Michael & Myrna Darland v. Snoqualmie Pass Util. Dist. ( 2019 )

FILED
July 16, 2019
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
MICHAEL C. DARLAND and MYRNA )
DARLAND, husband and wife, et al, ) No. 36002-4-111
)
Appellants, )
)
V. )
) UNPUBLISHED OPINION
SNOQUALMIE PASS UTILITY )
DISTRICT, a Washington municipal )
corporation, )
)
Respondent. )
FEARING, J. - In a previous appeal, we affirmed the trial court's dismissal of
Michael and Myrna Darland's cause of action against the Snoqualmie Pass Utility
District for reimbursement of assessments paid for utility local improvement districts.
We now reverse the superior court's dismissal, based on the statute of limitations, of the
Darlands' remaining causes of action. We, however, dismiss two other claims on the
merits as a matter of law.
No. 36002-4-III
Darland v. Snoqualmie Pass Utility District
FACTS
This lawsuit concerns extension of water and sewer services to a seventy-six acre
tract of land. We call the tract of land SnoCadia. The property sits east of Snoqualmie
Pass in Upper Kittitas County. Plaintiffs Michael and Myrna Darland are current owners
of SnoCadia and wish to develop the land for residences. Defendant Snoqualmie Pass
Utility District, the local water-sewer district, assessed the property for water and sewer
services.
We repeat some facts, beginning in the 1970s, from our earlier opinion. On
August 3, 1977, Count Michael Graf Von Holnstein purchased SnoCadia. In 1978,
Kittitas County approved a planned unit development on Von Holnstein’s land. As a
result of county approval, Kittitas County Sewer District No. 1, a predecessor of
Snoqualmie Pass Utility District, included SnoCadia in its service area when finalizing
the district’s comprehensive plan.
To construct public water system improvements, sewer-water districts may form
utility local improvement districts (ULIDs). A sewer-water district forms the ULID to
finance improvements that benefit a limited number of properties. After forming the
ULID, the utility district sells revenue bonds to pay for the improvements, and the owners
of the properties within the ULID pay assessments for the purpose of retiring the revenue
bonds. RCW 57.16.050.
On May 19, 1982, Kittitas County Sewer District No. 1 Board of Commissioners
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adopted resolution number 82-3, which approved an assessment for Utility Local
Improvement District No. 4 for purposes of sewer facilities. The resolution provided:
Each of the lots, tracts, parcels of land and other property shown on
the assessment roll is declared to be specially benefited by the proposed
improvement in at least the amount charged against the same.
Clerk’s Papers (CP) at 229. The resolution also declared:
[A]ll future connections within Utility Local Improvement District
No. 4 will be subject to a connection charge or ready-to-serve fee of
$1,275.00 each, but the property owner will be entitled to a credit of one
such connection charge for each $1,275.00 of assessment against that
property up to the full amount of that assessment.
CP at 229. ULID No. 4 assessed $48,917.25 against 72.47 acres of Michael Von
Holnstein’s property. Apparently the ULID did not benefit all SnoCadia.
Kittitas County Sewer District No. 1 changed its name to Snoqualmie Pass Sewer
District of King and Kittitas Counties sometime between May 19, 1982, and July 25,
1986. On July 25, 1986, Snoqualmie Pass Sewer District Superintendent Richard Kloss
penned a letter to Snoqualmie Pass landowners, including Michael Von Holnstein. The
letter addressed a proposed water system and read, in part:
SUBJECT: Pass-wide Water System
The following is in response to several questions asked about the
proposed pass-wide water system:
1. Financing will be accomplished by the formation of a Utility
Local Improvement District (ULID). The bonds would be issued at
approximately 8 1/2 percent (today’s rate) payable over a 15 year period.
The preliminary cost per acre is $ 1,425.00 and lots under 1 acre
would be $ 475.00 per lot. This method of payment allows all land over 1
acre to be guaranteed 3 residential equivalent hookups (1200 gpd). Lots
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under 1 acre would be entitled to 1 residential equivalent hookup.
The monthly payment based on a current 8 1/2 percent interest rate
for 15 years would be $14.03 per month per acre, and $4.68 for lots under 1
acre.
CP at 26. Superintendent Kloss’ letter referred to proposed ULID No. 7.
On December 10, 1986, the Snoqualmie Pass Sewer District Board of
Commissioners convened a regular meeting. The board of commissioners discussed
water and sewer hookups. The minutes of the meeting read in part:
The Board of Commissioners stated that this does not include any
distribution system for water and that it only runs the water mains by the
property making water available to them, this is also true for sewer.
CP at 34. Later records also suggest not only a commitment to grant customers hookups,
but also a commitment by the utility district to extend sewer and water mains to utility
customers’ respective properties, a promise contrary to utility industry customs.
On April 8, 1987, the Snoqualmie Pass Sewer District Board of Commissioners
convened a regular meeting, during which the board discussed ULID No. 7. Minutes of
the April 8 meeting include this entry:
Commissioner [Stan] DeBruler read the letter of protest from Mr.
Von Holstein aloud to the [b]oard members. Von Holstein’s property is 76
acres, abuts Mt. Grandeur. Mr. Von Holstein wants out because he has no
legal access because of easements. Supt. Kloss explained to the [b]oard
members the adjoining property owners and the neighboring easement
problems. Easement possibilities were discussed by the [b]oard and it was
suggested that a response to Mr. Von Holstein be made as soon as possible.
CP at 142.
