Manna Funding, LLC v. Kittitas County ( 2013 )

APR - q lDIJ
COURT
COURT OF APPEALS, DIVISION III, STATE OF
WASHINGTON
Manna Funding, LLC a Washington ) No. 30539-2-111
Limited Liability Company, Wild Horse )
Ranch, LLC, a Washington Limited )
Liability Company, Peregrine Skies, LLC, )
a Washington Limited Liability Company, )
Premier Property and Development )
Group, LLC, a Washington Limited )
Liability Company, Wild Rivers Crossing, )
LLC, a Washington Limited Liability ) ORDER DENYING MOTION
Company, ) FOR RECONSIDERATION
) AND AMENDING OPINION
Appellants, )
)
v. )
)
Kittitas County, a Washington municipal )
corporation I )
)
Respondent. )
The court has considered appellants' motion for reconsideration and is of the
opinion the motion should be denied. Therefore.
IT IS ORDERED the motion for reconsideration of this court's decision of
February 28,2013, is denied.
IT IS FURTHER ORDERED that the opinion shall be amended as follows:
No. 30539-2-111
Manna Funding v. Kittitas County
Footnote 8 at the end of the second full paragraph on page 21 shall be
deleted.
The second sentence in the second full paragraph on page 21 that begins
"Manna's failure" shall be amended to delete the words "invidious and."
DATED: April 9, 2013
PANEL: Judges Kulik, Korsmo. Siddoway
FOR THE COURT:
KEVIN M:"KORSMO
CHIEF JUDGE
2
FILED
Feb. 28,2013
In the Office of the Clerk of Coun
W A State Court of Appeals, Division II!
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
Manna Funding, LLC a Washington ) No. 30539-2-111
Limited Liability Company, Wild Horse )
Ranch, LLC, a Washington Limited )
Liability Company, Peregrine Skies, LLC, )
a Washington Limited Liability Company, )
Premier Property and Development Group, )
LLC, a Washington Limited Liability )
Company, Wild Rivers Crossing, LLC, a )
Washington Limited Liability Company, )
)
Appellants, ) PUBLISHED OPINION
)
v. )
)
Kittitas County, a Washington municipal )
corporation, )
)
Respondent. )
KULI~ J. - The Kittitas County Board of County Commissioners (Board) twice
denied an application by Manna Funding, LLC 1 for site-specific rezoning of its rural
I There are five appellants with equal interests in the subject property: Manna
Funding, LLC; Wild Horse Ranch, LLC; Peregrine Skies, LLC; Premier Property and
Development Group, LLC; and Wild Rivers Crossing, LLC. All are collectively referred
to by the parties as Manna.
No. 30539-2-II1
Manna Funding v. Kittitas County
acreage near Roslyn. Manna sought relief under the Land Use Petition Act (LUPA),
chapter 36.70C RCW, and the superior court ordered Kittitas County (the County) to
grant the rezone. Manna additionally sued the County for a claimed violation of
RCW 64.40.020 and 42 U.S.C. § 1983, and for tortious interference with a business
expectancy/tortious delay. The court dismissed Manna's lawsuit on summary judgment
and awarded the County attorney fees. Manna appeals.
We affirm the summary judgment order based upon our conclusions that
(1) Manna's application for rezoning was not an "application for a permit" for purposes
of a cause of action under RCW 64.40.020; (2) Manna had no federally protected
property interest in its application for rezoning for purposes of a claim under 42 U.S.c.
§ 1983; and (3) Manna produced no evidence of a contractual relationship or business
expectancy necessary to sustain its claims for tortious interference with a business
expectancy or tortious delay. We vacate the attorney fee award, however, and remand to
the superior court with instructions to award the County its attorney fees attributable
solely to the RCW 64.40.020 claim.
FACTS
In October 2006, Manna submitted to Kittitas County its application for a site-
specific rezone from "Forest and Range 20" (FR-20) to "Rural 3" (R-3) of its 100.31
2
No. 30539~2-II1
Manna Funding v. Kittitas County
acres of land lying north of the City of Roslyn and east of State Route 903. The land had
been zoned FR-20 in 1992. The requested rezone would allow a reduction in lot sizes
from 20 acres to 3 acres per residential unit. Manna made clear in its application that it
was currently seeking only a zoning reclassification. that no specific development
activities were currently proposed, and that any future development would comply with
the County's development regulations existing at the time ofthe application. A State
Environmental Policy Act (SEPA), chapter 43.21C RCW, mitigated determination of
nonsignificance was issued by County staff in December 2006.
After open record proceedings that included public testimony for and against
Manna's proposal, the County's Planning Commission adopted findings of fact and a
recommendation that the Board deny the rezone. The Board did so by Resolution 2007­
53 that was entered on May 15,2007. The Board found that Manna failed to prove the
rezone would contribute to the health, safety, and welfare of the surrounding zone, but did
not elaborate on that finding. The Board also determined that Manna's proposal failed to
3
No.30539-2-II1
Manna Funding v. Kittitas County
meet several necessary criteria for a rezone under Kittitas County Code (KCC)
17.98.020(7).2 The Board's findings reflected concerns that questionable property access
and steep slope hindering fire safety impacted the public health, safety, and welfare; that
the rezone would not have merit or value for the County or sub-area; that the steep slope
made the property unsuitable for reasonable development in general conformance with R­
3 zoning standards; and, that the proposed rezone would be materially detrimental to the
nearby urban forest zone and possibly to the historic city of Roslyn. The Board gave no
other supporting details or reasons for its findings.
