Pud Utility Dist. No. 2 Of Pacific Cty v. Comcast Of Wa, Inc. ( 2014 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
PUBLIC UTILITY DISTRICT NO. 2 OF DIVISION ONE
PACIFIC COUNTY, a Washington
Corporation, No. 70625-0-1
Respondent,
PUBLISHED OPINION
v.
COMCAST OF WASHINGTON IV,
INC., a Washington corporation;
CENTURYTEL OF WASHINGTON,
INC., a Washington corporation; and
FALCON COMMUNITY VENTURES I,
L.P., a California limited partnership,
d/b/a CHARTER COMMUNICATIONS, V,0
Appellants. FILED: October 13, 2014
Dwyer, J. — Pacific County Public Utility District No. 2 (hereinafter
District) permitted Comcast of Washington IV, Inc., CenturyLink of Washington,
Inc.,1 and Falcon Community Ventures I, L.P., d/b/a Charter Communications
(collectively Companies) to attach their communications equipment to its utility
poles pursuant to agreements with the Companies. However, at the beginning of
2007 the District revised its rates and instituted new nonrate terms and
conditions, which resulted in significant cost increases to the Companies. After
the Companies refused to pay the District at the new rates, declined to sign the
proposed agreement, and refused to remove their equipment from its poles, the
District initiated this lawsuit.
Previously d/b/a CenturyTel of Washington, Inc.
No. 70625-0-1/2
In early 2008, the legislature amended the statute governing utility pole
attachment rates, RCW 54.04.045, effective June 12, 2008. Prior to the
amendment, rates calculated by Washington public utility districts (PUDs)
needed only to be "just, reasonable, nondiscriminatory and sufficient." Former
RCW 54.04.045(2) (1996).2 The amendment, however, included a specific
formula, the result of which would yield a "just and reasonable" rate. RCW
54.04.045(3)(a)-(c). Whether the District's revised rate complied with the
amended statute became the central dispute in this case.
In the trial court—and now on appeal—the District and the Companies
maintained that each provision of the two-part formula written by the legislature
reflected a certain preexisting formula. However, they disputed which were the
apposite formulas. On appeal, we are presented with three principal issues: (1)
whether the nonrate terms and conditions in the proposed agreement complied
with RCW 54.04.045(2); (2) whether the trial court erred by concluding that the
District's revised rates prior to June 12, 2008 complied with RCW 54.04.045(2);
and (3) whether the trial court erred by concluding that the 2008 statutory
amendment, codified at RCW 54.04.045(3)(a)-(c), reflects the preexisting
formulas as proposed by the District's expert witness. We affirm the trial court
with respect to the first two issues, subject only to the severance of a few nonrate
terms. However, with respect to the third issue, we reverse and remand to the
trial court for further proceedings consistent with this opinion.
2 "All rates, terms, and conditions made, demanded or received by a locally regulated
utility for attachments to its poles must be just, reasonable, nondiscriminatory and sufficient."
No. 70625-0-1/3
The District, which is organized as a municipal corporation pursuant to
RCW 54.04.020, is a consumer-owned utility providing services in Pacific
County, Washington.3 The District owns and maintains poles that allow it to
furnish electricity to customers in Pacific County. In all, it serves approximately
17,000 customers in predominantly rural areas.
The Companies provide various communication services to customers in
Washington, including in Pacific County. In order to provide these services, the
Companies attach communications equipment to the District's utility poles. The
Companies were initially licensed to attach their equipment to the District's poles
under rental agreements assigned to them by previous communications
providers in Pacific County. These assigned agreements dated back to the
1970s and 1980s with respect to Comcast and Charter, and to the 1950s and
1960s with respect to CenturyLink.
Prior to 2007, the District's annual pole attachment rates of $8.00 per pole
for telephone companies and $5.75 per pole for cable companies had remained
fixed for 20 years. In February of 2006, the District provided written notice to the
Companies that it intended to terminate the agreements. The District advised the
Companies that it would implement new pole attachment rates effective January
1, 2007, and that the District would provide copies of a new pole attachment
agreement for the Companies to review.
3 There are 28 PUDs operating in Washington. Washington Public Utility Districts
Association, Frequently Asked questions, http://www.wpuda.org/pud-faqs.cfm (last visited August
28, 2014).
No. 70625-0-1/4
Several years earlier, the District had retained EES Consulting, Inc. to
perform a rate study. After analyzing the District's rates, EES recommended that
the District increase its rate to no less than $20.65 but closer to $36.39 per pole.
In making this recommendation, EES considered four different methodologies or
formulas: the Federal Communications Commission (FCC) Cable formula,4 the
FCC Telecom formula,5 the American Public Power Association (APPA) formula,6
and the Washington PUD Association formula.7 Gary Saleba, the president and
chief executive officer of EES, described the method by which EES arrived at its
recommendation.
The study that we performed in 2004/2005 is summarized in
Exhibit 6, and what we did in Exhibit - in the study, which was
4 The Cable formula states that
a rate is just and reasonable ifit assures a utility the recovery of not less than the
additional costs of providing pole attachments, nor more than an amount
determined by multiplying the percentage of the total usable space, or the
percentage of the total duct or conduit capacity, which is occupied by the pole
attachment by the sum of the operating expenses and actual capital costs of the
utility attributable to the entire pole, duct, conduit, or right-of-way.
47 U.S.C. § 224(d).
5 The Telecom formula is calculated as follows:
(2) A utility shall apportion the cost of providing space on a pole, duct,
conduit, or right-of-way other than the usable space among entities so that such
apportionment equals two-thirds of the costs of providing space other than the
usable space that would be allocated to such entity under an equal
apportionment of such costs among all attaching entities.
(3) A utility shall apportion the cost of providing usable space among all
entities according to the percentage of usable space required for each entity.
47 U.S.C. § 224(e).
6 The parties provided an algebraic representation of the APPA formula, which is as
follows:
Maximum Rate = Assignable Space Factor + Common Space Factor
Assignable Space Factor = Space Occupied by Attachment (Assignable Space) x
Assignable Space (Pole Height) x Average Cost (of Bare Pole) x Carrying Charge
Common Space Factor = Common Space (Pole Height) x Average Cost of Bare Pole
(Number of Attachers) x Carrying Charge
7The parties also provided an algebraic representation of the Washington PUD
Association method, which is as follows:
Annual rental rate = Accumulated average Pole Value (PV) * Annual Cost Ratio (ACR) x
Pole Use Ratio (PR)
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No. 70625-0-1/5
dated April of 2005, was to take a look at what the expenses were
for the PUD or the revenue requirement for a test period of 2004,
and then went through - after determining what the revenue
requirement for the '04 period was, we went through the four
different methodologies I talked about earlier and calculated rates,
pole attachment rates for the PUD, for the FCC cable, FCC
telecom, APPA method, and the PUD Association method.
While the study performed by EES utilized all four methodologies, in proposing
the range between $20.65 and $36.39, EES relied on the FCC Telecom formula
and the APPA formula, respectively.
Once the District received the results of the study and the
recommendation from EES, the District's general manager and finance manager,
Douglas Miller and Mark Hatfield—after considering and discussing the results
with the District's supervisors—concluded that an annual rate of $19.70 per pole
was appropriate. However, in light ofthe significant rate increase, Miller
recommended to the District's board of commissioners a transition rate of $13.25
per pole for 2007, with the $19.70 per pole rate to commence on January 1,
2008. Miller described the deliberative process of the District in his testimony.
Two times a month we have management staff meetings,
and we talk about things that are happening, things we're working
on. It's the - it's the supervisors at the PUD that work directly for
me. And we meet and talk about issues. And we talked about the
agreement and the rates and - or the study and the rates thatwere
recommended. And out of that, we kicked around where we
thought the numbers should be. And that's where we got the 13.25
and the 19.70.
We - at that time we were first starting to install fiber, our
own fiber plant, which would change the number of contacts per
pole, average number of contacts per pole, which would adjust the
- those formulas. And we made our best guess of where that might
go during the five-year period ofwhat we were going to recommend
these rates to be to the board.
And based on those assumptions, we came up with the
No. 70625-0-1/6
19.70. And then as we were debating the 19.70, we thought, you
know, this is a pretty big jump from 5.75 or $8, you know, to get to
the 19.70, so let's do a one-year interim rate that kind of steps to
the 19.70. And if you take the 5.75 and you add that to the $8 and
divide by two, it's a midpoint between those two rates. And you
add that to 19.70 and then divide by two and round it off, it comes
to 13.25. So that's how we got the 13.25.
Miller made his rate recommendation to the board of commissioners at
hearings held on December 5, 2006 and December 19, 2006, as well as at the
commissioners' meeting held on January 2, 2007. Although the Companies were
aware that the meetings were open to the public, no representatives of the
Companies attended the public hearings or the public meeting. Furthermore, the
Companies never requested agendas or minutes, which would have been
available upon request.
On January 2, 2007, the board of commissioners adopted Resolution No.
1256, which revised the District's annual pole attachment rate to $13.25 per pole,
effective January 1, 2007 and $19.70 per pole, effective January 1, 2008.
In addition to revising its rate, the District developed a new form of
agreement for attaching entities, which included nonrate terms and conditions.
The District began with a template agreement developed by the APPA and made
revisions in an effort to make it more applicable to the District. District
management, including operations, engineering, and financial personnel, were
consulted in developing the new agreement.
The District also communicated with the Companies regarding the
proposed agreement. The District sent a version of the proposed agreement to
the Companies for review and comment in early 2006. Over the next six months,
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No. 70625-0-1/7
the District received feedback from the Companies. It then incorporated some of
the Companies' suggestions and rejected others before mailing out for signature
the proposed agreement in November 2006. This version of the proposed
agreement generated additional feedback, which led the District to further modify
the agreement before sending a revised version to the Companies in August
2007. The transmittal letter attached to the revised version requested that the
Companies return the signed agreement by October 31, 2007. The letter stated
that, in the event that the Companies did not wish to remain on the District's
poles under the terms of the new agreement, the Companies were to notify the
District of their plans for removing their equipment. In early October, the District
contacted the Companies to remind them of the impending October 31, 2007
deadline. However, the Companies refused to sign the agreement, declined to
remove their equipment, and tendered payment only at the historic rates; the
District did not accept the Companies' tender of payment.8
Two other licensees attached their equipment to the District's poles. One
executed the first draft of the new agreement and both timely began paying at the
revised rate.
While the existing agreements between the District and the Companies
permitted the District to remove the Companies' equipment from its poles ifthe
8 The record indicates that Comcast and Charter tendered payment at the historic rates.
Additionally, Charter's tender requested that the Districtaccept the amount offered, "pending the
outcome of the litigation." CenturyLink, on the other hand, tendered payment "in an effort to
completely fulfill" its rental obligation. Although Comcast and Charter, in their joint briefing, cite to
Exhibit 515 in what we perceive to be an attempt to direct our attention to a tender of payment
made by Comcast, we find no evidence of the existence of an exhibit bearing that number,
whether in the trial court record, the verbatim report of proceedings, or elsewhere in the materials
designated by the parties.
-7-
No. 70625-0-1/8
Companies failed to do so, the District did not exercise its right. Instead, on
December 28, 2007, the District filed complaints against all three of the
Companies, alleging claims of breach of contract, trespass, and unjust
enrichment, and requesting relief in the form of a declaratory judgment, injunctive
relief, and damages. The Companies counterclaimed and sought to enjoin the
District from imposing terms in violation of RCW 54.04.045. The lawsuits were
then consolidated by agreement.
In March 2008, the legislature amended RCW 54.04.045, with an effective
date of June 12, 2008. Engrossed Second Substitute H.B. 2533, 60th Leg.,
Reg. Sess. (Wash. 2008). Prior to the amendment, pole attachment rates
charged by Washington PUDs were required only to be "just, reasonable,
nondiscriminatory and sufficient." Former RCW 54.04.045(2). In amending the
statute, however, the legislature instituted a specific formula, the result of which
would constitute a "just and reasonable rate." RCW 54.04.045(3).
(3) Ajust and reasonable rate must be calculated as follows:
(a) One component ofthe rate shall consist ofthe additional
costs of procuring and maintaining pole attachments, but may not
exceed the actual capital and operating expenses of the locally
regulated utility attributable to that portion of the pole, duct, or
conduit used for the pole attachment, including a share of the
required support and clearance space, in proportion to the space
used for the pole attachment, as compared to all other uses made
of the subject facilities and uses that remain available to the owner
or owners of the subject facilities;
(b) The other component ofthe rate shall consist ofthe
additional costs of procuring and maintaining pole attachments, but
may not exceed the actual capital and operating expenses of the
locally regulated utility attributable to the share, expressed in feet,
of the required support and clearance space, divided equally
among the locally regulated utility and all attaching licensees, in
-8
No. 70625-0-1/9
addition to the space used for the pole attachment, which sum is
divided by the height of the pole; and
(c) The just and reasonable rate shall be computed by
adding one-half of the rate component resulting from (a) of this
subsection to one-half of the rate component resulting from (b) of
this subsection.
