Kenneth Hauge v. City Of Lacey And Thurston County ( 2014 )

FILFD
COURT OF APPEALS
DIVISION 11
20114 SEP - 3 ! 3: 22,
STATE OF WASHINGTON
BY
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
KENNETH HAUGE, No. 44305 -8 -II
Appellant,
v.
CITY OF LACEY, a municipal corporation, UNPUBLISHED OPINION
Respondent,
THURSTON COUNTY, a subdivision of
Washington State,
Defendant.
LEE, J. — Kenneth Hauge appeals the trial court' s order granting summary judgment in
favor of the City of Lacey and dismissing his inverse condemnation claim. Hauge argues that,
despite a previous settlement between the parties related to the City' s condemnation and
acquisition of a right -of way over his property, the City failed to pay him just compensation for
-
a) the reduction of his property' s value due to increased traffic noise; and ( b) the removal of
three trees outside of the right -
of way.
- Hauge also argues that the trial court erred in failing to
address his claims for abuse, retaliation, negligence, and additional governmental takings.
Because the settlement between Hauge and the City provided Hauge with just compensation for
No. 44305 -8 - II
any reduction in his property' s value incident to the City' s road expansion and the disputed trees,
and Hauge' s other contentions are meritless, we affirm. We also deny Hauge' s request for
attorney fees.
FACTS
A. BACKGROUND
In May 2008, the City posted a public notice of its intent to widen Carpenter Road from
two to four lanes as part of a long -
term transportation project. From its inception, affected
property owner Hauge was steadfastly opposed to the widening project.
road - Hauge, who is
extremely sensitive to noise, feared the project would destroy the character of his property and
have adverse impacts on his and his elderly mother' s health. Accordingly, Hauge rejected the
City' s many prelitigation offers to purchase a 4, 058 square foot right - way over a narrow strip
of -
of his property.
In March 2010, the City offered Hauge $ 44, 500 as just compensation for the right -
of-
way. The City took the position that " just compensation is the difference between the fair
market value of the property before the acquisition and the fair market value of the property
remaining after the acquisition. It is the property that needs to be evaluated and not the
circumstances of the owner." Clerk' s Papers ( CP) at 180. Hauge rejected the offer and instead
asked for "$ 425, 000 for the total taking of [ his] property." CP at 183. The City rejected the
counter -offer because it was unwilling to " treat a partial acquisition as a total acquisition without
any basis for making that decision." CP at 184.
Hauge and the City were unable to reach an amicable agreement. In Deccember 2010,
the. City successfully sought an order of public use and necessity in December 2010, to condemn
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No. 44305 -8 -II
and acquire the of way
right - - over Hauge' s property. Before proceeding to a jury trial to
establish just compensation, Hauge and the City negotiated a settlement.
During negotiations, the City' s appraiser valued the of way
right - - at $ 57, 000. This
included $ 20, 000 for the land itself, $ 7, 680 for the contribution value of affected timber
including trees outside the of way
right - - that would need to be removed), and $ 29, 320 in
severance damages.' Hauge' s own appraiser assessed the value of the right -
of way at $
- 172, 500.
This figure included $ 34, 500 for the land itself, $26, 000 for trees to replace lost timber, $53, 000
in severance damages, and $ 59,000 for loss of the land value for accessory dwelling units and a
cedar fence. In March 2011, the parties filed a " Stipulation of Settlement" with the trial court
evidencing their agreement to settle for $ 150, 000. CP at 317 -19. After Hauge accepted the
funds, the trial court entered a " Decree of Appropriation" memorializing that the $ 150, 000
represented the " just compensation for the [ City' s] taking of the [ Hauge] property." CP at 322.
Following the settlement, the City began work on the of way.
right - - However, a dispute
soon arose over Hauge' s refusal to allow the City to remove three trees on his property abutting
the right - way. Believing it had compensated Hauge for the trees as part of the settlement, the
of -
City moved to enjoin Hauge from interfering with their removal. As part of its motion to enjoin,
the City included a declaration from City Engineer Roger Schoessel and the construction plans
filed as part of the public use and necessity hearing. Schoessel' s declaration stated that " Hauge
1
Severance damages are statutorily recognized in Washington. RCW 8. 12. 190( 2). " A loss of
value to the land that is not taken is referred to as `` severance damages.'" Cent. Puget Sound
Reg' l Transit Auth. v. Heirs &
Devisees ofEastey, 135 Wn. App. 446, 456, 144 P. 3d 322 ( 2006)
quoting Shields v. Garrison, 91 Wn. App. 381, 388 n.2, 957 P.2d 805, 967 P. 2d 1266 ( 1998)).
