating the decision of the Subdivision Review Committee, approved all the short plat applications subject to the dedication requirements. As to Empire Avenue, the Board concluded:

9. Empire Avenue NW has been determined to have deficiencies regarding pavement width and pavement condition by Urban Arterial Board Standards.

10. Existing pavement width on NW Empire is 16’ to 17’ wide. Since the time of . . . this finding, Empire has been improved to 20 feet of width by a maintenance project.

11. Urban Arterial Board standards require an improved roadway section of a minimum 24 feet of paving, ditches, and backslopes which can only be accomplished in a minimum of 50 feet of right-of-way.

12. Adequate right-of-way . is not available to allow future improvements for safe access based on the existing average daily traffic (ADT) 220 ADT, nor the increase in traffic that may be generated by this short plat.[⁶]

The commissioners also concluded that Twenty-Ninth Street is deficient in right-of-way and road surfacing; that Fir Street "is deficient in standards for right-of-way width to allow future street improvements”; and that Thirty-Second Street "does not meet Uniform Fire Code requirements for safe access” and is "deficient in right-of-way width, road surface, and pavement width.”⁷ Based upon these findings, the Commissioners determined that the plats could be approved only if the Sparkses dedicated sufficient rights-of-way to allow the roads to be improved according to county standards.

Respondents Sparks sought a writ of review in the Superior Court of Douglas County, arguing that the required dedications were unconstitutional takings of property without compensation. The Superior Court, the Honorable John E. Bridges, affirmed the County Commissioners’ action on June 18, 1992. Consistent with the Commissioners’ findings, the court determined the streets bordering the plats were deficient in paved surface and in width of right-of-way. Comparing the County’s traffic counts on each of the access streets with the projected average daily trips the developments would generate, the court found the developments would approximately double traffic in the area.⁸ It concluded Respondents Sparks did not establish that the County Commissioners’ action was arbitrary or capricious.⁹

The Court of Appeals reversed in a split decision on December 14, 1993.¹⁰ The majority (Chief Judge Philip J. Thompson writing) determined there was no evidence that residential development of the Sparkses’ properties would have an adverse impact which would necessitate widening the adjacent roads.¹¹ The court concluded that requiring dedication of rights-of-way as a condition for plat approval was an unconstitutional taking.

On January 13, 1994, Douglas County filed a petition for review in this Court. Consideration was deferred pending a decision of the United States Supreme Court in Dolan v. City of Tigard.¹² The Supreme Court has now ruled in that case. We granted the petition on September 7, 1994.

Discussion

The federal and Washington state constitutions provide that private property may not be taken for public use without just compensation.¹³ Where the government physically appropriates a portion of a person’s private property, such as through an easement or right-of-way, a taking has occurred which requires compensation.¹⁴ This rule does not necessarily apply, however, where conveyance of a property right is required as a condition for issuance of a land permit.¹⁵

"As a prerequisite for development permission, a regulation may require a landowner to dedicate property rights for public use if the regulatory exaction is reasonably calculated to prevent, or compensate for, adverse public impacts of the proposed development.”¹⁶ The theory underlying this principle is that if denial of a development permit does not constitute a taking of property, then neither is it a taking if instead the government imposes a condition on the development which serves the same legitimate police power purpose as denial of a permit, even if that condition involves dedication of land.¹⁷ A land use regulation is not a taking if it substantially advances a legitimate state interest and does not deprive the owner of economically viable use of the owner’s land.¹⁸ The constitutional propriety no longer applies, however, if the condition substituted for the denial "utterly fails to further the end advanced as the justification for the prohibition.”¹⁹

Not Arbitrary or Capricious

Any decision approving or disapproving a plat is reviewable for "unlawful, arbitrary, capricious or corrupt action.”²⁰ An action is arbitrary or capricious when the legislative body reaches its decision "willfully and unreasonably, without consideration and in disregard of facts or circumstances.”²¹ A decision reached after due consideration on a matter upon which there is room for differing opinions is not arbitrary or capricious.²² This is so even though a reviewing court may believe the decision is erroneous.²³ In this case, our review is limited to determining whether the findings of fact on the record were given due consideration by the trial court and by Douglas County when it conditioned approval of the Sparkses’ short plat applications upon dedication of rights-of-way.

