City Of Woodinville v. The Fowler Partnership ( 2015 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
CITY OF WOODINVILLE, a municipal
corporation of the State of Washington, No. 72417-7-1 %
Respondent, DIVISION ONE ro
UNPUBLISHED OPINION E
CO
THE FOWLER PARTNERSHIP, a a n
Washington general partnership,
Appellant. FILED: August 24, 2015
Appelwick, J. — Fowler appeals the trial court's order granting Woodinville's
motion for summary judgment. The order entitled Woodinville to a deed for 50 feet of
property without compensation. Fowler argues that its predecessor's Covenant to deed
the property on demand is not enforceable and that Woodinville has not already acquired
the property through a valid permit condition, common law dedication, or adverse
possession. We affirm.
FACTS
Early in 1985, Wood Associates submitted an application to King County for a
permit to develop its property into commercial buildings. Wood Associates also filed a lot
line adjustment application with King County in order to revise the property's internal lot
boundary lines. On March 22, 1985 King County approved the lot line adjustment subject
No. 72417-7-1/2
to Wood Associates dedicating the south 50 feet of the property to King County for public
road purposes. The approval required Wood Associates to provide a copy of a recorded
deed to satisfy the condition.
In April 1985, King County reviewed a site plan for the property. The site plan
included a handwritten notation stating, "50 [feet] to be dedicated upon demand by King
Co. per zoning requirement."
On May 21,1985, a document executed by Wood Associates, entitled "Covenants,
Conditions and Restrictions Running with the Land," (Covenant) was recorded in King
County. Later the same day, King County revised the lot line adjustment approval by
striking through the condition requiring a deed dedicating the property immediately.
Interlineated was a notation that read, "Covenant recorded under AF #850521 0708 which
reserves south 50 ft[.] for future public road, no dedication required at this time." The lot
line adjustment application approval with the revision was recorded on August 12, 1985.
In 1986, Woodinville City Center was built on the property. Fowler acquired title to
the property at issue via statutory warranty deed in 1991. In 1993, the City of Woodinville
incorporated. The property, previously located within unincorporated King County, then
fell within Woodinville city limits. King County did not request a dedication deed of the
property prior to Woodinville's incorporation.
Years later, on May 7, 2013, Woodinville entered into a development agreement
with Woodin Creek Village Associates to build several hundred units of residential
housing, retail space, and amenities on the property immediately to the south of
Woodinville City Center. A full street improvement was needed with the development of
No. 72417-7-1/3
the Woodin Creek Village property. Consequently, in early 2014, Woodinville contacted
Fowler and informed itthat it now required a dedication of the propertyfor a public road.
On March 25, 2014 Woodinville sent Fowler a letter with a dedication deed for
signature. Fowler refused to deed the property without compensation. After Fowler
refused to sign the deed, Woodinville filed an action for declaratory and injunctive relief
on April 22, 2014. Woodinville argued it was entitled to a declaration that the dedication
required under the Covenant is not a taking. Fowler responded and counterclaimed
arguing that requiring dedication of the deed without compensation is a taking, because
there was no adverse public impact of the lot line adjustment necessitating the dedication
of the property to King County as required by the Covenant.
On June 30, 2014, Fowler moved for summary judgment. It requested relief in the
form of dismissal of Woodinville's claim that it is entitled to the property without
compensation and a declaration that the demand for the deed without compensation is
an unconstitutional taking. Fowler argued that the Covenant does not run with the land,
that the Covenant does not say that the deed would be extracted without compensation,
and that its takings argument is not barred by the statute of limitations.
On July 3, 2014, Woodinville also filed a motion for summary judgment requesting
the relief it sought in its initial complaint. Specifically, it argued that as a matter of law,
the recorded Covenant requiring the dedication was enforceable, that Fowler was time-
barred from challenging the validity of the conditional approval of the lot line adjustment
imposed by King County, and that its enforcement of the Covenant given in consideration
for the lot line adjustment is not a compensable taking.
