Keith L. & Kay Burdine Holmquist And Fredrick Kaseburg v. City Of Seattle

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
KEITH L. HOLMQUIST and KAY
BURDINE HOLMQUIST, f/k/a KAY DIVISION ONE
BURDINE, husband and wife; and
FREDERICK A. KASEBURG, a single No. 73335-4-
man,
Appellants,
v. PUBLISHED OPINION
KING COUNTY, a political subdivision
of the State of Washington,
Defendant,
i
CITY OF SEATTLE, a municipal CD
corporation,
UD
Respondent. FILED: February 8, 2016 -
o
Dwyer, J. — Keith and Kay Holmquist and Frederick Kaseburg
(collectively, the owners) prevailed against King County and the City of Seattle in
this action to quiet title to certain Seattle real property. Both the City and the
County appealed, but only the City filed a notice of supersedeas without bond.
After we affirmed the trial court judgment, the owners moved the trial court to
award damages resulting from the City's decision to supersede the judgment
quieting title. The trial court denied their motion. We now reverse that decision
and remand the matter to the superior court for entry of an award of damages
consistent with this opinion.
No. 73335-4-1/2
I
A. Adjacent property owners quieted title to the street end ofNE 130th
The Holmquists and Kaseburg, the owners of developed single family
residential lots, filed this action seeking to quiet title to certain street end property
located between their properties. The real property at issue abuts Lake
Washington. In this action, filed initially against King County, the owners traced
their title to their predecessors, who came into ownership when King County
vacated the NE 130th Street right-of-way in 1932.1 The superior court granted
the City's motion to intervene, over the owner's objection that the City lacked any
colorable claim to or interest in the vacated NE 130th Street right-of-way. On
May 23, 2013, the trial court entered judgment quieting title against King County
and the City and in favor of the owners, each for one-half of the former street end
property.
B. The City superseded enforcement of thejudgment quieting title
Both the City and King County appealed, but only the City sought to stay
enforcement of the trial court's judgment quieting title in the owners. The City
filed a notice of supersedeas without bond pursuant to RCW 4.96.0502 and RAP
8.1(b)(2) and (f).3
1 Further details of the underlying action are set forth in Holmauistv. King County, 182
Wn. App. 200, 328 P.3d 1000, review denied. 181 Wn.2d 1029 (2014).
2 RCW4.96.050 provides, in pertinent part: "No bond is required of any local
governmental entity for any purpose in any case in any ofthe courts ofthe state ofWashington."
3 RAP 8.1 provides, in pertinent part:
(b) Right to Stay Enforcement of Trial Court Decision. A trial court
decision may be enforced pending appeal or review unless stayed pursuant to
the provisions of this rule. Any party to a review proceeding has the right to stay
enforcement of... a decision affecting real. . . property, pending review.
No. 73335-4-1/3
The owners objected to the City's maintenance, during the appeal, of a 4-
foot by 4-foot sign on the vacated NE 130th street end right-of-way property
announcing the City's intention to develop a forthcoming "N.E. 130th Shoreline
Street End Improvement" and reciting that the project is intended to "improve
public access to the shoreline street end." The sign contained the familiar logo of
the Seattle Parks and Recreation department, and invited the observer to "visit
us at seattle.gov/parks." The City also maintained a web site showing the
vacated property as a public waterfront street end, inviting public use and
occupancy as a public beach. The trial court allowed the City to maintain its sign
on the contested property during the appeal.
As a result of the City's notice of supersedeas, the public continued to use
the contested property while the City's appeal progressed. During the summers
of 2013 and 2014, members of the public accessed the property from the Burke-
Gilman trail and used the property for a public beach, swimming, storing and
launching watercraft, parking cars, mooring boats, and staging beach parties.