Both.the City' s appraiser and Hauge' s appraiser refer to these damages as " proximity damages,"
but, from the context, it is clear that severance damages are intended. CP at 128.
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No. 44305 -8 -II'
refused to allow the removal of the three ( 3) trees shown on Plan Sheet 7 even though the City
had] paid for those trees as part of the settlement." CP at 39. In May 2011, the trial court
granted the City' s motion to enjoin Hauge from interfering with removal of the trees. Hauge did
not appeal the order, and construction on the project continued.
B. PROCEDURE
In June 2012, Hauge filed a complaint against the City for inverse condemnation. The
complaint alleged that ( 1) the City did not compensate Hauge for the three trees it removed
outside of the right -
of way;
- ( 2) the City' s actions rendered Hauge' s auxiliary dwelling unit
uninhabitable; ( 3) the retaining wall built by the City did not comply with manufacturer
specifications, posed a substantial risk of collapse, and encroached on Hauge' s property; ( 4) the
City failed to compensate Hauge for heightened noise levels resulting from increased traffic on
Carpenter Road; and ( 5) the City' s actions caused a loss of lateral support on the property.
2
The City moved for summary judgment in response to Hauge' s complaint. Hauge
opposed the City' s summary judgment and filed a cross- motion for summary judgment.
Before the summary judgment hearing, Hauge amended his complaint. In the amended
complaint, Hauge alleged that ( 1) " The actions of the defendants have damaged the Property to
the extent that the Property is worthless to the plaintiff and a constructive taking has occurred,"
2) he should be compensated for the three trees removed outside of the right -of way, and ( 3)
-
the plaintiff has a cause of action for severance damages arising from diminution in the value of
2 The City submitted a CR 12(b)( 6) motion with considerable materials outside the pleadings and
asked the court to treat it "procedurally the same as a Motion for Summary Judgment pursuant to
CR 56." CP at 18. The trial court and the parties treated the City' s motion as a summary
judgment motion. On appeal, we review the motion as one for summary judgment. CR 12( c).
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No. 44305 -8 -II
the Property caused by the construction and continued existence of the widened Carpenter
Road." CP at 155 -56.
Shortly thereafter, the trial court heard oral argument on the parties' motions for
summary judgment, granted the City' s summary judgment motion and denied Hauge' s cross -
motion for summary judgment. Hauge appeals.
ANALYSIS
A. STANDARD OF REVIEW
We review a trial court' s summary judgment ruling de novo. Torgerson v. One Lincoln
Tower, LLC; 166 Wn.2d 510, 517, 210 P. 3d 318 ( 2009). Summary judgment is appropriate only
if the pleadings, affidavits, depositions, and admissions on file demonstrate the absence of any
genuine issues of material fact, and the moving party is entitled to judgment as a matter of law.
CR 56( c). A material fact is one on which the outcome of the litigation depends in whole or in
part. Owners Ass 'n Bd. of Dirs.
Atherton Condo. Apartment — v. Blume Dev. Co., 115 Wn.2d 506,
516, 799 P. 2d 250 ( 1990). We consider " all the facts submitted and the reasonable inferences
therefrom in the light most favorable to the nonmoving party." Atherton, 115 Wn.2d at 516.
Summary judgment is subject to a burden- shifting scheme. Young v. Key Pharms., Inc.,
112 Wn.2d 216, 225, 770 P. 2d 182 ( 1989). The moving party has the initial burden to show the
nonexistence of genuine issues of material fact. Young, 112 Wn.2d at 225. If the moving party
satisfies its initial burden, the inquiry shifts to the nonmoving party to " present evidence that
demonstrates that material facts are in dispute." Atherton, 115 Wn.2d at 516. However, ' a
complete failure of proof concerning an essential element of the nonmoving party' s case
necessarily renders all other facts immaterial. "' Young, 112 Wn.2d at 225 ( quoting Celotex
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No. 44305 -8 -II
Corp. v. Catrett, 477 U. S. 317, 322 -23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 ( 1986)). Summary
judgment should only be granted if the nonmoving party fails to show that a genuine issue as to a
material fact exists. Seven Gables Corp. v. MGM/UA Entm' t Co., 106 Wn.2d 1, 13, 721 P. 2d 11986).
B. JUST COMPENSATION
Hauge argues that the trial court misinterpreted the parties' settlement, and therefore, he
has not been provided just compensation for the diminution in value of his property in light of
increased noise from the expanded road or for the three trees removed during construction of the
of -
right - way. Because the only reasonable interpretation of the parties' settlement is that the
City provided Hauge with just compensation for the trees and severance damages for the effects
of the road, we disagree.
