City of Seattle v. Blume, 64462-4

CourtUnited States State Supreme Court of Washington
Citation947 P.2d 223,134 Wn.2d 243
Decision Date13 November 1997
Docket NumberNo. 64462-4,64462-4
PartiesThe CITY OF SEATTLE, a municipal corporation, Respondent, v. Bruce BLUME and Ann Stever Blume, husband and wife, and the marital community composed thereof, Petitioners.

Adolph & Bintinger, Robert Adolph, Paul Bintinger, Seattle, for Petitioners.

Mark Sidran, Seattle City Atty., Phillip Brenneman, Marcia M. Nelson, Asst. City Attys., Seattle, for Respondent.

MADSEN, Justice.

Petitioners, Bruce and Ann Stever Blume, filed a counterclaim for damages against the City for intentional interference with a business expectancy for the City's alleged delays in processing their building permit. They appeal a Court of Appeals' decision affirming the trial court's dismissal of their counterclaim. We reverse and remand.

STATEMENT OF THE CASE

In February 1987, Bruce and Ann Stever Blume applied In 1986, the City of Seattle adopted the Neighborhood Commercial Land Use Policies which zoned the site for the proposed University Center Phase II as NC3/85, allowing commercial development to a height of 85 feet and a size of 180,000 square feet. At present, the average time to obtain a permit in Seattle is two and one-half months. In the late 1980's, when the Blumes' project was proposed, permit time was longer, averaging as long as nine months.

to the City of Seattle Department of Construction and Land Use (DCLU) for a Master Use Permit (MUP) to build an office/research facility known as "University Center Phase II" which would be located in Seattle's University District at 4700 Ninth Avenue N.E. Since 1936, the Blume family has maintained control and ownership of the University Center property. The area houses numerous car dealerships and repair facilities, light industrial uses, retail businesses, strip malls, and high-rise condominium and office projects (such as Safeco headquarters). The proposed University Center Phase II site is adjacent to Phase I 1, and houses an existing auto repair shop and a boat and auto sales lot.

In accord with the areas NC3/85 zoning, Phase II was designed as a six-story office/research facility with a maximum height of 82 feet consisting of 116,000 square feet of office/research space and 16,000 square feet of retail space and incorporating 264 on-site parking spaces, most of which would be underground and could also be used as additional parking for the retail Phase I businesses after office hours. In accordance with average permitting processing time, the Blumes estimated that the MUP would be issued in six to nine months, that the building permit would By letter dated April 17, 1987, from Cheryl Waldman of the DCLU, the City notified the Blumes that it was requiring an Environmental Impact Statement (EIS) for the Phase II project, citing transportation concerns. Ms. Waldman indicated concern with cumulative impacts with four other projects. However, Mr. Blume notes that just prior to the submission of the Phase II proposal, a substantially identical project, also with cumulative impacts, was approved with no EIS requirement.

be issued, and that construction would begin in late fall of 1987.

As a prerequisite to submitting the EIS, the Blumes retained the Transpo Group, a transportation planning and traffic engineering consultant, to prepare traffic studies. In February 1987, a scope of work agreement was organized with Chris Larsen of the City. In May 1987, the Blumes approved the scope of work, and the completed traffic analysis was forwarded to the Blumes in August 1987. Thereafter, the Blumes state the City changed its personnel overseeing the traffic study and assigned two new individuals who then materially altered the scope of work previously agreed upon, requiring extensive, timely, and costly pattern studies. Again, the Blumes contend that other projects in the area, approved by the City, were never subjected to such onerous scrutiny. 2

The Blumes' draft EIS was submitted to the City on June 21, 1988. Commenting to the press on the Blumes' submission of the draft EIS, Cheryl Waldman of the DCLU stated in an interview published in the University of Washington Daily on June 21, 1988, that the City would make its decision on the Blumes' MUP by the end of 1988. However, the City did not approve the final EIS until January 1990. The Blumes state there is no evidence of correspondence or other contact by the City with the Blumes' environmental In 1990, the City of Seattle gave the Blumes its draft "Analysis and Decision" regarding the issuance of the Blumes' MUP for Phase II. The City refused to approve the MUP application and set forth numerous requirements to be met before a permit would be issued. Among other things, the City demanded a reduction in the size of the project space to either 49,000 or 89,000 square feet and also required additional parking spaces. The City also insisted on a reduction in the structure from six stories to four stories and the implementation of further traffic mitigation measures. Consequently, the Blumes had to redesign the project.

traffic consultants which might explain why the City took over 19 months to approve the final EIS. The City contends, however, that the Blumes, not the City, were responsible for the delays in completing the draft and final EIS statement.

