Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co.

Supreme Court Clerk
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
CENTRAL PUGET SOUND REGIONAL
TRANSIT AUTHORITY, a regional transit
authority, d/b/a SOUND TRANSIT,
Respondent,
v.
NO. 91653-5
AIRPORT INVESTMENT COMPANY, a
Washington corporation, d/b/a Hampton Inn,
Petitioner,
and
ENBANC
HORIZON AIR INDUSTRIES, INC., a
Washington corporation; IBEW 77
INTERNATIONAL BOULEYARD, LLC, a
Washington limited liability company;
JPMORGAN CHASE BANK, N.A., f/k/a
The Chase Manhattan Bank, as Trustee for Filed AUG 0 '' 2016
the Registered Holders of Prudential
Securities Financing Corporation Commercial
Mortgage Pass-Through Certificates, Series
199-C2; KING COUNTY; and ALL
UNKNOWNOWNERSandUNKNOWN
TENANTS,
Defendants.
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
STEPHENS, J.----Central Puget Sound Regional Transit Authority (Sound
Transit) condemned property owned by Airport Investment Company (AI C) in order
to secure easements to construct and operate an elevated light rail. The parties could
not agree on the amount of just compensation for the taking, so the matter proceeded
to trial. AIC contends it is statutorily entitled to attorney fees because Sound Transit
failed to make a valid settlement offer 30 days before trial. Specifically, AIC argues
that the 30-day offer Sound Transit made did not reflect the reduced temporary
construction easement it ultimately obtained, making the offer ineffective or
resulting in a total abandonment of the condemnation. AIC also seeks a new trial,
alleging the trial court erroneously allowed Sound Transit's counsel to question
AIC's president, Sandra Oh, about the taking valuation of a nontesti:tying appraisal
expert.
We affirm the Court of Appeals. A condemnee is entitled to attorney fees
under RCW 8.25.070(l)(a) only "[i]f[the] condemnor fails to make any written offer
in settlement" at least 30 days before trial. Sound Transit made a timely settlement
offer, which was not rendered ineffective by subsequent revisions to reduce the
impact of its temporary construction easement. AIC's evidentiary objection is also
unavailing: the trial court properly admitted Oh's testimony under ER 80l(d)(2) as
an admission of a party opponent.
FACTS AND PROCEDURAL HISTORY
Sound Transit is a regional transit organization authorized to construct and
operate a high-capacity electric light rail system (Light Rail). RCW 81.112.010;
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Clerk's Papers (CP) at 1-2. Pursuant to its statutory authority to condemn real
property to construct the Light Rail, Sound Transit sought easements over property
owned by AIC. The property consists of approximately 112,626 square feet ofland
area and is developed with a 4-story, 130-room hotel constructed in 1988.
In the condemnation action, Sound Transit sought to take a portion of the
property for a permanent guideway easement (PGE) to construct the Light Rail along
the property's western boundary. It also sought a temporary construction easement
(TCE), which afforded Sound Transit a nonexclusive, three-year time period to
construct the Light Rail and encumbered up to 3,882 square feet of the property. 1
Except when Sound Transit required exclusive occupancy, the TCE afforded AIC
the right to use the TCE area for any purpose that did not interfere with Sound
Transit's construction activities.
In May 2012, Sound Transit sent AIC a valuation offer of$142,300 for both
easements. This offer was based on an initial valuation by its appraiser of $79,825
for the PGE, $46,600 for the TCE, and $15,875 for improvements. Sound Transit
advised AIC that it had the right to obtain its own appraisal at Sound Transit's
expense. Id. AIC exercised this right, and its appraiser valued the easements at
$485,000. AIC submitted its appraisal to Sound Transit in July 2012 in a letter
expressing its belief that it was entitled to $485,000 for the easements. Suppl. Br. of
1
The TCE area included a space Sound Transit's contractor would need only if the
guideway column placement required the property's driveway to be relocated. AlC was
concerned about the size of the TCE because it would reduce available parking at the hotel,
eliminating approximately 25 parldng spaces.
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Cent. Puget Sound Reg 'l Transit Auth. v. Airport lnv. Co., 91653-5
Resp't Sound Transit, App. A at 1. Rejecting AIC's valuation, Sound Transit asked
AIC to reconsider its original offer.