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On June 24, 1987, the Snoqualmie Pass Sewer District held a public hearing on the
final assessment roll for ULID No. 7. During this June 24 public hearing, a
representative of Michael Von Holnstein read a letter from Von Holnstein that expressed
dismay over assessments on his property with no development potential. The letter
claimed SnoCadia could not be developed because it lacked a sixty-foot right of way for
access as required by the county. After the reading of the letter, the following dialogue
transpired:
PRES. CRAVEN: Is there any other person that would like to
address the Board relative to their property?
JOHN HIGHT: I have a question. With a piece of property big
enough to split and divide into another lot, will I have to pay the $710 two
times?
PRES. CRAVEN: You will have to pay another $710.
SUPT. KLOSS: Property under one acre is entitled to one hookup
and for anything above that you have to pay a hookup fee—710 is
prepaying that hookup.
SEC. DEBRULER: These are guaranteed hookups. We are
guaranteeing you water. This ULID # 7 is bringing water in trunk line past
your property.
CP at 39.
On July 31, 1987, Snoqualmie Pass Sewer District Superintendent Richard Kloss
sent notice to all district customers that the district would proceed with ULID No. 7
construction. The notice further declared:
The District will only be responsible for the water mains and the line
from the main to the property line. The water service line is the
responsibility of the homeowner or business.
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CP at 33.
In 1989, Louis Leclezio approached Michael Von Holnstein about purchasing
SnoCadia. To that end, Leclezio formed a joint venture investment group named Miller
Shingle Company. At the time Louis Leclezio negotiated a purchase of the acreage, he
knew that the land sat within the Snoqualmie Pass Sewer District boundaries and that the
property was subject to ULID Nos. 4 and 7. Leclezio further knew that Michael Von
Holnstein had defaulted on the ULID assessments and the assessments had accrued
penalties and interest. Finally, Leclezio knew that the sewer district had threatened to
foreclose on the land unless Count Von Holnstein paid amounts owed.
Before Miller Shingle Company purchased SnoCadia, Louis Leclezio viewed the
land and reviewed records at the Snoqualmie Pass Sewer District and at Kittitas County.
Leclezio met with sewer district superintendent Richard Kloss. Leclezio wanted to
confirm the availability of water and sewer for the land and its potential for rezoning to
commercial use. Due to penalties and interest, the amount owed by Von Holnstein to the
district substantially exceeded the property purchase price, and so Leclezio sought to
measure the potential gain from payment of the assessments.
According to Louis Leclezio, during a meeting with Snoqualmie Pass Sewer
District Superintendent Kloss, Kloss showed Leclezio a hookup status ledger maintained
by the district. The ledger disclosed that the sewer district owed Michael Von
Holnstein’s property two hundred and thirty water hookups and thirty-eight sewer
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hookups. Kloss also represented to Leclezio that the district guaranteed the hookups to
the land. Finally, Kloss represented to Leclezio that the sewer district guaranteed
delivery of the water and sewer lines to the boundary of each tax parcel of property
within the district. Thus, Leclezio concluded that, on payment of the assessments,
penalties, and interest accrued on SnoCadia, the district would provide the property a
minimum of two hundred and thirty water hookups and thirty-eight sewer hookups and
the sewer district would, at its cost, run the sewer and water mains from the district’s then
existing termini to at least the boundaries of SnoCadia. According to Leclezio, the
district’s guarantees induced him to purchase SnoCadia from Michael Von Holnstein and
to pay all assessments, penalties, and interest owed to the district on closing of the
purchase.
Michael Von Holnstein transferred SnoCadia’s 76.8 acres of land to Miller
Shingle Company on June 1, 1989. The company paid the purchase price to Von
Holnstein and $492,781.44 to Snoqualmie Pass Sewer District for ULID Nos. 4 and 7
assessments, interest, and penalties. On September 12, 1989, the Board of Kittitas
County Commissioners approved Louis Leclezio’s request to rezone SnoCadia from
forest and range land to commercial land.
At some date between 1989 and January 30, 1998, the Snoqualmie Pass Sewer
District changed its name to Snoqualmie Pass Utility District, the name of the defendant
in this suit. In January 1998, Louis Leclezio commenced preparations for the marketing
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and sale of the property. He sought confirmation from the Snoqualmie Pass Utility
District as to the number of water and sewer hookups available to the property. In
response to the inquiry, the utility district faxed a copy of a one page document headlined
“Hookup Status.” CP at 145. The document continued to show the acreage would
receive two hundred and thirty unused water hookups and thirty-eight unused sewer
hookups.
On August 11, 1999, the board of commissioners of the Snoqualmie Pass Utility
District convened. Meeting minutes from August 11 portend a water shortage within the
district. The minutes read, in part:
SYSTEM CONNECTION CHARGES
Supt. Kloss distributed copies of a draft resolution from Foster
Pepper & Shefelman to rescind pre-paid hookups as was discussed at our
last meeting. After a lengthy discussion the Board agreed to research this
matter further and see what other alternatives might be available. In the
meantime we need to put together a plan before any action can be taken.
Supt. Lenihan stated that our water rights issue is the biggest
problem. With our current water rights we cannot honor the water
hookups. He also reported that our wells are not reliable and the plan
should include for the cost to put in a new well and additional storage.
CP at 45.
In March 2001, the Snoqualmie Pass Utility District adopted a temporary
moratorium on the issuance of new certificates of water availability. The utility district
then acknowledged nearly exhausting its available water rights.
In June 2001, Louis Leclezio received an offer from an unidentified purchaser to
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purchase SnoCadia for $6 million subject to confirmation of available water and sewer
utilities. Thereafter, Leclezio and Snoqualmie Pass Utility District exchanged a series of
letters, primarily written by attorneys, through which Leclezio sought to confirm the right
to water and sewer hookups and in which the utility district denied any guarantee for
hookups.