After examining the record in this case, the trial court found:

[T]he four proposed short plats will result in either 16 single family residences or 32 duplexes. . . . [E]ach residence generates on an average 9.5 ADT’s [average daily trips] per day which mathematically computes (in consideration of the 16 proposed lots) at a minimum of 152 ADT to a possible maximum of 304 ADT’s. The County performed traffic counts on each of the access streets. Comparing these traffic counts with the projected ADT’s resulting from the short plats reveals that the developments will approximately double the traffic in the area. In the case of Fir Street, the increase will approximate 100 percent.[²⁴]

Based upon these findings, the trial court concluded that Douglas County did not act arbitrarily or capriciously when it conditioned approval of the plat applications upon dedication of rights-of-way for road improvements.

The Court of Appeals ruled to the contrary when it concluded the record "does not show an adverse impact, i.e., that the Sparkses’ developments necessitate widening the roads in question.”²⁵ The court noted that the evidence shows the new homes would at most add twenty-five vehicles per hour to existing traffic. It observed there is "no direct evidence these already deficient roads will be less safe after the addition of 25 cars per hour,” nor is twenty-five a "number of sufficient magnitude to support, by itself, a reasonable inference that the developments will decrease the roads’ safety.”²⁶ Finding no evidence of adverse impact, the Court of Appeals concluded the conditions imposed by Douglas County were arbitrary and capricious and constituted an unconstitutional taking.²⁷

"Findings of fact supported by substantial evidence are verities on appeal.”²⁸ The test of substantial evidence is whether evidence is sufficient to persuade a fair-minded person of the truth of the declared premise.²⁹ The County’s action conditioning approval of the plat applications on dedication of rights-of-way was based on its well-documented findings, including information on current road widths, road standards, and current and projected road use. Because its determination was made upon honest and due consideration of substantial evidence, it was neither arbitrary nor capricious.

The reviewing court may not substitute its findings for those of the trial court.³⁰ The Douglas County Superior Court presided over the proceedings and reviewed the entire record of hearings before the Subdivision Review Committee, the Douglas County Regional Planning Commission and the Board of County Commissioners in determining the extent of impact of the short plats. The Court of Appeals supplanted the trial court’s findings when it concluded there was no evidence of adverse impact of the Sparkses’ developments. In doing so, it did not apply the proper standard of review, which should have been limited to determining whether the action by Douglas County was arbitrary or capricious.

The Dolan Test of Constitutionality

The statement of the law by the Court of Appeals conflicts with the United States Supreme Court’s recent ruling in Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994). The Court of Appeals stated a dedication is permissible only if it "reasonably prevents or compensates for, in a specific and proportional fashion, adverse public impacts of the proposed development.”³¹ Dolan found such exacting scrutiny unacceptable.³²

In Dolan, a property owner sought a permit to remove the existing building housing her electric and plumbing supply business and to replace it with a larger building and an expanded parking lot. As a condition for approval, the City of Tigard required the owner to dedicate the portion of her property lying within the 100-year floodplain for improvement of a storm drainage system and to dedicate a fifteen-foot strip of land adjacent to the floodplain as a pedestrian/bicycle pathway. In an administrative appeal, it was determined that the floodplain dedication was reasonably related to the increase in impervious surface and stormwater runoff caused by the development, and that the pathway dedication was reasonably related to the need to accommodate increased traffic and provide alternative transportation.

The Oregon Supreme Court determined the dedications did not constitute takings because they were reasonably related to the impact they were designed to mitigate.³³ The United States Supreme Court reversed. It stated that whether a dedication requirement constitutes a taking depends upon resolution of two questions. First, does an "essential nexus” exist between a legitimate state interest and the requirement?³⁴ And second, if so, does the required degree of connection exist between the dedication and the projected impact of the proposed development?³⁵ The court readily found an "essential nexus” in Dolan, since prevention of flooding and reduction of traffic congestion are legitimate public purposes, and the dedications required by the City of Tigard would theoretically help achieve those purposes.³⁶ However, the degree of connection necessary between the dedications and the impacts caused by the development was a matter of concern.