On June 14, 2013, 30 days before trial, Sound Transit made a written
settlement offer to AIC of $463,500. The offer was for both the PGE and the TCE,
and was marked "FOR SETTLEMENT PURPOSES ONLY." CP at 1334. The offer
provided that it "remain[ed] open until accepted, rejected, or until withdrawn by
Sound Transit" and was "made subject to Sound Transit's reservation of its right to
re-evaluate this offer and submit a revised 30-day offer if the pending trial date is
continued." !d. The parties could not agree on the amount ofjust compensation due,
and the matter proceeded to trial.
On July 1, 2013, Sound Transit informed AIC that it would change the
configuration of the TCE because it no longer needed to relocate the property's
driveway to construct the Light RaiJ.Z That same day, Sound Transit provided AIC
with an updated parcel map and updated right-of-way plan showing the change. The
modification reduced the total TCE area by approximately 1,000 square feet. Suppl.
Br. of Resp't Sound Transit at 3. These changes to the TCE were designed to
ameliorate AIC's loss of business costs from the property's use as a parking lot.
Notwithstanding the language in the TCE, Sound Transit communicated to AIC that
2
Sound Transit alleges that when it had made the 30-day offer, the parties had
already discussed Sound Transit's plan to reduce the TCE square footage and to use only
a limited number of exclusive-use days to partially accommodate AIC's parking concerns.
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its construction would require only sporadic use of the TCE area during the three-
year period. 3 Sound Transit did not revoke or reduce its settlement offer despite the
reduced easement.
AIC then filed a motion in limine, requesting that the trial court exclude any
evidence that Sound Transit intended to use the TCE area for less than the entire
three-year term. At oral argument on the motion, the trial court agreed with AIC
that if Sound Transit had the right to exclusive use of the TCE area for the entire
three-year term, it could not tell the jury that its actual use would be less. The trial
court granted AIC's motion, "provided, however, this ruling ... does not preclude
[Sound Transit] from submitting a revised form of [TCE] providing for the actual
time of use of the easement area." CP at 904. 4
On the first day of trial, Sound Transit withdrew its 30-day settlement offer.
With leave of the trial court, Sound Transit provided AIC with revised TCE language
regarding time of use. This occurred after jury selection, but before opening
statements. Although the revised TCE still provided a three-year easement term, it
limited Sound Transit's exclusive use of the TCE to a maximum of 160
nonconsecutive days.
AIC also moved in limine to exclude evidence of its July 2012 valuation letter
stating that it was entitled to $485,000 for the easements. Sound Transit responded
3
AIC claimed that Sound Transit refused to commit to any altered term description
at this time. Suppl. Br. by AIC at 3; Pet. for Review by AIC at 3-4.
4
The trial court agreed with Sound Transit that as a matter of law, the lost income
and consequential damages AIC claimed were not compensable.
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that it had no objection to AIC's motion so long as Sound Transit's first appraisal
would also be excluded on the grounds that both parties' appraisals were for
purposes of settlement negotiations. Finding that neither initial appraisal letter
constituted a settlement offer under ER 408 (and also rejecting AIC's claim of work
product privilege), the trial court ruled that AIC and Sound Transit could "figure out
if you want to get into this history [of the first appraisals]. If one of you does, the
other one can." Verbatim Report of Proceedings (VRP) (July 16, 20 13) at 53-54.
Accordingly, the trial court did not "grant[] this motion on either side." Id. at 55.
At trial, Sound Transit's appraisal expert, Murray Brackett, testified that the
PGE was worth $113,169, the TCE was worth $61,503, and AIC was not entitled to
severance damages. VRP (July 24, 2013) at 1072, 1094. AIC's appraisal expert,
Scott Biethan, testified that the PGE was worth $210,000, the TCE was worth
$32,124, and AIC was entitled to $1,457,000 for diminished value, totaling
$1,699,124 in just compensation due. VRP (July 29, 2013) at 1502-03.
During its case in chief, Sound Transit called AIC president, Oh, to testify
about the July 2012 valuation letter. Before doing so, Sound Transit inquired about
possible avenues to introduce the letter into evidence. The court advised, "I think to
get this document in you need to lay a foundation. I don't know how to be more
clear than that. I don't read the case law as saying that apparent authority is enough
to introduce a party admission. The whole policy of the rule here is it needs to be
the party's statement ...." VRP (July 25, 2013) at 1190.
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When Sound Transit began to question Oh about the contents of AIC's
valuation letter, the trial court excused the jury to voir dire the witness:
THE COURT: Was there a belief that you were entitled to $485,000
for just compensation?
MS. OH: Whatever was in the appraisal and what the appraiser
came up with with -
THE COURT: Is that an accurate statement, Ms. Oh? Did you
believe you're entitled to $485,000? When you said it in July, was that an
accurate statement about what your belief was?