On June 2, 2001, attorney R. Drake Bozarth sent a letter on behalf of Louis
Leclezio and Miller Shingle Company to the Snoqualmie Pass Utility District. The letter
informed the utility district that a developer wished to acquire the property subject to the
district reconfirming in writing the total number of water and sewer hookups available.
On July 18, 2001, the Snoqualmie Pass Utility District replied to Drake Bozarth’s letter:
The District’s current policies for property owners in the District
seeking water service are set forth in Resolution No. 2001-3, adopted by the
Board of Commissioners on March 14, 2001, and Resolution No. 2001-6,
adopted by the Board of Commissioners on April 25, 2001. Pursuant to
Resolution No. 2001-6, a waiting list for the allocation of remaining and
future water supply was established.
CP at 49.
On September 5, 2001, Drake Bozarth, on behalf of Louis Leclezio, advised the
Snoqualmie Pass Utility District that Leclezio prepaid for two hundred and thirty water
hookups and thirty-eight sewer hookups under ULID Nos. 4 and 7. Bozarth again
requested that the utility district verify in writing the availability of water and sewer
service to the 76.8 acres. On September 6, 2001, the utility district’s attorney, Marc
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Greenough, sent another letter to Bozarth. The letter read in part:
With respect to your client’s claim that your client’s payment of
ULID assessments is the equivalent of a system connection charge, there
appears to be some misunderstanding in distinguishing ULID assessments
and system connection charges. The District has authority to impose ULID
assessments under RCW 57.16.050. The District has separate authority to
impose system connection charges under RCW 57.08.005. In classifying
customers, the District may in its discretion consider capital contributions
made to this system including assessments. RCW 57.08.081.
It appears that at certain times in the past, the District has maintained
a policy of granting credits against system connection charges for ULID
assessments that have been paid. However, a credit against a system
connection charge is not the same as payment of the system connection
charge itself. Please note that any credit for ULID assessments against
future payment of system connection charges is at the discretion of the
Board of Commissioners of the District. RCW 57.08.081.
CP at 57-58.
On September 18, 2001, Drake Bozarth, on behalf of Louis Leclezio, notified the
Snoqualmie Pass Utility District by letter that its conduct and apparent rescission of its
obligations by reason of his payment of the ULID assessments would cause a substantial
decrease in the market value of SnoCadia. On September 23, 2003, Daniel Mallove, new
counsel for the utility district, wrote to Brian Dorsey, new counsel for Louis Leclezio:
Your August 6, 2003 letter also asked the District to confirm the
entitlement of the Leclezio/Darland property to a certain number of water
and sewer connections and the actual capacity of the District to meet what
you describe as the District’s “obligation under those entitlements.”
As you may be aware, the District wrote to R. Drake Bozarth, your
clients’ previous counsel, on November 15, 2001 concerning the issues you
have raised. Please be advised that the District’s position has not changed
since that letter was sent. Specifically, it is the District’s position that your
clients do not have a guaranteed entitlement to any water and sewer
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connections to their property. Rather, pursuant to District Resolution No.
87-11, your clients received a monetary credit to be applied to the system
connection charges to be paid by your clients as part of the District’s
issuance of a Certificate of Water Availability for the subject property.
If your clients wish to obtain water or sewer service, they will need
to file an appropriate application for service pursuant to the requirements of
Resolution No. 2002-05 or any other applicable resolutions passed by the
District.
CP at 63. Thereafter, the proposed sale of the property failed due to the refusal of the
utility district to confirm the availability of water and sewer service to the property.
On June 12, 2003, Miller Shingle Company sold SnoCadia to Louis Leclezio,
Michael Darland, and Myrna Darland. The deed specifically conveyed
water rights, utilities, including Snoqualmie Pass Utility District
water and sewer hook-ups, (believed, without warranty by grantor, to
consist of 230 water hook-ups and 38 sewer hook-ups).
CP at 84. Under a related, but separate, contract between Louis Leclezio, on the one
hand, and Michael and Myrna Darland, on the other hand, the Darlands would hold title
to the entire property and would convey twenty-six acres to Leclezio on the satisfaction
of certain conditions, including proof that the property was entitled to receive two
hundred and thirty water hookups and thirty-eight sewer hookups. The Darlands
intended a residential development on the land and christened the proposed development
SnoCadia.
Currently the Snoqualmie Pass Utility District sewer main ends two thousand and
two hundred feet from the southern line of SnoCadia. The utility district’s water main
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ends four thousand and five hundred feet from the property. No easements permit lateral
lines to traverse between the two main lines and the 76.8 acres. Private landowners own
some of the land between the water and sewer mains and SnoCadia. The Washington
State Department of Transportation or United States Forest Service owns other
intervening land.
At some unknown date, the Washington State Department of Transportation
granted to Michael and Myrna Darland’s predecessors a twenty-foot access easement to
the property. Nevertheless, Kittitas County requires the Darlands to obtain two sixty-foot
access easements in order to develop the acreage for residences.
PROCEDURE
The case has a long fifteen year history. On July 14, 2004, Michael and Myrna
Darland and Louis Leclezio sued Snoqualmie Pass Utility District. The Darlands and
Leclezio requested a declaratory judgment, a writ of mandamus, and damages for inverse
condemnation, breach of contract, estoppel, and tortious interference. The Darlands and
Leclezio asked for an order establishing their right to the delivery of services to the
outside boundaries of SnoCadia in order to serve two hundred and thirty residential units
with water and thirty-eight residences with sewer. The Darlands and Leclezio also
sought an order compelling Snoqualmie Pass Utility District to lay lateral lines from its
main trunk lines to the property’s outside borders. Later the Darlands would demand that
the utility district condemn intervening land to procure for the Darlands sixty-foot access
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easements.
