Sharon Kay v. King County Solid Waste Division

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
SHARON KAY and JIM HOWE,
DIVISION ONE
Appellants,
No. 77935-4-I
V.
UNPUBLISHED OPINION
KING COUNTY SOLID WASTE
DIVISION, a municipal corporation,
FILED: June 3, 2019
Respondent.
DWYER, J. — Due to the negative impacts of a landfill operated by King
County, nearby resident Sharon Kay brought a civil action in which she claimed
that these effects amounted to a total taking of her property and, in the
alternative, that these effects amounted to a partial taking.1 After a trial, the jury
found that Kay suffered a partial taking. Kay’s subsequent request for an award
of attorney fees was denied. Because her request was denied contrary to the
letter and intent of the statute governing attorney fee awards in inverse
condemnation actions, we reverse.
Sharon Kay lives in a house adjacent to the Cedar Hills Regional Landfill,
a facility operated by the respondent King County Solid Waste Division (the
County). In 2013, a pipeline break at the landfill led to the release of substantial
1 Plaintiff Jim Howe brought unrelated causes of action against the King County Solid
Waste Division. These claims are not at issue in this appeal.
No. 77935-4-l12
amounts of toxic gas. Subsequently, Kay brought claims against the County for
nuisance, trespass, negligence, inverse condemnation, strict liability, and
negligent infliction of emotional distress. Before trial, the County made the
following written settlement offer, providing for the purchase of Kay’s property in
exchange for the extinguishment of her inverse condemnation claim:
Dear Ms. Kay and Mr. Howe,
With this letter, King County makes the following offer to purchase
your property:
PURCHASER: King County, Department of Natural
Resources and Parks—Solid Waste
Division
SELLER: Sharon Kay or Sharon Kay and Jim
H owe
PROPERTY ADDRESS: 1523 229th Ave SE, Issaquah, WA
98027, APN: 222306-9135
PURCHASE PRICE: $552,000
Should you accept King County’s offer to purchase your property
for the price listed above, the parties will then agree on a mutually
acceptable purchase and sale agreement and closing.
Kay and Howe did not accept the offer. The parties proceeded to trial.
The jury made the following findings in its special verdict:
QUESTION 6: Did the defendant’s actions create an inverse
condemnation partial taking of any of plaintiffs’ properties?
Kay residential property ANSWER: YES
QUESTION 8: For each property you answered “yes” on Questions
5 or 6, and/or Question 7, what is the fair market value of that
property before the taking?
[ANSWER:] Kay residential property $650,000
QUESTION 9: For each property you answered “yes” on Questions
5 or 6, and/or Question 7, what is the diminished fair market value
after the taking?
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No. 77935-4-1/3
[ANSWER:] Kay residential property $585,000
QUESTION 10: As to any taking, what was the date that taking
began?
[ANSWER:] Kay residential property December 7, 2013
Following the verdict, the trial court entered judgment. The judgment
provided that the inverse condemnation had commenced on December 7, 2013,
that Kay was entitled to $65,000, the difference of her property’s unimpaired fair
market value and impaired value, and that prejudgment interest on these inverse
condemnation damages totaled $31 221 .37. The judgment did not award the
County fee title to Kay’s property.
The trial court summarily denied Kay’s subsequent motion for an award of
attorney fees and costs.
When, as here, an appeal concerns the interpretation of a statute, we
review the trial court’s decision de novo. State v. Costich, 152 Wash. 2d 463, 470,
98 P.3d 795 (2004). Our primary objective is to give effect to the legislature’s
intent, derived by construing the language as a whole and 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 alone, as the
legislature is presumed to mean what it says. State v. Radan., 143 Wash. 2d 323,
330, 21 P.3d 255 (2001). If, however, the legislature’s intent cannot be
discerned from the plain text of the statute, we “resort to principles of statutory
construction, legislative history, and relevant case law to assist us in discerning
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No. 77935-4-1/4
legislative intent.” Cockle v. Dep’t of Labor & Indus., 142 Wash. 2d 801, 808, 16
P.3d 583 (2001).
