Abbey Road Group v. City of Bonney Lake

• Decision Date: 08 October 2009
• Docket Number: No. 80878-3.,80878-3.
• Citation: 167 Wn.2d 242,218 P.3d 180
• Court: Washington Supreme Court
• Parties: ABBEY ROAD GROUP, LLC, a Washington limited liability company; Karl J. Thun and Virginia S. Thun, husband and wife; Thomas Pavolka; and Virginia Leslie Revocable Trust; and William and Louise Leslie Family Revocable Trust, Petitioners, v. CITY OF BONNEY LAKE, a Washington municipal corporation, Respondent.

218 P.3d 180

167 Wn.2d 242

ABBEY ROAD GROUP, LLC, a Washington limited liability company; Karl J. Thun and Virginia S. Thun, husband and wife; Thomas Pavolka; and Virginia Leslie Revocable Trust; and William and Louise Leslie Family Revocable Trust, Petitioners, v. CITY OF BONNEY LAKE, a Washington municipal corporation, Respondent.

No. 80878-3.

Supreme Court of Washington, En Banc.

October 8, 2009.

Loren Dee Combs, Gregory Francis Amann, VSI Law Group PLLC, Tacoma, WA, for Petitioners.

Jeffrey Ganson, Dionne & Rorick, Lisa M. Worthington-Brown, Attorney at Law, Seattle, WA, for Respondent.

Milton G. Rowland, Foster Pepper PLLC, Spokane, WA, Jeffrey Scott Myers, Law Lyman Daniel Kamerrer et al., Olympia, WA, Amicus Curiae on behalf of Washington State Association of Municipal Attorneys.

C. JOHNSON, J.

¶ 1 This case asks us to determine whether development rights vest upon filing of a site plan review permit application (site plan application).¹ Under Washington statutory law, development rights vest upon the filing of a complete building permit application, RCW 19.27.095(1).² This case involves the question of whether any common law or constitutional due process principles support a different rule. Abbey Road Group, LLC, filed a site plan application for a multifamily condominium development with the city of Bonney Lake (City). The application was denied based on a later adopted zoning change which prohibited this type of development. Abbey Road challenged the denial, first administratively, then in court. The hearing examiner found that Abbey Road's rights did not vest. The superior court reversed the hearing examiner's decision. The City appealed, and the Court of Appeals reversed and held that filing a building permit application is necessary to vest development rights. We affirm the Court of Appeals.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 Abbey Road proposed a 575-unit condominium project on 36.51 acres within the City. Bonney Lake Municipal Code (BLMC) governs development procedures;³ however, the City has not adopted a vesting ordinance. On June 15, 2005, Abbey Road representatives attended a preapplication meeting with the City. At the meeting, the City distributed a letter generally reviewing the information required for a site development plan application and indicating the land use application fees. Before the hearing examiner there was evidence that City officials had advised Abbey Road orally and in writing that site development review would not vest rights in the existing commercial zoning. Thereafter, Abbey Road embarked on the development process, expending more than $96,500 in the process.⁴ On September 13, 2005, it submitted a site plan application, which is part of a preliminary stage in the development process relative to the building permit application phase. Later that same day, the City passed an ordinance rezoning the subject property to Residential/Conservation District, a zoning category precluding Abbey Road's multifamily development.

¶ 3 In an October 12, 2005, letter, the City Planning Director notified Abbey Road that its project had not vested under the prior ordinance because Abbey Road had not filed a building permit application and that its site plan application had been denied. Abbey Road appealed the director's determination to the hearing examiner. The hearing examiner found the director correctly determined that pursuant to Erickson & Associates, Inc. v. McLerran, 123 Wash.2d 864, 872 P.2d 1090 (1994), an applicant must submit a completed application for a building permit to vest the project. Abbey Road filed a petition under the Land Use Petition Act (LUPA), ch. 36.70C RCW challenging the hearing examiner's determination. The superior court reversed the hearing examiner's decision. That court concluded Abbey Road's development rights vested on September 13, 2005, when it filed a complete site plan application.

¶ 4 The Court of Appeals reversed the superior court and affirmed the hearing examiner's determination that Abbey Road's development rights did not vest absent a building permit application, as required under RCW 19.27.095(1). Further, the Court of Appeals declined to expand the vested rights doctrine under common law principles to recognize vesting upon the filing of a site plan application. The court also concluded that the City's process was not unduly burdensome such that it unconstitutionally frustrates vesting rights, and that its vesting process complied with common law and statutory vesting rights.⁵ Abbey Road petitioned this court, and we accepted review.⁶

ISSUE

¶ 5 Whether in these circumstances the filing of a site plan application vested Abbey Road's development rights?