No. 72417-7-1/4
The trial court granted Woodinville's motion for summary judgment and denied
Fowler's motion for summary judgment. Fowler appeals the trial court's order granting
Woodinville's motion for summary judgment.
STANDARD OF REVIEW
This court reviews summary judgment orders de novo. Hadlev v. Maxwell, 144
Wn.2d 306, 310-11, 27 P.3d 600 (2001). Summary judgment is appropriate only where
there are no genuine issues of material fact and the moving party is entitled to judgment
as a matter of law. CR 56(c); Peterson v. Groves, 111 Wn. App. 306, 310, 44 P.3d 894(2002). When considering the evidence, the court draws reasonable inferences in the
light most favorable to the nonmoving party. Schaafv. Hiqhfield. 127 Wn.2d 17, 21, 896
P.2d 665 (1995).
DISCUSSION
Whether Woodinville must compensate Fowler for a deed to the 50 feet of property
turns on the legal effect of the Covenant.1 The Covenant was executed and
acknowledged weeks before Wood Associates applied for permits for its development.
King County placed an explicit condition on the approval of the lot line adjustment: delivery
of an acceptable deed dedicating the south 50 feet of the property to the county. Two
months later, Wood Associates recorded the Covenant. The same day, King County
removed the condition of delivery of a deed immediately dedicating the property and
interlineated on the amended lot line adjustment approval a notation that read "covenant
recorded under AF #850521 0708 which reserves south 50 ft[.] for future public road, no
1 Fowler appears to concede that Woodinville is entitled to the deed to the property
as long as it is compensated.
No. 72417-7-1/5
dedication required at this time." We conclude that King County accepted the Covenant,
in lieu of an immediate deed, as a condition of the amended lot line adjustment approval.
The opening text of the Covenant identifies the owners and the property it was
developing, and then provides that the county may develop and/or construct a roadway
to be denominated NE 173rd Street, adjacent to and running along the southerly
boundary of lots A, B, and C. It also provides that the development may be initiated by
the formation of a County Road Improvement District (CRID). The first numbered
paragraph of the Covenant requires the property owner to participate in and not oppose
or protest the formation of a CRID or any road improvement project sanctioned by King
County. The second paragraph states that the property owner will maintain a 50 foot
setback along the southern border of its property in accordance with King County's zoning
and setback regulations. That same provision granted the property owner permission to
develop the 50 foot strip for a street or make landscape and drainage improvements. The
third paragraph states in part, "Owner will deed the south 50 - feet of Lots A, B and C to
King County for Public Road purposes when sanctioned by King County." The concluding
paragraph notes that the "[tjiming of the formation of any such CRID or other road
improvement project and the dedication of the south 50 - feet of Lots A, B, and C shall be
determined by King County." It also specifies the minimum standard for any
improvements and an option for property owners to require a higher standard.
The provisions for the formation of a CRID and the references to construction
standards are of little interest here. Stripped of them, the Covenant states the following:
(1) Owner will deed the south 50 feet of Lots A, B, and C to King County; (2) King County
may construct NE 173rd Street over the south 50 feet; (3) timing of the construction and
No. 72417-7-1/6
delivery of the deed shall be determined by King County; and (4) in the meantime, the
owner will maintain a 50 foot setback, but may develop that 50 foot strip for street,
landscape, and drainage improvement in accordance with an approved county plan.
These provisions became conditions of the amended lot line adjustment approval.
Fowler contends there was an insufficient nexus between the Wood Associates'
lot line adjustment request and King County's extraction of the right of way in the
Covenant. It contends that the required dedication in the Covenant was an improper
condition placed upon the property, because there was no evidence that the lot line
adjustment would have adverse public impacts. Fowler argues that the required
dedication of the property under the Covenant would have constituted an unconstitutional
taking if King County had attempted to enforce the Covenant without paying
compensation.