MS. OH: My belief was whatever the appraiser said was -
THE COURT: Yes. Focus on the letter and the date and tell me if
this was your belief.
MS.OH: Well, that was my belief from the information from
the appraiser.
THE COURT: Okay. Thank you. May I have this?
MS.OH: Oh, sorry.
THE COURT: I'm going to let you question her about this letter-
THE COURT: ... I do think it's clear that this is a statement of
something that she believed at the time and you can bring it in as her party
admission.
Id. at 1202-03.
AIC's counsel objected, argumg, "I don't think we meet the hearsay
exception." I d. at 1203. The trial judge responded, "She just said that this was her
belief at the time. That's not hearsay. It's her belief. Let's bring in our jury." I d.
Showing Oh AIC's July 2012 valuation letter, Sound Transit's counsel asked
whether it was ''[AIC's] and your belief, strong belief, that [AIC] was entitled to a
total of $485,000 for just compensation?" I d. at 1205. When instructed by the trial
judge to answer "yes or no," Oh responded, "Yes." Id. at 1205-06.
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
Sound Transit then moved to admit the AIC's valuation letter as an exhibit.
The trial court denied the motion, stating, "You have her testimony." Id. at 1206.
The cross-examination and redirect examination did not address Oh's testimony
concerning the $485,000 valuation figure. In closing argument, AIC's counsel
referred the jury back to Oh's testimony as well as an earlier valuation estimate by
Sound Transit's appraiser, saying, "If you're going to hold Ms. Oh to her number,
then you hold Mr. Brackett to his first number as well." VRP (July 30, 20 13) at
1766.
At the close of trial, the jury awarded AIC $225,000 in just compensation for
the two easements ($163,497 for the PGE and $61,503 for the ICE). The jury did
not award diminished value damages. CP at 1000-04. AIC then filed a postverdict
motion for attorney fees and costs under RCW 8.25.070(1)(a) and RCW
8.25.075(l)(b), arguing that when Sound Transit changed the size of the ICE and
the durationallanguage of the ICE, it either nullified the 30-day offer or abandoned
the condenmation proceeding altogether. The trial court denied AIC's motion. AIC
also moved for a new trial, which the trial court denied as untimely.
AIC appealed the judgment and the trial court's order denying its motion for
a new trial. The Court of Appeals affirmed. Cent. Puget Sound Reg'! Transit Auth.
v. Airport Inv. Co., noted at 185 Wash. App. 1033, 2015 WL 321435 (2015). We
accepted review. Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 185
Wash. 2d 1017 (2015).
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Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co., 91653-5
ANALYSIS
This case presents two unrelated issues:
(I) Whether AIC is statutorily entitled to attorney fees for going to trial on
the just compensation issue because Sound Transit modified the TCE after it made
its 30-day offer.
(2) Whether the trial court erred by allowing Oh to be questioned about the
taking valuation of a nontestifying expert contained in the July 2012letter.
Award ofFees under RCW 8.25.070(J)(a)
The Washington State Constitution provides that "[n]o private property shall
be taken or damaged for public or private use without just compensation having been
first made." WASH. CONST. art. I, § 16. "Originally the determination of 'just
compensation' was limited to an inquiry of the fair cash market value of the property
involved." State v. Roth, 78 Wash. 2d 711, 712, 479 P.2d 55 (1971). As "[t]he
necessary expense of litigation often forced property owners to accept the
condenmor's offer even though they felt it was not just compensation," the
legislature in 1965 "enacted several statutory changes to rectify the situation."5 Id.
5
In 1965, the legislature enacted RCW 8.25.010 (requiring condemnor to serve on
condemnee a written offer showing the amount oftota1 compensation it will settle for 30
days before trial), RCW 8.25.020 (requiring condemnor to cover, in addition to the fair
market value of the property, actual and reasonable expenditures incurred by the
condemnee in the process of evaluating the condemnor's offer), former RCW 8.25.030
(repealed by LAWS OF 1971, Ex. Sess., ch. 240, § 22) (giving trial court discretion to award
the condemnee reasonable attorney and expert witness fees if the condemnor abandons the
proceedings after entry of an order of public use and necessity), and former RCW 8.25.040
(repealed by LAWS OF 1971, ch. 240, (requiring condemnor to pay a limited amount for the
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Two years later, in 1967, the legislature "took further steps to attain a measure
of equality between 'just compensation' and the condemnee's net compensation" by
passing RCW 8.25.070. !d. at 713. RCW 8.25.070(1) governs the award of attorney
fees, providing in pertinent part:
[I]f a trial is held for the fixing of the amount of compensation to be awarded
to the owner or party having an interest in the property being condemned, the
court shaW 6l award the condemnee reasonable attorney's fees and reasonable
expert witness fees in the event of any of the following:
(a) If condemnor fails to make any written offer in settlement to
condemnee at least thirty days prior to commencement of said trial; or
(b) If the judgment awarded as a result of the trial exceeds by ten
percent or more the highest written offer in settlement ... by condemnor in
effect thirty days before the trial.