RCW 54.04.045(3)(a)-(c). With respect to subsection (3)(a), the legislature
included the following provision:
Forthe purpose of establishing a rate under subsection (3)(a) of
this section, the locally regulated utility may establish a rate
according to the calculation set forth in subsection (3)(a) of this
section or it may establish a rate according to the cable formula set
forth by the federal communications commission by rule as it
existed on June 12, 2008, or such subsequent date as may be
provided by the federal communications commission by rule,
consistent with the purposes of this section.
RCW 54.04.045(4).
Included with the amendment was a statement of legislative intent, which
is as follows:
It is the policy ofthe state to encourage the joint use of utility poles,
to promote competition for the provision of telecommunications and
information services, and to recognize the value of the
infrastructure of locally regulated utilities. To achieve these
objectives, the legislature intends to establish a consistent cost-
based formula for calculating pole attachment rates, which will
ensure greater predictability and consistency in pole attachment
rates statewide, as well as ensure that locally regulated utility
customers do not subsidize licensees. The legislature further
intends to continue working through issues related to pole
attachments with interested parties in an open and collaborative
process in orderto minimize the potential for disputes going
forward.
9
No. 70625-0-1/10
Engrossed Second Substitute H.B. 2533. Whether the revised rate instituted
by the District in Resolution No. 12569 was in compliance with the amended
statute became the central dispute in this case.
After extensive discovery was conducted, the Companies filed a joint
motion for partial summary judgment in December 2009, in which they requested
that the trial court determine as a matter of law that RCW 54.04.045(3)(a) reflects
the FCC Cable formula and that RCW 54.04.045(3)(b) reflects the FCC Telecom
formula. The trial court denied the Companies' joint motion.10
Thereafter, in October 2010, this case was tried before the Honorable
Michael J. Sullivan. Ample testimony was presented by the parties, including
testimony from three expert witnesses, two of whom—Gary Saleba on behalf of
the District and Patricia Kravtin on behalf of Comcast and Charter—opined that
subsections (3)(a) and (3)(b) reflected preexisting formulas; however, Saleba and
Kravtin disagreed as to which formulas were reflected by each subsection.11
On March 15, 2011, the trial court issued a memorandum decision in
which it ruled in favor of the District and against the Companies. In its decision,
the trial court stated that it would entertain proposed findings of fact and
conclusions of law. Thereafter, the District submitted proposed findings of fact
and conclusions of law, as well as a proposed judgment, to which the Companies
filed extensive objections and proposed revisions. The District also submitted a
9 Specifically, the annual rate of $19.70 per pole, which was the rate in effect at the time
that the amended statute became effective.
10 This remained the Companies' position at trial and on appeal.
11 The focus of Mark Simonson's testimony—the third expert witness (called by
CenturyLink)—was on nonrate terms and conditions.
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No. 70625-0-1/11
motion, proposed findings of fact and conclusions of law, and a proposed order,
all of which related to its request for attorney fees and costs; the Companies
objected and provided responses. The trial court heard oral argument on the
proposed findings of fact and conclusions of law on September 16, 2011. On
December 12, the trial court entered the findings of fact, conclusions of law,
order, and judgment proposed by the District—both as to the substantive issues
and as to the request for attorney fees and expenses. The trial court also
awarded damages, as well as fees and costs, in favor of the District, totaling
$1,856,155.02.
Of particular significance to the marrow of this appeal, the trial court
concluded that "Section 3(a) of RCW 54.04.045 (2008) reflects the FCC Telecom
method and Section 3(b) reflects the APPA method as of the date of trial."
Conclusions of Law 10. Additionally, the trial court concluded that the District
"did not act arbitrarily or capriciously, in interpreting Section 3(a) of RCW
54.04.045 as the FCC Telecom formula and Section 3(b) as the APPA formula
for PUD pole attachment rates as of the date of trial." Conclusions of Law 11.
The trial court further concluded that the District's revised rates "were just,
reasonable, non-discriminatory, and sufficient, those rates being $13.25 prior to
January 1, 2008, and $19.70 after January 1, 2008." Conclusions of Law 12.
In rejecting the Companies' interpretation of subsections (3)(a) and (3)(b)
of RCW 54.04.045, the trial court found, among other things, that the rate derived
by one of the Companies' expert witnesses—Patricia Kravtin—was
"unreasonable and impractical as it relates to this case." Findings of Fact 34. In
-11 -
No. 70625-0-1/12
addition, the trial court found that "[t]he opinions of Defendants' rate expert,
Patricia Kravtin, were based primarily on theoretical analysis of economics and
public policy, rather than actual local information regarding Pacific County and
Pacific PUD. She had never visited Pacific County prior to trial." Findings of
Fact 35. Moreover, the trial court found that "Defendants' rate expert Patricia
Kravtin's opinion on the PUD's maximum legal rate was lower than what
Defendants had been voluntarily paying for over twenty years." Findings of Fact
36.
After the Companies filed an untimely notice of appeal, Division Two
entered an order permitting the Companies to appeal. On April 23, 2012, the
Companies filed a separate appeal of the trial court's award of $27,690.14 for
fees and costs the District incurred on the Companies' posttrial motion to vacate
the judgment. That appeal was consolidated with the Companies' other appeal.
The District then filed in the Supreme Court a motion for discretionary
review of the decision permitting the Companies to appeal. A subsequent motion
to stay proceedings in Division Two, pending the Supreme Court's action, was
granted on March 27, 2012. On June 5, 2012, the Supreme Court denied the
District's motion for discretionary review.12,13 The Companies' appeal was then
transferred to Division One.
12 Although the parties do not cite to the record in support of this factual assertion, they
are in accord that the District's motion for discretionary review was denied. Compare CenturyLink
Opening Br. at 13 n.9, with District's Br. at 16-17.
13 In the District's merits brief, it includes a version of the procedural history that took
place between the denial of its motion for discretionary reviewand the transfer of this appeal to
Division One. However, the District fails to cite to the record to support its version of events,
which precludes us from confirming the veracity of its factual statements.
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No. 70625-0-1/13
The Companies contend that the trial court erred in its treatment of the
nonrate terms and conditions in the District's proposed pole attachment
agreement. Specifically, they aver that the trial court improperly applied a
deferential standard of review, which, in turn, led to an erroneous conclusion that
the terms and conditions were just, reasonable, nondiscriminatory, and sufficient.
We disagree.
A
The Companies assert first that the trial court erred by limiting its review of
the imposition of the District's nonrate terms and conditions to determining
whether they were arbitrary and capricious. Their assertion is unavailing.
Where "municipal utility actions come within the purpose and object of the
enabling statute and no express limitations apply," it is proper to leave "the
choice of means used in operating the utility to the discretion of municipal
authorities." City of Tacoma v. Taxpayers of City of Tacoma, 108Wn.2d679,
695, 743 P.2d 793 (1987). Accordingly, "judicial review of municipal utility
choices" is limited "to whether the particular contract or action was arbitrary or
capricious, or unreasonable." City of Tacoma, 108 Wn.2d at 695 (citation
omitted).
Arbitrary and capricious refers to "willful and unreasoning action,
taken without regard to or consideration of the facts and
circumstances surrounding the action. Where there is room for two
opinions, an action taken after due consideration is not arbitrary
and capricious even though a reviewing court may believe it to be
erroneous."
13
No. 70625-0-1/14
Lane v. Port of Seattle. 178 Wn. App. 110, 126, 316 P.3d 1070 (2013) (quoting
Abbenhaus v. City of Yakima. 89 Wn.2d 855, 858-59, 576 P.2d 888 (1978)),
review denied 180 Wn.2d 1004 (2014).
Consistent with its holding in City of Tacoma, our Supreme Court has
shown deference to an implementing entity where the governing statute
delineated general boundaries for proper rates. See People's Org, for Wash-
Energy Res, v. Utils. & Transp. Comm'n, 104 Wn.2d 798, 808, 823, 711 P.2d 319(1985) (where the rates to be set were required to be "fair, reasonable, and
sufficient," the Supreme Court concluded that "the WUTC[14] did not exceed its
statutory authority and was not arbitrary or capricious").
While RCW 54.04.045(3)(a)-(c) sets forth specific instructions regarding
the method of calculating just and reasonable rates, it does not provide similar
guidance with respect to nonrate terms and conditions, requiring only that they
"be just, reasonable, nondiscriminatory,'151 and sufficient." RCW 54.04.045(2).
Given the similarity between the general boundaries of the statute in
People's Org, for Wash. Energy Res, and the general boundaries in RCW
54.04.045(2),16 we conclude that it was proper for the trial court to limit its review
of the District's nonrate terms and conditions to determining whether they were
arbitrary and capricious.
14 Washington Utilities and Transportation Commission.
15 "'Nondiscriminatory' means that pole owners may not arbitrarily differentiate among or
between similar classes of licensees approved for attachments." RCW 54.04.045(1 )(d).
16 It is of little significance that People's Org, for Wash. Energy Res, involved rates,
whereas nonrate terms and conditions are at issue here. City of Tacoma articulates that
"municipal utility actions," which surely include a PUD setting nonrate terms and conditions, are
entrusted to the discretion of the municipal authorities. 108 Wn.2d at 695.
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B
The Companies next take issue with the procedure by which the District
considered and decided on the nonrate terms and conditions. More specifically,
the Companies assert that the District's refusal to negotiate the nonrate terms
and conditions of the agreement with the Companies was procedurally
unconscionable. This assertion is unavailing.
Procedural unconscionability involves "blatant unfairness in the bargaining
process and a lack of meaningful choice." Torgerson v. One Lincoln Tower, LLC,
166 Wn.2d 510, 518, 210 P.3d 318 (2009).
Procedural unconscionability is determined in light of the totality of
the circumstances, including (1) the manner in which the parties
entered into the contract, (2) whether the parties had a reasonable
opportunity to understand the terms, and (3) whether the terms
were "hidden in a maze of fine print."
Torgerson, 166 Wn.2d at 518-19 (internal quotation marks omitted) (quoting
Yakima County (W. Valley) Fire Prot. Dist. No. 12 v. City of Yakima, 122Wn.2d
371, 391, 858 P.2d 245 (1993)).
While the Companies maintain that the District was obligated to negotiate
the nonrate terms and conditions, they cite no authority to that effect.
Governmental entities such as the District are held to standards of transparency,
including the Open Public Meetings Act of 1971,17 which was complied with by
the District herein;18 however, we are directed to no authority obligating the
17 Ch. 42.30 RCW.
18 The trial court concluded that "[t]he District met the requirements of the Open Public
Meetings Act in its consideration of new pole attachment rates, terms, and conditions."
Conclusions of Law 32. CenturyLink concedes that "the District provided the requisite formal
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No. 70625-0-1/16
District to negotiate individually regarding nonrate terms and conditions.
The record establishes that proper public proceedings were held, that the
Companies were given notice of these proceedings, and that they failed to
participate. To the extent that the District did discuss the terms of the proposed
agreement with the Companies, it did so for reasons that were not tethered to
any legal obligation.
C
The Companies finally take issue with the substance of many of the
nonrate terms and conditions, asserting that they violate RCW 54.04.045(2) or,
alternatively, that they are substantively unconscionable. From this, the
Companies assert that the entire proposed agreement is invalid, arguing that
"[sjevering so many unlawful provisions would render the 2007 Agreement
unintelligible and unworkable." While several of the District's nonrate terms are
untenable, they are severable from the proposed agreement. This is so because
they do not materially alter the essence of the agreement, which is the
severability standard set forth in the proposed agreement.19 Ultimately, we
decline to hold that these unsupported nonrate terms render the entire proposed
agreement unenforceable, whether because of RCW 54.04.045(2) or the
common law prohibition of substantively unconscionable terms.
public notice of its Commissioners' consideration of the new rates." Neither Comcast nor Charter
challenges the trial court's conclusion of law on appeal.
19 The severability clause in the proposed agreement provides for the following:
Ifany provision or portion thereof of this Agreement is or becomes invalid under
any applicable statute or rule of law, and such invalidity does not materially alter
the essence of this Agreement to either party, such provision shall not render
unenforceable this entire Agreement but rather it is the intent of the parties that
this Agreement be administered as if not containing the invalid provision.