The Fifth Amendment to the United States Constitution provides that private
property may not be taken for public use “without just compensation.” Article 1,
section 16 of the Washington Constitution similarly provides:
No private property shall be taken or damaged for public or private
use without just compensation having been first made, or paid into
court for the owner. which compensation shall be ascertained by
. .
a jury.
Two avenues of relief are available to property owners, the value of whose
property is totally or partially taken by government action. The first is a traditional
eminent domain proceeding, wherein the government body (condemnor) seeks
or has already obtained actual ownership of, or an ownership right in, private
property so as to use it for public benefit. See, e.g., Pub. Util. Dist. No. 2 of
Grant County v. N. Am. Foreign Trade Zone lndus., LLC, 159 Wash. 2d 555, 565,
151 P.3d 176 (2007). In these cases, any settlement offer will necessarily be an
offer to purchase the specific property right at issue. Because the condemnor is
required to identify the specific property interest that it seeks to acquire, in
contemplating settlement, the parties intend to place a value on the identified
interest. Thus, when settlement discussions fail, a subsequently entered
judgment will necessarily reflect the fair market value of the specific property
right. See State v. McDonald, 98 Wash. 2d 521, 525, 656 P.2d 1043 (1983). In
such a case, a settlement offer can be easily compared to the final judgment, as
each specifies a value for an interest that is conveyed by the judgment. See ~j~y
of Seattle v. Seattle-First Nat’l Bank, 79 Wash. 2d 490, 491, 487 P.2d 777 (1971).
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No. 77935-4-1/5
In the end, in return for a payment, the condem nor receives both the
extinguishment of the claim against it and conveyance and ownership of the
identified specific interest in the property.
The second avenue of relief available to a property owner is an inverse
condemnation action. An inverse condemnation occurs when the government
takes or damages property without the formal exercise of the power of eminent
domain. Dickqieserv. State, 153 Wash. 2d 530, 534-35, 105 P.3d 26(2005).
Damages in an inverse condemnation case are equal to the amount the property
has diminished in fair market value. Petersen v. Port of Seattle, 94 Wash. 2d 479,
482-83, 618 P.2d 67 (1980). A successful plaintiff will remain the owner of the
property at issue but is awarded damages to compensate for the diminished fair
market value of the property. The decline in value is measured as of the time of
trial. Petersen, 94 Wash. 2d at 482.
In many inverse condemnation cases, the question of whether a taking
has in fact occurred becomes an issue for the trier of fact; the condemnee avers
that the condemnor has damaged or taken some, most, or all of the value of the
condemnee’s property. See, e.g., Sintra, Inc. v. City of Seattle, 131 Wash. 2d 640,
648, 935 P.2d 555 (1997). Thus, unlike in an eminent domain action, where the
specific property interest at issue is known and the existence of a taking is not
disputed, in many inverse condemnation actions the parties dispute not only the
extent of liability but also the amount of the property interest taken or damaged
and the value thereof. When the jury finds that only a partial taking has occurred,
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No. 77935-4-1/6
the condemnee receives damages for the diminished value of the property while
retaining full title and ownership thereof.2 See, e.g., Petersen, 94 Wash. 2d at 481.
The legislature has provided further protection for property owners
asserting or defending condemnation claims. “The legislature has recognized
that awards in eminent domain proceedings, though constitutional, may fall short
of complete compensation because of litigation expenses.” Petersen, 94 Wash. 2d
at 487. To address this shortfall, ROW 8.25.070 provides for the payment of a
condemnee’s attorney fees in eminent domain actions. ROW 8.25.075 provides
similar protections for those pursuing inverse condemnation actions.
