Hansen v. Moses Lake Irrigation & Rehab. Dist.

• Decision Date: 22 September 2022
• Docket Number: 37698-2-III
• Citation: Hansen v. Moses Lake Irrigation & Rehab. Dist., 37698-2-III (Wash. App. Sep 22, 2022)
• Parties: MICHAEL "MICK" HANSEN, Respondent/Cross Appellant, v. MOSES LAKE IRRIGATION AND REHABILITATION DISTRICT, a Washington Municipal Corporation, and its Directors RON COVEY, MARY PERRY, KEN KERNAN, JEFF FOSTER AND BILL BAILEY, and each of them; and GRANT COUNTY, a Washington political subdivision and LAURE GRAMMER, the Grant County Assessor, DAVE FIREBAUTH, the Grant County Auditor, and DARRYL PHEASANT, the Grant County Treasurer, Appellants/Cross Respondents.
• Court: Washington Court of Appeals

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MICHAEL "MICK" HANSEN, Respondent/Cross Appellant, v. MOSES LAKE IRRIGATION AND REHABILITATION DISTRICT, a Washington Municipal Corporation, and its Directors RON COVEY, MARY PERRY, KEN KERNAN, JEFF FOSTER AND BILL BAILEY, and each of them; and GRANT COUNTY, a Washington political subdivision and LAURE GRAMMER, the Grant County Assessor, DAVE FIREBAUTH, the Grant County Auditor, and DARRYL PHEASANT, the Grant County Treasurer, Appellants/Cross Respondents.

No. 37698-2-III

Court of Appeals of Washington, Division 3

September 22, 2022

UNPUBLISHED OPINION

Siddoway, C.J.

The Moses Lake Irrigation District was created almost a century ago to develop and maintain a dam on Moses Lake to store water for irrigation purposes. As land within the District's boundaries was increasingly put to residential and other nonagricultural uses, demand for irrigation waned. Concerned about losing water rights and the lake's recreational and property enhancement values, local residents in the early 1960s supported legislation authorizing the creation of "irrigation and rehabilitation" districts. Such districts are authorized, in addition to irrigation purposes, to rehabilitate or improve inland lakes and shorelines for the health, recreation and welfare of area residents. The existing irrigation district became the Moses Lake Irrigation and Rehabilitation District (District), and remains the only district of that type in the state.

Irrigation and rehabilitation districts were authorized to specially assess land located in the district in amounts up to $1.00 per $1,000.00 of assessed value without securing authorization by a vote of electors, and the District began to rely on that source of revenue. After the legislature reduced the special assessment limit to $0.25 per $1,000.00 of assessed value without elector approval, the District continued its same method and rate of assessment and, when questioned, defended the assessment in excess of the $0.25 per $1,000.00 in assessed value limit as a rate imposed for delivering irrigation services.

Michael "Mick" Hansen brought the action below to challenge the District's assessments and its allocation of voting rights to members. Through a series of summary judgment rulings, he had partial success. The District appeals the trial court's summary judgment rulings that Mr Hansen's challenge to District assessments is not barred by Washington's tax anti-injunction act and that rates it imposed were not "reasonable" rates imposed on persons "for whom district service is made available for irrigation water."

RCW 87.03.445(2). Mr. Hansen cross appeals the trial court's rejection of two of his voting or assessment-related claims and its denial of his request for an award of attorney fees. We affirm.

FACTS AND PROCEDURAL BACKGROUND

In 1928, landowners who described their lands as "susceptible of irrigation" and desired to organize an irrigation district in Grant County, petitioned the board of county commissioners for approval of such a district for "all of the purposes mentioned in Section 7417 of the Supplement to Remington and Ballinger's Code." Clerk's Papers (CP) at 1837. They identified those purposes as

1. For the construction or purchase of works, or parts of same, for the irrigation of lands within the operation of the district[,]

2. The reconstruction, repair, improvement of existing irrigation works[,]

3. The operation or maintenance of existing irrigation works[,]

4. The construction, reconstruction, repair or maintenance of a system of diverting conduits from a natural source of water supply to the point of individual distribution for irrigation purposes[,]

5. The execution and performance of any contract authorized by law with any department of the federal government or of the State of Washington, for reclamation and irrigation purposes[, and]

6. The performance of all things necessary to enable the district to exercise the powers herein granted.

Id. The plan of improvement contemplated was "the construction of a permanent dam at the outlet of Moses Lake for the purpose of catching and holding all of the waters flowing into said Moses Lake." Id. at 1838.