The court in Dolan then announced that a "rough proportionality” standard of scrutiny best embodies the requirement of the Fifth Amendment.³⁷ Under that approach, the local government must demonstrate that the exaction it imposes is "roughly proportional” to the impact of the development:

No precise mathematical calculation is required, but the city must make some sort of individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development.[³⁸]

Applying this test to the facts, the Supreme Court in Dolan rejected the conditions imposed upon the proposed store expansion. First, the court determined that, although keeping the floodplain open and free from development advanced the legitimate purpose of flood control, the City of Tigard’s condition requiring the dedicated land to become part of the public greenway system did not promote the interest of flood control.³⁹ If the proposed development had somehow encroached on existing green-way space in the city, the court said, it would have been reasonable to require some alternative greenway space for the public. But because the City did not make any "individualized determination” to support such a condition, it did not show the required reasonable relationship between the floodplain easement and the proposed building.⁴⁰

The court acknowledged that, although dedications for public ways are reasonable requirements to avoid congestion from a proposed property use, the City did not show the required reasonable relationship when it found only that the pathway "could” offset some of the traffic demand, but made no finding that it "will” or is "likely to” offset some of the traffic demand generated by the project.⁴¹ While stating that a precise calculation is not required, the court said the City must nonetheless "make some effort to quantify its findings” beyond making a mere conclusory statement of impact.⁴²

The approach adopted by the United States Supreme Court in Dolan can be applied in consonance with Washington law. RCW 82.02.020 permits dedications as a condition for subdivision approval if the local government can show the conditions are "reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.” Reviewing agencies must consider adequacy of access to a proposed subdivision, and may condition approval on provision of adequate access.⁴³ Short subdivision plats may not be approved unless the legislative body finds, among other things, that appropriate provisions are made "for the public health, safety, and general welfare and for . . . open spaces, drainage ways, streets or roads. . . ,”⁴⁴

But the fact that the dedications in this case were imposed, in part, to accommodate anticipated future improvement of the roads makes application of the Dolan standard less certain. It is not clear whether, under Dolan, municipalities may take into account future developments and their anticipated cumulative impacts. A Nebraska case cited in Dolan as representative of the "reasonable relationship” standard held that a local government may not require a property owner to dedicate private property for future public use as a condition for obtaining a building permit when that future use is not "occasioned by the construction sought to be permitted.”⁴⁵ At any rate, the determinative issue in this case is not future use, but the degree of connection between the County’s exaction and the impact of the developments.

Rough Proportionality

Addressing the first step of the Dolan test, the Sparkses have conceded that a "nexus” exists between requiring dedication of rights-of-way and the County’s legitimate interest in promoting road safety.⁴⁶ The next step— determining whether a reasonable relationship also exists between the dedications and the impact created by the developments — is disputed in this case.

The pivotal issue under the Dolan approach is whether the exactions demanded by Douglas County are roughly proportional to the impact of the Sparkses’ proposed developments. Respondents Sparks argue that the determination by the Court of Appeals that the new land use has no adverse impact on road safety demonstrates an absence of rough proportionality between development impact and exactions. Respondents also claim there is no way to truly measure whether the conditions demanded by the County are proportionate to the impact of the development.

While Dolan disregarded precise calculations in analyzing development impacts, it ruled that local government must make some effort to quantify its findings to support its permit conditions. In this case, the findings made by the County were more than mere conclusory statements of general impact. They were the result of the kind of individualized analysis required under Dolan. The report prepared by the Planning Office for each of the short plats documented the deficiencies in right-of-way width and surfacing of the adjoining streets.⁴⁷ Douglas County’s records also reflect calculation of increase in traffic and the. specific need for dedication of rights-of-way based upon the individual and cumulative impacts of the series of short subdivisions.

The findings upon which the County relies reflect the required rough proportionality between the exactions and the impact of the Respondents’ proposed developments. It is undisputed that the developments would generate increased traffic on adjacent roads which are not adequate for safe access under county standards. The County has, in the process of individualized analysis, satisfied the final step of the Dolan test.