On August 30, 2004, the Snoqualmie Pass Utility District answered Michael and
Myrna Darland’s and Louis Leclezio’s complaint and primarily denied the complaint’s
allegations. Nevertheless, the utility district admitted that, through the formation of
ULID Nos. 4 and 7, it entered into a contract with the owners of property within those
two ULIDs. The contract conferred special benefits to those property owners. The
district raised many affirmative defenses, including the statute of limitations.
On January 25, 2005, Michael and Myrna Darland and Louis Leclezio moved for
partial summary judgment on the following questions, among others:
Issue No. 1: Did the District guarantee that the Property would
receive 230.07 ERU’s of water service and 38.37 ERU’s of sewer service
as a “special benefit” to the Property by assessing the Property for said
service, when all assessments have been paid in full?
....
Issue No. 3: Is the District obligated, at its sole expense, to extend
the water and sewer mains to at least the boundary of each parcel
comprising the Property, with sufficient capacity to deliver at least 400
gallons per day (gpd) of water per hook-up?
CP at 921-22 (boldface omitted).
The trial court granted in part and denied in part Michael and Myrna Darland’s
and Louis Leclezio’s summary judgment motion. The trial court concluded that Michael
and Myrna Darland and Louis Leclezio were entitled to receive two hundred and thirty
hookups of water service at four hundred gallons per day per residence and thirty-eight
hookups of sewer service as a special benefit under ULID Nos. 4 and 7. The court denied
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summary judgment as to the question of whether the utility district must, at its expense,
extend the water and sewer mains to the property boundaries. The court found competing
facts as to whether the utility district agreed to extend service lines to SnoCadia.
In September 2005, the parties entered a memorandum of agreement tentatively
resolving the dispute. Under the agreement, each party assumed separate responsibilities
to seek necessary right-of-way permits and easements to create access to the 76.8 acres in
order to allow development of SnoCadia. The Snoqualmie Pass Utility District incurred
the primary responsibility of seeking utility related rights-of-way, easements, and
permits. The Darlands assumed the primary responsibility to obtain all access related
easements and permits, principally in the form of two sixty-foot wide access roads to the
property in order to comply with county requirements for development. The procurement
of easements was a condition to the memorandum agreement becoming a binding
agreement and to the Darlands dismissal of this suit. On October 4, 2005, the parties
entered a stipulation and order staying litigation pending settlement. For the next nine
years, the parties unsuccessfully sought easements from third parties to accommodate
development of SnoCadia.
On August 20, 2014, Michael and Myrna Darland filed their first amended
complaint. The complaint alleged breach of contract, breach of implied covenant of good
faith and fair dealing, negligence, inverse condemnation, estoppel, and unjust enrichment.
The complaint sought damages and a declaratory judgment.
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In January 2015, the Darlands again moved for partial summary judgment. The
Darlands requested that the trial court compel the district to use its powers of eminent
domain to condemn two sixty-foot-wide access and utility easements over privately held
properties so that the Darlands’ property could utilize the special benefits conferred by
ULID Nos. 4 and 7.
The trial court denied Michael and Myrna Darland’s second summary judgment
motion. On April 16, 2015, the trial court entered the following order:
(1) With respect to the issue of road access to plaintiff’s [sic] property,
because defendant does not have the legal authority to exercise its powers of
eminent domain to condemn property for the purpose of providing road access to
plaintiffs’ property, plaintiffs are not entitled to judgment against defendant as a
matter of law on that issue;
(2) With respect to the issue of extending utility service to plaintiff’s [sic]
property, questions of fact exist as to (a) which party should pay for the costs of
any eminent domain proceeding which may be necessary to acquire the property
rights to extend utility service to plaintiff’s [sic] property and (b) which party
should pay for the costs of installation of the water and sewer mains needed to
extend utility service to plaintiff’s [sic] property; and
(3) Consequently, Plaintiffs’ Motion for Partial Summary Judgment is
DENIED.
CP at 1555. In its letter memorandum explaining its decision, the trial court observed
that Snoqualmie Pass Utility District will not be required to provide access easements,
but will be required to provide utility easements. The court wrote:
As to the cost of bringing the utilities to the edge of the property,
Judge Cooper explained in 2005 that a question of fact remains regarding
whether defendant is required to, at its sole expense, extend water and
sewer mains to the property boundary so that plaintiffs can enjoy the
special benefits for which they have already paid. Accordingly, that
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question remains in need of a trial. While it may ultimately be determined
after trial that defendant should pay for the legal costs of the eminent
domain proceeding and that plaintiffs should pay for the “dirt work”
(trenching and pipe costs), the court could also fashion some other sort of
remedy. In any event, it does at this point seem beyond dispute that
defendant shall have to, whether it wishes or not, exercise its power of
eminent domain to ensure that plaintiff has access to the sewer and water
benefits already paid for. “In order for a sewer to be susceptible of use to a
given parcel of land, there must be access from said land to said sewer
without passing through the property of other individuals.” Memorandum
Decision, page 9 (quoting Towers v. Tacoma, 151 Wash. 577, 583 (1929)).
CP at 1104.