Relying on RCW 8.25.070(1)(a), AIC argues it is entitled to attorney fees
because Sound Transit did not make a written offer for the precise interest in the
property it ultimately condemned. Suppl. Br. by AIC at 5-6. Specifically, AIC
contends that Sound Transit did not make an offer that matched the revised TCE.
As a result, AIC complains it was prevented from having "the opportunity to receive
and consider a settlement offer for the reduced taking and from evaluating Sound
Transit's case as it would be presented to the jury." !d. at 2.
Statutory interpretation presents a legal question we review de novo. State v.
Costich, 152 Wash. 2d 463, 470, 98 P.3d 795 (2004). Our analysis ofRCW 8.25.070
begins with the plain language employed by the legislature. !d. The plain meaning
actual reasonable expenses necessarily incurred by the condemnee in removing his
[personal property] from the appropriated property).
6
In 1971, the legislature amended RCW 8.25.070 to state that the court "shall"
award fees instead of the court "may" award fees. LAWS OF 1971, Ex. SESS., CH. 39, § 3.
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
of a statute may be discerned "from all that the Legislature has said in the statute and
related statutes which disclose legislative intent about the provision in question."
Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wash. 2d 1, 11,43 P.3d 4 (2002).
Our primary goal is to give effect to the legislature's intent, which we derive by
construing the language as a whole, giving effect to every provision. State v. J.P.,
149 Wash. 2d 444, 450, 69 P.3d 318 (2003). If the language is unambiguous, we give
effect to that language and that language alone because we presume the legislature
says what it means and means what it says. State v. Radan, 143 Wash. 2d 323, 330, 21
P.3d 255 (2001).
The trial court correctly denied AIC attorney fees under RCW 8.25.070(1)(a).
This provision entitles a condemnee to attorney fees under RCW 8.25.070(1 )(a) only
if the condemnor fails to make any written offer in settlement at least 30 days before
trial to fix compensation. Because it is undisputed that Sound Transit made a timely
written settlement offer to AIC for $463,500, AIC's claim for attorney fees fails
under the plain meaning of the statute. The text does not allow for an interpretation
that vitiates the meaning of "any offer" when the scope of the taking is modified
subsequent to the offer. AIC cannot invoke RCW 8.25.070(l)(a) for an award of
attorney fees.
AIC contends that Sound Transit's settlement offer was effectively no offer at
all because it was based on a different property interest than the one Sound Transit
ultimately sought to condemn per the revised TCE. But this argument runs contrary
to the overall statutory scheme: RCW 8.25.070(l)(a) awards attorney fees to the
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
condemnee only if condemnor fails to make "any written offer in settlement" of the
condemnation action, anticipating ongoing attempts at settlement. (Emphasis
added.) AIC's proposed interpretation renders the statute unworkable. It would
prevent a condemnor from making any change to the property interests comprising
the overall taking any time after the initial 30-day offer, at the risk of paying the
condemnee's attorney's fees and expert witness fees (unless perhaps the condemnor
is able to have the trial continued and submit a new offer for the modified taking).
AIC had a full and fair opportunity to accept Sound Transit's settlement offer-
which offer remained unchanged despite the reduced size and scope of the TCE. 7
AIC worries that RCW 8.25.070(l)(a) will be subject to abuse---through
gamesmanship or bad faith-if condemnors are allowed to modify the scope of a
taking at trial after making a settlement offer. We find AIC's concerns misplaced.