We interpret settlement agreements the same way we interpret other contracts. McGuire
v. Bates, 169 Wn.2d 185, 188, 234 P. 3d 205 ( 2010). " The touchstone of contract interpretation
is the parties' intent." Tanner Elec. Co -op v. Puget Sound Power & Light Co., 128 Wn.2d 656,
674, 911 P.2d 1301 ( 1996).
In Washington, the intent of the parties to a particular agreement may be
discovered not only from the actual language of the agreement, but also from
viewing the contract as a whole, the subject matter and objective of the contract,
all the circumstances surrounding the making of the contract, the subsequent acts
and conduct of the parties to the contract, and the reasonableness of respective
interpretations advocated by the parties."
Scott Galvanizing, Inc. v. Nw. EnviroServices, Inc., 120 Wn.2d 573, 580 -81, 844 P. 2d 4281993) ( quoting Berg v. Hudesman, 115 Wn.2d 657, 667, 801 P. 2d 222 ( 1990)). If "only one
6
No. 44305 -8 -II
reasonable inference can be drawn from the extrinsic evidence," we can determine the contract' s
meaning as a matter of law. Scott Galvanizing, 120 Wn.2d at 582.
In interpreting contracts, courts normally give words their "' general and ordinary
accepted meaning and connotation' unless otherwise defined by the parties or by the dictates of
the context." Blue Mountain Mem' l Gardens v. Dep' t ofLicensing, Cemetery Bd., 94 Wn. App.
38, 43, 971 P. 2d 75 ( quoting Keeton v. Dep' t of Soc. & Health Servs., 34 Wn. App. 353, 360 -61,
661 P. 2d 982, review denied, 99 Wn.2d 1022 ( 1983)), review denied, 138 Wn. 2d 1011 ( 1999).
However, " a term of art in a given field is given its technical meaning when used in, an
agreement within that field." Blue Mountain, 94 Wn. App. at 43 ( citing RESTATEMENT ( SECOND)
OF CONTRACTS § 202 ( 1981)).
The Decree of Appropriation stated that $ 150, 000 was " just compensation" for the taking
of Hauge' s property. " Just compensation" is a term of art in eminent domain law. Where a
partial taking of a plaintiff' s land is involved, just compensation " is the difference between the
fair market value of the entire property before the acquisition and the fair market value of the
remainder after the acquisition." State v. Sherrill, 13 Wn. App. 250, 254 -55, 534 P.2d 598,
review denied, 86 Wn.2d 1002 ( 1975). " Fair market value is the amount of money which a well
informed purchaser, willing but not obliged to buy the property would pay, and which a well
informed seller, willing but not obliged to sell it would accept, taking into consideration all uses
to which the property is adapted." State v. Wilson, 6 Wn. App. 443, 447, 493 P. 2d 1252 ( 1972).
Here, Hauge argues that the parties intended the $ 150, 000 settlement as compensation for
the " fair market value of the 4, 058 sq. ft. portion of property," and not compensation for the trees
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No. 44305 -8 -II
and severance damages for the impact that the right -of way would have on Hauge' s remaining
-
land. Br. of Appellant at 6. The record, however, belies this assertion.
Before reaching settlement, the City' s appraiser valued just compensation for the right-
of-way at $ 57, 000, a figure that included $ 20, 000 for the land itself, $7, 680 for trees that had to
be removed, and $ 29, 320 in severance damages for the effect the new road would have on the
property value of Hauge' s remaining land. Hauge' s appraiser valued just compensation at
172, 500, which included $ 34, 500 for the acquired land, $ 26, 000 for lost timber, $ 53, 000 for
severance damages — a figure that explicitly accounted for " increased noise and vibration above
the allowable standards," and $ 59, 000 for the loss of land value for an additional dwelling unit
and a cedar fence. CP at 55 -56. Given these figures, it is highly improbable that the City paid
Hauge $ 150, 000 merely for 4, 058 square feet of right - way and nothing else.
of -
Additionally, although the stipulation of settlement does not specifically reference " just
compensation," it does reference the City' s petition for public use and necessity and the decree
3
of appropriation. Both these documents state that the parties intended the $ 150, 000 settlement
to represent " just compensation" to Hauge pursuant to the eminent domain proceedings. CP at
322, 314. When read together, and in context of the settlement negotiations between the parties,
the only reasonable interpretation is that the parties intended the $ 150, 000 settlement amounted
to just compensation for the diminution of Hauge' s property value, including the lost trees and
severance damages. Tanner Elec., 128 Wn.2d at 674. Thus, Hauge' s argument that the
3
The stipulation of settlement also specifically references chapter 8. 25 RCW ( " Additional
provisions applicable to eminent domain proceedings ").