The City's appeal was unsuccessful. We affirmed the trial court's
decision, questioning the basis for the City's assertion of any interest that could
justify the City's intervention in the owners' quiet title action against King County,
given that the City was never in the chain oftitle. Holmauist v. King County, 182
(2) DecisionAffecting Property. Except where prohibited by statute, a
party may obtain a stay of enforcement of a decision affecting rightsto
possession, ownership or use of real property ... by filing in the trial court a
supersedeas bond ....
(f) Supersedeas by Party Not Required to Post Bond. If a party is not
required to post a bond, that party shall file a notice that the decision is
superseded without bond and, after filing the notice, the party shall be in the
same position as if the party had posted a bond pursuantto the provisions of this
rule.
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Wn. App. 200, 328 P.3d 1000 (2014). The Supreme Court denied the City's
petition for review. 181 Wn.2d 1029 (2014). The case was mandated on
February 13, 2015. See RAP 12.5(a), (b)(3).
C. The superior court denied the owners' motion for an award of damages
caused by the City's supersession of its judgment
After the mandate issued, the owners sought an award of damages
against the City for depriving them of the exclusive use and enjoyment of the
property and for the City's public benefit in continuing to maintain the property for
public use during the 21 months in which the City's appeal was pending. As a
measure of damages, the owners advanced the City's own calculation of the
price per square foot charged by the City to private parties to lease comparable
waterfront street end properties. See Seattle Ordinance (SO) 123611 (2011).
The City contested the owners' right to collect damages but did not offer the court
a different methodology for calculating damages.
The superiorcourt denied the motion for an award of damages on March
10, 2015.4 The owners timely appealed.
II
The owners first contend that the City is liable for any damages they
incurred as a result of its decision to supersede the trial court's judgment. This is
so, they assert, because a local government that supersedes without bond is
nevertheless liable for damages resulting from that supersession. We agree.
The question of whether the City may be liable to the owners for damages
caused by its choice to supersede, without bond, the trial court's judgment
4The order states simply, "IT IS HEREBY ORDERED that the Motion to Establish
Damages Due to City's Stay is DENIED."
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regarding ownership of the street end property is controlled by our Supreme
Court's decision in Norco Construction. Inc. v. King County. 106 Wn.2d 290, 721
P.2d511 (1986).
Therein, our Supreme Court held that King County's supersedeas of an
adverse land use decision without bond did not exempt it from damages resulting
from the inability of the property owner, Norco, to use its property while the
supersedeas was in place.
We now turn to Norco's claim that it is entitled to recover
damages allegedly resulting from King County's supersession of
enforcement of the trial court's writ of mandamus.
It is undisputed that King County did not have to post a bond
in order to supersede enforcement of the trial court decision.
Ordinarily, a party must file a supersedeas bond in order to
supersede the enforcement of a trial court decision pending appeal.
RAP 8.1(b). The State, however, is not required to post such a
bond in order to supersede enforcement, on the theory that ifthe
trial court judgment is affirmed, the State treasury provides an
adequate guaranty that the prevailing party will be able to collect
the amount of the judgment. See RCW 4.92.080; Rutcoskv v.
Tracy. 89 Wn.2d 606, 612, 574 P.2d 382, cert denied. 439 U.S. 930(1978). This exemption from the requirement of posting a
supersedeas bond also applies to counties. Hockley v. Hargitt, 82
Wn.2d 337, 347, 510 P.2d 1123 (1973). King County clearly
complied with these rules by filing a notice that the decision was
superseded without bond. This act put King County "in the same
position as if [it] had posted a bond . .." RAP 8.1(c).
Norco contends that, pursuant to RAP 8.1(b)(2), it is entitled
to damages caused by King County's superseding enforcement of
the trial court judgment. RAP 8.1(b)(2) concerns the amount of the
supersedeas bond to be fixed in decisions affecting property. It
provides,
If the decision determines the disposition of
property in controversy, or if the property is in the
custody of the sheriff, or ifthe proceeds of the
property or a bond for its value are in the custody or
control of the court, the amount of the supersedeas
bond shall be fixed at such sum only as will secure
any money judgment plus the amount of loss which a
partymay be entitled to recover as a result of the
No. 73335-4-1/6
inabilityof the party to enforce the judgment during
review.