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"We review the trial court's decision following a bench trial to determine
whether the findings of fact are supported by substantial evidence and whether
those findings support the conclusions of law." 224 Westlake, LLC v. Engstrom
Props.. LLC, 169 Wn. App. 700, 720, 281 P.3d 693 (2012). "'Substantial
evidence' is a quantum of evidence sufficient to persuade a rational, fair-minded
person that the premise is true." Newport Yacht Basin Ass'n of Condo. Owners
v. Supreme Nw.. Inc.. 168 Wn. App. 56, 63-64, 277 P.3d 18 (2012). "If that
standard is satisfied, we will not substitute our judgment for that of the trial court
even though we might have resolved disputed facts differently." Green v.
Normandy Park, 137 Wn. App. 665, 689, 151 P.3d 1038 (2007); accord 224
Westlake, LLC, 169 Wn. App. at 720 ("Evidence may be substantial even if there
are other reasonable interpretations of the evidence."). Indeed, "[rjeview is
deferential, requiring the appellate court to view the evidence and its reasonable
inferences in the light most favorable to the prevailing party in the highest forum
that exercised fact-finding authority." Johnson v. Dep't of Health, 133 Wn. App.
403, 411, 136 P.3d 760 (2006). On the other hand, "[w]e review questions of law
and conclusions of law de novo." Newport Yacht Basin Ass'n, 168 Wn. App. at
64.
"Substantive unconscionability involves those cases where a clause or
term in the contract is one-sided or overly harsh." Townsend v. Quadrant Corp.,
153 Wn. App. 870, 882, 224 P.3d 818 (2009), aff'd on other grounds by 173
Wn.2d 451, 268 P.3d 917 (2012). Terms used to define substantive
unconscionability include "'[sjhocking to the conscience,'" "'monstrously harsh,'"
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and "'exceedingly calloused.'" Zuver v. Airtouch Commc'ns, Inc., 153Wn.2d
293, 303, 103 P.3d 753 (2004) (internal quotation marks omitted) (quoting
Nelson v. McGoldrick, 127Wn.2d124, 131, 896 P.2d 1258 (1995)).
The trial court made the following findings of fact with regard to the
nonrate terms and conditions:
30. There are credible reasons relating to safety,
reliability, financial stability, cost, and other district considerations
for the terms and conditions of the proposed Agreement
Defendants challenged.
31. There are credible reasons for provisions in the
proposed Agreement Defendants challenge, including but not
limited to, those relating to:
Tagging of fiber
Unauthorized attachment fees
Removal of attachments after agreement termination and
reimbursement of removal costs if not removed
Waivable requirement for a bond
Attacher responsibility for hazardous materials they bring
onto the District's property
Requirement of a permit for overlashing, other than in an
emergency
Liability and indemnification provisions providing protection
to the District
Transfer or relocation of attachments
Removal of nonfunctional attachments
Inspections by the District
Annual reports on attachment locations
Furnishing copies of required insurance policies on District
request
Survivability of certain continuing obligations after
Agreement termination
Attorneys' fees and cost provisions
"Grandfathering" with respect to NESC requirements
Permitting requirements
Waivable professional certification requirement, including the
alternative of a "licensee in good standing"
Invoicing and payment provisions
Requirement that any assignee of the Agreement sign the
Agreement
Requirement that guy wires be bonded and insulated
-18
No. 70625-0-1/19
• Requirement of District consent to placement of facilities
within four feet of the pole base
The trial court then reached the following conclusions of law:
30. The proposed terms and conditions of the District's
new Pole Attachment Agreement were just, reasonable, non
discriminatory, and sufficient, and were not arbitrary or capricious.
33. The District's proposed Pole Attachment Agreement
is not unconscionable.
35. The non-rate terms and conditions of the District's
proposed Pole Attachment Agreement meet the requirements of
RCW 54.04.045, once a few undisputed revisions to the Agreement
are made for pole attachment application processing timing and
notification provisions in Sections 5 and 6 of the 2008 amendments.
36. The District's pole attachment rates, terms, and
conditions are not illegal or unlawful.
The Companies take issue with a great many of the nonrate terms and
conditions. Although we agree that not all terms are valid, we do not hold that
their invalidity renders the entire agreement invalid. Instead, they may be
severed and the agreement may be preserved.
First, the Companies contend that the proposed agreement is ambiguous
as to whether the District's attachment fees are on a per pole or a per attachment
basis. Even assuming, without deciding, that this ambiguity existed, evidence
was adduced at trial that clarified the District's intent to charge on a per pole
basis.20 This evidence was of a sufficient quantum to persuade a rational, fair-
20 Contrary to the Companies' position, the parol evidence rule does not bar the
admission of extrinsic evidence to interpret an ambiguous provision. See Berg v. Hudesman, 115
Wn.2d 657, 666-68, 801 P.2d 222 (1990).
-19-
No. 70625-0-1/20
minded person that the District intended to charge on a per pole basis.
Accordingly, the Companies' contention lacks merit.21
Second, the Companies contend that the proposed agreement is
ambiguous as to whether "grandfathering" is permitted. The practice of
"grandfathering" excuses an attacher from upgrading its existing attachments to
comply with engineering standards. The Companies assert that although section
4.1 of the proposed agreement permits "grandfathering," section 6.1 seems to
foreclose its use by indicating that all preexisting installations must comply with
the agreement, including service standards, within 18 months. However, Miller,
the District's general manager, explained how these two provisions, in fact, work
in tandem.
What it says under 6.1 is that for attachments that did not meet the
standard at the time they were installed or don't meet, you know,
the standard if they've just installed. Essentially, if they don't meet
the standard when they were installed, then they need to be
brought up to, you know, the standard. If they did meet the
standard at the time they were installed ... then they're
grandfathered, then they're okay, because under 4.1 it indicates
that they're grandfathered, that they're fine.
Miller's testimony provides a sufficient quantum ofevidence to persuade a
rational, fair-minded person that "grandfathering" is permitted under certain, if not
all, circumstances. Substantial evidence supports the trial court's findings offact
as to "grandfathering."
21 In addition, CenturyLink argues that the question of appropriate fees is rendered
ambiguous in the agreement. This is so, it asserts, because section 3.1 indicates that the parties
are to look to Appendix Ato the agreement to determine applicable fees, but that Appendix A
refers the parties back to section 3.1. CenturyLink's reading ofthese two sections is willfully
blind. Prominently displayed in Appendix Aare the proper fees to be charged. There is no
ambiguity.
-20-
No. 70625-0-1/21
Third, Comcast and Charter contend that the requirement that they pay
any "rearrangement or transfer" costs necessary to accommodate the District's
own communications fiber is unreasonable. At trial, the District's general
manager agreed that licensees should not be required to pay to make room for
the District's communications fiber. On appeal, the District does not dispute
Comcast's and Charter's contention, or otherwise direct our attention to evidence
in the record supporting the trial court's finding. However, in the absence of
evidence that severing this term would materially alter the essence of the
agreement, we conclude that this term is severable from the proposed
agreement.
Fourth, the Companies contend that section 6.3, which requires attacher
employees who are responsible for installing cable attachments to have
experience performing installation work on electric transmission or distribution
systems, is unreasonable. However, the District's chief of engineering and
operations testified that such experience would be necessary if these employees
were working in the safety zone, and the record indicates that the Companies'
equipment is, at times, in the safety area. We are satisfied that this type of
provision, which ensures a safe work environment, is well within the bounds of
reason.22
Fifth, Comcast and Charter contend that the requirement in section 6.3
22 Both as to this provision and as to section 6.3 ofthe proposed agreement (which we
address in resolving the sixth argument raised by the Companies), Comcast and Charter
additionally argue that they are unreasonable because cable companies do not employ electrical
workers. We summarily reject this argument.
-21 -
No. 70625-0-1/22
that postconstruction inspections be performed by licensees is inconsistent with
the District's own policies and standard industry practice. The District's chief of
engineering testified that it would, in fact, be reasonable for the District to
continue performing postconstruction inspections itself. The District does not
address Comcast's and Charter's contention in its merits brief. This provision,
however, is severable pursuant to the severability clause. This is so because
there is no evidence that severing it from the agreement materially alters the
essence of the agreement.
Sixth, Comcast and Charter contend that licensees should not, contrary to
the requirement of section 6.3, have to use a professional engineer when
submitting pole attachment applications. This is so, they aver, because it is not
required to by law. Furthermore, Comcast and Charter argue that the District
currently only requires a professional engineer for complex and large jobs where
there is a concern about weight on the poles. However, Miller testified that, at
the urging of the Companies, the District added a provision that would waive the
requirement of using a professional engineer for "those that we haven't had
issues with and have worked with us." The thrust of Miller's testimony reveals
that this term was included not to burden established licensees such as Comcast
and Charter but, rather, to protect the District against the prospect of
irresponsible future licensees. Adopting this provision was well within the
District's discretion.
22
No. 70625-0-1/23
Seventh, CenturyLink contends that the unilateral attorney fees provision
(in the District's favor) contained in the proposed agreement is contrary to law.
However, RCW 4.84.330 states, in pertinent part:
In any action on a contract or lease entered into after September
21, 1977, where such contract or lease specifically provides that
attorneys' fees and costs, which are incurred to enforce the
provisions of such contract or lease, shall be awarded to one of the
parties, the prevailing party, whether he or she is the party specified
in the contract or lease or not, shall be entitled to reasonable
attorneys' fees in addition to costs and necessary disbursements.
Thus, the agreement's unilateral attorney fees provision will not preclude a
prevailing party from recovering attorney fees. Contrary to CenturyLink's
contention, however, RCW 4.84.330 does not declare unilateral attorney fees
provisions to be void or illegal; the statute merely operates to make them
bilateral.
Eighth, CenturyLink contends that the District's attempt to force it to bear
the cost of"undergrounding" its facilities in section 10.3 ofthe proposed
agreement is unlawful. In support of this contention, it cites to RCW 35.99.060,
which permits "cities and towns" to require service providers to relocate facilities
under certain circumstances. From this, CenturyLink urges that because the
District is not a city or a town, its attempt to have CenturyLink bearthe cost of
"undergrounding" is contrary to law. We disagree. Nowhere in RCW 35.99.060
does the legislature foreclose a PUD from requiring an attacher to bear the cost
of "undergrounding" its facilities.
Nevertheless, CenturyLink argues that this would run contrary to its
Washington Utilities and Transportation Commission (WUTC) tariff, which
-23-
No. 70625-0-1/24
requires its customers to bear the cost of customer requests for relocation or
rearrangement of facilities. However, CenturyLink's argument assumes that the
WUTC can enforce its tariff against the District, an assumption that is rebutted by
applicable statute. See RCW 54.04.045(7) ("Nothing in this section shall be
construed or is intended to confer upon the utilities and transportation
commission any authority to exercise jurisdiction over locally regulated
utilities.").23 The District's "undergrounding" term does not violate RCW
35.99.060 and cannot violate CenturyLink's tariff.
Ninth, CenturyLink contends that section 4.4, which purports to immunize
the District from liability to CenturyLink or its customers for actual or
consequential damages—even for the District's own foreseeable negligence—
constitutes "overreaching." However, section 16.1 clarifies that the District is
liable for its own negligence and willful misconduct. Furthermore, a witness for
CenturyLink testified that the District's indemnification provision was "fair."
Accordingly, we are satisfied that the alleged "overreaching" does not run afoul of
RCW 54.04.045(2), the common law prohibition of substantively unconscionable
terms, or on any other basis require invalidation or severability.
Tenth, CenturyLink contends that the provision of the proposed agreement
that requires, in the absence of the District's permission, a four foot minimum
distance between the attachers' equipment and the base of the District's poles is
unreasonable and illegal. It cites the constitutionally guaranteed right to utilize
23 It is beyond cavil that tariffs may not repeal or supersede a statute. See People's Org,
for Wash. Energy Res, v. Utils. & Transp. Comm'n. 101 Wn.2d 425, 427-34, 679 P.2d 922 (1984).
-24-
No. 70625-0-1/25
the right-of-way. Wash. Const., art. XII, § 19; RCW 80.36.040. That right,
however, was guaranteed as against railroad corporations—not public utility
districts. Wash. Const., art. XII, § 19. Moreover, the constitutional provision
makes clear that this right is not inviolable: "The legislature shall.. . provide
reasonable regulations to give effect to this section." Wash. Const., art. XII, §
19. Here, the legislature, through RCW 54.04.045, provided public utility districts
the authority to regulate pole attachments. Miller testified that the reasons for
this buffer area are safety-related. These concerns provided an adequate basis
upon which the District could exercise its considerable discretion. There was no
error.
Eleventh, CenturyLink contends that it was overreaching for the District to
insist upon a "mirror image" agreement, meaning that the agreement purported to
offset each pole owned by CenturyLink to which the District attached its
equipment with each pole owned by the District to which CenturyLink attached its
equipment.24 This is so, it asserts, because whereas CenturyLink occupies only
one foot of any pole owned by the District, the District occupies seven and a half
feet of any pole owned by CenturyLink. The District does not respond to this
argument. In the absence of evidence to the contrary, we hold that the term was
unreasonable. Nevertheless, given that the term does not materially alter the
essence of the agreement, it may be severed from the proposed agreement.
