Htk Management, L.L.C. v. Rokan Partners

• Decision Date: 23 July 2007
• Docket Number: No. 58782-0-I.,No. 58113-9-I.
• Citation: Htk Management, L.L.C. v. Rokan Partners, 162 P.3d 1147, 139 Wn. App. 772 (Wash. App. 2007)
• Court: Washington Court of Appeals
• Parties: In the Matter of the Petition of the Seattle Popular Monorail Authority, A City Transportation Authority, to acquire by Condemnation Certain Real Property for Public Use as Authorized by Resolution No. 04-16. HTK MANAGEMENT, L.L.C. and Seattle Popular Monorail Project, Appellants, v. ROKAN PARTNERS and AMPCO Systems Parking, Respondents.

162 P.3d 1147

139 Wn. App. 772

In the Matter of the Petition of the Seattle Popular Monorail Authority, A City Transportation Authority, to acquire by Condemnation Certain Real Property for Public Use as Authorized by Resolution No. 04-16 HTK MANAGEMENT, L.L.C. and Seattle Popular Monorail Project, Appellants, v.ROKAN PARTNERS and AMPCO Systems Parking, Respondents.

No. 58113-9-I.

No. 58782-0-I.

Court of Appeals of Washington, Division 1.

July 23, 2007.

George Kresovich, Timothy Dwight Benedict, Hillis Clark Martin & Peterson, for HTK Management, L.L.C.

P. Stephen DiJulio, Sharon Elizabeth Cates, Foster Pepper PLLC, Seattle, for Seattle Popular Monorail Project.

Richard Carl Yarmuth, Jordan Gross, Yarmuth Wilsdon Calfo PLLC, Seattle, for Rokan Partners.

Paul Arley Harrel, Daniel W. Ferm, Megan L. Pedersen, Williams Kastner & Gibbs PLLC, Seattle, WA, for Ampco Systems Parking.

John R. Zeldenrust, Maragaret A. Pahl, Office of the Pros.Atty., Seattle, for King County Finance.

GROSSE, J.

¶ 1 The power of eminent domain is an inherent power of the state and redelegations of that power to private parties are invalid.Here, the Seattle Monorail Project agreed to assign its rights in an uncompleted condemnation proceeding to a private party.Because the Seattle Monorail Project did not have the power to make such an assignment, and because the Seattle Monorail Project's actions evidenced its intent to abandon the condemnation proceedings, we affirm the trial court on this issue.

FACTS

¶ 2 In April 2004, the Seattle Popular Monorail Authority, a/k/a Seattle Monorail Project (SMP), filed a petition to condemn property owned by HTK Management, L.L.C.(HTK).The subject property contains a parking garage.Rokan Partners(Rokan) holds a long-term lease on the property and AMPCO System Parking (AMPCO) operates the garage as a sub-lessee of Rokan.HTK challenged the trial court's finding of public use to the Supreme Court.

¶ 3The parties reached a mediated settlement agreement contingent upon the outcome of the Supreme Court case.The settlement agreement called for the entry of a stipulated judgment if SMP prevailed in the suit.The stipulated judgment called for SMP to take title of the property through condemnation in return for a $10,400,000 just compensation award, inclusive of all fees and costs.

¶ 4 On October 20, 2005, the Supreme Court in HTK Management, L.L.C. v. Seattle Popular Monorail Authority¹ affirmed the trial court's finding of public use and necessity.By that time, public concern had arisen over the financial viability to the monorail project.SMP placed a modified monorail proposal before voters on November 8, 2005.The voters rejected the proposal, effectively terminating the project for which the subject property was to be acquired.On November 9, 2005, the SMP Board of Directors passed a resolution authorizing steps to terminate SMP.On November 16, 2005, the Supreme Court issued its mandate.

¶ 5 In light of SMP's changed fortunes, negotiations were conducted between the parties to arrive at another settlement.In December 2005, the SMP Board of Directors approved a settlement between HTK and SMP where SMP assigned its rights in the stipulated judgment to HTK.In return, HTK waived any claims that it might have against SMP and indemnified and held SMP harmless from any other claims arising from this action.When the stipulated judgment was presented for entry, Rokan and AMPCO filed motions to block its entry.

¶ 6The trial court found in favor of Rokan and AMPCO.Specifically, the trial court concluded that SMP had abandoned the condemnation proceedings when it agreed to assign its rights to HTK under the stipulated judgment.The court dismissed the condemnation action and vacated the stipulated judgment.Furthermore, the trial court concluded that because SMP abandoned the condemnation, Rokan and AMPCO were entitled to costs and fees under RCW 8.25.075(1)(b).