ANALYSIS

A. Standard of Review

¶ 6 Judicial review of land use decisions proceeds under LUPA. The court may grant relief under LUPA only if the party seeking relief has carried the burden of establishing that one of the following standards is met:

(a) The body or officer that made the land use decision engaged in unlawful procedure or failed to follow a prescribed process, unless the error was harmless;

(b) The land use decision is an erroneous interpretation of the law, after allowing for such deference as is due the construction of a law by a local jurisdiction with expertise;

(c) The land use decision is not supported by evidence that is substantial when viewed in light of the whole record before the court;

(d) The land use decision is a clearly erroneous application of the law to the facts;

(e) The land use decision is outside the authority or jurisdiction of the body or officer making the decision; or

(f) The land use decision violates the constitutional rights of the party seeking relief.

RCW 36.70C.130(1). On appeal, Abbey Road challenged the hearing examiner's decision under (b), (c), (d), and (f), asserting it was an erroneous interpretation of the law, a clearly erroneous application of the law to the facts, and not supported by substantial evidence, and it violated Abbey Road's constitutional rights.

¶ 7 Standards (a), (b), (e), and (f) present questions of law, which we review de novo. Standard (c) concerns a factual determination that we review for substantial evidence. Substantial evidence is evidence that would persuade a fair-minded person of the truth of the statement asserted. Our deferential review requires us to consider all of the evidence and reasonable inferences in the light most favorable to the party who prevailed in the highest forum that exercised fact-finding authority. Moreover, we give due deference to the local authority's construction of the law within its expertise. RCW 36.70C.130(1)(b). Standard (d) requires us to employ the clearly erroneous standard of review. Cingular Wireless, LLC v. Thurston County, 131 Wash.App. 756, 768, 129 P.3d 300 (2006).

B. Background: Vested Rights Doctrine

¶ 8 Our vesting doctrine grew out of case law recognizing that vesting rights is rooted in notions of fundamental fairness. This doctrine reflects the recognition that development rights can represent a valuable and protectable property interest. Erickson, 123 Wash.2d at 870, 872 P.2d 1090.

¶ 9 Washington's vested rights doctrine, as it was originally judicially recognized, entitles developers to have a land development proposal processed under the regulations in effect at the time a complete building permit application is filed, regardless of subsequent changes in zoning or other land use regulations. Hull v. Hunt, 53 Wash.2d 125, 130, 331 P.2d 856 (1958).

¶ 10 Washington's rule is the minority rule, and it offers more protection of development rights than the rule generally applied in other jurisdictions. The majority rule provides that development is not immune from subsequently adopted regulations until a building permit has been obtained and substantial development has occurred in reliance on the permit. Our cases rejected this reliance-based rule, instead embracing a vesting principle which places greater emphasis on certainty and predictability in land use regulations. By promoting a date certain vesting point, our doctrine ensures that "new land-use ordinances do not unduly oppress development rights, thereby denying a property owner's right to due process under the law." Valley View Industrial Park v. City of Redmond, 107 Wash.2d 621, 637, 733 P.2d 182 (1987). Our vested rights cases thus recognize a "date certain" standard that satisfies due process requirements.

¶ 11 In 1987, the legislature codified these judicially recognized principles in RCW 19.27.095(1). Laws of 1987, ch. 104, § 1. RCW 19.27.095(1) reads:

A valid and fully complete building permit application for a structure, that is permitted under the zoning or other land use control ordinances in effect on the date of the application shall be considered under the building permit ordinance in effect at the time of application, and the zoning or other land use control ordinances in effect on the date of application. The goal of the statute is to strike a balance between the public's interest in controlling development and the developers' interest in being able to plan their conduct with reasonable certainty. Development interests can often come at a cost to public interest. The practical effect of recognizing a vested right is to potentially sanction a new nonconforming use. "A proposed development which does not conform to newly adopted laws is, by definition, inimical to the public interest embodied in those laws." Erickson, 123 Wash.2d at 873-74, 872 P.2d 1090. If a vested right is too easily granted, the public interest could be subverted. Erickson, 123 Wash.2d at 874, 872 P.2d 1090.

C. Application of Doctrine

¶ 12 We have previously resolved many of the arguments in this case in Erickson, which involved a challenge to the constitutionality of a Seattle ordinance setting the vesting date either when a building permit application is filed or a master use permit (MUP) is issued.⁷...