On July 8, 2015, Michael and Myrna Darland filed a motion for partial summary
judgment seeking to recover the monies paid to Snoqualmie Pass Utility District under
ULID Nos. 4 and 7 for water and sewer service. On October 22, 2015, the utility district
cross-moved for summary judgment on the Darlands’ claim for return of money paid. On
December 28, 2015, the trial court denied the Darlands’ motion for partial summary
judgment and granted the district’s motion for summary judgment. The trial court
thereby dismissed the action for reimbursement. In a memorandum decision, the trial
court explained:
Having exhausted their ability to obtain adequate access to this
property (and presumably develop it like originally envisioned), plaintiffs
resort to the only remedy they can presently conceive of: a money judgment
against defendant for the value paid of past assessments, plus interest. This
request is put forth with full knowledge that plaintiffs themselves never
paid one penny towards the assessments in question: those assessments
were paid for by the previous landowners. The overall condition of the
property was known, or should have been known, to plaintiff when it was
purchased. The price of the property when plaintiffs purchased it
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necessarily included every facet of that property; and every tort, contract,
easement or other legal burden cognizable at law was transferred with the
property to the plaintiffs when they took that deed. There was then and is
now no cognizable claim for recoupment of previously paid ULID
assessments.
From the evidence presented it is clear that defendant has done
nothing to harm plaintiffs or their property, and the assessments defendants
previously collected from the previous landowners were legally collected
and legally expended, and nothing has been presented by plaintiff which
establishes a need to have a trial about anything. Defendant’s motion
should be granted, plaintiffs’ motion should be denied, and the case should
be dismissed entirely.
CP at 249, 710 (emphasis added). On December 28, 2015, the trial court entered an order
granting the Snoqualmie Pass Utility District’s summary judgment motion, which order
reads, in part:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that
(1) Defendant’s Cross-Motion for Summary Judgment is GRANTED;
(2) Plaintiffs’ Motion for Partial Summary Judgment Seeking to Recover
All Monies Paid to District is DENIED; and this action is dismissed
without fees or costs to either party.
CP at 250, 711.
Michael and Myrna Darland appealed and focused on forcing Snoqualmie Pass
Utility District to condemn access easements to SnoCadia or to refund the special
assessments paid. This court issued “no ruling as to whether the 2015 order dismissing
the action abrogated the 2005 order obligating the utility district to provide water and
sewer hookups.” CP at 251. It also declined to answer the Darlands’ first two issues
raised on appeal. Those two issues included the following two questions:
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Issue 1: Is the Snoqualmie Pass Utility District obligated at its costs
to extend the existing water and sewer lines to Darlands’ property under
ULID Nos. 4 and 7?
Answer 1: We do not answer this question because the parties did
not properly brief the issue.
....
Issue 2: Did the trial court err when ruling that the Snoqualmie Pass
Utility District lacks legal authority to condemn private property for access
and utility easements benefitting the Darlands’ property?
Answer 2: We do not address this issue because the Snoqualmie Pass
Utility District lacks any obligation to condemn property for the purpose of
access to the Darlands’ land.
CP at 251, 254. Regarding the Darlands’ third issue, this court held that RCW 57.16.100
barred the Darlands’ reimbursement claim.
On the first appeal, this court declined to address Snoqualmie Pass Utility
District’s contentions that the statute of limitations barred Michael and Myrna Darland’s
lawsuit and the Darlands lacked standing to assert claims against the utility district. This
court affirmed the trial court’s 2005 and 2015 summary judgment orders and remanded to
the trial court “for what, if any, further proceedings are appropriate.” CP at 263.
On November 21, 2017, Michael and Myrna Darland again moved, in superior
court, for partial summary judgment. The Darlands sought to compel Snoqualmie Pass
Utility District to use its statutory power of eminent domain to condemn the utility
easements necessary to deliver water and sewer service to the boundary of SnoCadia. On
November 22, 2017, the utility district cross-moved for summary judgment on the statute
of limitations and other grounds.
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On April 23, 2018, the superior court granted Snoqualmie Pass Utility District’s
partial summary judgment motion and dismissed all of the Darlands’ causes of action as
time-barred. In a letter ruling, the trial court explained that any claim for breach of
contract was extinguished by the statute of limitations before Michael and Myrna Darland
purchased SnoCadia. Also, the utility district had performed no wrongful act toward the
Darlands. According to the superior court, earlier summary judgment rulings
determining that the Darlands possessed a right to sewer and water hookups were wrong
in light of the statute of limitations. The court qualified its ruling by stating that the
Darlands might hold enforceable rights to hookups if they filed an engineered application
to the utility district. The superior court dismissed the lawsuit in its entirety.
LAW AND ANALYSIS
The superior court granted summary judgment to Snoqualmie Pass Utility District
based on the statute of limitations. In reviewing a summary judgment, this court engages
the same inquiry as the trial court. Wolfe v. Department of Transportation, 173 Wn. App.
302, 305, 293 P.3d 1244 (2013). Therefore, this court’s review is de novo. Briggs v.
Nova Services, 166 Wn.2d 794, 801, 213 P.3d 910 (2009). Summary judgment is proper
if the pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show the absence of any genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law. CR 56(c). This
court construes all facts and reasonable inferences in the light most favorable to the
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nonmoving party. Enterprise Leasing, Inc. v. City of Tacoma, 139 Wn.2d 546, 551, 988
P.2d 961 (1999).
Michael and Myrna Darland contend that, in granting summary judgment to the
district, the trial court erroneously concluded that all of their claims accrued in the 1980s
when the predecessor to Snoqualmie Pass Utility District formed the utility local
improvement districts and assessed property owners for the expenses of the local
districts. The Darlands characterize their claims as seeking compensation for action of
the utility district occurring in 2001. During that year, the utility district first declared an
unwillingness to provide water services to the property. We agree. Because the Darlands
sued within three years of Snoqualmie Pass Utility District’s failure to assure service, the
statute of limitations bars none of the remaining claims. At least a question of fact exists
as to the timeliness of Michael and Myrna Darland asserting those claims.