A superior court rendering a judgment for the plaintiff awarding
compensation for the taking or damaging of real property for public
use without just compensation having first been made to the owner
shall award or allow to such plaintiff costs including reasonable
attorney fees and reasonable expert witness fees, but only if the
judgment awarded to the plaintiff as a result of trial exceeds by ten
percent or more the highest written offer of settlement submitted by
the acquiring agency to the plaintiff at least thirty days prior to trial.
ROW 8.25.075(3).
“ROW 8.25.075 clearly manifests a legislative intent that if a condemnor
chooses to take property without instituting condemnation proceedings, the
owner shall be reimbursed for his costs of litigation in obtaining his
constitutionally guaranteed just compensation.” Oity of Snohomish v. Joslin, 9
Wash. App. 495, 500, 513 P.2d 293 (1973). Thus, ROW 8.25.075(3) protects
landowners who might otherwise exhaust their resources in litigating a takings
2 The condemnee may not then bring a subsequent claim for damages already
compensated, but may commence a new action should government activity lead to a further decline
in the condemnee’s property’s value. Petersen, 94 Wash. 2d at 486.
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No. 77935-4-117
claim by ensuring they are compensated for their attorney fees and costs and, in
this way, vindicating their right to full and fair compensation for their losses.
The requirement that a condemnor pay the condemnee’s attorney fees
may be avoided by a showing that the government entity made a qualifying good
faith settlement offer, as defined in the statute. Once the government entity has
shown that it has made such an offer, the condemnee must then show that the
offer was insufficient, as defined in the statute. Thus, our first inquiry is whether
the government made a qualifying settlement offer, i.e., one that allows for
application of the statutorily required comparison. Our second inquiry involves
conducting that comparison.
Ill
“Settlement agreements are governed by contract principles subject to
judicial interpretation in light of the language used and the circumstances
surrounding their making.” Sherrod v. Kidd, 138 Wash. App. 73, 75, 155 P.3d 976
(2007) (quoting Stottlemyre v. Reed, 35 Wash. App. 169, 171, 665 P.2d 1383
(1983)). Accordingly, a settlement offer must conform to the requirements of any
other contract offer and must be analyzed as such.
“Since only in very exceptional circumstances can informal contracts be
created except by a manifestation of assent of the parties to the terms of the
promise and to the consideration for it, it is ordinarily necessary for one of the
parties to propose to the other the promise which he will make for a certain
consideration, or to state the consideration which he will give for a certain
promise. That is, a proposal or offer is necessary.” Wetherbee v. Gary, 62
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No. 77935-4-1/8
Wn.2d 123, 127-28, 381 P.2d 237 (1963) (quoting 1 WILLIsT0N, CONTRACTS § 23
(3d ed. 1957)). In other words, an offer must be sufficient to allow, if accepted,
enforcement of promises by both parties set forth therein—it must contain a
specific description of the consideration to be given by both parties.
The County’s settlement offer did contain a specific description of both
parties’ consideration—it provided for payment of $552,000 to Kay in exchange
for the extinguishment of her inverse condemnation claim and the conveyance of
title to the property at issue to the County. We analyze these elements of
consideration as part of the County’s offer when comparing it to the final
judgment.
IV
It is the meaning of the statute as it applies to the County’s offer that is at
the heart of the parties’ dispute. The County urges that the statute is
unambiguous and that, per a plain language reading, its settlement offer was
sufficient to excuse payment of attorney fees. Kay urges that the statute is
ambiguous, and that the intent of the legislature was to require comparison of the
value of the settlement offer against the value of the final judgment.
A
The County advocates a plain language reading of the statute.
Unambiguous language is given its plain meaning without adding language to the
statute. Cerrillo v. Esparza, 158 Wash. 2d 194, 201, 142 P.3d 155 (2006). “Courts
may not read into a statute matters that are not in it and may not create
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No. 77935-4-1/9
legislation under the guise of interpreting a statute.” Kilian v. Atkinson, 147
Wash. 2d 16, 21, 50 P.3d 638 (2002) (footnote omitted).