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No. 44305 -8 -II
settlement did not include damages for the trees and the impact of the right -of way on his
-
remaining land fails.
Hauge also asserts that he did not need to appeal the trial court' s ruling on the motion to
enjoin because the issue of whether he had been compensated for the three trees abutting the
right - way " was simply not before the court" when it enjoined him from interfering with the
of -
City' s construction activities. Br. of Appellant at 20. But this was precisely the issue before the
trial court. The City moved to enjoin Hauge from interfering with the tree removal process
because the three trees at issue " were purchased by the Petitioners as part of the settlement and
judgment entered herein." CP at 37. Moreover, the City submitted the plans used during the
public use and necessity hearing which clearly indicate that the three abutting trees would need
to be removed. The trial court' s order enjoining Hauge from interfering with the removal effort
references these plans. Hauge never appealed the trial court' s order. The doctrine of collateral
estoppel precludes a party from relitigating an issue of ultimate fact previously determined by a
valid and final judgment. State v. Williams, 132 Wn.2d 248, 253 -54, 937 P. 2d 1052 ( 1997).
Thus, Hauge' s assertion that he did not need to appeal the trial court' s ruling on the motion to
enjoin fails.
Finally, Hauge stresses that the following provision in the stipulation of settlement
evinces the City' s intent to purchase the right - f way without also compensating Hauge for the
o -
diminution in property value to his remaining land:
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No. 44305 -8 -II
It is further agreed by the [ City] that neither this Stipulation nor the Judgment and
Decree to be entered herein shall in any manner be used to prevent [ Hauge] from
filing a separate action for displacement, negligence, personal injury, or any other
road related action on the City]... in constructing the Carpenter Road
part of the [
Improvement Project or relating to such roadway.
CP at 319. Contrary to Hauge' s assertions, this " reservation of rights" clause does not allow
Hauge to seek just compensation for damage for which the City has already paid. Rather, the
clause recognizes that the settlement would not preclude Hauge from filing suit for additional
takings or other causes of action not envisioned by the settlement. " Filing two separate lawsuits
based on the same event —claim spitting —is precluded in Washington," Landry v. Luscher, 95
Wn. App. 779, 780, 976 P. 2d 1274, review denied, 139 Wn.2d 1006 ( 1999), and it is
unreasonable to read this provision as encouraging claim splitting.
The only reasonable interpretation from the extrinsic evidence is that the $ 150, 000
settlement between Hauge and the City provided him just compensation for the acquired land,
for the three trees abutting the right - way, and for the diminution in property value due to
of -
increased noise from the road expansion. Accordingly, we affirm the trial court' s granting of
summary judgment on these claims.
C. HAUGE' S OTHER CLAIMS
Hauge next argues that summary judgment was improper because the trial court " focused
only on his takings claims and failed to consider the nature or sufficiency of his remaining
claims, which he characterized as abuse and retaliation claims." Br. of Appellant at 9. He also
alleges that he sufficiently pled and argued that the City failed " to construct a retaining wall on
the right -
of way
- according to the manufacturer' s specifications" and that the City " took
additional property from him for the project outside the scope of the original right -
of-way." Br.
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No. 44305 -8 -II
of Appellant at 13, 15. Because Hauge never actually brought causes of action for abuse and
retaliation, and the record does not raise a genuine issue of material fact with regard to Hauge' s
contention that the City acted negligently in building the retaining wall or appropriated
additional property during its construction, we hold that these claims were insufficiently pleaded
and/or properly dismissed on summary judgment.
Washington follows notice pleading rules and simply requires a `` concise statement of
the claim and the relief sought. "' Champagne v. Thurston County, 163 Wn.2d 69, 84, 178 P.3d
936 ( 2008) ( quoting Pac. Nw. Shooting Park Assn v. City ofSequim, 158 Wn.2d 342, 352, 144
P. 3d 276 ( 2006)); see also CR 8( a). A complaint that fails to give the opposing party fair notice
of asserted claims is insufficient. Dewey v. Tacoma Sch. Dist. No. 10, 95 Wn. App. 18, 25, 974
P. 2d 847 ( 1999). " While inexpert pleadings may survive a summary judgment motion,
insufficient pleadings cannot."
Pac. Nw. Shooting ParkAss' n, 158 Wn.2d at 352.