Twelfth and finally, CenturyLink contends that, when considered in
24 In a few areas of Pacific County CenturyLink's predecessors erected utility poles to
which the District later attached its facilities.
-25-
No. 70625-0-1/26
concert, sections 2.10 and 5.12,25 and Article 11 would mandate removal of its
material from the District's poles on unrealistic time frames. However, a
CenturyLink witness confirmed that the agreement's timeframes actually
provided licensees 60 days longer than the six-month notice that CenturyLink
itself requested. We are satisfied that this time frame comports with RCW
54.04.045(2) and is not substantively unconscionable.
While several terms from the proposed agreement are untenable, they are
severable from the agreement. The Companies have failed to demonstrate that
these scattered, untenable terms—whether considered individually or
collectively—are sufficient to render the entire proposed agreement
unenforceable. Therefore, although the trial court was incorrect insofar as it
concluded that all of the nonrate terms and conditions were valid, we hold that
once the offending terms have been severed from the agreement, it is in
compliance with RCW 54.04.045(2) and it does not violate the common law
prohibition of substantively unconscionable terms.
Ill
While the Companies did not devote significant space in their merits
briefing to arguing that the District's rates in effect prior to the effective date of
the 2008 amendment failed to comply with RCW 54.04.045(2), they do appear to
have, at the very least, assigned error to the trial court's findings and conclusions
25 A review of the proposed agreement did not reveal the existence of a section
corresponding to this number.
-26-
No. 70625-0-1/27
to the contrary.26 However, their argument in support of this allegation, which
may charitably be described as cursory, is unpersuasive.
For the same reason as given in Section II.A. of our decision, the District's
rates that were calculated and charged prior to the effective date of the 2008
amendment were properly subject to the arbitrary and capricious standard of
review by the trial court.
The trial court concluded that "The District's Commissioners adopted pole
attachment rates that were just, reasonable, non-discriminatory, and sufficient,
those rates being $13.25 prior to January 1, 2008, and $19.70 after January 1,
2008." Conclusions of Law 12. The trial court also concluded that "The District's
pole attachment rates both before and after the adoption of Resolution No. 1256
and before and after the 2008 amendment to RCW 54.04.045 were not arbitrary
or capricious." Conclusions of Law 29.
Review of the trial court record provides no tenable reason for us to
reverse the trial court's conclusion. The record reveals that the District
considered a range of potential rates, calculated by reference to four different
formulas, before adopting a rate that, in spite of signifying a substantial increase
26 Asympathetic reading ofthe following assertion indicates that Comcast and Charter, in
addition to challenging the District's rate afterthe 2008 amendment, were challenging the revised
rates since their inception: "The [District's] Agreement's proposed rates, and many of its other
proposed terms were unjust and unreasonable, contrary to RCW 54.04.045." Additionally,
CenturyLink, in its reply brief, argues that by assigning errorto a finding of fact by the trial court
(33)—which dealt with the legality of the District's revised rates before the 2008 amendment—
CenturyLink preserved its right to argue that the rates were not valid prior to the amendment.
Nevertheless, because CenturyLink did not present argument in its opening brief in support of its
assignmentof error, we do not considerCenturyLink's tardy argument first advanced in its reply
brief. See Cowiche Canyon Conservancy v. Boslev, 118 Wn.2d 801, 809, 828 P.2d 549 (1992)
("An issue raised and argued for the first time in a reply brief is too late to warrant
consideration.").
-27-
No. 70625-0-1/28
from previous rates, fell below the recommendation made by EES. Moreover, in
order to ease the transition for licensees, the District decided to phase in the
increased rate incrementally.
In the absence of evidence to the contrary, we affirm the trial court's
conclusion that the District's rates prior to the effective date of the 2008
amendment satisfied former RCW 54.04.045(2) and that these rates were not the
result of arbitrary and capricious decision making. Because the Companies
refused to pay the District's newly instituted rates and because they refused to
remove their equipment from the District's poles, they became trespassers on the
District's property. In light of the Companies' failure to pay the revised rates and
failure to remove their equipment, we affirm the trial court's award of damages for
unpaid fees prior to June 12, 2008, as well any damages awarded to
compensate the District for the Companies' trespass prior to that date.
IV
The Companies' primary contention on appeal is that the trial court erred
by concluding that the 2008 amendment to RCW 54.04.045, which established a
procedure for calculating a just and reasonable pole attachment rate, reflected
certain preexisting formulas, as identified by the District's consultant and expert
witness. This error was induced, the Companies aver, by the trial court's
deferential review of the District's post hoc interpretation of the statutory
amendment. Had the trial court construed the language of the statute as
amended, the Companies argue, it would have necessarily concluded that they
reflect different—albeit preexisting—formulas.
-28-
No. 70625-0-1/29
We agree that the trial court improperly applied a deferential standard of
review to the District's interpretation of the language of the statute. Moreover, we
agree that the formulas advanced by the District and accepted by the trial court
were inapposite. Yet, the trial court's error does not legitimate the Companies'
proposed interpretation. The fact of the matter is that neither the District, nor the
Companies, nor the trial court applied the newly minted statutory language in an
effort to determine whether the District's rates did, in fact, comply with the unique
formula set forth in the 2008 amendment. Instead, both in the trial court and on
appeal, all parties labored—often employing tortured reasoning and contortional
construction—to show how the unique formula hewed more closely to certain
preexisting formulas, while trivializing any distinctive features. Notwithstanding
this pervasive yet misguided approach by the parties, it was incumbent upon the
trial court to apply the unique formula as written. Owing to its failure to do so, we
reverse and remand with instructions to the trial court to apply the unique formula
as written and in a manner not inconsistent with our analysis herein.
A
We first address the propriety of the trial court's deferential review. The
Companies contend thatthe trial court, in applying an arbitrary and capricious
standard of review, improperly deferred to what the trial courtfound to be the
PUD commission's interpretation of the 2008 amendment to RCW 54.04.045.
We agree.
The conclusion of law at issue states, in pertinent part:
The District... did not act arbitrarily or capriciously, in interpreting
-29-
No. 70625-0-1/30
Section 3(a) of RCW 54.04.045 as the FCC Telecom formula and
Section 3(b) as the APPA formula for PUD pole attachment rates
as of the date of trial.
Conclusions of Law 11.
This conclusion of law is based on a misperception. The trial testimony
was that the PUD commission adopted the $13.25 and $19.70 rates at its
January 2, 2007 meeting. This was 17 months before the effective date of the
statutory amendment. There is no evidence in the record that the PUD
commission (the embodiment of the agency to which any deference, if
appropriate, would be given) took any action to interpret the 2008 amendment.
To the contrary, it was the District's consultant and expert witness, Saleba, who
derived the theory upon which the District based its litigation strategy. Thus, in
actuality, the trial court applied the arbitrary and capricious test to the testimony
of the District's expert witness (not to an action of the PUD commission). In
doing so, the trial court erred.
In fact, where a statute sets forth that which is required, an agency
possesses no discretion to act in variance to its terms. The legislature passed
the 2008 amendment in order to achieve a degree of uniformity. Thus, any
preexisting discretion a PUD commission possesses is restricted by the language
of the amended statute. A PUD commission has no discretion to set pole
attachment rates at variance with the requirements of sections (3)(a), (b), and (c).
B
There are 28 PUDs in Washington. Each PUD commission retains its
preexisting discretion with regard to rate-setting except as that discretion is
-30-
No. 70625-0-1/31
restricted by the amended statute. With regard to the methodology set forth in
sections (3)(a), (b), and (c), that methodology must be applied. Uniformity could
not be achieved if the courts deferred to 28 different PUD commission
interpretations of the meaning of the words in a state statute.
Conversely, with regard to the data applied to the methodology, the PUDs
retain their traditional discretion and the courts should continue to defer to the
PUDs in this regard.27
Thus, the District must set rates by applying the formula set forth in the
amended statute. The trial court erred by concluding that the District possessed
the discretion to apply two different formulas—even if the District's expert witness
believed them to be suitable stand-ins. On the other hand, with regard to the
data, assumptions, and other information used to calculate the formula, the
District retains the discretion it has long held, given that this discretion was not
divested by the 2008 statutory amendment. See, e^, People's Org, for Wash-
Energy Res., 104 Wn.2d at 808 (deference accorded where the statute "in very
broad terms, basically just directed] them to set those rates which the agencies
determine to be justand reasonable"); Teter v. Clark County. 104 Wn.2d 227,
231, 233, 237-38, 704 P.2d 1171 (1985) (where rates were authorized under the
police power, and thus were subject only to the requirement thatthey
"'reasonably tend to correct some evil or promote some interest ofthe state,'"
rates would be sustained "unless it appears, from all the circumstances, that they
27 For instance, the useful life of a utility pole may vary from district to district. So may the
average number ofattachers. The districts' calculations of such data, and the means and
methods by which thesecalculations are derived, continue to be entitled to deference.
-31 -
No. 70625-0-1/32
are excessive and disproportionate to the services rendered," so "as to be called
arbitrary" (internal quotation marks omitted) (quoting Markham Advertising Co. v.
State, 73 Wn.2d 405, 421-22, 439 P.2d 248 (1968))); Prisk v. City of Poulsbo. 46
Wn. App. 793, 804-05, 732 P.2d 1013 (1987) (where rates were required to be
uniform, court declined to rule that they "were determined arbitrarily or unfairly");
US W. Commc'ns . Inc. v. Utils. & Transp. Comm'n, 134 Wn.2d 48, 54, 949 P.2d
1321 (1997) (where agency was required to "set rates which are fair, just,
reasonable and sufficient," the court utilized an arbitrary and capricious standard
of review); Cole v. Wash. Utils. &Transp. Comm'n, 79 Wn.2d 302, 309, 485 P.2d
71 (1971) (where agency was required to set rates which were just, fair,
reasonable, and sufficient, the court was to utilize an arbitrary and capricious
standard of review).
Given that RCW 54.04.045(3)(a)-(c) sets forth specific instructions for the
District to follow, the trial court should have construed the meaning of those
instructions without affording deference to the implementing entity. Any
deference should have been afforded only to the District's compilation and
calculation of the data to which the formula was applied.
C
As noted above, the trial court erred by deferring to the testimony of an
expert witness testifying on the District's behalf. Well before the 2008
amendment to RCW 54.04.045, the District hired EES Consulting, Inc., to
conduct a pole attachment rate study, the results of which prompted the District
to revise its rates. Saleba, the president and chief executive officer of EES, later
-32-
No. 70625-0-1/33
testified as an expert witness on behalf of the District. Although the District
offered Saleba's testimony at trial—the substance of which reveals an insistence
that the validity of the District's rates should be settled by determining which
preexisting formula hews most closely to subsection (3)(a) and which preexisting
formula hews most closely to subsection (3)(b)—no evidence was presented to
the trial court that the PUD commission ever applied the unique formula in the
amended statute to determine whether its revised rate was in compliance.
The trial court credited Saleba's testimony and memorialized his approach
to interpreting the statute in its conclusions of law. In so doing, the trial court—
rather than deferring to an interpretation made by the PUD commission—
deferred to an attempt by an expert witness to establish that the legislature did
not mean everything that it said when it amended RCW 54.04.045.
This mistake is compounded by the fact that Saleba's approach to
statutory interpretation was misguided. Saleba's testimony evinced a disregard
for the words of the statute as written by the legislature. Instead of applying the
words in subsections (3)(a) and (3)(b), he compared and contrasted each
subsection with certain preexisting formulas. As Saleba explained it,
As a general premise, when asked to review a statute and
determine its rate-setting applicability, we take a look at the options
available for the rate calculation and then compare those rate
calculations to the language in the statute. And that's - that's what
I did here.
Again, going back to how I - I do this, I take a look at the statute
and then / compare the language and the various options to that
statute. And the two options I'm looking at in this exhibit and
comparing to (3)(a) are the FCC cable and the FCC telecom.
33-
No. 70625-0-1/34
(Emphasis added.)
Accepting that the legislature, in drafting the amendment, was unaware of
these preexisting formulas—despite explicitly referencing one of them in RCW
54.04.045(4)28—would require, on behalf of the trial court, a willing suspension of
disbelief. Yet, by sanctioning Saleba's approach, the trial court, in effect, ruled
that while the legislature was aware of these various preexisting formulas, and
although it intended to make subsections (3)(a) and (3)(b) reflect two of the
established formulas, it instead wrote a unique formula with distinctive features.