Our precedent requires a condemnor to present an adequate taking description to
allow the landowner time to prepare for trial. See In re Municipality ofMetropolitan
Seattle, 67 Wash. 2d 923, 928, 410 P.2d 790 (1966). Here, AIC has not shown that the
modified TCE was inadequately described or otherwise resulted in prejudice to its
trial preparations. Nor did AIC present evidence that Sound Transit committed bad
7
AIC relies on State v. Basin Development & Sales Co., 53 Wash. 2d 201, 204-05, 332
P.2d 245 (1958), for the proposition that '"the burden is on the condemnor to present
sufficient construction plans to understand the extent of the loss to the owner.'" Pet. for
Review by AIC at 15 (quoting Basin, 53 Wash. 2d at 204-05). But Basin is inapposite. In
Basin, the trial court denied the condemnor's motion to stipulate to a new condemnation
after the verdict had already been rendered. Basin, 53 Wash. 2d at 204. Here, AIC had the
opportunity to accept Sound Transit's unchanged settlement offer even after Sound Transit
indicated there would be a downward modification of the TCE.
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
faith or engaged in gamesmanship in its settlement negotiations. Instead, the record
discloses that Sound Transit reduced the scope of the TCE based on a changed
understanding of its construction needs and to ameliorate AIC's concerns about
decreased parking. Despite the scaled-back TCE, it kept the same settlement offer
on the table until trial.
An additional statutory safeguard exists against the risk of gamesmanship and
abuse from condemnors proffering unreasonable settlement offers to avoid paying
fees. RCW 8.25.070(l)(b) separately awards fees to the condemnee when the
condemnor's offer is less than 90 percent of the jury's just compensation verdict. In
this case, the jury awarded AIC more compensation for the revised TCE than AIC's
appraiser testified it was worth. CP at 1415. AIC suggests condemnors will have
an incentive to make an inflated pretrial settlement offer based on a greater taking
than ultimately sought at trial in order to avoid an award of fees under RCW
8.25.070(l)(b). Not only did AIC not rely on this provision in its fee motion, but
the argument also overlooks the counterincentive a condemnor has to offer in
settlement only that amount justified by the taking it actually needs. It is difficult to
imagine that condemnors will generally be motivated to make artificially high
settlement offers.
Alternatively, AIC argues that it is entitled to fees and costs under RCW
8.25.075(l)(b) because Sound Transit's change to the scope of the TCE constituted
an abandonment of the condemnation proceedings altogether. Suppl. Br. by AIC at
6-7; see RCW 8.25.075(1)(b) (providing for reasonable attorney and expert witness
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
fees if "[t]he proceeding is abandoned by the condemnor"). AIC contends that
Sound Transit abandoned its taking by modifYing the TCE after its settlement offer
and putting before the jury a different taking from the one for which it petitioned and
obtained possession and actual use. Suppl. Br. by AIC at 6-7. In support of this
argument, AIC cites to the TCE's reduction in square footage and duration of use.
Id. at 9.
We find this argument unpersuasive. The very fact that the parties litigated to
judgment over just compensation establishes that the proceeding was never
abandoned. AIC advocates for a rule that would consider a condemnation
proceeding to be abandoned whenever the taking "materially changes." But such a
rule is contrary to established precedent holding that a proceeding is abandoned
when the condemnor never takes any property. See Port of Grays Harbor v. Citifor,
Inc., 123 Wash. 2d 610, 619, 869 P.2d 1018 (1994) (holding condemnor "clearly
abandoned the condemnation proceedings" under RCW 8.25.075(l)(b) because it
never acquired property). 8
8
In accord with Washington precedent, courts have narrowly construed
"abandonment" in 42 U.S.C. § 4654(a)(2), the federal analog to RCW 8.25.075. United
States v. 122.00 Acres, 856 F.2d 56 (8th Cir. 1988) (proceeding deemed abandoned when
condenmor determined that the jury's determination of just compensation went beyond its
budget capabilities and moved to dismiss the condemnation action all together); United
States v. 4.18 Acres, 542 F.2d 786 (9th Cir. 1976) (condemnation proceeding not deemed
abandoned when condemnee successfully moved to dismiss the action and rather than
appeal the dismissal the condemnor proceeded to file a new condemnation action within
one year of dismissal); United States v. 431.60 Acres, 355 F. Supp. 1093 (S.D. Ga. 1973)
(government admitted to abandonment).