Respondents argue that the substandard conditions of the roads existed even prior to the Sparkses’ plat applications and cannot therefore be caused by their proposed developments. But it has been established that the increase in traffic generated by those plats on already unsafe roads would require additional right-of-way and reconstruction to accommodate the overflow. Empire Avenue, in particular, has been listed in the County’s six-year road improvement plan, and the county engineer testified the developments themselves necessitate upgrading of that road. The adverse impact created by the plats on adjacent roads was concluded by the trial court upon substantial evidence and need not be reexamined by this court.

Summary and Conclusions

A decision approving or disapproving a plat is reviewable for arbitrary or capricious action. Based upon well-documented findings by the Douglas County Planning Office, the Subdivision Review Committee and the Regional Planning Commission, Petitioner Douglas County conditioned its approval of plat applications by Respondents Sparks on dedication of rights-of-way for road improvements. It reached its determination upon due consideration of substantial evidence of increase in traffic which would likely result from the proposed developments. The Superior Court of Douglas County thus properly found the County’s action was not arbitrary or capricious. The Court of Appeals was in error in substituting its own judgment in overruling the trial court’s finding of adverse impact.

The result reached by the Court of Appeals is not sustainable under the recent ruling by the United States Supreme Court in Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994). The determination by the Court of Appeals that there was no adverse impact generated by the Sparkses’ developments was based upon a strict standard of "specific proportionality” between development impacts and exactions which the court in Dolan examined and expressly rejected. Under Dolan, a land use regulation does not effect a taking if the local government shows by individualized determination that its exaction is "roughly proportional” to the impact of the development. That degree of connection was established in this case by evidence the proposed developments would likely generate increased traffic on adjacent roads that are inadequate for safe access. Douglas County’s required dedication of rights-of-way as a condition for approval of the Sparkses’ plat applications thus does not constitute an unconstitutional taking of property.

We reverse the decision of the Court of Appeals which reversed the Douglas County Superior Court ruling upholding the action by Petitioner Douglas County conditioning approval of plat applications by Respondents Sparks on dedication of rights-of-way for road improvements.

Dolliver, Guy, Johnson, and Talmadge, JJ., and Utter, J. Pro Tern., concur.

1 See Ex. A; Clerk’s Papers at 4.

2 Clerk’s Papers at 5-13. The record indicates existing right>of-way widths as follows: Empire Street Northwest — forty-five feet; Twenty-Ninthth Street Northwest — forty-five feet; Fir Street Northwest — twenty-five feet; Thirty-Second Street Northwest — fifteen feet.

Douglas County Code 17.20.060 established the following standards for widths of streets and sidewalks within short plats and subdivisions: Arterial street— minimum width is sixty to eighty feet with four-foot sidewalks; Secondary arterial — sixty feet of right-of-way with four-foot sidewalks; Local streets — fifty feet of right-of-way with four-foot sidewalks. The Douglas County Comprehensive Plan provides that Empire Avenue is a collector arterial, and Thirty-Second Street and Fir Street are local streets. Clerk’s Papers at 30.

3 Clerk’s Papers at 12-13.

4 Administrative R. (Sparks 2) at 49-56.

5 Administrative R. (Sparks 2) at 57.

6 Administrative R. (Sparks 2) at 20-21.

7 Administrative R. (Sparks 3) at 25; (Sparks 4) at 25; (Sparks 5) at 22-23.

8 Clerk’s Papers at 47.

9 Clerk’s Papers at 48.

10 Sparks v. Douglas County, 72 Wn. App. 55, 863 P.2d 142 (1993).

11 Id. at 58-59.

12 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed. 2d 304 (1994).

13 U.S. Const. amend. V; Const. art I, § 16 (amend. IX).

14 Nollan v. California Coastal Comm’n, 483 U.S. 825, 831-32, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987).

15 Id. at 836.

16 Presbytery of Seattle v. King County, 114 Wn.2d 320, 336 n.30, 787 P.2d 907 (quoting Richard R. Settle, Regulatory Taking Doctrine in Washington: Now You See It, Now You Don’t, 12 U. Puget Sound L. Rev. 339, 356 (1989)), cert. denied, 498 U.S. 911 (1990).