Despite reversing summary judgment in favor of the utility district on the basis of
the statute of limitations, undisputed facts permit us to grant the district summary
judgment on two of Michael and Myrna Darland’s causes of action. We address the
defense of the limitation period first.
Law of the Case Doctrine
Before addressing the Snoqualmie Pass Utility District’s defense of the statute of
limitations, we must resolve a preliminary question. Michael and Myrna Darland assert
that the law of the case doctrine bars the utility district from raising the defense because
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No. 36002-4-III
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the district raised the defense in a 2015 partial summary judgment motion and in the first
appeal and because the superior court’s 2005 ruling, affirmed in the first appeal by this
court, included a finding that the utility district’s first actionable conduct occurred on July
18, 2001.
Under the law of the case doctrine, questions determined on appeal, or which
might have been determined had they been presented, will not again be considered on a
subsequent appeal without a substantial change in the evidence. State v. Worl, 129
Wn.2d 416, 425, 918 P.2d 905 (1996). Accordingly, the parties, the trial court, and this
court are bound by the holdings of the court on a prior appeal until such time as they are
authoritatively overruled. Greene v. Rothschild, 68 Wn.2d 1, 10, 414 P.2d 1013 (1966).
In 1976, our Supreme Court adopted RAP 2.5(c)(2), codifying the law of the case
doctrine:
Prior Appellate Court Decision. The appellate court may at the
instance of a party review the propriety of an earlier decision of the
appellate court in the same case and, where justice would best be served,
decide the case on the basis of the appellate court's opinion of the law at the
time of the later review.
The doctrine is discretionary, not mandatory. Greene v. Rothschild, 68 Wn.2d at 8.
After remand from this court, the superior court directly addressed whether the
statute of limitations barred Michael and Myrna Darland’s claims. The superior court
never earlier addressed the question. Nor did we reach this question during the first
appeal. We earlier ruled: “[b]ecause we affirm dismissal of Michael and Myrna
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No. 36002-4-III
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Darland’s request for reimbursement of special assessments paid, we do not address
Snoqualmie Pass Utility District’s contentions that the statute of limitations bars the
claim . . . .” CP at 262. The “claim” referenced is the Darlands’ claim for reimbursement
of the special assessments that the predecessor in interest paid. Since no court earlier
addressed the utility district’s argument that the statute of limitations barred the
remaining claims, the law of the case doctrine does not apply.
Contract Claim
We analyze the application of the statute of limitations for some of the discrete
claims asserted by Michael and Myrna Darland against Snoqualmie Pass Utility District.
We begin with the contract claim.
The parties agree that Snoqualmie Pass Utility District’s formation of ULID Nos.
4 and 7 created a written contract between the utility district and owners of the property
within the two local districts, under which the utility district would provide water and
sewer services to property. Both parties also agree that RCW 4.16.040 imposes a six year
limitation period on “an action upon a contract in writing, or liability express or implied
arising out of a written agreement.” RCW 4.16.040(1). The Darlands and the utility
district disagree as to the accrual date of the Darlands’ breach of contract claim.
The statute of limitations in a contract action begins to run at the time of the
breach. City of Algona v. City of Pacific, 35 Wn. App. 517, 521, 667 P.2d 1124 (1983).
The Darlands argue that the utility district first breached the parties’ contract on July 18,
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No. 36002-4-III
Darland v. Snoqualmie Pass Utility District
2001. On that day, the Snoqualmie Pass Utility District replied, to Louis Leclezio’s
counsel’s request for confirmation of water and sewer hookups, with a letter avoiding the
question and stating that the utility district now kept a waiting list for the allocation of its
water supply. The Darlands filed their complaint less than three years later, on July 14,
2004.
The utility district claims that the 2001 letter did no repudiate any contract, but
rather its precedent board of commissioners created a waiting list for services. We reject
the utility district’s argument for several reasons. First, even if the 2001 resolutions only
created a waiting list, the creation of such a list breached the contract for services since
no waiting list existed when Snoqualmie Pass Utility District created the utility local
improvement districts, imposed assessments on the land, and agreed to provide services
in consideration for the assessments. Second, if we adopted the utility district’s position,
no breach of contract has yet to occur such that the statute of limitations has not even
commenced to run. Third, the superior court ruled in 2005 that the Darlands were
entitled to water and sewer service. This refusal occurred in 2001 and the Darlands
timely filed their breach of contract claim in 2004.
Snoqualmie Pass Utility District argues that the statute of limitations on the utility
local improvement district contracts accrued in 1983 and 1987. The utility district relies
on this court’s language in the first appeal, “[i]f Count Von Holnstein determined that the
problematic circumstances resulted in a lack of benefits to the 76.8 acres, he had the right
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No. 36002-4-III
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to file a lawsuit challenging the ULIDs within” six years. CP at 262. The district
mischaracterizes this court’s language, however. This passage from the opinion
discussed the lack of sixty-foot access easements to the SnoCadia land, i.e. “conditions
that erect difficulties for SnoCadia to benefit from the ULIDs,” obstacles which were also
present at the time of the ULID assessments. CP at 262. If the Darlands were
challenging the validity of the initial ULID assessments from the 1980s, then the utility
district’s reasoning would apply.