(Italics ours.)
Thus, RAP 8.1(b)(2) authorizes the trial court to include the
amount of loss resulting from the supersession of enforcement of a
decision affecting property in the bond amount. This indicates that
when a party supersedes a trial court decision affecting property
and is unsuccessful on appeal, the prevailing party may recover
damages resulting from the supersession.
We conclude that pursuant to RAP 8.1(b)(2), a party who
supersedes enforcement of a trial court decision affecting property
during an unsuccessful appeal is liable to the prevailing party for
damages resulting from the delay in enforcement. King County's
exemption from the requirement of posting a bond does not affect
its potential liability for such damages. As long as it has filed a
notice that the trial court decision is superseded without bond, a
party that is exempt from the bond requirement is in the same
position as if it had posted a bond. RAP 8.1(c).
We hold that Norco is entitled to recover damages which
resulted from King County's supersession of enforcement of the
trial court's writ of mandamus.
Norco. 106 Wn.2d at 295-97; see also Ames v. Ames. 184 Wn. App. 826, 855,
340 P.3d 232 (2014) (In Norco. "our Supreme Court . . . noted that under RAP
8.1(b)(2), a party who supersedes enforcement of a trial court decision affecting
property during an unsuccessful appeal is liable to the prevailing party for
damages resulting from the delay in enforcement.").
Pursuant to Norco. Washington courts follow the established rule that
once an appeal has failed, the supersedeas obligor's "liability for damages ... is
absolute." John Hancock Mut. Life Ins. Co. v. Hurley. 151 F.2d 751, 755 (1st Cir.
1945) (emphasis added).
In all aspects relevant to the question of liability arising from supersedeas
without bond, this case is indistinguishable from Norco. Like King County, the
City was statutorily exemptfrom posting a supersedeas bond. RCW 4.96.050.
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No. 73335-4-1/7
The City chose to take advantage of this exemption by filing a notice of
supersedeas without bond. Thereafter, the City's appeal was unsuccessful.
Therefore, like Norco, the owners "[are] entitled to recover damages which
resulted from [the City]'s supersession of enforcement of the trial court's
[judgment]." Norco. 106 Wn.2d at 297.
The superior court's rationale for denying the owners' motion for an award
of damages was not made clear in its order. To the extent that its decision was
based on the incorrect conclusion that the City was not subject to liability for
superseding the judgment, it erred.
Ill
The owners next contend that the trial court erred by denying them an
award ofdamages. This is so, they assert, because they established that they
were damaged by the City's supersession of the trial court's decision and
presented a valid methodology for quantifying their damages. We agree.
We apply general principles for establishing damages. Claimants
generally must establish damages with reasonable certainty.5 Lewis River Golf,
Inc. v. P.M. Scott & Sons. 120 Wn.2d 712, 717, 845 P.2d 987 (1993); accord
Sherrell v. Selfors. 73 Wn. App. 596, 601, 871 P.2d 168 (1994) (applying the
reasonable certainty standard to an intentional trespass case). "Furthermore, the
doctrine respecting the matter of certainty, properly applied, is concerned more
5The fact of loss is established with reasonable certainty when it is established by a
preponderance of the evidence. Lewis River Golf. Inc. v. P.M. Scott &Sons. 120Wn.2d712,
717-18, 845 P.2d 987 (1993) (citing Roy Ryden Anderson, Incidental and Consequential
Damages, 7 J.L & Com. 327, 395-96 (1987)).
No. 73335-4-1/8
with the fact of damage than with the extent or amount of damage." Gaasland
Co. v. Hvak Lumber & Millwork. Inc.. 42 Wn.2d 705, 712, 257 P.2d 784 (1953).