The trial court erred by accepting Saleba's "closest to the pin" approach to
statutory interpretation: a desire to apply preexisting formulas that somewhat fit
the language of the statute rather than applying the language of the statute itself.
A number of excerpts from Saleba's testimony further illustrate his
misguided approach, which was erroneously legitimated by the trial court.
Saleba testified that RCW 54.04.045(3)(a) reflects the FCC Telecom
formula. His reasoning in support ofthis conclusion contained an unstated, but
nevertheless prominent, assumption: subsection (3)(a) must reflect either the
FCC Cable formula or the FCC Telecom formula. Working from this assumption,
he pointed out that although (3)(a) makes mention of "a share of the required
support and clearance space," the Cable formula—in contrast—refers only to
"usable space." This difference, according to Saleba, ruled out the possibility
that subsection (3)(a) reflects the Cable formula.
I take a look at the statute and then I compare the language and
28 The FCC Cable formula.
-34
No. 70625-0-1/35
the various options to that statute. And the two options I'm looking
at in this exhibit and comparing to (3)(a) are the FCC cable and the
FCC telecom. Again, (3)(a) talks about a share of required support
and clearance. I take a look at - at FCC cable. It refers to usable
space. It doesn't refer to support and clearance.
The merit of Saleba's observation is immaterial. His error stems from his failure
to apply the language of the statute as written by the legislature.
Not only did Saleba neglect to apply the language of the unique formula,
he inverted the method of determining a just and reasonable rate as prescribed
by the legislature. Specifically, he postulated that if subsection (3)(a) reflected
the FCC Cable formula, the allocation of bare pole costs between the District and
its attachers would be, in his opinion, unreasonable.
So anyway, I looked at GSS-5, and it showed that using FCC cable
would result in a 6 percent allocation of the bare pole cost to the
pole attacher. So I envisioned this pole out in the country that's got
the PUD on it, and it's got a third-party attacher. And that's it. And
I look at that pole and I say, does it seem reasonable to me that the
cable people would pick up 6 percent of that - that pole cost and
the PUD's other customers 94 percent? And to me that was an
unreasonable allocation of cost.
Q. Okay. Based on your review of (3)(a), what did-did you-
what methodology did you conclude the language in Section (3)(a)
represented?
A. I concluded it represented the FCC telecom.
Although the language of subsections (3)(a) and (3)(b) is somewhat
byzantine, Saleba's transposition defied an uncomplicated directive: "A just and
reasonable rate must be calculated as follows: . . . ." RCW 54.04.045(3).
Saleba's misguided approach is further illustrated by his discussion of
incremental costs. He testified that because the Cable formula utilizes
incremental costs, which are discriminatory—and would therefore violate the
35
No. 70625-0-1/36
requirement that rates be nondiscriminatory—subsection (3)(a) cannot reflect the
Cable formula.
In rate setting there's a couple of ways people talk about pricing
and one is to look at incremental cost and the other is to look at
rolled in. Incremental costing is where you would charge
somebody based upon just the incremental variable costs
associated with providing service.
And I'll use a real life example of maybe a rental property.
Let's say that you had a - let's say I had a piece of property that I
wanted to use six months and my brother wanted to use six
months. Incremental pricing would be where I would charge my
brother rental on the other half of the year just predicated on the
additional, as an example, electricity and water he might use by
using the property, with no contribution to the annual cost
associated with the property.
Our recommendation was that the reasonable range for pole
attachment rates were between the 20.65 calculated from the FCC
telecom, with a cap at 36.39 from the APPA method, and we felt
the range should be higher, weighted more towards the APPA end,
because the FCC cable, in our view, arbitrarily allocated two-thirds
of the unusable space to the electric utility, whereas we felt all
users should pay equally in that.
(Emphasis added.)
Q. Okay. So then what - what - we're going to get to what you
promote in a minute. But what you're really promoting is a - a
formula that results in the - in the attachers providing PUD more
money because it's based on a per capita rather than a use
allocation, right?
A. Per capita use is a - my - my - the AP—
Q. "Per capita" I mean per user.
A. Correct. That's - yes. Yes, equal proportionality.
Q. You don't like the cable 'cause it doesn't do that, right?
A. Correct.
Putting aside Saleba's failure to apply the language of subsection (3)(a) as
written, it is important to note that the proscription on instituting discriminatory
rates prevents PUDs from arbitrarily differentiating between licensees; it does
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No. 70625-0-1/37
not, however, require that attachers and PUDs split costs equally. RCW
54.04.045(1 )(d) ("'Nondiscriminatory' means that pole owners may not arbitrarily
differentiate among or between similar classes of licensees approved for
attachments."). Moreover, the nondiscriminatory directive deals with the rate as
a whole—not the component parts of the rate, such as subsections 3(a) and 3(b).
Furthermore, the legislature, by authorizing PUDs to utilize the Cable formula,
has already made a determination that the utilization of the Cable formula does
not violate the nondiscriminatory requirement. See RCW 54.04.045(4).
In a final effort to corroborate his assessment that subsection (3)(a) does
not reflect the Cable formula, Saleba directed the trial court's attention to section
(4), which authorizes use of the Cable formula.
For the purpose of establishing a rate under subsection (3)(a) of
this section, the locally regulated utility may establish a rate
according to the calculation set forth in subsection (3)(a) of this
section or it may establish a rate according to the cable formula set
forth by the federal communications commission by rule as it
existed on June 12, 2008, or such subsequent date as may be
provided by the federal communications commission by rule,
consistent with the purposes of this section.
RCW 54.04.045(4) (emphasis added). The inclusion of the Cable formula in
section (4), according to Saleba, foreclosed the possibility that subsection (3)(a)
could reflect the Cable formula.
Section (4) of the statute says that three - that in the event that -
that the local utility has the option of support - of substituting the
cable formula - which in this case you're talking about the FCC
cable formula - in - in - for Section (3)(a). Which to me says that if
Section (3)(a) was meant to be the cable, Section (4) wouldn't be
needed. Because Section (4) wouldn't say you can substitute the
cable for the cable.
37
No. 70625-0-1/38
Unsurprisingly, Saleba again neglected to apply the language of subsection
(3)(a). However, he also misconstrued section (4).
Contrary to Saleba's assessment, section (4) does not conclusively
establish that subsection (3)(a) reflects a formula other than the Cable formula.
Instead, section (4) only discloses the legislature's intent to permit PUDs—in the
event that the FCC Cable formula was altered between the date that RCW
54.04.045 was amended and the date that the amendment became effective (or
subsequently thereafter)—to avail themselves of an updated FCC Cable formula.
In order to understand why the legislature included this provision, it is imperative
to recognize that the cable television industry is no longer a fledgling industry
buttressed by taxpayer subsidies but, rather, a robust industry well-equipped for
fiscal autonomy.29 Given the industry's maturation since the advent of the Cable
formula, it was reasonable for the legislature to surmise that the rate calculated
using the Cable formula might increase in the future. Indeed, at the time that the
legislature amended RCW 54.04.045, the FCC was undertaking a review of its
pole attachment rates.30 Consequently, it is reasonable to conclude that the
legislature intended to permit the District to avail itself of a potentially higher rate
29 The trial court found that "The FCC Cable formula was developed to support a fledgling
cable TV industry, which is no longer a fledgling industry." Findings of Fact 49.
30 Implementation of Section 224 of the Act; Amendment of the Commission's Rules and
Policies Governing Pole Attachments, WC Docket No. 07-245, FCC 07-187, 22 FCC Red. 20195
(proposed Nov. 20, 2007) (to be codified at 47 C.F.R. pt. 1),
https://apps.fcc.gov/edocs public/attachmatch/FCC-07-187A1.pdf.
38
No. 70625-0-1/39
yielded by the Cable formula,31 which would further the legislature's explicit intent
in amending the statute to "ensure that locally regulated utility customers do not
subsidize licensees." Engrossed Second Substitute H.B. 2533. Rather than
merely a fortuitous rider to section (4), the option for PUDs to utilize the Cable
formula "consistent with the purposes of this section" is revealing of a keen
understanding by the legislature of the uncertain regulatory milieu in which it
acted.
Moving now to Saleba's examination of subsection (3)(b), he similarly
neglected to apply the words of the statute as written by the legislature. Instead,
he compared subsection (3)(b) to the Telecom formula and the APPA formula,
determined that subsection (3)(b) was more similar to the APPA formula and,
thus, concluded that subsection (3)(b) reflects the APPA formula.
Q. Can you explain your review of Section (3)(b), please.
A. Yes. Again, going back to the language of Section (3)(b), it
calls out that support and clearance, or what other people call
unusable space, is equally allocated among all locally - among the
locally regulated utility and all licensees. And "equal" is the -the -
the phrase I'm - I'm focusing on.
Q. Okay.
A. FCC telecom talks about putting in usable - support and
clearance but only two-thirds. I don't see anything in Section (3)(b)
that refers to two-thirds of the support facilities. It talks about
equally, which to me is all. So - so, therefore, it told me that FCC
telecom was not the appropriate formula for Section (3)(b).
Q. Did you form an opinion on what methodology the language
of Section (3)(b) represented?
A. Yes. I then went to the APPA methodology where it talks
about equally proportioning among the utilities. The "equally" in the
APPA formula and the "equally" in (3)(b) hooked up in my mind,
31 The Senate Bill Report explains that "The bill allows for use of future rate-setting
methodologies as set by rule by the FCC." S.B. Rep. on Engrossed Second Substitute H.B.
2533, 60th Leg., Reg. Sess. (Wash. 2008).
-39-
No. 70625-0-1/40
which told me that (3)(b) had to be the APPA formulation.
Even if Saleba is correct that subsection (3)(b) more closely resembles the APPA
formula, the fact remains that he did not apply the words of subsection (3)(b) as
written by the legislature. Had the legislature intended that subsection (3)(b)
directly reflect the APPA formula, it would have so indicated.32 Because it did
not, however, it was incumbent upon the District and the trial court to apply the
words as written and thereby give meaning to the unique formula conceived by
the legislature.
Given the trial court's improper display of deference to the District's expert
witness, we conclude not only that the trial court erred by utilizing an arbitrary
and capricious standard of review, but that it erred by adopting Saleba's
testimony. The legislature's amendment of RCW 54.04.045 included a rate
calculating formula that, notwithstanding the legislature's decision to borrow
aspects of various preexisting formulas,33 is unique. Because itwas not applied
as such, we reverse the trial court's ruling.
D
Nevertheless, it is by no means certain that the trial court's error will result
32 As it did with respect to the FCC Cable formula in section (4).
33 The sponsor of the 2008 amendment to RCW 54.04.045, Representative John McCoy,
made the following comment on the floor of the legislature:
Thank you, Mr. Speaker. When this bill leftthis house and went to the other side,
it did leave a little bit of work and the senate helped and the state all helped fix
that little formula that we had taken a little bit of the FCC formula, a little bit of the
APPA, and they came up with an excellent formula ....
An audiovisual representation of McCoy's statement was admitted into evidence during
the course of the trial.
-40-
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in the Companies prevailing on remand.34 The Companies, whether of their own
initiative or in response to the District's approach,35 also failed to apply the
unique formula as written by the legislature. Furthermore, to the extent that the
Companies did present evidence in support of their alternative interpretation, the
trial court found the rate derived by one of their expert witnesses—Patricia
Kravtin36—to be "unreasonable and impractical."37 Findings of Fact 34-36.
Therefore, on remand, the trial court need not accept the Companies'
calculations simply because we rejectthat which was employed by the District's
expert witness and deferred to by the trial court. The Companies will only prevail
on remand if the District cannot, after applying the statute as written by the
legislature, establish that its rates are just and reasonable, as well as
nondiscriminatory and sufficient.
Kravtin adopted a flawed approach similar to that taken by Saleba.
Indeed, rather than applying the words ofthe statute, she instead assumed that
subsection (3)(b) reflects the Telecom formula and—working from that
assumption—concluded that the Telecom formula may be applied, subject only
34 In this litigation, the Companies have taken an "If he loses, Imust win" approach to the
issues. Aswe will discuss, such is not the case—given that this case wentto trial and the trier of
fact did not choose to credit the testimony of the Companies' expert witnesses.
35 In the Companies' joint motion for partial summary judgment filed in December 2009,
they requested that the trial court determine as a matter of law that subsection (3)(a) functions as
the FCC Cable formula and that subsection (3)(b) functions as the FCC Telecom formula.
36 Kravtin testified on behalf of Comcast and Charter, but not CenturyLink. The trial court
found that her opinions "were based primarily on theoretical analysis ofeconomics and public
policy, rather than actual local information regarding Pacific County and Pacific PUD." Findings
of Fact 35.