¶ 7 At a subsequent hearing, Rokan and AMPCO requested costs and fees.AMPCO requested a total award of $311,780.97 and Rokan asked for $295,724.20.HTK and SMP opposed the requested fees.The trial court awarded AMPCO $247,609 and Rokan $194,170.

¶ 8 HTK and SMP appeal the trial court's decisions vacating the stipulated judgment and awarding Rokan and AMPCO fees.Rokan cross-appeals the trial court's decision awarding it less than the full amount of its requested fees.AMPCO does not cross-appeal the decision to award it less than the full amount of its requested fees, but asks that its fee award be affirmed.

ANALYSIS

¶ 9This case presents the issue of whether a public entity's agreement to assign its rights as a condemnor to a private party under an uncompleted eminent domain proceeding constitutes an abandonment of the condemnation by the public entity.The trial court concluded that SMP lacked the power to assign its rights as condemnor to HTK.Furthermore, SMP had abandoned the condemnation proceedings when it agreed to assign its rights to HTK under the stipulated judgment.For the reasons stated below, we agree with the trial court.

¶ 10"The power of eminent domain is an attribute of sovereignty; it is an inherent power of the state."²The limits of this power are set out in the Washington State Constitution article I, section 16, which states:

Private property shall not be taken for private use, except for private ways of necessity, and for drains, flumes, or ditches on or across the lands of others for agricultural, domestic, or sanitary purposes.No private property shall be taken or damages for public or private use without just compensation having been first made, or paid into court for the owner, and no right-of-way shall be appropriated to the use of any corporation other than municipal until full compensation therefor be first made in money, or ascertained and paid into court for the owner, irrespective of any benefit from any improvement proposed by such corporation, which compensation shall be ascertained by a jury, unless a jury be waived, as in other civil cases in courts of record, in the manner prescribed by law.Whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such, without regard to any legislative assertion that the use is public: Provided, that the taking of private property by the state for land reclamation and settlement purposes is hereby declared to be for public use.

¶ 11 As with what happened in this case, the statelegislature may expressly delegate its power of eminent domain to a city transportation authority.³Such legislative delegations are strictly construed, and thus, redelegations of eminent domain powers are generally held to be invalid.⁴Here, SMP assigned its rights in an uncompleted condemnation proceeding to a private party, HTK.SMP lacked the authority to make such an assignment.The trial court was correct.

¶ 12 Moreover, the trial court correctly concluded that SMP's approval of the assignment evidenced its intent to abandon the condemnation.The elements of abandonment of a condemnation proceeding are set forth in Nichols on Eminent Domain:⁵

Abandonment has two elements: the intent to abandon and the performance of an external act giving effect to the intent.Condemnation may be abandoned by the passage of a resolution or the repeal of the initial ordinance that permitted the commencement of the condemnation action.The intent necessary for an abandonment may be shown by actions, conduct, or declarations.

SMP's intent to abandon the condemnation is expressed in its resolution approving the assignment.By its own words, SMP approved the assignment because it "would permit the owner of that property to keep the property while at the same time protecting the Seattle Monorail Project and its taxpayers from any further liability, cost or expense related to the acquisition of that property."⁶If condemnation means anything it is that the governmental entity actually takes privately owned property and assigns it to public use.Here, SMP by its own admission did not intend to take the property at all, but instead intended to allow HTK (as SMP's assignee) to remain the private owner of the property.It follows that SMP's approval of the assignment agreement by resolution was the external act demonstrating that SMP did not intend to take the property and assign it to public use.

¶ 13 HTK argues that the basis for the trial court's ruling was CR60(b)(11).Rokan's motion cited as authority CR 60(1), (3), (6), and (11), while AMPCO's motion cited CR 60(3) and (11) as grounds for relief.The trial court's order does not state which rule it applied.CR60(b)(11) states, "On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for . . . [a]ny other reason justifying relief from the operation of the judgment."⁷HTK argues that this rule is primarily equitable in nature, that the trial court failed to balance the equities in providing relief under this rule, and if the equities are considered they favor HTK and the entry of the stipulated judgment.Essentially, HTK argues that it was misled by Rokan and AMPCO into thinking that its deal with SMP would meet with their approval.

¶ 14 However, equity cannot be used to confer upon a city transportation authority like SMP powers that are without legal authorization.⁸Thus, equity cannot save HTK and SMP from the fact that the attempted assignment was not legally permissible, or from the fact that SMP's action in approving the assignment qualifies as an abandonment of the condemnation.Furthermore, the circumstances surrounding this case were highly unusual, and would justify the trial court's use of CR60(b)(11).Thus, the trial court did not abuse its discretion in exercising its powers under CR60(b)...