17 Nollan, 483 U.S. at 836.

18 Id. at 834.

19 Id. at 837.

20 RCW 58.17.180.

21 Breuer v. Fourre, 76 Wn.2d 582, 584, 458 P.2d 168 (1969).

22 Washington State Employees Ass’n v. Cleary, 86 Wn.2d 124, 129, 542 P.2d 1249 (1975).

23 Abbenhaus v. Yakima, 89 Wn.2d 855, 858-59, 576 P.2d 888 (1978).

24 Finding of fact 2.14; Clerk’s Papers at 47.

25 Sparks, 77 Wn. App. at 58.

26 (Footnote omitted.) Id. at 58-59.

27 Id. at 58-59.

28 Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 819, 828 P.2d 549 (1992).

29 Robinson v. Safeway Stores, Inc., 113 Wn.2d 154, 157, 776 P.2d 676 (1989).

30 Thorndike v. Hesperian Orchards, Inc., 54 Wn.2d 570, 575, 343 P.2d 183 (1959).

31 (Italics ours. Italics omitted.) Sparks, 77 Wn. App. at 58.

32 The court in Dolan rejected the stringent test adopted by some state courts: "Under this standard, if the local government cannot demonstrate that its exac.tion is directly proportional to the specifically created need, the exaction becomes 'a veiled exercise of the power of eminent domain and a confiscation of private property behind the defense of police regulations.’ We do not think the Federal Constitution requires such exacting scrutiny, given the nature of the interests involved.” Dolan, 114 S. Ct. at 2319 (citation omitted).

33 Dolan v. City of Tigard, 317 Or. 110, 112, 854 P.2d 437, 443-44 (1993).

34 Dolan, 114 S. Ct. at 2317.

35 Dolan, 114 S. Ct. at 2317.

36 Dolan, 114 S. Ct. at 2317-18.

37 As indicated by the court in Dolan, this test is similar to the "reasonable relationship” test adopted by a majority of state courts, requiring the municipality to show the dedication requirement is reasonably related to the needs created by the development. However, the court did not use the term "reasonable relationship,” which it said could be confused with the "rational basis” test underlying equal protection claims. Dolan, 114 S. Ct. at 2319.

38 Dolan, 114 S. Ct. at 2319-20.

39 Id. at 2320.

40 Id. at 2321.

41 Id. at 2321-22.

42 Id. at 2322.

43 Lechelt v. Seattle, 32 Wn. App. 831, 835, 650 P.2d 240 (1982) (citing 4 Robert M. Anderson, American Law of Zoning §§ 23.33-.35 (2d ed. 1977)), review denied, 99 Wn.2d 1005 (1983).

44 RCW 58.17.110(2). The statute provides in relevant part:

A proposed subdivision and dedication shall not be approved unless the city, town, or comity legislative body makes written findings that: (a) Appropriate provisions are made for the public health, safety, and general welfare and for such open spaces,, drainage ways, streets or roads, alleys, other public ways . . . and all other relevant facts . . .; and (b) the public use and interest will be served by the platting of such subdivision and dedication. . . . Dedication of land to any public body, provision of public improvements to serve the subdivision, and/or impact fees imposed under ROW 82.02.050 through 82.02.090 may be required as a condition of subdivision approval. ... No dedication, provision of public improvements or impact fees . . . shall be allowed that constitutes an unconstitutional taking of private property.

Local governments are to adopt their own regulations governing short plats, which may be different from those governing major subdivisions. ROW 58.17.060(1). Douglas County, however, has mandated that short plats be subject to the same requirements as those governing subdivisions. See Douglas County Code 17.12.120; ch. 17.20.

45 Simpson v. North Platte, 206 Neb. 240, 248, 292 N.W.2d 297, 302 (1980).

46 Resp’ts’ Supp. Memo. in Opp’n to Pet. for Review at 3-4.

47 Clerk’s Papers at 5-13.