37 The otherexpert witness, Mark Simonson, testified on behalf of CenturyLink.
Simonson's testimony, however, was focused on the nonrate terms and conditions ofthe
District's proposed agreement, and only as they related to CenturyLink. Therefore, his testimony
does not provide support for the Companies' position regarding the District's rates.
-41 -
No. 70625-0-1/42
to a mathematical modification. Although Kravtin's divagation from the statutory
text was not so pronounced as Saleba's, it nonetheless betrayed her unsound
methodology.
Q. Can you tell us what methodology, in your opinion, applies to
(3)(b)?
A. Yes. In my opinion, the methodology is the telecom formula,
with a small modification.
Q. Okay. . . . [C]an you explain how the telecom formula works?
A. Yes. The telecom formula works in exactly analogous
fashion to the cable formula. In fact, it was based on the cable
formula. The same three components we discussed earlier, that I
won't repeat.
The only difference with regard to the telecom formula is a
space allocator. It's now broken into two parts. It has the same
useable space. The same allocator is used for useable space, that
proportional allocator, but then for unusable space, that space,
subject to a two-thirds adjustment, is divided equally by the number
of attachers.
The legislature, in amending RCW 54.04.045, wrote a singular rate
formula. Even assuming, without deciding, that a substantial overlap exists
between the FCC Telecom formula and subsection (3)(b), it is nevertheless
dear—and, indeed, the parties do not dispute—that the two are not identical.
While Kravtin's switch-and-bait approach to construing the statute may hold
superficial appeal, it is improper.38
38 Additionally, the trial courtfound that the rate derived by Kravtin was unreasonable and
impractical based, in part, on the local information lacking from her proposed rate. Findings of
Fact 35 ("The opinions of Defendants' rate expert, Patricia Kravtin, were based primarily on
theoretical analysis of economics and public policy, rather than actual local information regarding
Pacific County and Pacific PUD. She had never visited Pacific County prior to trial."); Findings of
Fact 34 ("The pole attachment rate derived by Defendant's expert witness, Patricia Kravtin, is
unreasonable and impractical as it relates to this case.").
An example of Kravtin's lack of local information is her conclusion that transmission poles
should not be considered by the District in setting a rate, despite the fact that there were
attachments by the Companies to a majority of the District's transmission poles. On the subject
-42-
No. 70625-0-1/43
While we hold that the trial court, on remand, must interpret the unique
rate formula based on the words of the statute and not based on opinions as to
what formulas it appears to resemble, we must repeat that because the formula
is not designed to ensure mathematical certainty and because the District
enjoyed ample discretion prior to the 2008 amendment, the District retains
considerable discretion in its rate calculation. Although our directive to the trial
court, unadorned, is that the statute must be applied as written, the legislature's
amendment of RCW 54.04.045 did not fully divest the District of the previously
liberal discretion it enjoyed. What follows is a nonexhaustive list of the discretion
retained by the District in calculating a just and reasonable rate.
Both subsections (3)(a) and (3)(b) contain the phrase "shall consist of the
additional costs of procuring and maintaining pole attachments, but may not
exceed the actual capital and operating expenses of the locally regulated
utility " RCW 54.04.045(3)(a)-(b) (emphasis added). However, neither
subsection clarifies whether these costs and expenses are treated as gross costs
and expenses or net costs and expenses. Nevertheless, the legislature explicitly
of transmission poles, CenturyLink assigned error to the trial court's finding that "Including District
transmission poles, as well as distribution poles, in the District's rate calculations was
reasonable." Findings of Fact 38. However, its critique is based on the fact that no preexisting
formulas authorize the use of transmission poles in calculating rates. As should be clear by now,
we reject this approach and, in light of the Companies' common practice of attaching to the
District's transmission poles, rule that the trial court's finding was supported by substantial
evidence.
An example of Kravtin's unreasonable and impractical rate derivation is the deduction
she made for costs that benefit only the District. For example, she addressed the "cross arms" on
a pole, which do not benefit the attachers. According to Kravtin, pursuantto the FCC Cableand
Telecom formulas, it is appropriate to deduct 15 percent from the District's account to offset costs
stemming from features that do not benefit the attachers. However, no such deduction is
authorized by the rate formula authored by the legislature.
-43-
No. 70625-0-1/44
intended the 2008 amendment "to recognize the value of the infrastructure of
locally regulated utilities" and to "ensure that locally regulated utility customers do
not subsidize licensees." Engrossed Second Substitute H.B. 2533. Therefore,
the District retains discretion to determine, after calculating a rate pursuant to
both gross costs and expenses and net costs and expenses, which result best
advances the policy explicated by the legislature.
The District also retains discretion to determine whether to designate a
portion of the pole as unusable "safety space" and, if it does so, whether to
require the Companies to bear a share of the cost associated with the unusable
space.39 In both subsections (3)(a) and (3)(b), the legislature directs PUDs to
consider a "share" of the "required support and clearance space." In pole
attachment vernacular, another term for "support and clearance space" is
unusable space. However, the legislature did not define that which constitutes a
proper share and it did not define that which constitutes unusable space. Rather
than providing evidence as to which preexisting formula hews most closely to
these subsections, the absence of further definition affords the District discretion
to determine that which constitutes unusable space and, further, what share of
the cost associated with the unusable space should be borne by the attachers.40
39 The Companies assign error to a finding made by the trial court regarding the safety
space: "Defendants use the safety space on the District's poles, and the safety space is primarily
for their benefit." Findings of Fact 39. However, the District points to numerous instances in the
record of testimony that supports these findings. Accordingly, we conclude that the trial court's
finding was supported by substantial evidence. See 224 Westlake, LLC, 169 Wn. App. at 720
("We review the trial court's decision following a bench trial to determine whether the findings of
fact are supported by substantial evidence and whether those findings support the conclusions of
law.").
40 Again, this discretion is guided by the legislature's statement of intent.
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No. 70625-0-1/45
Instituting a policy of not using the safety space is a prerogative of the District
both as a rate maker and as a utility operator.
The District also retains discretion in the manner in which it calculates the
number of licensees that attach per pole. The District calculated that, on
average, there were 2.38 attachers per pole owned by the District. On the other
hand, the Companies offered Kravtin's testimony that, pursuant to the federal
formulas, the number of attachers must be assumed to be three. However,
because the formula created by the legislature is unique, it was not incumbent
upon the District to assume that there were three attachers per pole; instead, it
could avail itself of data derived by surveys conducted by its employees or
agents in order to estimate the actual number of attachers. This approach is in
harmony with the legislature's stated intent that the amendment "ensure that
locally regulated utility customers do not subsidize licensees." Engrossed
Second Substitute H.B. 2533. If the District were to assume the presence of
three attachers per pole, this input would ultimately lower the rate, which would,
in turn, impose a higher financial burden on the District's customers.41
In sum, we reverse the trial court's determination that subsection (3)(a)
reflects the FCC Telecom formula and that subsection (3)(b) reflects the APPA
formula and remand for further proceedings. On remand, the District must apply
the statute as written to the relevant data, albeit subject to the discretion that was
not withdrawn by the 2008 amendment. Only after receiving evidence and
41 Indeed, Kravtin's insistence that the FCC "3 attacher per pole" presumption be used,
rather than actual data from the operation of the Pacific PUD, appears to be one basis for the trial
court's finding that her testimony was not worthy of belief.
-45-
No. 70625-0-1/46
testimony based both on a proper application of the amended statute and on
underlying data that, in the trial court's view, is worthy of being credited, may the
trial court determine whether the District's revised rates are, in addition to the
other requirements imposed by RCW 54.04.045, "just and reasonable."
V
Comcast and Charter both challenge the trial court's award of damages to
the District, alleging that its prejudgment interest award was inaccurate.
Specifically, they argue that, in the event that we affirm the trial court's ruling in
any respect, the amount of the prejudgment interest award should be offset to
account for the District's failure to mitigate its damages, as well as the trial court's
failure to calculate the award at an interest rate of five percent per annum. We
disagree.
"We review a prejudgment interest award for abuse of discretion."
Uniqard Ins. Co. v. Mut. of Enumclaw Ins. Co., 160 Wn. App. 912, 925, 250 P.3d
121 (2011). "Under this standard, we reverse a trial court's decision only if it 'is
manifestly unreasonable, exercised on untenable grounds, or exercised for
untenable reasons. Untenable reasons include errors of law.'" Humphrey Indus.,
Ltd. v. Clay St. Assocs.. LLC, 176 Wn.2d 662, 672, 295 P.3d 231 (2013) (quoting
Noble v. Safe Harbor Family Pres. Trust, 167Wn.2d 11, 17, 216 P.3d 1007(2009)).
"Prejudgment interest compensates a plaintiff for the 'use value' of
damages incurred from the time of the loss until the date of judgment."
Humphrey Indus., 176 Wn.2d at 672; see also Polygon Nw. Co. v. Am. Nat'l Fire
-46-
No. 70625-0-1/47
Ins. Co.. 143 Wn. App. 753, 793, 189 P.3d 777 (2008) ("[A]n award of
prejudgment interest is in the nature of preventing the unjust enrichment of the
defendant who has wrongfully delayed payment."). Prejudgment interest may be
awarded "(1) when an amount claimed is 'liquidated' or (2) when the amount of
an 'unliquidated' claim is for an amount due upon a specific contract for the
payment of money and the amount due is determinable by computation with
reference to a fixed standard contained in the contract, without reliance on
opinion or discretion." Prierv. Refrigeration Enq'q Co., 74 Wn.2d 25, 32, 442
P.2d 621 (1968). A liquidated claim is "one where the evidence furnishes data
which, if believed, makes it possible to compute the amount with exactness,
without reliance on opinion or discretion." Prier, 74 Wn.2d at 32.
Comcast and Charter first contend that the District failed to mitigate its
damages. In support of their contention, they point out that the District has
refused to accept their annual offer of payment at the historic rate, despite the
inclusion of a reservation of the District's right to collect the difference between
payment tendered at the historic rates and the District's newly instituted rates,
pending the outcome of the litigation between them. Their contention is
unavailing.
"The doctrine of mitigation of damages," which generally applies in both
contract and tort cases, "prevents recovery for those damages the injured party
could have avoided by reasonable efforts taken after the wrong was committed."
Bernsen v. Big Bend Elec. Coop.. Inc., 68 Wn. App. 427, 433, 842 P.2d 1047(1993V. cf. Desimone v. Mut. Materials Co., 23 Wn.2d 876, 884, 162 P.2d 808-47-
No. 70625-0-1/48
(1945) ("[T]he requirement of minimizing damages does not apply to cases ... of
intentional or continuing torts."). When the injured party is presented with a
choice between two reasonable courses, however, '"the person whose wrong
forced the choice cannot complain that one rather than the other is chosen.'"
Hogland v. Klein. 49 Wn.2d 216, 221, 298 P.2d 1099 (1956) (quoting Charles T.
McCormick, Handbook on the Law of Damages § 35, at 133-34 (1935)). Indeed,
"'the plaintiff is not bound at his peril to know the best thing to do.'" Hogland. 49
Wn.2d at 221 (quoting 1 Theodore Sedgwick et al., A Treatise on the Measure
of Damages § 221, at 415 (9th ed. 1912)). Furthermore, "[t]he party whose
wrongful conduct caused the damages ... has the burden of proving the failure
to mitigate." Cobb v. Snohomish County, 86 Wn. App. 223, 230, 935 P.2d 1384(1997).
As an initial matter, any prejudgment interest that was calculated based on
damages caused by the Companies' trespass is not susceptible to attack by way
of alleging that the District failed to mitigate its damages. Although damages
must be mitigated in most tort cases, damages resulting from an intentional tort
need not be. Bernsen, 68 Wn. App. at 433. Given that trespass is an intentional
tort, Broughton Lumber Co. v. BNSF Rv. Co., 174 Wn.2d 619, 630 n.9, 278 P.3d
173 (2012), it was not incumbent upon the District to mitigate damages stemming
from the Companies' trespass.
Turning now to damages awarded for breach of contractual obligations,
Comcast and Charter contend that the District failed to mitigate its damages by
48
No. 70625-0-1/49
refusing to accept their annual offers of payment at the historic rate, which, they
aver, included the reservation of rights noted above.
Although the jointly filed briefing of Comcast and Charter contains
argument to the effect that both Comcast and Charter tendered payment at the
historic rates—including a reservation of rights—their citations to the record only
reveal an attempt by Charter to include a reservation of rights in its tender.42
Contrary to Comcast's and Charter's contention, the District's refusal of its
offer does not constitute a failure to mitigate damages. Had the District accepted
Comcast's and Charter's offers of payment at the historic rate, it would have
been receiving annual payment of $19.70 per pole from two attachers,4344 $5.75
per pole from Comcastand Charter, and no money from CenturyLink.45 By
receiving different rates from its licensees, the District would have risked running
afoul of the legislature's directive that rates received by the District be
nondiscriminatory.46
42 As explained supra at n.8, we found no evidence of Exhibit 515 being admitted at trial
or included in the record. However, even if Comcast and Charter were correct insofar as they
aver that Comcast's tender of payment included a reservation of rights, for the reasons stated
below, we would not hold that the District's refusal of such an offer constituted a failure to mitigate
damages.