The County contends that its offer was sufficient to meet the requirements
of RCW 8.25.075(3) because the amount of money awarded by the final
judgment was substantially less than its settlement offer—the County offered to
pay Kay $552,000 before trial, and Kay was awarded damages of only
$96,221.37. The County is wrong.
In arguing as it does, the County misapprehends its own offer. The
County did not offer to pay Kay $552,000 in exchange for extinguishment of her
cause of action. Rather, the County offered to pay $552,000 to Kay in exchange
for the dismissal of her claims against the County and conveyance of fee title to
her property to the County. But the final judgment did not award the County title
to Kay’s property. It only awarded the County extinguishment of Kay’s claims
upon payment of the amount due.
The plain text of RCW 8.25.075(3) requires that a private landowner be
awarded attorney fees in an inverse condemnation action except in the event that
the condemnor can show that the final judgment after trial did not exceed, by 10
percent or more, the highest written offer submitted by the condemnor to the
condemnee at least 30 days before trial.
When we view the statute according to its plain words, it is clear that the
County did not tender a qualifying offer. The final judgment was not comparable
to the highest written offer made by the County prior to trial. The final judgment
provided Kay $65,000 in inverse condemnation damages, plus prejudgment
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No. 77935-4-1/10
interest from the date the damage commenced to the date of judgment—a total
of $96,221.37. This judgment allowed Kay to retain title to her property.
The County’s offer did not include any payment for damages. Instead, it
required Kay to sell her property to the County, thereby extinguishing her
condemnation claim. This was an entirely different bargain than that which is
embodied in the judgment. Pursuant to the settlement offer, Kay would have
received $552,000 in exchange for dismissal of the inverse condemnation claim
and transfer of title to her property to the County. Under the final judgment, she
may continue to live on and own her property and was granted $96,221.37.
The County’s interpretation of RCW 8.25.075(3) is untenable. Its entire
focus is on the amount of money it offered to pay—it ignores the consideration it
demanded in return. Indeed, the County glosses over the clear difference
between an offer that requires the conveyance of title to real property and one
that does not. Under the plain language construction of the statute that it urges
we adopt, its settlement offer cannot be compared to the final judgment. Thus, it
failed to make a qualifying offer.
As stated above, a valid offer requires a clear description of the
consideration to be furnished by both parties should it be accepted. Wetherbee,
62 Wash. 2d at 127-28. An offer to give a sum of money with nothing expected in
return is simply a gratuitous promise and is too indefinite to be enforced.
Huberdeau v. Desmarais, 79 Wash. 2d 432, 439-40, 486 P.2d 1074 (1971). By
contrast, a contract sets forth terms that, if accepted, may be readily enforced.
Were the County’s written settlement offer to Kay accepted, the County would be
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No. 77935-4-Ill 1
able to seek specific performance to require Kay to convey title, while Kay would
be able to seek a monetary remedy if the County failed to tender payment. The
final judgment, however, differed materially from the terms of the offer, as it
awarded Kay damages without requiring the conveyance of title to the land.
B
For her part, Kay avers that the wording of the statute is ambiguous, and
that the intent of the legislature was to require comparison of the value of the
settlement offer against the value of the final judgment. To discern this intent,
Kay directs us to the statutory scheme within which RCW 8.25.075 exists. ‘The
principle of reading statutes in pan materia applies where statutes relate to the
same subject matter.” Hallauer v. Spectrum Props., Inc., 143 Wash. 2d 126, 146,
18 P.3d 540 (2001). “In ascertaining legislative purpose, statutes which stand in
pan materia are to be read together as constituting a unified whole, to the end
that a harmonious, total statutory scheme evolves which maintains the integrity of
the respective statutes.” State v. Wright, 84 Wash. 2d 645, 650, 529 P.2d 453
(1974). In conducting our analysis herein, we look to RCW 8.25.075’s similarly
worded companion statute, RCW 8.25.070. Both statutes cover the award of
attorney fees in condemnation actions.