2 The criteria in KCC 17.98.020(7) are:
a. The proposed amendment is compatible with the comprehensive plan.
b. The proposed amendment bears a substantial relation to the public health,
safety or welfare.
c. The proposed amendment has merit and value for Kittitas County or a sub­
area of the county.
d. The proposed amendment is appropriate because of changed circumstances
or because of a need for additional property in the proposed zone or because
the proposed zone is appropriate for reasonable development of the subject
property.
e. The subject property is suitable for development in general conformance
with zoning standards for the proposed zone.
f. The proposed amendment will not be materially detrimental to the use of
properties in the immediate vicinity of the subject property.
g. The proposed changes in use ofthe subject property shall not adversely
impact irrigation water deliveries to other properties.
h. The proposed amendment is in full compliance with chapter 17.13 KCC,
Transfer of Development Rights.
Subsection h was added by Ordinance 2010-006 in 2010 and is not applicable in this case.
4
No. 30539-2-III
Manna Funding v. Kittitas County
On June 5,2007, Manna filed a LUPA petition requesting the superior court to
overturn Resolution 2007-53. The petition also incorporated a complaint for damages
under RCW 64.40.020 and 42 U.S.C. § 1983. After determining that the Board failed to
adequately review the record and make meaningful findings of fact from which its
conclusions could be drawn, the superior court reversed the Board's decision, vacated
Resolution 2007-53, and remanded the matter for new hearings before the Planning
Commission and Board. The court specifically instructed the Board to conduct on-the­
record discussions to illuminate its decision-making, and to make detailed findings of fact
to support its conclusions. The court elaborated:
Any finding of fact and conclusion of law set forth in the resolution should
reflect just what the Board has reviewed in determihing its findings.
Moreover, the findings should be based upon the evidence presented, not on
conclusions that the applicant did not meet rezone criteria. For instance, if
the Board were to make an ultimate finding that access was questionable, it
should make particular findings based upon the record to demonstrate why
the access was questionable .... Similarly, making a bald finding that the
petitioners did not meet their burden of proof to demonstrate the rezone
positively affected the health, safety, morals and general welfare of the
county, without making findings of fact as to why the Board concludes it
did not meet the burden does not help the court in its judicial review of the
proceedings.
Clerk's Papers (CP) at 534 n.18.
After a new public hearing and findings by the Planning Commission, the Board
entered Resolution 2008-104 on June 17,2008, again denying Manna's application. The
5
No. 30539-2-III
Manna Funding v. Kittitas County
Board found Manna failed to show that the proposed R-3 zoning would contribute to the
health. safety, and welfare of the surrounding zone. The Board further found with respect
to the KCC rezone criteria that (1) Manna's proposed amendment "would not change
access to the property" and therefore bears no relation to the health, safety, and welfare,
(2) Manna failed to prove the rezone had merit and value for Kittitas County or a sub-area
of the County, (3) "there is no warranted change in circumstances ... [and] further ... the
analysis in the record is not sufficient to determine there is a need for additional property
in the proposed zone," and (4) "information in the record regarding the commercial forest
zone to the north and the Urban Forest Zone to the south would make a Rural-3 zone
detrimental to the existing zones." CP at 790.
On July 8,2008, Manna filed a second LUPA petition, seeking to overturn
Resolution 2008-104. The petition likewise included a complaint for damages under
RCW 64.40.020 and 42 U.S.C. § 1983. In a memorandum decision issued on February 5,
2009, the court observed that the Board failed to heed its instructions to include detailed
findings to explain the reasons for its decision, and that its findings were again too
conclusory for review. The court ruled that substantial evidence conclusively established
Manna had met its burden on all of the KCC rezoning criteria, and that the R-3 zone
comports with the comprehensive plan and implements its goals and policies relating to
6
No.30539-2-II1
Manna Funding v, Kittitas County
rural lands. Consequently, the rezone bears a substantial relationship to the public
3
welfare. The court thus reversed the Board's decision, vacated Resolution 2008-104,
and remanded the matter to the Board with instructions to approve Manna's requested
rezone,4 The County did not appeal. On February 18,2009, the Board entered an
ordinance approving Manna's requested R-3 zone change.
Manna subsequently filed an amended complaint on August 11, 2011, adding .
claims for tortious interference with a business expectancy and tortious delay, Manna
filed a motion for partial summary judgment as to RCW 64.40.020 liability of the County
for claimed arbitrary and unlawful delay by the Board, while reserving damages issues for
discovery and a trial. The County filed a cross motion for summary judgment to dismiss
Manna's entire lawsuit on grounds of absence of standing, limitations, ripeness, and
3 The court cited to Henderson v, Kittitas County, 124 Wn, App. 747,100 P.3d 842
(2004) (rezone that furthers the goals of the county's comprehensive plan bears a
substantial relationship to the public health, safety, morals, or general welfare) .
. 4 While not expressed in its written findings, the Board's limited discussions on the
record revealed continued concern about access to the property due to steepness/safety
issues, and perceived lack of merit or value to the County because Manna had no project
pending and it was only speculative whether the assessed value of the property may
increase. The court rejected these considerations in its memorandum decision. The court
ruled there was no basis for a finding of no relationship to the health, safety, and welfare
of the County because road access/engineering issues are not proper considerations for
zoning approval. but pertain only to specific development/permitting requirements. The
court also found Manna provided evidence that the rezone would eventually add to the
County's tax base. thus demonstrating merit and value for the County.