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
Even if we were inclined to adopt a new rule akin to constructive
abandonment, the out-of-state authorities AIC relies on are distinguishable. See
Appellant AIC's Opening Br. at 41 n.3. In those cases, the physical taking changed
in size and scope. See People ex rel. Dep 't ofTransp. v. N. Tr. Co., 376 N.E.2d 286,
287, 59 Ill. App. 3d 1053, 17 Ill. Dec. 287 (1978) (condemnor modified original
physical taking of 312.5 square feet to 500 square feet, a 84 percent decrease);
County ofKern v. Galatas, 200 Cal. App. 2d 353,354-55, 19 Cal. Rptr. 348 (1962)
(condemnor modified original physical taking of 75.49 acres to 48.87 acres, a 35
percent decrease); Montgomery County v. McQuary, 26 Ohio Misc. 239, 265 N.E.2d
812, 813 (1971) (condemnor "abandoned[ed] the course ofthe easements through
the property of the defendant ... and designate[ d] a different course"); FKM P 'ship,
Ltd. v. Bd. of Regents of Univ. of Houston Sys., 255 S.W.3d 619 (Tex. 2008)
(condemnor modified original physical taking of 47,008 square feet to 1,260 square
feet, a 97 percent decrease). Here, in contrast, Sound Transit made no reduction to
its permanent taking (the PGE); the only change was to reduce the area impacted by
the TCE by 25 percent and to limit its duration to fewer nonconsecutive days of
exclusive possession. Moreover, Sound Transit's settlement offer never changed
despite the reduced TCE. The Court of Appeals properly rejected AIC's claim that
it is entitled to attorney fees under RCW 8.25.075(l)(b).
Admission ofOh 's Testimony regarding the July 2012 Valuation
AIC sought a new trial on the ground that the trial court erred by admitting
Oh's testimony that she believed AIC was entitled to $485,000 for the easements.
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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
Suppl. Br. by AIC at 13-14. AIC contends this testimony "was not admissible
because it contained not Ms. Oh's own belief of value, but the belief of value of an
expert who was not in court." Id. at 15. The trial court admitted the testimony under
ER 80l(d)(2).
We review a trial court's interpretation of an evidentiary rule de novo. State
v. DeVincentis, 150 Wash. 2d 11, 17,74 P.3d 119 (2003). Once the rule is correctly
interpreted, the trial court's decision to admit or exclude the evidence is reviewed
for an abuse of discretion. I d. A trial court abuses its discretion only if its decision
is manifestly unreasonable or based on untenable grounds. Wash. State Physicians
Ins. Exch. &Ass'n v. Fisons Corp., 122 Wn.2d 299,339,858 P.2d 1054 (1993).
A statement qualifies as an admission by a party opponent ifthe "statement is
offered against a party and is (i) the party's own statement, in either an individual or
a representative capacity or (ii) a statement of which the party has manifested an
adoption or belief in its truth." ER 80l(d)(2). Such an admission is not hearsay. Id.
The trial court properly admitted Oh's testimony. Before allowing Oh to be
questioned about the July 2012 valuation letter, the trial judge asked Oh whether the
letter reflected her belief that AIC was entitled to $485,000 for damages. She
confirmed that it did and later repeated this belief in her testimony before the jury.
There is no dispute that Oh, as AIC's president, was entitled to speak on AIC's
behalf. Oh's statement regarding her belief as to the value in July of 2012 was
clearly offered against AIC. And the fact that that the letter containing the $485,000
valuation was never admitted at trial is of no consequence. Admission of a statement
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Cent. Puget Sound Reg'! Transit Auth. v. Airport lnv. Co., 91653-5
by a party opponent does not hinge on admitting documents corroborating the party
opponent's statement. Because Oh manifested a belief in the truth of the $485,000
valuation, the trial court properly considered it to be her statement under ER
80l(d)(2).
AIC nevertheless contends the trial court improperly admitted Oh's testimony
because, as a lay witness, "[s]he never expressed any expertise or method by which
she came to personally believe that the property was worth any particular amount.
She expressly testified she solely relied on her appraiser." Suppl. Br. of AIC at 15.
Her testimony, AIC argues, was used merely as a conduit to bring in the out-of-court
valuation opinion of a nontestifying appraisal expert. See Sentine!C3, Inc. v. Hunt,
181 Wash. 2d 127, 139 n.5, 331 P.3d 40 (2014) (rejecting admission of expert
witnesses' valuation opinion put into evidence through party's testimony because
the valuations "were based entirely on a consulting expert's valuation that
'constituted hearsay'" (quoting SentinelC3, Inc. v. Hunt, 176 Wash. 2d 152, 162, 309
P.3d 582 (2013))). It is true that allowing Oh's testimony brought into evidence the
fact of an earlier, lower appraisal obtained by AIC. The jury certainly understood
that Oh's belief was based on this appraisal valuation. 9 CP at 952. But the trial
court's voir dire of Oh revealed that she had adopted the valuation as her own belief,
making it admissible as a statement of a party opponent. No requirement exists that
9 During deliberations, the jury sent an inquiry to the judge, asking how to "consider
the estimate from a third appraiser, who was briefly mentioned? We think that estimate
was $485,000. Can we consider this as evidence or witness testimony?" CP at 952. The
judge responded, "You may consider all the testimony and exhibits that were admitted into
evidence, and assign it what weight you believe it is worth." !d. 953.