The federal and Washington state constitutions provide that private property may
not be taken for public use without just compensation. Sparks v. Douglas County. 127
Wn.2d 901, 907, 904 P.2d 738 (1995). 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. Id. This rule does not necessarily
apply, however, where conveyance of a property right is required as a condition for
issuance of a land permit, jd. 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. JcL
No. 72417-7-1/7
Woodinville argues that the conditions on the amended lot line adjustment
approval were reasonably related to the impacts of development, were authorized under
the King County zoning code, and did not amount to a taking. The lot line adjustment
approval required the dedication, but makes no reference to the zoning code. The site
plan for the development contained a notation that the dedication was required per the
zoning code. The applicable code provisions however are not in the trial court record.
Nor does the record document the impacts of the lot line adjustment (or other aspects of
the development) which would justify such conditions under the zoning code. The record
is insufficient to sustain Woodinville's position.
Ifthe nexus was insufficient between Wood Associates' lot line adjustment request
and the required dedication in the Covenant, Fowler argues that imposing the Covenant
conditions without compensation is an unconstitutional taking.2 See id. Even ifthe nexus
is sufficient, Fowler also argues that the Covenant does not say that Wood Associates
would deed the property to King County without compensation. It notes that the Covenant
referenced chapter 36.88 RCW which authorizes the formation of a CRID. That statute
authorizes the county to acquire a necessary right of way by gift, purchase, or by
condemnation. RCW 36.88.310. Fowler argues that two out of three alternatives, i.e.,
purchase and condemnation, explicitly require payment of compensation. And, Fowler
cites to Lappin v. Lucurell. 13 Wn. App. 277, 534 P.2d 1038 (1975), for the assertion that
a gift ordinarily will not be presumed.
2 Ifthe dedication of the property required by the Covenant was reasonably calculated to
prevent, or compensate for, adverse public impacts of the lot line adjustment approval,
then the requirement for the dedication in the Covenant without compensation would not
have been an unconstitutional taking. And, King County would have been entitled to the
property upon demand.
No. 72417-7-1/8
This argument lacks merit. King County did not need to invoke chapter 36.88 RCW
to acquire the property. The Covenant provided explicitly for the deed. The Covenant
was not short on details and provided for contingencies—alternative methods of
proceeding with the project and alternative development standards. Notably, the
Covenant does not mention eminent domain. It is silent about either a value for the
property, a method to determine the value for the property, or conditioning the deed on
tender of payment. Any ambiguities in the drafting would be construed against the party
drafting it. Riss v. Angel. 80 Wn. App. 553, 557, 912 P.2d 1028 (1996), affd, 131 Wn.2d
612, 934 P.2d 669 (1997). Nothing in the record suggests that King County drafted the
Covenant. We conclude that the Covenant language did not require King County to
compensate Wood Associates for the dedication of the 50 foot right of way for NE 173rd
Street.
Because we conclude the Covenant does not provide for compensation, we now
address Fowler's claim of an unconstitutional taking. Fowler contends an unconstitutional
taking is ripe for judicial review only "after there has been a final local decision" and that
King County never made a "final decision," because it did not demand the deed.
Therefore, it contends that Wood Associates could not have challenged the conditioning
of the lot line approval on the Covenant. Fowler argues the challenge became ripe only
when Woodinville demanded that it provide the deed.3 Fowler relies on Saddle Mountain
3 Even if the taking challenge was not ripe until Woodinville demanded the deed,
Fowler nonetheless lacks standing to challenge the taking now, because of the
subsequent purchaser rule. Where property is taken under the exercise of the power of
eminent domain, the owner at the time of the taking or injury is the proper person to initiate
the proceeding or sue. Hoover v. Pierce County, 79 Wn. App. 427, 433, 903 P.2d 464(1995). Because the right to damages for an injury to property is a personal right
8
No. 72417-7-1/9
Minerals v. Joshi, 152 Wn.2d 242, 252, 95 P.3d 1236 (2004) for this assertion. But, its
reliance is misplaced. In Saddle Mountain the court considered a regulatory taking and
opined that before a property owner can raise a takings claim, the government entity
charged with implementing the regulation must reach a final decision regarding the
application of the regulations to the property at issue. Id.Here, there is no question that a final decision was made when the amended lot
line adjustment was granted. The uncompensated conditions were imposed at that time.