After the DCLU issued its draft MUP decision, the Blumes allege the City conditioned issuance of the permit on the approval of the two neighborhood groups that opposed the Phase II project. The Blumes contend the DCLU was, in effect, delegating land use decision-making authority impermissibly to these groups. 3 The City states, however, that any negotiations the Blumes carried out with neighborhood groups were wholly voluntary. The Blumes, the City asserts, decided to negotiate with opposing neighborhood groups, which delayed the permitting process, so that those differences could be settled rather than having their disputes resolved in litigation. Throughout the balance of 1990 and 1991, the Blumes engaged in numerous In late 1991 and early 1992, the Blumes submitted compromises to the City of Seattle which included reducing the height of the building to four floors, broadening the footprint of the building, mitigating traffic, including additional parking, etc. The City responded by letter dated May 28 with a list of additional conditions. The Blumes state that in June 1992, after five years and four months of delays and the expenditure of funds in excess of one million dollars and lost business opportunities, that the project was no longer feasible. In a letter dated June 2, 1992, the Blumes formally requested the withdrawal of the Phase II permit application.

meetings with representatives of the opposing neighborhood groups in an effort to meet their demands.

On May 20, 1988, the Blumes executed a loan agreement with the City for $1,300,000 in Community Development Block Grant (CDBG) funds. 4 This action was commenced by the City of Seattle to collect unpaid interest on the 1.3 million dollar loan made to the Blumes. The Blumes paid the principal, but withheld payment of the interest as an offset for the damages they assert they suffered as a result of the City's delays and filed a counterclaim in response to the City's action. They allege the City, by delaying the permitting process, acted in an arbitrary and capricious manner in violation of RCW 64.40. The Blumes also claim the City intentionally interfered with a business expectancy.

The City of Seattle moved to dismiss the Blumes' counterclaims on a motion for summary judgment in Superior Court. The trial court dismissed both claims, finding that the Blumes' decision to take themselves out of the permitting process precluded their tortious interference In an unpublished opinion, the Court of Appeals affirmed, finding that both claims were barred by the 30-day statute of limitations period provided in RCW 64.40.030. The Blumes filed a motion for reconsideration arguing their claim for tortious interference with a business expectancy was not barred by the statute of limitations provision contained in RCW 64.40.030. The Court of Appeals granted in part the motion for reconsideration and changed its opinion, stating in a footnote that even if the 30-day statute of limitations did not apply to the tortious interference claim, it was the Blumes' independent business judgment to withdraw from the permitting process that caused any damages suffered, citing King v. City of Seattle, 84 Wash.2d 239, 525 P.2d 228 (1974). Court of Appeals' Order Granting in Part Motion for Reconsideration and Changing Opinion at 2 (July 23, 1996).

claim and that the RCW 64.40 claim was barred by the statute of limitations.

The Blumes filed a petition for review in this court arguing that the Court of Appeals' decision to bar the tortious interference claim based on RCW 64.40.030 is contrary to this court's decision in Stenberg v. Pacific Power & Light Co., 104 Wash.2d 710, 709 P.2d 793 (1985), and that their decision to withdraw from the permitting process does not preclude the tortious interference claim. This court granted the Blumes' petition for review.

STATUTE OF LIMITATIONS

Petitioners contend that the 30-day statute of limitations provided in RCW 64.40.030 does not apply to their tortious interference claim, which has a three-year statute of limitations. See Stenberg, 104 Wash.2d 710, 709 P.2d 793. The Court of Appeals stated in a footnote that it was unclear whether Petitioners' tortious interference claim was separate from their claim under RCW 64.40.020. Based on the court's belief that the tortious interference claim was part of the claim for damages under RCW 64.40.020, it affirmed the dismissal Contrary to the Court of Appeals' statements, Petitioners' tortious interference claim is separate from their claim for damages pursuant to RCW 64.40.020. Thus, it was erroneous for the court to find...

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