7
No. 30539-2-II1
Manna Funding v. Kittitas County
failure to satisfY the elements of its various claims. The court denied Manna's motion
and granted the County's motion. The court awarded the County $21,496.50 in attorney
fees as prevailing party under RCW 64.40.020. Manna appeals.
ANALYSIS
This court reviews an order of summary judgment de novo. Hisle v. Todd Pac.
Shipyards Corp., 151 Wash. 2d 853, 860, 93 P.3d 108 (2004). Summary judgment is
appropriate when there is "no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter oflaw." CR 56(c). "A material fact is of such
a nature that it affects the outcome of the litigation." Ruffv. County ofKing, 125 Wn.2d
697,703,887 P.2d 886 (1995). We consider the facts and inferences from the facts in the
light most favorable to the nonmoving party. Jones v. Allstate Ins. Co., 146 Wash. 2d 291,
300, 45 P.3d 1068 (2002).
A defendant moving for summary judgment may meet the initial burden by
pointing out the absence of evidence to support the nonmoving party's case. Young v.
Key Pharms., Inc., 112 Wash. 2d 216, 225 n.l, 770 P.2d 182 (1989) (quoting Celotex Corp.
v. Catrett, 477 U.S. 317,325,106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). "If the moving
party is a defendant and meets the initial showing, then the inquiry shifts to the party with
the burden of proof at trial, the plaintiff." Id. at 225 (footnote omitted). The facts set
8
No.30539-2-III
Manna Funding v. Kittitas County
forth must be specific, detailed, and not speculative or conclusory. Sanders v. Woods.
121 Wash. App. 593, 600, 89 P.3d 312 (2004). If, at this point, the plaintiff'"fails to make
a showing sufficient to establish the existence of an element essential to that party's case,
and on which that party will bear the burden of proof at trial', then the trial court should
grant the motion." Young, 112 Wn.2d at 225 (quoting Celotex, 477 U.S. at 322).
Damages Claim under RCW 64.40.020. The issue is whether a site-specific rezone
application is an "application for a permit" for purposes of a cause of action under chapter
64.40 RCW.
RCW 64.40.020(1) provides in pertinent part:
Owners of a property interest who have filed an application for a permit
have an action for damages to obtain relief from acts ofan agency which
are arbitrary, capricious, unlawful, or exceed lawful authority.
(Emphasis added.)
The definitions section in RCW 64.40.010 includes the following:
(2) "Permit" means any governmental approval required by law
before an owner of a property interest may improve, sell, transfer, or
otherwise put real property to use.
(5) "Regulation" means any ordinance, resolution, or other rule or
regulation adopted pursuant to the authority provided by state law. which
imposes or alters restrictions, limitations, or conditions on the use of real
. property.
(6) "Act" means a final decision by an agency which places
requirements, limitations, or conditions upon the use of real property in
9
No.30539-2-III
Manna Funding v. Kittitas County
excess of those allowed by applicable regulations in effect on the date an
application for a permit is filed.
Manna broadly contends that Resolutions 2007-53 and 2008-104 were "acts" on an
"application for a penni!" for purposes of RCW 64.40.020( 1) because they were final
decisions by the County that placed limitations upon the use of Manna's real property.
Manna then argues that a site-specific rezone application plainly falls within the
definition of "permit" because it is a "governmental approval required by law" before an
owner of a property interest may "put real property to use." Manna reasons that a site-
specific rezone application involves quasi-judicial decisionmaking, thus subjecting an
agency to liability under RCW 64.40.020. Lutheran Day Care v. Snohomish County, 119
Wn.2d 91,103-05,111,829 P.2d 746 (1992). This is in contrast to area-wide rezones,
which are legislative in nature and subject to a different review procedure under the
Growth Management Act, chapter 36.70A RCW. Woods v. Kittitas County, 162 Wn.2d
597,608, 174 P.3d 25 (2007). The definition of "project permit" under LUPA 5 is
5 RCW 36.70C.020(2) provides in pertinent part:
"Land use decision" means a final determination by a local jurisdiction's body or
officer with the highest level of authority to make the determination, including
those with authority to hear appeals. on:
(a) An application for a project permit or other governmental approval
required by law before real property may be improved, developed, modified, sold,
transferred, or used, but ... excluding applications for legislative approvals such
as area-wide rezones and annexations.
10
No.30539-2-II1
Manna Funding v. Kittitas County
virtually identical to the definition of "permit" under RCW 64.40.010(2), as shown by
case law establishing that a site-specific rezone is a '"project permit application" subject to
LUPA review. Wenatchee Sportsmen Ass 'n v. Chelan County, 141 Wash. 2d 169, 181 n.2, 4
P.3d 123 (2000); Woods, 162 Wn.2d at 608. Manna thus reasons that to hold that a site-
specific rezone meets the definition of "permit" under L UPA but not the virtually
identical definition in RCW 64.40.010(2) would defy plain meaning. And consistent with
this reasoning, the term "permit" for purposes of a cause of action under RCW 64.40.020
is not strictly limited to building permits, grading permits and the like, but pertains to a
broad range of approval and decisions affecting use of property-including rezone
decisions.