Creation of the Moses Lake Irrigation District was approved, and it obtained a water right that has been certified to be up to 50,000 acre-feet, for the irrigation of 11,213 acres within the district. Laws governing the operation of irrigation districts are now codified at chapter 87.03 RCW. As relevant to this appeal, which involves the authority to raise funds irrigation districts may do so in three ways: they may make assessments "in proportion to the benefits accruing to the lands assessed" under RCW 87.03.240, or "fix reasonable rates or tolls and charges, and collect the same from all persons for whom district service is made available for irrigation water, domestic water, electric power drainage or sewerage, and other purposes," or employ both rates or tolls or charges and assessment. RCW 87.03.445(2).

For decades, the District assessed its landowners based on acreage. Historical records reveal that between 1940 and 1946, the assessments ranged from $0.15 per acre to $1.00 per acre.

The District has never constructed any pumps, canals, or pipelines for delivering irrigation water from Moses Lake to district members. Instead, landowners are responsible for building any system to deliver water to their individual properties, and some members of the District have done so. In this respect, plaintiff Hansen, a landowner in the District and who served for approximately two years as a director, believes it operates differently from other irrigation districts. He contends that other irrigation districts do have water delivery systems. The District does not monitor who is taking water from the lake for irrigation purposes or charge them for taking water. Lake water can be taken by anyone, for free.

In 1961 and 1963, legislation was passed and amended that allowed any irrigation district that had the major portion of an inland navigable body of water within its exterior boundaries, and that had been granted rights to 50,000 acre-feet of water or more, to become an "irrigation and rehabilitation" district. Laws of 1961, ch. 226, §§ 1-8; Laws of 1963, ch. 221, §§ 1-11. The legislation was reportedly sponsored by Mr. Hansen's uncle, Tub Hansen. The District supported the legislation. Its records reflect its concern in 1962 that "'the farmers within the boundaries of the . . . District are presently irrigating only about 3,000 acres of land and some of this land is being converted from farm land to residential and other land uses.'" CP at 1508-09. It recognized a "'real danger of the lake being reduced to an elevation from its present level[,] which would be disadvantageous to the people and property owners of the . . . District,'" given that the lake provided "an abundance of opportunity for recreation associated with water and water sports, all of which has a definite influence on the value of homes and properties with[in] the boundaries of the . . . District." CP at 1509.

The legislation provided that in addition to their irrigation purposes, irrigation and rehabilitation districts could be organized and maintained "to further the recreational potential of the area and to further the rehabilitation or improvement of inland lakes and shore lines . . . to further the health, recreation, and welfare of the residents in the area." Laws of 1963, ch. 221, § 3. It provided that the directors of an irrigation and rehabilitation district, in addition to retaining their authority as directors of an irrigation district, were authorized to "specially assess land located in the district for benefits thereto," providing that such assessment "shall not exceed one mill [$1 per $1,000 of assessed value] upon such assessed valuation without securing authorization by vote of the electors of the district." Laws of 1961, ch. 226, § 8.^[1] The provisions governing irrigation and rehabilitation districts are codified in chapter 87.84 RCW.

With the approval of the Grant County Commissioners, the District became, and it remains, the only irrigation and rehabilitation district in the State of Washington. Following its conversion to an irrigation and rehabilitation district, its directors voted to set the levy at the one mill limit they were authorized to assess without a vote of District electors.

In 1973, the legislature reduced the amount the directors of an irrigation and rehabilitation district can specially assess for recreational and rehabilitation benefits without a vote of the electors. It was reduced to $0.25 per $1,000.00 of assessed value. Laws of 1973, 1st Ex. Sess., ch. 195, § 132. That remains the limit today. RCW 87.84.070. The directors deemed more than that to be needed for District operations and continued to specially assess properties located based on their property (land and improvement) value, without securing approval of the District electors.

In performing audit work in 2012, staff of the state auditor questioned whether it was allowable for the District to assess property owners based on assessed valuation, given RCW 87.03.240's language that assessments "shall be made in proportion to the benefits accruing to the lands assessed." CP at 1462. The District's response, according to audit records, was that "all property owners have the same benefits because each of them have the legal right to request water be provided to them (with the understanding that the cost of infrastructure would be borne by the property owner)," and in the District's view, "all benefits were equal." Id.

Audit staff looked at the issue again in 2013, and one staffer compiled a spreadsheet that identified parcels within the District as commercial,...