Here, Hauge argues that, although his " complaint is not a model of clarity," it sufficiently
pleaded claims for abuse and retaliation by City employees. Br. of Appellant at 13. Even
assuming " abuse" and " retaliation" claims are recognized causes of action, Hauge' s complaint
does not indicate that he is bringing such claims or seeking relief on these grounds. In the
FACTS" portion of his complaint, Hauge mentions that " employees of the City of Lacey or its
contractors frequently directed hostile and aggressive behavior at plaintiff Kenneth Hauge and
his mother, Helen." CP at 8. But, under the " CAUSES OF ACTION" section, Hauge nowhere
mentions a claim for abuse or retaliation. CP at 9 -10. In addition, the trial court allowed Hauge
to submit an amended complaint four days before it heard argument on the parties' summary
judgment motions. Despite having the opportunity to clarify the causes of action for which he
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No. 44305 -8 -II
would be seeking relief, Hauge did not mention a claim for abuse or retaliation. This is
insufficient to give fair notice of his asserted claims. Thus, we hold that, even under
Washington' s generous notice pleading standards, Hauge failed to sufficiently plead claims for
abuse and retaliation.
Hauge also argues that he sufficiently pleaded a claim for either negligence or inverse
condemnation because the City failed to construct the retaining wall according to manufacturer
specifications and the wall encroaches on his property. To counter Hauge' s bare assertions in his
pleadings, the City presented a number of expert declarations, stating that the wall was built
according to manufacturer specifications, is structurally sound, and does not encroach on
4
Hauge' s property. Hauge failed to rebut the City' s evidence on this point. A party opposing
summary judgment " may not rely merely upon allegations or self -
serving statements, but must
set forth specific facts showing that genuine issues of material fact exist." Newton Ins. Agency &
Brokerage, Inc. v. Caledonian Ins. Grp., Inc., 114 Wn. App. 151, 157, 52 P. 3d 30 ( 2002).
Therefore, we hold that, even assuming Hauge properly pleaded a claim for negligence 5 or
inverse condemnation related to the retaining wall, he failed to bring forth any evidence
4
Hauge did submit an expert' s report. However, contrary to Hauge' s assertion- that he
presented expert testimony on the issue" of the wall' s " significant risk of future collapse," the
report nowhere states that the alleged deficiencies in the construction of the retaining wall
potentially damaged ( or encroached on) Hauge' s property. Br. of Appellant at 15.
5 Hauge argues that he " sought leave to amend his complaint a second time to add a negligence
claim; however, it appears that the amendment never occurred because the trial court dismissed
13 n. 10. This contention
the complaint on summary judgment." Br. of Appellant at
misrepresents the record. Although Hauge argued in his cross -motion for summary judgment on
September 28, 2012, that he " should be allowed to amend the complaint to allege damages due to
negligence" in building the retaining wall, Hauge filed his amended complaint approximately
12
No. 44305 -8 -II
sufficient to survive summary judgment on this issue.
Finally, Hauge appears to argue that the City took additional property outside the right-
of-way for which he was not compensated. Hauge fails to articulate what property this claim
6
involves. Therefore, we do not address this argument any further. See RAP 10. 3( a)( 5) -( 6).
D. ATTORNEY FEES
Hauge argues that the " City' s response brief is so nonresponsive as to constitute no
response at all" and, accordingly, the City " should pay [ Hauge' s] attorney fees and costs on
appeal" as a RAP 18. 9( a) sanction. Appellant' s Reply Br. at 8. However, the City' s response,
though brief, does articulate arguments supporting its position that ( a) "[ t] he claim for the taking
of trees outside of the of way
right - - had been resolved by the condemnation action," ( b) the
parties settlement accounted for severance damages; and ( c) Hauge' s" statement that the City
and the court were on notice that Mr. Hauge had claims different than that set forth in his
Amended Complaint is stated for the first time in Mr. Hauge' s Appellate Brief." Br. of Resp' t at
6, 7 -8. Therefore, we deny Hauge' s request for attorney fees.
one month later. CP 91.
The trial court did not specifically address Hauge' s negligence claim
at
because he twice failed to plead itnot because summary judgment was prematurely granted.
6 Hauge does not articulate what property this claim involves, but does cite to clerk' s papers that
were stricken by this court because they were not before the trial court when that court ruled on
summary judgment.
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No. 44305 -8 -II
We affirm the trial court' s summary judgment dismissal of Hauge' s lawsuit and deny
attorney fees as a RAP 18. 9( a) sanction against the City.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
2. 06. 040, it is so ordered.
14