‘The purpose of RCW 8.25.070 is to encourage settlement before trial and
ensure that each side makes a good faith effort to settle.” Olympic Pipe Line Co.
v. Thoeny, 124 Wash. App. 381, 399, 101 P.3d 430 (2004).~ It is a reasonable
~ RCW 8.25.075 was enacted, and RCW 8.25.070 amended, as part of the Relocation
Assistance and Real Property Acquisition Policy Act, Laws of 1971, 1st Ex. Sess., ch. 240. This
act was passed so that state and local governments could obtain financial aid in acquiring real
property by meeting the requirements of the federal Uniform Relocation Assistance and Real
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No. 77935-4-1/12
inference that the legislature’s intent was to ensure just compensation for
property owners in inverse condemnation actions and to encourage good faith
settlement offers. Joslin, 9 Wash. App. at 500. Both section .070 and section .075
do this by excusing public entities from paying attorney fees when a final
judgment’s value does not exceed by 10 percent the value of the highest written
settlement offer.
The value of the final judgment herein is readily ascertainable: Kay was
allowed to retain title to her property, which the jury found to have an impaired
value of $585,000, and received $65,000 in damages to cover the difference
between the impaired value and that which the jury found would be the property’s
unimpaired value: $650,000. In addition, she was awarded prejudgment interest
in the amount of $31 221 ~37~4 Adding this to the $585,000 value of the property
and the $65,000 she received in damages, the value to Kay of the final judgment
on her inverse condemnation claim was $681,221.37.
The value to Kay of the settlement offer was substantially less. Had Kay
accepted the settlement offer, she would have received $552,000. But her claims
would have been extinguished and she would have had to convey her property to
the County. Contrasted with the $681 221.37 value of the final judgment, it is
plain that the value of the judgment ($681 221 .37) exceeds by well over 10
percent the value of the County’s highest written settlement offer ($552,000).
Property Acquistion Policies Act of 1970, 42 U.S.C. §~ 4654, 4655, that litigation expenses,
including attorney fees, be paid in certain cases.
~ Prejudgment interest may be awarded to successful inverse condemnation plaintiffs and,
when it is, becomes part of the judgment awarded as a result of trial. Sintra, Inc., 131 Wash. 2d at
656-57; accord Costich, 152 Wash. 2d at 474-75.
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No. 77935-4-1113
The divergence between what would have been required under a settlement as
proposed by the County and the final judgment highlights the folly of construing
the offer merely as that which the County promised to give while ignoring that
which it demanded in return.
Accepting the County’s reading of the statute would produce unjust results
in future litigation. Any inverse condemnee, bringing a suit to recover the
difference between the impaired and unimpaired value of his or her property,
would be denied an award of attorney fees so long as the condemnor made an
offer to purchase the entire property in an amount greater than the damages
being sought. This would place condemnees in a position of either accepting an
offer to sell their property for less than its fair market value or continuing to
litigate the inverse condemnation action without hope of recovering necessary
litigation expenses. Such a state of affairs would essentially put an end to the
government’s risk in such a lawsuit, frustrating the legislature’s goal. Courts are
not required to read statutes in a manner that would lead to absurd or unjust
results. Univ. of Wash. v. City of Seattle, 188 Wash. 2d 823, 834, 399 P.3d 519
(2017).
Regardless of whether RCW 8.25.075 is viewed as ambiguous or
unambiguous, the County loses. Accordingly, we reverse and remand to the trial
court, with instructions to enter an appropriate award of attorney fees to Kay. As
Kay prevails in this appeal, we also exercise our discretion to grant her
reasonable attorney fees on appeal pursuant to RAP 18.1. Upon compliance
with that rule, a commissioner of our court will enter an appropriate order.
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Reversed and remanded.
WE CONCUR:
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