The County contends that RCW 64.40.020(1), by its clear terms, allows recovery
of damages only to a property owner who has applied for a permit to develop the
property. Since Manna's application was strictly for a rezone, it lacks standing to bring a
claim under RCW 64.40.020(1). Westway Constr., Inc. v. Benton County, 136 Wash. App.
859, 866, 151 P .3d 1005 (2006).
No Washington case is cited or found that addresses whether a site-specific rezone
application is an "application for a permit" under RCW 64.40.020( 1). Statutory
interpretation is a question of law reviewed de novo. W. Telepage, Inc. v. City o/Tacoma
11
No.30539-2-III
Manna Funding v. Kittitas County
Dep 't ofFin., 140 Wash. 2d 599, 607, 998 P.2d 884 (2000). Courts apply general principles
of statutory construction in determining the meaning of statutory language. If the
language of a statute is plain and unambiguous, we derive its meaning from the language
of the statute itself. Harmon v. Dep 't ofSoc. & Health Servs., 134 Wash. 2d 523, 530, 951
P.2d 770 (1998). Statutes are interpreted so that all language is given effect and no
portion is rendered meaningless or superfluous. Whatcom County v. City ofBellingham,
128 Wash. 2d 537, 546, 909 P.2d 1303 (1996). A court "should interpret the meaning of
terms in the context of the statute as a whole and consistently with the intent of the
legislature." One Pac. Towers Homeowners' Ass 'n v. HAL Real Estate Invs., Inc., 148
Wash. 2d 319, 330, 61 PJd 1094 (2002). If the language is susceptible to more than one
reasonable interpretation, an ambiguity exists and courts attempt to give effect to the
intent and purpose of the legislature. Harmon, 134 Wn.2d at 530. If the intent ofa
statute is not clear, the court may resort to statutory construction, including a
consideration of legislative history. Cherr.v \'. Mun. ofMetro. Seattle, 116 Wash. 2d 794,
799,808 P.2d 746 (1991); Harmon, 134 Wn.2d at 530 (to discern legislature's intent. a
court may look to any legislative history materials that are probative of that intent);
Lutheran Da:v Care. 119 Wn.2d at 104-05 (same).
RCW 64.40.020(1) is clear that only an owner with an interest in the property who
12
No. 30539-2-II1
Manna Funding v. Kittitas County
has filed an "application for a permit" may sue for damages under the statute. Westway
Constr., 136 Wn. App. at 866 (plaintifflacked standing under RCW 64.40.020 because
contractor who applied for permit had no property interest and person with property
interest did not apply for permit). "Standing challenges are jurisdictional and may be
raised at any time." Stevens County v. E. Wash. Growth Mgmt. Hearings Bd., 163 Wn.
App. 680, 686, 262 P.3d 507 (2011), review denied, 173 Wash. 2d 1019 (2012). While
Manna does have the standing of an interested property owner under RCW 64.40.020(1),
the dispositive question is whether it also has the permit applicant status necessary to sue
under the statute.
RCW 64.40.020(1) is also clear that a "permit" applicant's cause of action for
damages is "to obtain relief from acts of an agency." (Emphasis added.) A county is an
agency for purposes of the statute. RCW 64.40.010(1); Lutheran Day Care, 119 Wn.2d
at 101. Under RCW 64.40.010(6), an "act" is defined as that which places "requirements,
limitations, or conditions upon the use of real property in excess ofthose allowed by
applicable regulations in effect on the date an application for a permit is filed. "
(Emphasis added.) Manna does not address the above-italicized language. The
legislative history, however. sheds light on this already-clear language as pertains to the
particular question whether a rezone application is "an application for a permit" for
l3
No. 30539-2-II1
Manna Funding v. Kittitas County
purposes ofRCW 64.40.020(1).
Chapter 64.40 RCW was passed by the legislature in 1982. LAWS OF 1982, ch.
232. The bill originated as H.B. 1006 and became Substitute H.B. 1006. Viewing
legislative history, the bill file includes a document entitled "Bill Analysis" for the House
Committee on Local Government. The document explains the bill's intended scope:
Acts of a public entity which are subject to a lawsuit under the bill include
requirements or conditions placed upon land that are in excess of the zoning·
and other restrictions upon the use of the land in effect at the time an
application fora "permit["J is made. A "permit" is defined as governmental
approval required by law before a property owner may improve, sell or
otherwise use property.
HOUSE COMM. ON LOCAL GOVERNMENT, H.B. ANALYSIS on H.B. 1006, at 2, 47th
Leg., Reg. Sess. (Wash. Jan. 25,1982) (on file with Wash. State Archives); see
also HOUSE COMM. ON LOCAL GOVERNMENT, SUMMARY on H.B. 1006 ("Act" is
defined as when public entity imposes conditions or limitations which are more
stringent than those contained in adopted regulations) (on file with Wash. State
Archives); SENATE COMM. ON JUDICIARY, SYNOPSIS on Substitute H.B. 1006, at 1
(Wash. Feb. 23,1982) (on file with Wash. State Archives).6
6 The Senate Journal contains another pertinent point of inquiry about the bill's
intent. Senator Metcalf queried: ", Senator Hemstad, this does, then, make it substantially
easier to develop property? This is a development bill, this is a real estate development
bill or is it, make it more difficult or more easy to develop propertyT " 1 SENATE
14
No. 30539~2-III
Manna Funding v. Kittitas County
More pointedly, the House Committee file and Senate Committee file also each
include a "Discussion of Issues" document that contains the following question and
answer:
3. Will HB 1006 create a cause of action if an application for a zone
change is denied?