Implied Covenant of Good Faith and Fair Dealing
Michael and Myrna Darland asserted no cause of action for the implied covenant
of good faith in the original complaint filed on July 14, 2004. The Darlands inserted this
claim in their first amended complaint, filed on August 20, 2014. Civil Rule 15(c) states,
“[w]henever the claim or defense asserted in the amended pleading arose out of the
conduct, transaction, or occurrence set forth or attempted to be set forth in the original
pleading, the amendment relates back to the date of the original pleading.” The
Darlands’ claim for breach of the implied covenant arises from the same conduct as
alleged in the Darlands’ original complaint. Because this cause of action benefits from
the relation back doctrine, for statute of limitations purposes, we treat the claim as filed
on July 14, 2004. Thus, the cause of action based on the covenant survives the statute of
limitations. Both parties agree that claims for the breach of good faith and fair dealing, a
tort, must be brought within three years. RCW 4.16.080.
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No. 36002-4-III
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Negligence
Michael and Myrna Darland asserted their claim for negligence for the first time in
the 2014 amended complaint. The cause of action surrounds the same conduct
supporting the breach of contract claim. Therefore, this claim also survives the statute of
limitations because of the relation back doctrine under CR 15(c).
The statute of limitations for a negligence action is three years. RCW 4.16.080(2).
The statute of limitation period begins to run when the plaintiff’s cause of action accrues.
Giraud v. Quincy Farm & Chemical, 102 Wn. App. 443, 449, 6 P.3d 104 (2000).
Usually, the cause of action accrues when the plaintiff suffers injury, however, the three
year limitations period is tolled “until the plaintiff knows or, through the exercise of due
diligence, should have known all the facts necessary to establish a legal claim.” Giraud
v. Quincy Farm & Chemical, 102 Wn. App. at 449.
The utility district maintains that negligent injury to property claims are subject to
a two year statute of limitations under RCW 4.16.130. While we agree with the utility
district’s legal contention, we find the argument factually misplaced. The Darlands
ground their negligence claim on the utility district’s failure to take the steps necessary to
deliver water and sewer to the property, not for any physical damage to the land. We
render no decision as to the validity of the merits of the negligence claim since the parties
do not brief this issue.
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No. 36002-4-III
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Estoppel
We now begin to address causes of action about which questions exist as to the
viability of the claims on the merits in addition to the limitation period. Although
Michael and Myrna Darland refer, in their amended complaint, to a claim for estoppel,
they now characterize the cause of action as one for promissory estoppel. In addition to
arguing the statute of limitations bars the promissory estoppel action, Snoqualmie Pass
Utility District contends the merits of the cause of action fails as a matter of law. We
disagree.
Snoqualmie Pass Utility District relies on Spectrum Glass v. Public Utility District
No. 1 of Snohomish, 129 Wn. App. 303, 317, 119 P.3d 854 (2005), which stands for the
proposition that promissory estoppel does not apply when a contract governs. Stated
differently, the promise must lie outside the confines of a binding agreement.
Nevertheless, Michael and Myrna Darland rely on some promises not contained in the
writings surrounding formation of the utility local improvement districts. Those promises
include comments of utility district employees and a ledger showing SnoCadia entitled to
sewer and water hookups.
Snoqualmie Pass Utility District argues, in the alternative, that the promises relied
on by the Darlands occurred long before the couple acquired the property, and therefore
any cause of action is barred by the statute of limitations. Nevertheless, the cause of
action for promissory estoppel accrues on breach of the promise not when the defendant
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No. 36002-4-III
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relays the promise. Again, since there is a genuine issue of material fact as to when the
Darlands’ claims accrued, summary judgment was improper.
Unjust Enrichment
The Darlands’ claim for unjust enrichment alleges, in relevant part:
As a result of the District’s refusal and/or failure to deliver the
special benefits for which the Subject Property was assessed and paid for,
the District has been unjustly enriched by the amount of the assessments,
penalties, and interest it received relating to the Subject Property. Said
amounts, together with pre-judgment interest, should be disgorged and
restored to Darland.
CP at 213. Based on this language, Snoqualmie Pass Utility District contends that the
Darlands’ unjust enrichment claim merely restates their dismissed claim for
reimbursement of assessments paid.
A claim for unjust enrichment may be brought by a party to recover the value of a
benefit retained even absent any contractual relationship, if fairness and justice require it.
Young v. Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008). Unjust enrichment includes
three elements: (1) the defendant receives a benefit, (2) the received benefit is at the
plaintiff’s expense, and (3) the circumstances make it unjust for the defendant to retain
the benefit without payment. Young v. Young, 164 Wn.2d at 484-85. The Darlands do
not meet element two. The Darlands never paid for the assessments, and so they cannot
establish the received benefit was at their expense.
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No. 36002-4-III
Darland v. Snoqualmie Pass Utility District
We may affirm summary judgment on any basis supported by the record.
Swinehart v. City of Spokane, 145 Wn. App. 836, 844, 187 P.3d 345 (2008). We affirm
dismissal of the unjust enrichment claim on its merits.
Inverse Condemnation
Snoqualmie Pass Utility District argues that the subsequent purchaser rule bars the
Darlands’ inverse condemnation claim. We agree.
In Hoover v. Pierce County, 79 Wn. App. 427, 433, 903 P.2d 464 (1995), this
court reinforced the general rule that a grantee or purchaser of land cannot sue for a
taking or injury occurring prior to his acquisition of title, but rather, the subsequent
purchaser may sue only for a new injury or taking. A prior owner’s right to damages for
injury to property does not pass to a subsequent purchaser unless expressly conveyed.
Crystal Lotus Enterprises Ltd. v. City of Shoreline, 167 Wn. App. 501, 505 n.8, 274 P.3d
1054 (2012). An exception to the doctrine exists when additional governmental action
causes a measureable decline in market value during the claimant’s ownership. Wolfe v.