Once the fact of loss is proved with reasonable certainty, uncertainty or difficulty
in determining the amount of the loss will not prevent recovery. Lewis River Golf.
120Wn.2d at 717-18: accord Barnard v. Compugraphic Corp.. 35 Wn. App. 414,
417, 667 P.2d 117 (1983) ("[Plaintiffs] are not to be denied recovery because the
amount of damage is not susceptible to exact ascertainment."). Although
mathematical certainty is not required, the amount of damages must be
supported by competent evidence. Fed. Signal Corp. v. Safety Factors. Inc.. 125
Wn.2d 413, 443, 886 P.2d 172 (1994). Evidence of damage is sufficient if it
gives the trier of fact a reasonable basis for estimating the loss and does not
require mere speculation or conjecture. Clayton v. Wilson. 168 Wn.2d 57, 72,
227 P.3d 278 (2010); accord Interlake Porsche &Audi. Inc. v. Bucholz. 45 Wn.
App. 502, 510, 728 P.2d 597 (1986) ("Damages must be supported by competent
evidence in the record; however, evidence of damage is sufficient if it affords a
reasonable basis for estimating the loss and does not subject the trier of fact to
mere speculation or conjecture." (citation omitted)). In this regard, the law has
not significantly changed since it was summarized by the Supreme Court six
decades ago.
The most important qualification, and one relevant to the
case at bar, is the difference in the quantum of proof needed to
establish the fact of damage as against that needed to establish the
amount of damage:
There is a clear distinction between the
measure of proof necessary to establish the fact that
the plaintiff has sustained some damage and the
measure of proof necessary to enable the jury to fix
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No. 73335-4-1/9
the amount. Formerly, the tendency was to restrict the
recovery to such matters as were susceptible of
having attached to them an exact pecuniary value, but
it is now generally held that the uncertainty which
prevents a recovery is uncertainty as to the fact of the
damage and not as to its amount and that where it is
certain that damage has resulted, mere uncertainty as
to the amount willnot preclude the right of recovery
The damages must be susceptible of
ascertainment in some manner other than by mere
speculation, conjecture, or surmise and by reference
to some definite standard, such as market value,
established experience, or direct inference from
known circumstances. (Italics ours.)
Gaasland Co., 42 Wn.2d 705, 713, 257 P.2d 784 (1953) (quoting 15 Am. Jur.
Damages § 23, at 414-16 (1938)).
The owners assert that they are entitled to an award of damages because
they were deprived of the exclusive use of the street end property during the
pendency of the appeal.6 They are correct.
Regarding the fact of damage, the owners presented undisputed evidence
that, as a result of the City's supersession of the trial court's judgment, against
the owners' will, the owners were denied the exclusive use of their real property
while the public was allowed to continue using the street end property as a public
beach. The City concedes this point but argues that, because the owners could
use the beach in concert with other members of the public during the appeal
period, the owners suffered neither actual damage nor compensable loss. The
City could not be more wrong.
6 Their claim was more detailed in the trial court, where they claimed that they were
damaged by the "inability to own, possess, improve, landscape, and incorporate the property into
their residential use of their lots."
No. 73335-4-1/10
The City's argument ignores that "[t]he very essence of the nature of
property is the right to its exclusive use." Olwell v. Nye & Nissen Co., 26 Wn.2d
282, 286, 173 P.2d 652 (1946): accord Guimontv. Clarke. 121 Wn.2d 586, 608,
854 P.2d 1 (1993) (fundamental attributes of ownership include "the right to
possess, exclude others from, or dispose of property"). Stated differently, "the
right to exclude others" is "one of the most essential sticks in the bundle of rights
that are commonly characterized as property." Kaiser Aetna v. United States,
444 U.S. 164, 176, 100 S. Ct. 383, 62 L. Ed. 2d 332 (1979).
Respecting the paramount right to exclude others, Washington courts
compensate the loss of exclusive possession under a variety of legal theories.