[Answer] No. HB 1006 does not apply to zone changes. It only creates a cause of
action when the allowable use under applicable regulations is denied or restricted
without just cause.
Discussion of Issues, H.B. 1006, 47th Leg., Reg. Sess., at 1 (Wash. 1982) (on file with
Wash. State Archives).
In addition, a bill summary from the Washington Association.ofRealtors
contained in the Senate Committee file sheds further light on the object of legislative
remedy-government attempts to "downzone" property following receipt of permit
applications. The Realtors summary explains that a typical example of the problem was a
developer who filed a legal action claiming an arbitrary and capricious decision by the
county for approving his plat, but with one-third less lots than allowed by zoning. Two
years later, the court overturned the lower density so the plat was finally approved as
JOURNAL, 47th Leg., Reg. Sess., at 1449 (Wash. 1982). Senator Hemstad responded:
'" What it is doing is providing to a party with a grievance for arbitrary, capricious, or
unlawful conduct by local officials in failure on a timely basis to authorize the
development of the property to recover damages for that period of time in which the
property was improperly withheld from development.'" Id.
15
No. 30539-2-II1
Manna Funding v. Kittitas County
originally requested with full density, but current law (pre-chapter 64.40 RCW) did not
give the property owner any damages relief. Wash. Ass'n of Realtors, No.1 Priority for
1982, Substitute H.B. 1006, Section 8 (Wash. Feb. 12, 1982) (located in Senate
Committee on Judiciary file on H.B. 1006) (on file with Wash. State Archives).
Manna's situation is just the opposite because its application was to upzone its
property from FR-20 to R-3. The County did not impose restrictions of less than one
residence for every 20 acres when it denied Manna's requested R-3 rezone. This helps
further illustrate why the County's resolutions denying the rezone were not "acts" as
defined in RCW 64.40.010(6) because its challenged decisions did not place any hew
requirements, limitations, or conditions upon the use of real property in excess of those
allowed Manna under then-current FR-20 zoning. Critically, Manna's application was
strictly for a rezone only and not for any type of development permit.
We conclude that when the plain language of the statute pertaining to "acts" of an
agency for which an "applicant" may sue is viewed in light of the legislative history, an
application, such as Manna's, that solely requests the rezoning o/property is not an
"application for a permit" under RCW 64.40.020(1). See Westmark Dev. Corp. v. City 0/
Burien, 140 Wash. App. 540, 548, 166 P.3d 813 (2007) (purpose of chapter 64.40 RCW is
to '" provide a swift remedy for property damage caused by govern~ental agency
16
No. 30539-2-II1
Manna Funding v. Kittitas County
action''') (quoting Wilson v. City o/Seattle, 122 Wn.2d 814,825,863 P.2d 1336 (1993)).
While Manna correctly argues that a court determining legislative intent may also
look to other statutes dealing with the same subject matter, see e.g., Harmon, 134 Wn.2d
at 530, such inquiry is not relevant here. Manna's analogy to RCW 36.70C.020(2)(a) and
case authority from Wenatchee Sportsmen and Woods that a site-specific rezone is a
"project pennit application" under LUPA is not controlling. Those cases did not involve
a claim under RCW 64.40.020. And Manna was able to receive its available remedy
under LUPA when the court ordered the County to approve the rezone and the County did
so by ordinance. See RCW 36.70C.030(1)(c) (distinguishing land use petition from trial
on claims for monetary damages and compensation).
We affirm the trial court's summary judgment dismissal of Manna's
RCW 64.40.020 claim on the sole basis that Manna did not file an "application for a
permit" giving rise to a cause of action for any "act" of the County under the statute. See
Young, 112 Wn.2d at 225 (failure ofproof on an essential element renders immaterial all
other facts as to claim) (quoting Celotex, 477 U.S. at 322-23)~ Boyce v. West, 71 Wn.
App. 657, 665, 862 P.2d 592 (1993) (same). Whether Manna's suit was barred for failure
17
No. 30539-2-II1
Manna Funding v. Kittitas County
to exhaust administrative remedies under RCW 64.40.030 is irrelevant in this situation. 7
42 u.s.c. § 1983 Due Process Claim. 42 U.S.c. § 1983 provides: "Every person
who, under color of any statute, ordinance, regulation ... of any State ... subjects, or
causes to be subjected, any citizen of the United States ..' . to the deprivation of any
rights, privileges, or immunities secured by the Constitution and laws, shall be liable to
the party injured in an action at law, suit in equity, or other proper proceeding for
redress."
To establish a prima facie due process violation under § 1983, the plaintiff must
show that the defendant deprived the plaintiff of a constitutionally protected property
right. Mission Springs, Inc. v. City o/Spokane, 134 Wash. 2d 947, 962, 954 P.2d 250(1998); Robinson v. City a/Seattle, 119 Wash. 2d 34, 58, 830 P.2d 318 (1992); see Nieshe v.
Concrete Sch. Dist., 129 Wash. App. 632, 641-42, 127 P.3d 713 (2005) (fact that decision-
making entity may have deviated from its procedures, or acted arbitrarily, is not a prima
facie deprivation of constitutional due process) (citing Williams v. City 0/ Seattle, 607 F.