43 "Two other companies besides Defendants which have pole attachments on the
District's poles have been paying at the rates the District adopted in Resolution No. 1256 since it
was put into effect in 2007." Findings of Fact 44. Because the Companies do not offerany
argument as to why this finding is not supported by the evidence, we regard itas a verity on
appeal. See, ag,, Karlberg v. Otten, 167 Wn. App. 522, 525 n.1, 280 P.3d 1123 (2012) ("'It is
incumbent on counsel to present the court with argument as to why specific findings of the trial
court are not supported by the evidence and to cite to the record to support that argument.'"
(quoting In re Estate of Lint. 135 Wn.2d 518, 531-32, 957 P.2d 755 (1998))).
44 It would have received $13.25 per pole from these two attachers in 2007 and $19.70
per pole from each in 2008.
45 CenturyLink does not contend that its attemptto secure an accord and satisfaction led
to a failure by the District to mitigate its damages.
46 By receiving different rates from different licensees, the District would have risked
contravening an additional legislative directive contained in section (2): "A locally regulated utility
-49-
No. 70625-0-1/50
"All rates, terms, and conditions made, demanded, or received by a locally
regulated utility for attachments to it poles must be just, reasonable,
nondiscriminatory, and sufficient." RCW 54.04.045(2). "'Nondiscriminatory'
means that pole owners may not arbitrarily differentiate among or between
similar classes of licensees approved for attachments." RCW 54.04.045(1 )(d).
Had the District accepted a significantly reduced rate from Comcast and
Charter—both of which were trespassing—while concomitantly receiving its
newly instituted rate from two other attachers, the District would have been
receiving different rates from different licensees. In the absence of further
legislative guidance or judicial construction, the fact that the offer from Charter
included a reservation of the District's right to collect the difference between
payment tendered at the historic rate and at the revised rate—in the event that
the District prevailed in this litigation—was no guarantee for the District that, by
accepting, it could maintain compliance with the nondiscriminatory requirement.
Furthermore, had the District accepted Comcast's and Charter's offers, it
would have sent a message to the two attachers dutifully paying the new rate
that they were being overcharged or, at the very least, that there were economic
incentives to breach their agreements with the District. Moreover, in the absence
of contrary authority, it would have been reasonable for the District to conclude
that acceptance of the offers from Comcast and Charter would result in a
violation of the requirement that rates received be "sufficient." The lack of further
shall levy attachment space rental rates that are uniform for the same class of service within the
locally regulated utility service area." RCW 54.04.045(2).
-50-
No. 70625-0-1/51
definition of this term in the statute would have left the District with no guidance
as to whether it was in compliance with the statute.
Given the uncertainty as to whether the District could accept the offers of
Comcast and Charter while still complying with RCW 54.04.045(2), coupled with
the prospect of incentivizing other licensees to breach their agreements, we
conclude that the District's refusal constituted a reasonable course of action,
which may not be scrutinized after the fact by the parties which forced the choice.
See Labriola v. Pollard Grp.. Inc., 152 Wn.2d 828, 840, 100 P.3d 791 (2004).
Although we do not here purport to chart the depth and breadth of what action
constitutes "reasonable efforts" to prevent avoidable damages, there can be no
doubt that the definition excludes assuming the risk of contravening a legislative
mandate, while incentivizing other licensees to breach their agreements and
become trespassers. The District did not fail to mitigate its damages.
If the Companies wished to avoid the risk of having to pay prejudgment
interest, but still desired to withhold from the District the contested sum until their
dispute was resolved, they should have paid that sum into the Pacific County
Superior Court's registry. See Colonial Imports v. Carlton Nw.. Inc., 83 Wn. App.
229, 248, 921 P.2d 575 (1996) (Baker, C.J., dissenting) ("If a defendant wishes
to protect itself against the prejudgment interest rate provided by statute, all the
defendant need do is pay into the registry of the court that amount which the
defendant believes is the proper judgment amount. By doing so, prejudgment
interest is tolled on the amount deposited."). Indeed, given that the policy
undergirding prejudgment interest as a permissible form of damages "'has been
-51 -
No. 70625-0-1/52
based upon the view that one who has had the use of money owing to another
should in justice make compensation for its wrongful detention,'" Prier, 74 Wn.2d
at 32 (quoting McCormick, supra, § 54), had the Companies paid into the
registry of the court the amount they believed to be in dispute, they would not
have had the use of that amount prior to the adverse judgment and, accordingly,
any prejudgment interest on the amount deposited would have been tolled.
Comcast and Charter next contend that the trial court incorrectly
calculated prejudgment interest at a rate of 12 percent per annum. This is so,
they assert, because (1) the trial court justified the 12 percent interest rate based
on RCW 4.56.110(4), which only addresses the interest rate that accrues from
the entry of a judgment; (2) the proposed agreement from the District could not
be taken into account, given that it was unsigned; and (3) the District's own rate
expert calculated damages based on an interest rate of five percent. Their
contention is unavailing.
"Prejudgment interest is allowed in civil litigation at the statutory judgment
interest rate." Unioard Ins. Co., 160 Wn. App. at 925. RCW 4.56.110 "sets the
rate for four categories of judgments: (1) breach of contract where an interest
rate is specified, (2) child support, (3) tort claims, and (4) all other claims."
Unigard Ins. Co., 160 Wn. App. at 925 (footnote omitted). "In determining the
appropriate interest rate, a court should examine the component parts of the
judgment, determine what the judgment is primarily based on, and apply the
appropriate category." Unigard Ins. Co., 160 Wn. App. at 925.
None of Comcast's and Charter's assertions provide a basis upon which
-52-
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we could conclude that the trial court abused its discretion in calculating
prejudgment interest at a rate of 12 percent per annum. Their first assertion is
foreclosed by well-established precedent, which makes clear that "[pjrejudgment
interest is allowed in civil litigation at the statutory judgment interest rate."
Unigard Ins. Co., 160 Wn. App. at 925. Thus, it is a proper exercise of discretion
for a trial court to calculate prejudgment interest in a civil dispute at the statutory
judgment interest rate reflected in RCW 4.56.110. Given this, regardless of
whether the trial court improperly made reference to or relied upon an 18 percent
interest rate contained in the unsigned agreement proposed by the District—their
second assertion—and regardless of the five percent interest rate calculated by
the District's own rate expert—the basis for their third assertion—so long as the
trial court utilized a rate that was consistent with RCW 4.56.110, there was no
abuse of discretion. Although this action was predicated, in part, on breach of
contract claims, no interest rate was specified in the contracts. Thus, the trial
court applied RCW 4.56.110(4) and settled on a rate of 12 percent interest per
annum. Twelve percent is within the permissible range of interest rates pursuant
to RCW 4.56.110(4).47 See RCW 19.52.020. Accordingly, the trial court did not
47 The ceiling for permissible interest rates is set by RCW 19.52.020(1), which is
incorporated by reference in RCW 4.56.110(4) and which states:
(1) Any rate of interest shall be legal so long as the rate of interest does not
exceed the higher of: (a) Twelve percent per annum; or (b) four percentage
points above the equivalent coupon issue yield (as published by the Board of
Governors of the Federal Reserve System) of the average bill rate for twenty-six
week treasury bills as determined at the first bill market auction conducted during
the calendar month immediately preceding the later of (i) the establishment of the
interest rate by written agreement of the parties to the contract, or (ii) any
adjustment in the interest rate in the case of a written agreement permitting an
adjustment in the interest rate.
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abuse its discretion.
VI
The District seeks affirmance of the award of attorney fees and expenses
granted to it in the trial court and an award of attorney fees and costs on appeal.
First, it argues that, as the prevailing party, the trial court properly awarded it fees
and expenses. Second, it argues that it should be awarded fees and costs on
appeal. Third, it argues that it is entitled to an award ofattorney fees based on
the Companies' untimely appeal. The Companies contest all such claims.
A
The District first contends that it was properly awarded attorney fees and
expenses in the trial court. With regard to the District's fees and expenses in
connection with the nonrate terms and conditions, as well as the District's rates
prior to June 12, 2008, we agree. However, as the District may not be the
prevailing party on remand with regard to the issue of whether its rate complied
with the 2008 amendment to RCW 54.04.045, it is premature to say that it is
entitled to an award of fees and expenses in the trial court as to that issue.
Whether there is a legal basis for awarding attorney fees is reviewed de
novo; however, a discretionary decision to award fees and expenses—and the
reasonableness of such an award—is reviewed for abuse of discretion. Gander
v. Yeager, 167 Wn. App. 638, 647, 282 P.3d 1100 (2012).
"Washington follows the American rule 'that attorney fees are not
recoverable by the prevailing party as costs of litigation unless the recovery of
RCW 19.52.020(1).
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such fees is permitted by contract, statute, or some recognized ground in
equity.'" Panorama Vill. Condo. Owners Ass'n Bd. of Directors v. Allstate Ins.
Co., 144 Wn.2d 130, 143, 26 P.3d 910 (2001) (quoting McGreevy v. Or. Mut. Ins.
Co., 128 Wn.2d 26, 35 n.8, 904 P.2d 731 (1995)). "In general, a prevailing party
is one who receives an affirmative judgment in his or her favor." Riss v. Angel.
131 Wn.2d 612, 633, 934 P.2d 669 (1997). "Contractual provisions awarding
attorney fees to the prevailing party also support an award of appellate attorney
fees." City of Puvallup v. Hogan, 168 Wn. App. 406, 430, 277 P.3d 49 (2012).
In light of our holding with regard to the nonrate terms and conditions and
the validity of the District's rates prior to June 12, 2008, the District is properly
considered the prevailing party as to those issues in the trial court and was,
accordingly, entitled to an award of fees as to those issues. However, whether
an award of fees in conjunction with the rates controlled by the amended statute
is appropriate must abide further proceedings.
With regard to the trial court's award of expenses, we reach a similar
conclusion. In response to the trial court's award of expenses to the District,
Comcast and Charter48 aver that the portion of the award given to compensate
48 In its opening brief, CenturyLink did not challenge the trial court's award of expenses
as to the work done by EES. In its reply brief, it states, "CenturyLink continues to join in all
arguments made by co-defendants Comcast and Charteron the issues of damages and the
awards to the District of attorneys' fees and costs." To the extent that this statement could be
interpreted as an attempt by CenturyLink to challenge the trial court's award of expenses, we do
not consider its challenge. See Cowiche Canyon Conservancy, 118 Wn.2d at 809 ("An issue
raised and argued for the first time in a reply brief is too late to warrant consideration.").
Moreover, CenturyLink did not, in its merits briefing, indicate the number of hours billed
by its expert witness in connection with this litigation or the hourly rate charged by its expert, or
direct us to a place in the record, the verbatim report of proceedings, or elsewhere in the
materials designated by the parties, where we could obtain this information. The effect of this is
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the District for the expenses it incurred through the use of services provided by
EES should be reversed. This is so, they contend, because EES provided both
rate analysis services to the District prior to this litigation and litigation-related
services (including Saleba's expert testimony) after this litigation had
commenced. Comcast and Charter assert that the invoices that were submitted
to the trial court failed to specify the nature of the work that formed the basis for
the amount charged in the bill, which removed any indicia of reliability from the
trial court's subsequent determination that the expenses were, in fact, litigation-
related. We disagree.
The trial court made the following pertinent finding with respect to its
award of expenses:
The fees and expenses of EES Consulting totaling
$251,150.11 billed to and paid by the District are reasonable
expenses incurred in connection with this lawsuit. They were paid
directly by the District to EES Consulting for expert witness work,
and the documentation is sufficient to enable the Court to make this
determination. The EES Consulting expenses are awarded to the
District.
Contrary to Comcast's and Charter's contention, the record supports the
trial court's finding. While the invoices submitted to the District by EES did not
explicitly describe the nature of the work undertaken by EES, every bill was
invoiced on a date that was subsequent to both the date that this litigation was
commenced and the effective date of the 2008 amendment to RCW 54.04.045.
Given that EES had long since completed the rate study for which it had been
to preclude us, as part of our subsequent consideration of the reasonableness of the expenses
incurred by the District with regard to EES, from also considering the hourly rate charged by
CenturyLink's expert witness, as well as the number of hours for which CenturyLink was invoiced.
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retained by the District, itwas reasonable for the trial court to conclude that these
invoices reflected work done by EES in connection with this litigation.