See, e.g.. Bradley v. Am. Smelting & Ref. Co.. 104 Wn.2d 677, 692-93, 709 P.2d
782 (1985) (trespass claim for airborne pollution that "invaded the plaintiff's
interest in the exclusive possession of his property"); Highline Sch. Dist. No. 401
v. Port of Seattle. 87 Wn.2d 6, 11, 548 P.2d 1085 (1976) (inverse condemnation
based on noise pollution); Kuhr v. City of Seattle. 15 Wn.2d 501, 504, 131 P.2d
168 (1942) (where encroachment interferes with owner's right to exclusive use
and enjoyment, "we think it of little moment what the theory of the injured party's
cause of action may be"). Moreover, courts assess damages for even minimal
interference with an owner's right of exclusive use and possession. See Loretto
v. Teleprompter Manhattan CATV Corp.. 458 U.S. 419, 422, 102 S. Ct. 3164, 73
L. Ed. 2d 868 (1982) (owner entitled to compensation for television company's
installation of "'cable slightly less than one-half inch in diameter and of
approximately 30 feet in length'" above roof of apartment building).
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No. 73335-4-1/11
The City's argument—that only the loss of the use of private property
altogether, and not just the loss of exclusive use, is compensable—ignores this
established law. Furthermore, the City's assertion that the right to the exclusive
use of property is not, in itself, of value rings hollow given that the City derives
income from leasing comparable waterfront street end properties to abutting
property owners so that they may use the property exclusively.
Regarding the amount of damages, the owners propose to quantify their
damages using the rental value of the street end property, as calculated using
the City's own formula for renting comparable properties. This is an
unremarkable proposition, as rental value is a well-established measure of
damages where a party has been deprived of ownership rights. See Colby v.
Phillips. 29 Wn.2d 821, 824, 189 P.2d 982 (1948) (rental value awarded as offset
against the purchase price for defendant's delay in conveying title); Brown v.
Pierce County. 28 Wash. 345, 352, 68 P. 872 (1902) (damages for a property
owner's lost possession and use of real property measured by the "'fair and
reasonable rental value of that property for the purpose for which it was taken
and used'"); Panorama Vill. Homeowners Ass'n v. Golden Rule Roofing. Inc.. 102
Wn. App. 422, 427-28, 10 P.3d 417 (2000) (measure of recovery for a
contractor's unfinished or defective construction of a home); accord Woodworth
v. Nw. Mut. Life Ins. Co.. 185 U.S. 354, 363, 22 S. Ct. 676, 46 L. Ed. 945 (1902)
(appellant who superseded a lower court judgment awarding property to owner
liable to the owner, who was kept out of possession, for property's "rents and
profits"); 1 Dan. B. Dobbs, Dobbs Lawof Remedies 788 (2d ed. 1993) ("When [a]
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No. 73335-4-1/12
trespasser's presence is substantial enough to count as a possession, or even as
temporary use, damages for the invasion can be measured by rental value of the
land during the period of the trespass.. . . Rental value is also an appropriate
measure for temporary takings under eminent domain powers, that is, for taking
the land for a limited period of time. The rental market value of the land in these
cases represents the value of possession or use." (footnote omitted));
Restatement (Second) of Contracts § 348(1) (1981) (if breach delays the use
of property and the loss of value to the injured party is not proved with
reasonable certainty, owner may recover damages based on the rental value of
the property); see generally V. Woener, Annotation, Measure and amount of
damages recoverable under supersedeas bond in action involving recovery or
possession of real estate, 9 A.L.R.3d 330 (1966).
Nevertheless, the City contends that rental value is an unreasonable basis
for an award of damages in this case. The City advances two arguments in this
regard.7 Both are unavailing.
First, the City asserts that rental value is an inappropriate measure in this
case because the owners neither could have, nor intended to, actually rent the
street end property. In advancing this claim, the City misapprehends the owner's
purpose in proposing rental value as the measure ofdamages. The owners do
not argue that they intended to rent the property, in whole or in part, or that they
would have been bound by the City's methodology for determining the rent they
could charge if they did. Rather, their claim is that the City's own methodology
7The City sets its argument forth in five parts. However, parts one through four all
concern the owners' intent or ability to rent the street end property.