Supp. 714,718-19 (W.D. Wash. 1985)). "Property interests are not created by the
7We also do not decide whether the Board acted arbitrarily, capriciously, or
unlawfully in its denials of Manna's rezone application. We note with respect to damages
that Manna presented no evidence of compensable damages under RCW 64.40.010(4) in
response to the County's motion for summary judgment so as to meet its summary
judgment burden of prima facie establishing each element ofRCW 64.40.020.
18
No.30539-2-III
Manna Funding v. Kittitas County
constitution but are reasonable expectations of entitlement derived from independent
sources such as state law." Mission Springs, 134 Wn.2d at 962 n.15 (citing Ed. of
Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972)). '" A
protected property interest exists if there is a "legitimate claim of entitlement" to a
specific benefit.'" Nieshe, 129 Wn. App. at 641-42 (quoting Goodisman v. Lytle, 724
F .2d 818, 820 (9th Cir. 1984)).
Consistent with these principles, the law is well settled that a landowner has a
vested right to develop land under the zoning ordinances in effect at the time the permit
application is submitted. See Weyerhaeusel: v. Pierce County, 95 Wash. App. 883, 890, 976
P.2d 1279 (1999); Hale v. Island County, 88 Wash. App. 764, 771, 946 P.2d 1192 (1997).
This is well illustrated, for example, in Mission Springs, 134 Wn.2d at 962 (developer
who met ordinance requirements had constitutionally cognizable right to grading permit),
and Cox v. City ofLynnwood, 72 Wn. App, 1,863 P.2d 578 (1993) (applicant meeting
code requirements for boundary line adjustment entitled to § 1983 damages for city's
arbitrary and capricious denial). Cf Kelly v. Chelan County, 157 Wash. App. 417, 427-28,
237 P .3d 346 (2010) (development rights to project did not vest under the regulations in
effect at time of application for conditional use permit).
19
No. 30539-2-II1
Manna Funding v. Kittitas County
Manna contends that its interest in obtaining a valid and lawful decision on its
rezone application is a protected "property interest" under 42 U.S.C. § 1983. Manna
again theorizes that because a site-specific rezone is a land use decision (project permit
application under LUPA). it would also defy logic to not provide rezone applicants the
same substantive due process protections of § 1983 that Lutheran Day Care, 119 Wn.2d at
125, confirms are afforded other applicants for conditional use permits and building
permits. We reject Manna's arguments.
The dispositive principle, as urged by the County, is that "vested rights generally
do not apply to rezoning applications because at that point no decision has been
rendered." Hale, 88 Wn. App. at 771 (citing Teed v. King County, 36 Wash. App. 63 644,
677 P.2d 179 (1984); 6 WASHINGTON STATEBARAsS'N, REAL PROPERTY DESKBOOK
§ 97.8(2)(g) at 97-46 (3d ed. 1996)); see also Braun v. Ann Arbor Charter Township, 519
FJd 564, 573-74 (6th Cir. 2008) (plaintifflandowners had no constitutionally protected
property interest in application for future rezoned use of farm property for a trailer park):
Camastro v. City o/Wheeling, 49 F. Supp. 2d 500,505-06 (N.D. W.Va. 1998) (plaintiff
had no protected property interest for 42 U.S.C. § 1983 due process purposes in obtaining
zoning variance for car wash building).
20
No.30539-2-III
Manna Funding v. Kittitas County
We conclude that Manna had no vested/constitutionally protected property right
pertinent to R-3 zoning prior to the superior court's February 5, 2009 order directing the
County to grant its application. Until that time, its constitutionally protected property
interest was under existing FR-20 zoning for which no violation is claimed and nothing
was lost. Manna cites no authority that there is a federally protected property interest
under § 1983 in obtaining a decision on a mere application to rezone ("upzone") property.
Moreover, the County promptly issued the rezone ordinance within two weeks of the trial
court's order.
Accordingly, we uphold the trial court's summary judgment dismissal of Manna's
§ 1983 claim on the basis there is no evidence that the County deprived Manna of a
federally protected property right. Manna's failure of proof on this essential element
renders immaterial the facts relating to ripeness issues and to Manna's claim that the
Board denied it substantive due process by acting in arbitrary or invidious and irrational
fashion in passing on its rezone application. Young, 112 Wn.2d at 225; Boyce, 71 Wn.
App. at 665. 8
8In any event, we have carefully reviewed the record of the proceedings before the
Planning Commission and Board. As a matter of law, we find no conduct approaching
the animus necessary to sustain a § 1983 action. See Sintra, Inc. v. City ofSeattle, 119
Wn.2d 1,23.829 P.2d 765 (1992) (applying "invidious or irrational" standard to land use
decisions in Washington); County ofSacramento v. Lewis, 523 U.S. 833, 846-47, 118 S.
21
No.30539-2-II1
Manna Funding v. Kittitas County
Tortious Intelference with Business Expectancy/Delay. A claim for tortious
interference with a business expectancy requires five elements: (1) the existence of a
valid contractual relationship or business expectancy, (2) that defendants had knowledge
of that relationship, (3) an intentional interference inducing or causing a breach or
termination of the relationship or expectancy, (4) that defendants interfered for an
improper purpose or used improper means. and (5) resultant damage. Leingang v. Pierce
County Med. Bur., Inc., 131 Wash. 2d 133, 157,930 P.2d 288 (1997). Arbitrary delay is one
improper means of interfering with a business expectancy. Pleas v. City ofSeattle, 112
Wash. 2d 794, 805, 774 P.2d 1158 (1989); Westmark Dev. Corp., 140 Wn. App. at 560.