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Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co., 91653-5
the party opponent must possess particular "expertise or method" in forming an
opinion. ER 801(d)(2)(ii) requires only that the party "has manifested an adoption
or belief in [the statement's] truth." The trial court properly rejected AIC's hearsay
objection and admitted the evidence. AIC is not entitled to a new trial.
CONCLUSION
We affirm the Court of Appeals. AIC is not entitled to attorney fees under
RCW 8.25.070(1)(a) or (b), and the trial court properly allowed AIC's president to
be questioned about the July 2012 valuation letter.
-18-
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5
WE CONCUR:
(2 .Q.
{
-19-
Cent. Puget Sound Reg 'l Transit Auth. v. Airport Inv. Co.
No. 91653-5
JOHNSON, J. (dissenting)-In this classic bait-and-switch case, Central
Puget Sound Regional Transit Authority (Sound Transit) changed its condemnation
claim during trial from what it told the property owner when the "settlement" offer
was conveyed. No offer was ever "on the table" for property interest claimed
during trial. The offer caused, if not compelled, the property owner to seek fair
value for their property at trial, where Sound Transit essentially said, "Never mind,
we do not need that much property, and therefore settlement should be for a lesser
fair value for the condemned property interest." Torturing the statutory purpose,
the majority denies the property owner fees and costs even though no offer was
ever made for the property Sound Transit actually took. Under the statute as
written, this "changing the rules after the game is played" is unsupportable, or
should be. The majority's new rule encourages such gamesmanship. I dissent.
The majority incorrectly denies Airport Investment Company (AIC) its
statutory entitlement to attorney fees. A straightforward reading of the statute
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5
(Johnson, J., dissenting)
discloses that any "offer" must be for the "interest in the property being
condemned." RCW 8.25.070(l)(a). The majority essentially rewrites this provision
and untethers the "offer" from the "interest in the property being condenmed,"
defying common sense and the most elementary of principles of statutory
construction and contracts. Some relationship must exist between a condemnor's
offer and what it is taking. This case arose because Sound Transit changed its
claim during trial.
The majority erroneously concludes that because Sound Transit made "any"
offer, no fee award is due under RCW 8.25.070(1 ). 1 Public policy, legislative
intent and well-settled principles of statutory interpretation should mean that you
cannot divorce the offer from the interest in the property by changing the claim
after the "offer" was made and rejected. A straightforward application of the
language ofthe statute requires that the "offer" be for the "interest in the property
being condemned." No other reading makes sense.
The purpose ofRCW 8.25.070 is to encourage condemnors to make fair
offers, thus avoiding litigation and encouraging settlement before trial. See State v.
1
"(1) Except as otherwise provided in subsection (3) of this section, if a trial is held for
the fixing of the amount of compensation to be awarded to the owner or party having an interest
in the property being condemned, the court shall award the condemnee reasonable attorney's fees
and reasonable expert witness fees in the event of any of the following:
"(a) If condemnor fails to make any written offer in settlement to condemnee at least
thirty days prior to commencement of said trial." (Emphasis added.)
2
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5
(Johnson, J., dissenting)
Costich, 152 Wash. 2d 463, 471, 98 P.3d 795 (2004). The majority at least
acknowledges that our precedent requires a condemnor to present an adequate
taking description before trial to allow the landowner time to prepare for trial.
Majority at 12 (citing In re Municipality ofMetropolitan Seattle, 67 Wash. 2d 923,
928, 410 P.2d 790 (1966) (Kenmore Props.)). It is true that a property owner
before trial has a "right to be adequately advised of the exact nature of the
proposed taking, so that he [or she] may evaluate the resultant damage." Kenmore
Props., 67 Wash. 2d at 927. However, the majority's reading of Kenmore Properties
ignores that the same reason why a property owner must be adequately informed of
the exact nature of the taking before trial underlies why he or she must be informed
of the exact nature of the taking when being given a settlement offer. It makes
sense that a condemnor must provide the property owner a description of the taking
to allow the landowner to make a decision to accept any offer and, if not, prepare
for trial.