Department of Transportation, 173 Wn. App. at 308 (2013).
Louis Leclezio paid the assessments. Any additional governmental action
purportedly occurred on July 18, 2001. At that time, Miller Shingle Company and
Leclezio owned the property. Michael Darland and Myrna Darland did not acquire title
to the property until 2003.
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No. 36002-4-III
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Utility Easements
Michael and Myrna Darland assign error on appeal to the trial court’s refusal to
rule that the utility district possessed legal authority to condemn the utility easements
necessary to deliver to SnoCadia the 230 water hook-ups and 38 sewer hook-ups, which
the land should receive, as a matter of law, pursuant to this court’s prior decision. The
superior court did not address this contention because of dismissal of claims based on the
statute of limitations.
The Darlands allege that the utility district admitted that it has the statutory
authority to condemn utility easements. The Darlands also contend that the utility district
holds a duty to condemn the utility easements necessary to extend its water and sewer
lines to the Darlands’ property. The utility district argues that, since the trial court did
not reach this issue, this appeals court lacks any ruling to review on appeal. We agree
with the utility district.
In denying the Darlands’ partial summary judgment motion, the trial court ruled:
Viewed with limitation of actions principles in mind, the only issue
that has ever been justiciable in this case is whether the subject property is
entitled to the special benefits promised under ULID 4 and ULID 7. That
issue has been settled. The property is entitled to those benefits. To date,
plaintiffs have never properly attempted to access these benefits. They
have never submitted a properly engineered application to the District for
approval. If such an application were submitted and unreasonably rejected,
it seems that plaintiffs could then sue to enforce their rights.
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No. 36002-4-III
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CP at 1540. The court’s letter ruling involves no discussion of whether the utility district
has the statutory authority to condemn private land for utility easements.
The Darlands observe that the utility district admitted in prior briefing to the trial
court that it has the statutory authority to condemn utility easements. The utility district
wrote:
The District clearly has the authority to condemn property for the
purpose of installing water or sewer lines and other utility facilities on
property, and the District clearly has the express authority to condemn land
and interests in land for that purpose. See RCW 57.08.005(1), (3), (5), and
(7).
CP at 534. The Darlands also cite a portion of this court’s prior decision wherein this
court discussed a letter sent by the utility district’s counsel, John Milne, in which he
“recognized a contractual obligation of the utility district to provide an extension of the
utility services to the Darlands’ land and the need for the extension of the utility easement
to fulfill this duty.” CP at 245. The Darlands cite to other statements uttered by this
court in its prior decision, but mischaracterize the quoted language. The misinterpreted
language dealt with access easements, not utility easements.
When the trial court has not reached an issue, this court lacks a ruling to review.
An appellate court may decline to reach issue where not considered by trial court when
granting summary judgment. Carrillo v. City of Ocean Shores, 122 Wn. App. 592, 609,
94 P.3d 961 (2004).
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No. 36002-4-III
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2017 Court of Appeals Opinion
Finally, the Darlands ask this court to revisit its prior decision, which declined to
decide whether the utility district has authority to condemn access easements to
SnoCadia. The Darlands contend that this court incorrectly ruled that the Darlands
provided no evidence that the utility district represented it would provide access
easements to SnoCadia and this court mistakenly commented that the Darlands failed to
cite authority for the argument. Snoqualmie Pass Utility District replies that this court
cannot or should not change its prior decision. We agree with the utility district.
RAP 2.5(c)(2) provides that, “[t]he appellate court may at the instance of a party
review the propriety of an earlier decision of the appellate court in the same case and,
where justice would best be served, decide the case on the basis of the appellate court’s
opinion of the law at the time of the later review.” This court will grant reconsideration
of an identical legal issue in a subsequent appeal of the same case when the holding of
the prior appeal is clearly erroneous and the application of the law of the case doctrine
would result in manifest injustice. Folsom v. County of Spokane, 111 Wn.2d 256, 264,
759 P.2d 1196 (1988).
Michael and Myrna Darland strenuously argue that, during the first appeal, they
provided evidence of promises made by Snoqualmie Pass Utility District that it would
provide access easements. Nevertheless, in this second appeal the Darlands still fail to
cite the record for any promise uttered by the utility district about access easements.
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No. 36002-4-III
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In this second appeal, the Darlands reference their prior briefing to establish a
legal obligation on behalf of Snoqualmie Pass Utility District to procure access
easements. The Darlands reiterate that, under RCW 8.12.030, the utility district has the
same powers that cities and towns have to condemn land for water and sewer systems.
They state RCW 57.02.030 mandates that the statute be liberally construed to carry out its
purposes and objectives. According to the Darlands, the utility district cannot fulfill its
contractual obligation to the Darlands to provide water and sewer hookups if SnoCadia
lacks access. Nevertheless, as in the prior appeal, the Darlands cite no Washington cases
showing the power to condemn land for a utility user to gain ingress and egress to the
user’s land.
With the repetitive arguments and citations from prior briefing, the Darlands fail
to show how this court’s prior ruling is “clearly erroneous” and how the application of
the law of the case doctrine results in “manifest injustice” under RAP 2.5(c)(2).
Therefore, we again decline to address the question as to whether the district has the
authority to condemn access easements for the benefit of Michael and Myrna Darland.
CONCLUSION
We affirm the superior court’s dismissal of Michael and Myrna Darland’s claims
for unjust enrichment and inverse condemnation. We reverse the dismissal of the
Darlands’ other causes of action and remand for further proceedings consistent with this
opinion.
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A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
Fearing, J.
WE CONCUR:
Lawrence-Berrey, C.J.
Pennell, J.
33