Citing to Westmark. Manna applies these five elements to both its tortious interference
and tortious delay claims. Br. of Appellant at 46.
A valid "business expectancy" includes any prospective contractual or business
relationship that would be of pecuniary value. Newton Ins. Agency & Brokerage, Inc. v.
Caledonian Ins. Group, Inc., 114 Wash. App. 151, 158,52 P.3d 30 (2002) (citing
Ct. 1708, 140 L. Ed. 2d 1043 (1998) (applying "shocks the conscience" standard to
§ 1983 cases not involving claimed denial of a fundamental right); Shanks v. Dressel, 540
F .3d 1082, 1088-89 (9th Cir. 2008) (same): see also Mongeau v. City ofMarlborough,
492 F.3d 14,17-18 (lstCir. 2007): Eichenlaub v. Township ofIndiana. 385 F.3d 274.
285-86 (3rd Cir. 2004); United Artists Theatre Circuit, Inc. v. Township of Warrington,
316 F.3d 392,399,402 (3rd Cir. 2003); Licari v. Ferruzzi, 22 F.3d 344,347 (1st Cir.
1994).
22
No. 30539-2-II1
Manna Funding v. Kittitas County
RESTATEMENT (SECOND) OF TORTS § 766B, cmt. c (1979). "All that is needed is a
relationship between parties contemplating a contract, with at least a reasonable
expectation of fruition. And this relationship must be known, or reasonably apparent, to
the interferor." Scymanski v. Dufault, 80 Wn.2d 77,84-85,491 P.2d 1050 (1971).
Manna contends that summary judgment dismissal was improper because it
established a prima facie case on all five elements: (1) the business expectancy was the
rezone approval once Manna met all of the KCC 17.98.020(7) criteria; (2) Kittitas County
had full knowledge of the relationship with Manna through its rezone application and first
LUPA petition; (3) if not after Resolution 2007-53. then certainly after Resolution 2008­
104, the County had intentionally interfered with Manna's expectation of a lawful rezone
decision; (4) the County had absolutely no legitimate purpose or interest in twice issuing
unlawful and virtually unreviewable decisions that lacked any support in the record; and
(5) Manna incurred delay damages from the County's action in an amount to be proven
through pretrial discovery. We find no error.
Manna made clear in its rezone application that it was currently seeking only a
zoning reclassification and that no specific development activities were currently
proposed. Manna identified no prospective business relationship with any party and it
repeatedly insisted in both its application and contemporaneous environmental checklist
23
No.30539-2-II1
Manna Funding v. Kittitas County
that the rezone was unrelated to any development project. Manna's manager, Tiffany
Doty, verified these facts in her deposition testimony submitted with the County's
summary judgment motion. She testified Manna was only seeking rezone approval to
allow for future creation of three-acre lots, and that between the time of the first rezone
denial in May 2007 and the rezone approval in February 2009, Manna had no written
contract or agreement of any kind with any developer. Thus, no agreement or business
relationship was terminated or severed because of the Board's denial of the rezone. Ms.
Doty also said that although Manna had stayed in touch with some potential investors and
developers prior to the rezone denial, nothing occurred with respect to the property after
the rezone was approved. Manna had not applied for a subdivision of its property into
three-acre lots, nor did it apply for any building or development permits on the property.
Manna provided no contrary evidence in its response to the County's summary judgment
motion.
Thus, as argued by the County, Manna failed to produce evidence of the first two
elements-existence (and knowledge by the County) of a valid contractual relationship or
business expectancy with which the County could interfere or delay. This renders all
other facts immaterial with respect to the additional elements requiring the County's
intentional interference, improper purpose or improper means. and proximate causation of
24
No.30539-2-II1
Manna Funding v. Kittitas County
damages (of which Manna shows none in any event). Young, 112 Wn.2d at 225; Boyce,
71 Wn. App. at 665.
The case Manna primarily relies on, Pleas v. City ofSeattle, is distinguishable.
There, the City was held liable for intentional interference with developer Parkridge's
business expectancy because it acted with an improper purpose (political motives and
favoritism to a neighborhood group)~ and by improper means (arbitrary delay) in refusing
to grant necessary environmental and building permits for a high-rise apartment project
that was allowed under existing zoning regulations. Pleas, 112 Wn.2d at 796. Part of the
delay was also attributable to the city council granting an opposing neighborhood group's
"downzone" application (filed after Parkridge applied for permits) that the court ruled
was "unreasonable, arbitrary and capricious and therefore void." Id. at 797. Due to the
delays, Parkridge incurred ascertainable damages for lost profits, Joss of favorable
financing, increased construction costs due to inflation, and the costs of an environmental
impact statement discarded by the City. Jd. at 799.