For the property owner to determine if a settlement offer is fair-and
consequently whether to litigate the condemnation action-the property owner
must know what exactly Sound Transit is offering and what property interest
Sound Transit is taking in exchange for that offer. Any change to what Sound
Transit provides to the property owner makes the calculation impossible.
3
Cent. Puget Sound Reg'/ Transit Auth. v. Airport Inv. Co., No. 91653-5
(Johnson, J., dissenting)
Engaging in what is essentially a statutory rewrite, the majority claims that
AIC failed to demonstrate that the temporary construction easement (TCE) was
inadequately described, or that the changed TCE "otherwise resulted in prejudice
to its trial preparations," or that Sound Transit "committed bad faith or engaged in
gamesmanship in its settlement negotiations." Majority at 12. Under the majority's
view, evidently, all the statute requires is that any offer "comes close" to
describing the property and, if so, the property owner must now prove some type
of materiality or prejudice. Nowhere in the statute does it say this. What the statute
says is that the offer match the property interest sought. In this case, at trial, both
the physical footprint and the duration changed from that specified in the offer.
Whether this change was or was not "material" to the property owner's decision
can never be known with certainty. Nor should condemnation trials include this
issue. One certainty is established: the property owner never had the decision to
accept an offer never presented.
The majority offers no cases to support its rule that a court must somehow
consider materiality of any changes. Unfortunately, the majority fails to explain
how the property owner can prove "materiality"-by what standard or much else.
Fortunately, the statute answers this question. The statute provides that the burden
is on Sound Transit to make offers for what it wants. Any change voids the offer.
4
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5
(Johnson, J., dissenting)
Even if it were, under the statute, appropriate to engage in such an inquiry, a
taking reduced by both its physical footprint and a reduction in duration is a lesser
taldng. A lesser taking is material in relation to the evaluation of the offer of just
compensation. Here, the original TCE allowed for exclusive use of up to 1,080
days; the new TCE narrowed that exclusive use to 160 days. 2 The changes included
a 25 percent decrease in the area of the easement and a reduction of the duration by
2.5 years. Sound Transit presented an entirely different picture of the taking to the
jury than its pretrial offer had specified. Under the majority's approach, a
condemnor can overstate its taking at the beginning of condemnation proceedings
and then present the jury with a lesser taking to insulate itself from having to pay a
fee award. While this likely was not the deliberate strategy of Sound Transit, the
majority seems to ignore the possibility and risk of gamesmanship and abuse from
its result, which conflicts with the statutory purposes.
The majority claims RCW 8.25.070(1)(b}-which separately awards fees to
the condernnee when the condemnor's offer is less than 90 percent of the jury's
just compensation verdict-provides a safeguard against the risk this potential
abuse. Majority at 13. For this ostensible safeguard to be triggered, the jury award
2
The record does not disclose exactly when Sound Transit made this change. We can
presume that trial preparations and discovery were complete and at the very least the appraisal
was done.
5
Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5
(Johnson, J., dissenting)
must necessarily be greater than the pretrial offer, which will almost never be the
case when the property interest is reduced. In other words, RCW 8.25.070(1)(b)
protects the condemnee only when the condemnor has offered less than what the
jury awards. In instances where the pretrial offer is based on a taking that is less
than what the taking presented at trial-either by its duration or its physical
amount or both as is the case here-then the jury award will never be less than the
pretrial offer. Under the statute, this does not make sense. Apparently, no question
in this case exists that had Sound Transit gone to trial on its original claim, the
award would have been larger. Because of the difference, no comparison between
the offer and the award can be done.
The statute was designed to protect property owners who receive unfair
settlement offers from bearing the costs of pursuing just compensation.
Conversely, the statute was also designed to protect Sound Transit from bearing
the costs of litigation when a fair offer of settlement is made. The property owner
has a choice to make. If it decides to litigate, the statute determines fairness by
comparing what was offered before trial to what the jury awarded. That
comparison is simple where the taking on which the initial offer was based is the
same as the taking evaluated by the jury. It becomes impossible and meaningless to
compare the pretrial offer to the jury award where the property interests are
different.
6
Cent. Puget Sound Reg'/ Transit Auth. v. Airportlnv. Co., No. 91653-5
(Johnson, J., dissenting)
Under the statute, an offer is inextricably linked to the property interest on
which the offer is made. In this case, because the offer was for a different property
interest than that sought at trial, it is simply void and AIC is statutorily entitled to
recover its fees and costs. For these reasons, I dissent.
"-··
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