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No. 73335-4-1/13
for calculating the rental value of comparable properties is a "reasonable basis
for estimating [their] loss." This is so because it provides a close approximation
of the value of the owners' temporary loss of the exclusive use of their property
due to the City's supersession.
Second, the City complains that it did not have notice that the owners
would seek to recover damages based on the property's rental value. In
advancing this claim, the City ignores that there is no requirement that such
notice be given. As the dissent in Norco long ago noted, with some distress:
I question Norco's ability to seek delay damages when King County
had no notice that delay damages would be sought. I recognize,
however, that our court rules currently do not provide a mechanism
by which entities not required to post bonds may be apprised that
delay damages will be sought. Parties posting supersedeas bonds
have notice of potential delay damages when an additional amount
for delay damages is actually required to be posted.
106 Wn.2d at 297-98 (Goodloe, J., concurring in part, dissenting in part). To the
extent that the circumstance described by Justice Goodloe constituted a
problem, neither the legislature, by statute, nor the Supreme Court, by rule, has
deemed it to be a problem in need of a solution.
Accepting rental value as a reasonable basis for calculating damages for
temporary loss of use and occupancy of real property, the owners established
their particular damages using the City's own methodology for computing the
rental value of waterfront street end properties it owns.8 Seattle Ordinance
123611 establishes the rental value of these waterfront street ends by (1)
determining the per square foot assessed value of the abutting privately owned
8The City owns 149 waterfront street ends, many ofwhich are leased to adjoining private
owners by annual permits.
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No. 73335-4-1/14
lot, (2) multiplying that per square foot value times the square footage of the
street end, (3) multiplying that value by a "demand probability factor," and (4)
multiplying that value by a City standard rate of return to arrive at an annual
rental fee.9 Applying this methodology to the facts herein, the owners reached a
figure of approximately $3,600 per month.10 The supersedeas was in effectfor
approximately 20.7 months.11 Therefore, the total proposed damages were
$74,520.12
Generally, "[a] trier of fact has discretion to award damages which are
within the range of relevant evidence." Mason v. Mortg. Am.. Inc.. 114 Wn.2d
842, 850, 792 P.2d 142 (1990). Herein, because the City chose not to provide
an alternative,13 the evidence supports only one damage calculation—$74,520.
This figure is the effective "range" of possible damage awards.
9This is technically the permitting cost, notthe rental cost. At oral argument, the City
stated that the cost to lease the property would have been greater. Oral argument at 17:20.
10 The owners elected to round the actual figure down to this value from $3,601.90. Br. of
Appellant at 14-15.
11 The owners established the time frame by counting from the date of the judgment
quieting title, May 23, 2013, to the date ofthe mandate, February 13, 2015. Oral argument at
19:35. This calculation was unopposed.
12 The owners also contended that they were entitled to "additional damages" equal to the
"substantial governmental benefits [received by the City] by physically appropriating [their]
property as a public beach." But the dollar amount that results from an application ofthe City's
rental formula represents the trade-off between the public's use of a given property and private
use ofthe same property. Given that this formula is the basis for the owner's proposed damage
award, the City's use ofthe property as a public beach and the owners' inability to exclude others
from using the property are opposite sides ofthe same coin. We reject the owners' attempt to
double count damages resulting from the denial oftheir exclusive use ofthe property pending
appellate review.
13 The City conceded at oral argument that it had a full opportunity to present another
measure ofdamages but chose to argue, instead—and erroneously—that its supersession
caused no damage. Oral argument at 8:30.
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No. 73335-4-1/15
Reversed and remanded to the superior court for entry of a supplemental
judgment awarding damages in the amount of $74,520.
/V )
We concur:
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