Alternatively, Comcast and Charter49 argue that the award of expenses
must be reversed because it was unreasonably high. In support of this
argument, they reference the difference between the hours billed by their expert
witness Kravtin and the hours billed by EES. We find their argument
unpersuasive.50
The record supports the trial court's finding that the expenses incurred
were reasonable. Kravtin devoted approximately 270 hours of work in
connection with this litigation. EES, on the other hand, devoted nearly 1,400
hours of work in connection with this litigation. However, Kravtin's hourly rate of
$375.00 was nearly twice that of Saleba's hourly rate of $200.00, whose hourly
rate was higher than that of any other employee of EES who provided litigation-
related services to the District.51 Furthermore, Saleba's testimony addressed
49 In its opening brief, CenturyLink, in a footnote, states that it "adheres to the arguments
made below regarding the impropriety of the nature and amount of the District's claimed fees and
costs, particularly the District's exorbitant expert witness fees." However, we decline to consider
this cursory assertion as proper appellate argument, particularly given CenturyLink's attempt to
rely on argument presented to the trial court by incorporating it by reference rather than
presenting a reasoned argument in its merits brief. See Norcon Builders. LLC v. GMP Homes
VG. LLC. 161 Wn. App. 474, 497, 254 P.3d 835 (2011) ("'placing an argument... in a footnote
is, at best, ambiguous orequivocal as to whether the issue istruly intended to be part of the
appeal'" (internal quotation marks omitted) (quoting St. Joseph Gen. Hqsp. v. Dep't of Revenue,
158 Wn. App. 450, 473, 242 P.3d 897 (2010), modified on remand. 165 Wn. App. 23, 267 P.3d
1018 (2Q11))V see Diversified Wood Recycling. Inc. v. Johnson, 161 Wn. App. 859, 890, 251
P.3d 293 (2011) ("We do not permit litigants to use incorporation by reference as a means to
argue on appeal orto escape the page limits for briefs setforth in RAP 10.4(b).").
50 Although a request for an award ofattorney fees must reflect a lodestar method
calculation, there is no such requirement with regard tothe work ofother professionals. The trial
court may consider any competent evidence in reaching its determination.
51 The invoices reveal that other employees of EES, whose hourly rates were lower than
Saleba's, provided services to the District. These employees include the following: Anne Falcon
(hourly rate of $190.00), Kelly Tarp (hourly rate of $160.00), Seung Kim (hourly rate of $160.00),
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both the validity of the District's rates and the validity of its nonrate terms and
conditions, whereas Kravtin's testimony merely addressed the validity of the
District's rates. An inference arising from the significantly higher rate charged by
Kravtin when compared to that which was charged by Saleba (or any other
employee of EES) is that Kravtin's hourly yield was commensurate with her
increased hourly rate. That inference, considered together with the broader
scope of the testimony that was given by Saleba during the course of the trial,
indicates that the trial court's finding was adequately supported by evidence
contained in the record. Comcast and Charter have offered no basis for us to
conclude that the trial court's award of expenses was unreasonable.
In view of our foregoing analysis, we conclude that, in the event thatthe
District prevails on remand, the award of expenses should not be disturbed.
Both the basis for and the reasonableness of the trial court's finding were
adequately supported by the record. However, in the event that the Companies
prevail on remand, the award of expenses will need to be reassessed in the
following manner: the trial court will be required to identify and segregate the
amount of expenses to award based on the work done by EES with regard to the
issues on which the District prevailed, while not awarding expenses on the issue
on which the District did not prevail. In any event, given our affirmance ofthe
trial court's ruling with regard to the nonrate terms and conditions and the revised
rates prior to June 12, 2008, an award of expenses that were related to litigation
Amber Gschwend (hourly rate of $140.00), Lisa Fortney (hourly rate of $140.00), Amber Nyquist
(hourly rate of $140.00), Janet White (hourly rate of $140.00) Sarah Neubauer (hourly rate of
$120.00), and Diane Running (hourly rate of $120.00).
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of those issues was proper.
B
The District next contends that it is entitled to an award of attorney fees
and costs on appeal. Because this case is to be remanded, we delegate to the
trial court, after final resolution of the merits, the question of an award of fees and
costs on appeal. With regard to the nonrate issues, an award of fees is
appropriate. With regard to the rates assessed prior to June 12, 2008, an award
of fees is appropriate. However, with regard to the rates assessed on or after
June 12, 2008, an award of fees will be appropriate only in the event that the
District is the ultimate prevailing party on that issue.
C
The District next contends that it is entitled to an award of attorney fees
and costs relating to the Companies' untimely appeal. This is so, it avers,
because fees and costs "would not have been incurred by the district but for the
Companies' failure" to appeal within the requisite period.
Review of this issue is problematic because it was briefed opaquely: the
parties either do not cite to the record, cite to things outside of the record, or cite
to things which may be in the record but with a citation that fails to identify where
in the voluminous record it may be contained. What seems to be clear is this: the
District (1) is requesting that we affirm the trial court's award of attorney fees and
costs for its opposition to the Companies' motion to vacate and reenter final
judgment in the trial court, and (2) is seeking an award of attorney fees and costs
59
No. 70625-0-1/60
with respect to the Companies' motion for extension of time, the District's motion
to stay, and the District's motion for discretionary review.
With respect to the first request, we affirm the trial court's award. The
District sensibly notes that because the Companies did not appeal the trial
court's denial of their motion to vacate, the District is the prevailing party. The
Companies do not dispute this in their briefing, and because the District prevailed
on a motion that will not be reversed (or even challenged, presumably) on
remand, we affirm the trial court's award of attorney fees and expenses relating
to the Companies' motion to vacate.
With respect to the second request, the District argues that the "same
principles applicable to the award of fees and costs" relating to the motion to
vacate apply to the Companies' motion for extension of time, the District's motion
to stay, and the District's motion for discretionary review by the Supreme Court.
Not so. Because the District is, at this stage, only a partially prevailing party, we
direct the trial court to consider this request on remand, after the merits of all
substantive claims are resolved.
The District argues, alternatively, that we should impose terms or
compensatory damages—or both—as provided for by RAP 18.9, which allows a
court to sanction a party for its failure to comply with RAP 5.2(a), which requires
filing of a notice of appeal to be done within 30 days of entry of judgment. In
response, the Companies assert that Division Two already declined to award the
District any fees on this basis. Although the Companies do not cite any Division
Two ruling to this effect, we decline to sanction the Companies pursuant to RAP
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18.9(a).
VII
In the complaints filed to commence these actions, the District requested
equitable relief in the form of an injunction, which was granted by the trial court
and memorialized in its conclusions of law.
45. In addition to the declaratory judgment, damages, and
interest awarded, the District is entitled to the injunctive relief
requested.
46. Defendants must start paying at the District's rates as
set forth in Resolution No. 1256 and must enter into the District's
proposed Pole Attachment Agreement (with revisions per
Conclusion of Law 35 above), or they must remove their
attachments from District poles within thirty (30) days, and if not so
removed, the District may remove Defendants' attachments at
Defendants' expense.
We affirm the trial court's ruling with regard to the nonrate terms and
conditions and the District's revised rates prior to June 12, 2008. The trial court's
grant of injunctive relief is supported by these holdings. When the Companies
refused to sign the proposed agreement, refused to remove their equipment from
the District's poles, and refused to pay the revised rates commencing January 1,
2007, they became trespassers on the District's property. Thus, insofar as the
trial court based its grant of equitable relief upon the Companies' refusal to sign
the agreement, remove their equipment, and pay the initial revised rates, the trial
court's ruling was proper. However, because we remand for resolution of the
propriety of the revised rates following the effective date of the amendment, we
direct the trial court on remand to consider whether it should modify its grant of
equitable relief, either on an interim basis or otherwise.
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No. 70625-0-1/62
VIII
The Companies contend that they are entitled to an award of attorney fees
on appeal. This is so, they assert, because the reciprocal fee-shifting provision
of RCW 4.84.330 entitles them, as prevailing parties, to attorney fees. However,
because we reverse and remand to the trial court for further proceedings, it is, at
best, premature to determine that any of the Companies are entitled to an award
of attorney fees. Nevertheless, we provide guidance to the trial court with
respect to the Companies' argument.
The statute upon which the Companies rely is as follows:
In any action on a contract or lease entered into after September
21, 1977, where such contract or lease specifically provides that
attorneys' fees and costs, which are incurred to enforce the
provisions of such contract or lease, shall be awarded to one of the
parties, the prevailing party, whether he or she is the party specified
in the contract or lease or not, shall be entitled to reasonable
attorneys' fees in addition to costs and necessary disbursements.
RCW 4.84.330.
As an initial matter, CenturyLink will be precluded from securing attorney
fees pursuant to this statute. This is so because the only contract upon which
CenturyLink could sue is a contract from 1969, which was entered into before the
reciprocal fee shifting provisions became effective.52
Nevertheless, CenturyLink cites this court's decision in Herzoo Aluminum,
Inc. v. General American Window Corp., 39 Wn. App. 188, 692 P.2d 867 (1984),
for the proposition that RCW 4.84.330 applies to "any action" on a contract, even
when the claimed contract is found to have never been formed. This is an overly
52 Indeed, CenturyLink seeks fees pursuant to that contract.
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expansive reading of Herzog Aluminum, where we held "that the broad language
'[i]n any action on a contract' found in RCW 4.84.330 encompasses any action in
which it is alleged that a person is liable on a contract." 39 Wn. App. at 197(alteration in original). Indeed, Division Two rejected a similar argument in
Wallace v. Kuehner, 111 Wn. App. 809, 46 P.3d 823 (2002). In that case,
Division Two declined to apply Herzog Aluminum to an instance in which the
parties seeking attorney fees never intended to form a contract. Wallace, 111
Wn. App. at 820 (distinguishing cases in which the parties intended to form a
contract, but due to lack of a meeting of the minds, mutual mistake, or statute of
limitations, the contract was not enforceable). Similarly, CenturyLink never
intended to form a contract with the District and so it may not avail itself of a
provision from the proposed agreement that it rejected in order to capitalize on
the reciprocal fee shifting provision authorized by RCW 4.84.330.
However, CenturyLink contends that a new contract was formed in 1987.
This is so, it asserts, because a party to a terminable at will contract can
unilaterally modify an existing contract, and because the 1969 contract was
modified in 1987 when the parties agreed to a new rate, that modification
constitutes a new contract for purposes of RCW 4.84.330. In support of this,
CenturyLink relies on Cascade Auto Glass, Inc. v. Progressive Casualty
Insurance Co., 135 Wn. App. 760, 145 P.3d 1253 (2006). However, that case
involved unilateral modification to an existing contract. See Cascade Auto Glass,
135 Wn. App. at 769. Here, admittedly, "the parties agreed to a new rate."
Therefore, Cascade Auto Glass is inapposite.
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Finally, CenturyLink contends that it is entitled to fees on equitable
grounds. Specifically, it asks that we apply the equitable principle of mutuality of
remedies. Although Washington courts have applied this principle, Kaintz v.
PLG, Inc.. 147 Wn. App. 782, 197 P.3d 710 (2008), Mt. Hood Bev. Co v.
Constellation Brands, Inc., 149 Wn.2d 98, 63 P.3d 779 (2003), Park v. Ross
Edwards, Inc., 41 Wn. App. 833, 706 P.2d 1097 (1985), those decisions were
reached where bilateral attorney fees provisions precluded RCW 4.84.330 from
applying (Park and Kaintz) and where a different statute applied (Mt. Hood Bev.
Co.). Thus, where other contractual or statutory provisions have rendered RCW
4.84.330 inapposite, courts have sometimes applied the equitable principle of
mutuality of remedies. No such provisions are present here. The statute only
permits reciprocal fee shifting for contracts entered into after September 21,
1977. Applying the equitable remedy requested here would be tantamount to
excising words from the statute and, even more troubling, would risk allowing the
equitable remedy to swallow the statutory rule. We decline to award fees to
CenturyLink on equitable grounds.
Comcast and Charter also seek attorney fees on appeal pursuant to prior
contracts with the District. Just as CenturyLink does, they assert that the
reciprocal fee-shifting provision of RCW 4.84.330 entitles them, as prevailing
parties, to attorney fees. Unlike CenturyLink's contract, however, both
Comcast's and Charter's contracts were entered into after September 21, 1977.
Accordingly, if, on remand, they are prevailing parties, then they will be able to
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No. 70625-0-1/65
avail themselves of the reciprocal fee-shifting provision in RCW 4.84.330.53
Affirmed in part. Reversed and remanded in part.
We concur:
BtTcW, |
53 Keeping in mind, of course, that the District is already the prevailing party with regard
to the litigation over the nonrate terms and the rate charged through June 12, 2008.
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