Here, in contrast to Pleas where the developer applied for specific project permits
allowed under existing zoning, Manna only applied for a rezone to possibly facilitate
future, but unspecified, development plans. Unlike the developer in Pleas who incurred
actual damages, Manna did not identify any business expectancy of pecuniary value-no
25
No. 30539-2-III
Manna Funding v. Kittitas County
business relationship, contract, or development project. All the County knew was that
Manna wanted it to approve a rezone. On these facts, only after Manna received its R-3
rezone in February 2009 could it stand in similar shoes to the developer in Pleas. But the
Board acted expeditiously-within two weeks of the court's order-to enact the
ordinance granting Manna's rezone. Since there was no identified contract, permit, or
contemplated development activity (either pre- or post-ordinance), the County did nothing
to interfere with or delay any business expectancy.
Manna's other cited interference with a business expectancy cases are likewise
distinguishable because they involved delay of identified projects. Westmark Dev. Corp.,
140 Wn. App. at 558-63 (city interfered with business expectancy by acting with
improper purpose in singling out developer's apartment project and using improper means
by unreasonably delaying original permit decision); City ofSeattle v. Blume, 134 Wn.2d
243,947 P.2d 223 (1997) (city delayed processing of developer's master use permit for
office building/research facility designed in accord with current zoning regulations). Two
other cases cited by Manna are inapposite because they are not interference with
business expectancy cases. Wilson, 122 Wn.2d at 823 (claim under RCW 64.40.020):
Cal([as v. Dep '1 ofConstr. & Land Use, 129 Wash. App. 579, 120 P.3d 110 (2005) (claims
under 42 U.S.c. § 1983 and RCW 64.40.020).
26
No. 30539-2-III
Manna Funding v. Kittitas County
We conclude that the trial court did not err in granting summary judgment
dismissal of Manna's tortious interference and tortious delay claims.
Attorney Fees. Attorney fees may be awarded when authorized by a contract, a
statute, or a recognized ground in equity. Fisher Props., Inc. v. Arden-Mayfair, Inc., 106
Wash. 2d 826. 849-50. 726 P.2d 8 (1986). RCW 64.40.020(2) provides: "The prevailing
party in an action brought pursuant to this chapter may be entitled to reasonable costs and
attorney's fees."
After prevailing on summary judgment, the County filed a motion and
accompanying affidavit of counsel (with billing time sheets) requesting an award of
$21,496.50 in attorney fees and $1,665.99 in costs. The County's lawyer did not attempt
to segregate fees attributable solely to the RCW 64.40.020 claim. Manna argued that the
County was required to do so and that any fee award must be limited to those the County
could actually demonstrate were related to the RCW 64.40.020 claim. The County's
lav.ryer disagreed but suggested if fee segregation were appropriate, perhaps 10 percent to
20 percent of the time billed would fall outside of the RCW 64.40.020 claim.
The trial court's order awarding attorney fees states in its entirety:
Kittitas County, as the prevailing party under RCW 64.40.020, is awarded
judgment for $21,496.50 in attorney fees. The request for costs is denied
because the costs requested do not qualify as court costs.
27
No. 30539-2-III
Manna Funding v. Kittitas County
CP at 1531.
Manna again contends the trial court erred in failing to require the County to
segregate its fees attributable only to the RCW 64.40.020 claim. We agree.
"If attorney fees are recoverable for only some of a party's claims, the award must
properly reflect a segregation of the time spent on issues for which fees are authorized
from time spent on other issues." Mayer v. City o.fSeattle, 102 Wash. App. 66, 79~80, 10
P.3d 408 (2000); accord Dice v. City ofMontesano, 131 Wn. App. 675,690, 128 P.3d
1253 (2006). A court is not, however, required "to artificially segregate time ... where
the claims all relate to the same fact pattern, but allege.different bases for recovery."
Ethridge v. Hwang, 105 Wash. App. 447, 461, 20 P.3d 958 (2001) (citing Blair v. Wash.
State Univ., 108 Wash. 2d 558, 572, 740 P.2d 1379 (1987)). The party claiming an award of
attorney fees has the burden of segregating its lawyer's time. Loeffelholz v. Citizens for
Leaders With Ethics & Accountability Now, 119 Wash. App. 665, 690, 82 P.3d 1199(2004).
Although our review of an attorney fee award is for abuse of discretion, the trial
court must nevertheless calculate the fees using the lodestar method of analysis, and it
must enter findings of fact and conclusions of law supporting its decision to award fees.
Mahler v. Szucs, 135 Wash. 2d 398, 434-35, 957 P.2d 632 (1998). Such a record is
28
No. 30539-2-III
Manna Funding v. Kittitas County
necessary for an appellate court to review the award. Bentzen v. Demmons, 68 Wn. App.
339,350,842 P.2d 1015 (1993). When a trial court fails to create the appropriate record,
the remedy is to remand for entry of proper findings and conclusions. Mahler, 135 Wn.2d
at 435.
Such is the case here. The court did not enter any findings. Nor did it require the
County to segregate out its lawyer's time unrelated to the RCW 64.40.020 claim. We
observe that while the County's billing entries are typically general in nature, some
entries do specifY work on non-RCW 64.40.020 claims.
Consistent with the above-cited cases, we vacate the attorney fee award and
remand for the superior court to determine the appropriate amount of attorney fees to be
awarded to the County as prevailing party under RCW 64.40.020.
Holding. The summary judgment order dismissing Manna's lawsuit is affirmed.
The attorney fee award is vacated and remanded consistent with this opinion.
Kulik, J.
WE CONCUR:
I4orsmo, C.J.
29