It was recorded as notice in the land title records. If the conditions were not reasonably
related to the impacts under zoning regulations, the "taking"—the obligation to provide
the dedication deed on demand—occurred when the amended lot line adjustment
became final. At that point the county had only to provide notice to receive the deed. The
question was only when the deed would be officially "sanctioned" as provided in the
Covenant. The Covenant was a condition to a final land use decision that was made in
1985. Therefore, Fowler's argument that Wood Associates could not challenge the
condition until the deed was demanded lacks merit.
The time period for filing a writ of review to challenge a land use decision is limited
to 30 days from the time a final local governmental land use decision is issued. Brutsche
v. City of Kent, 78 Wn. App. 370, 380, 898 P.2d 319 (1995). Wood Associates did not
challenge the Covenant as an unconstitutional condition placed upon the lot line
adjustment approval within 30 days of it becoming a final decision.4 Brutsche compels
belonging to the property owner, the right does not pass to a subsequent purchaser
unless expressly conveyed, jd. at 433-34.
4 It is worth noting that although Brutsche was decided in 1995—well after the lot
line adjustment was approved—the law at the time of the amended lot line adjustment
approval was similar. Cathcart-Maltbv-Clearview Cmtv. Council v. Snohomish County,
No. 72417-7-1/10
the conclusion that Fowler's challenge to the enforceability of the Covenant as between
King County and Wood Associates is time barred.
Fowler further argues that laches bars the city's claim because no party sought to
enforce any alleged rights under the Covenant for 29 years and that the Covenant has
expired. Laches is an equitable principle that relates to neglect for an unreasonable
length of time, under circumstances permitting diligence, to do what in law should have
been done. Arnold v. Melani, 75 Wn.2d 143, 147, 449 P.2d 800 (1968). More than a
lapse of time must be demonstrated in order for a laches defense to succeed. Id. at 148.
The Covenant clearly contemplated a delay in construction of the street. It specifically
authorized King County to dictate timing. Fowler and its predecessors had the benefit of
the permits issued with the Covenant conditions. They developed and used the 50 feet
that were subject to the dedication, as provided in the Covenant. The conditions were
filed in the public records, not hidden from the parties. Whether Woodinville was unaware
of its legal interest for years, is not a basis to apply laches here. Whether Fowler paid too
much for the property because it did not understand the dedication is not a basis to apply
laches. Whether Fowler paid property taxes on the 50 feet when it should not have had
to do so, is not a basis to apply laches here. The record does not demonstrate that the
delay in requesting the delivery of the deed caused a change of position that would make
enforcement of the Covenant inequitable.
96 Wn.2d 201, 205-06, 634 P.2d 853 (1981). Absent a controlling statute or ordinance,
a writ of review had to be filed "within a reasonable period after the rezone decision." jd,
In Cathcart, the court held that because a writ was filed within 30 days of the county's
decision, it was timely, jd. at 206.
10
No. 72417-7-1/11
Because Fowler's challenge is barred as untimely, we need not consider whether
the Covenant as a contract is enforceable5 or whether Woodinville acquired the property
via common law dedication or adverse possession. King County's interest in NE 173rd
Street reverted to Woodinville by virtue of RCW 35.02.180 upon incorporation.
Woodinville is entitled to the transfer of the deed as a mere formality. Because we
conclude that Woodinville's request now for the dedication deed does not constitute a
taking, Fowler is not entitled to a judgment for the market value of the property nor is it
entitled to attorney fees for a condemnation pursuant to RCW 8.25.070.
We affirm.
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WE CONCUR: ^
I
1
5 Fowler emphasizes that Woodinville had no rights to the property under the
Covenant, because the Covenant was revoked by law when King County failed to accept
the dedication. But, acceptance was not dependent upon demanding or receiving the
deed. Acceptance was completed when King County struck the original condition on the
lot line adjustment approval and substituted the Covenant conditions in the amended lot
line adjustment approval.
11