Kendall v. Douglas, Grant, Lincoln and Okanogan Counties Public Hosp. Dist. No. 6, 58122-3

Decision Date05 December 1991
Docket NumberNo. 58122-3,58122-3
Citation118 Wn.2d 1,820 P.2d 497
PartiesBernard KENDALL and Margaret Kendall, husband and wife; Lawrence Peterson and Betty Peterson, husband and wife; Robert Osborne and Mary Osborne, husband and wife, Appellants, v. DOUGLAS, GRANT, LINCOLN AND OKANOGAN COUNTIES PUBLIC HOSPITAL DISTRICT NO. 6, Respondent.
CourtWashington Supreme Court

Underwood, Campbell, Brock & Cerutti, P.S., Kenneth D. Carpenter, Davenport, for appellants.

Foster, Pepper & Shefelman, Thomas F. Ahearns, Seattle, Karen J. Boyle, Charlestown, N.H., for respondent.

SMITH, Justice.

This is an appeal by taxpayers on direct review from the Grant County Superior Court challenging the validity of a hospital district formed to take over operation of the Coulee Hospital in Grand Coulee, Washington. Appellants/Cross-Respondents (Appellants) are property owners in the Hartline District of Grant County, one of the counties constituting Hospital District Number 6. Respondent/Cross-Appellant (Respondent) is Grant, Douglas, Lincoln and Okanogan Counties Public Hospital District Number 6. The trial court granted summary judgment in favor of Respondent, dismissing Appellants' action with prejudice. We affirm the trial court.

In July 1990, a petition was filed in the Grant County Auditor's Office requesting formation of a multi-county hospital district. The boundary lines incorporated the counties of Grant, Douglas, Lincoln, Ferry 1 and Okanogan. The county commissioners for each county acted independently on the petition.

On August 2, 1990, the Grant County auditor certified that the minimum required number of Grant County voters had signed the petition, which was then submitted to the Grant County Board of Commissioners pursuant to RCW 70.44, which authorizes public hospital districts. The Commissioners during the following 2 months held several hearings on the proposed hospital district. In addition to testifying at these hearings, certain Hartline residents, including Appellants, expressed dissatisfaction with the proposed boundary lines and requested that they be redrawn. They also filed a petition with the Commissioners. 2

On August 20, 1990, the Grant County Commissioners issued Resolution 90-76-CC, giving notice of a public hearing to be held on September 4, 1990, regarding the petition to form a hospital district. On September 4, 1990, a hearing on the petition was begun in Grand Coulee and continued to September 11, 1990, at the County Commissioners' hearing room in Ephrata. On September 11, 1990, Grant County Commissioners denied Appellants' request to have the boundary lines redrawn, concluding that it was "convenient and just" for the boundary lines to remain as proposed and that it would be submitted to the voters at a general election for approval.

On September 18, 1990, Grant County Commissioners confirmed their earlier decision and on September 20, 1990, enacted County Resolution 90-93-CC, formally defining the area of Grant County to be included within the boundary of the proposed Hospital District and making a finding that the adjusted boundary was "reasonable, just and conducive to the welfare and convenience" of Grant County residents within the proposed hospital district. 3

On September 4, 1990, Lincoln County Commissioners held hearings on the petition. That hearing was continued to September 6, 1990. Two additional hearings were held on September 17, 1990, and September 21, 1990. On September 21, 1990, the Commissioners issued a resolution "establishing and defining the area of the County to be included in the proposed District." The Commissioners found the "boundary lines ... reasonable and just and conducive to the welfare and convenience of the residents of the County living within the proposed District."

On September 4, 1990, Okanogan County Commissioners held a "fact finding public meeting" on the petition and a public hearing on September 10, 1990. On September 21, 1990, in Resolution 76-90, the Commissioners established and defined the area of the County to be included in the proposed District. They also determined that "such boundary lines are reasonable and just and conducive to the welfare and convenience of the residents of the county living within the proposed District."

On September 21, 1990, Douglas County Commissioners issued Resolution C.E. 90-75 establishing and defining the area of the County to be included in the proposed District. They also determined that "such boundary lines are reasonable and just and conducive to the welfare and convenience of the residents of the County living within the proposed District."

With the exception of Okanogan County, each participating county reduced the amount of property originally included in the Hospital District as permitted under RCW 70.44.035. Douglas County reduced the total acres involved by 99.5 percent; Ferry County by 100 percent; Lincoln County by 88 percent; and Grant County by 7 percent. The property included by Douglas County before withdrawal had an assessed valuation of $10,955,926; and after withdrawal, the remaining portion had an assessed valuation of $4,667,488. Ferry County withdrew all of its territory, with an assessed valuation of $5,524,707. The property included by Lincoln County before withdrawal had an assessed valuation of $11,775,820; after withdrawal, the remaining portion had an assessed valuation of $1,396,330. The property included by Grant County before withdrawal had an assessed valuation of $72,456,390. Only a nominal amount was withdrawn. Of that assessed valuation, the Hartline rural areas comprised $33,472,256. The town of Hartline alone comprised $3,139,502 of that assessed valuation. The property included by Okanogan County before withdrawal had an assessed valuation of $17,666,744. With no withdrawals, that remained unchanged. Approximately 271,360 acres of the Okanogan land was Indian trust property, leaving only 30,547 taxable acres of land in Okanogan County.

On November 6, 1990, pursuant to RCW 70.44.040 and RCW Title 54, voters in a general election in Douglas, Grant, Lincoln and Okanogan Counties passed the proposition for formation of Hospital District Number 6 with the redrawn boundaries.

On November 27, 1990, in the Grant County Superior Court, Bernard Kendall and Margaret Kendall, husband and wife; Lawrence Peterson and Betty Peterson, husband and wife; and Robert Osborne and Mary Osborne, husband and wife, (Appellants) filed a complaint for declaratory judgment requesting the court to invalidate the formation of Hospital District Number 6. Appellants are owners of real and personal property in the Hartline and Rural Hartline Precincts of Grant County. Respondent is the Douglas, Grant, Lincoln and Okanogan Counties Public Hospital District Number 6 (Hospital District). Appellants did not name as parties nor serve the municipalities or the commissioners of either county. They named only the Hospital District. Nor did Appellants serve the Attorney General.

Appellants claim they are representative aggrieved taxpayers included in the Grant County area of the Hospital District. Appellants Kendall reside in the rural Hartline precinct with real and personal property within the Hospital District. Appellants Osborne reside in the Hartline precinct and have real property in rural Hartline. Appellants Peterson reside in Lincoln County, but own real property in Grant County within the Hospital District.

On March 22, 1990, the Honorable Charles W. Cone, Grant County Superior Court, entered an order granting summary judgment to the Hospital District and dismissed the action with prejudice. That order upheld creation of the Hospital District. Appellants appealed to the Court of Appeals, Division Three, but on June 12, 1991, we granted the Hospital District's motion to transfer the matter to this court.

Four questions are presented in this case:

1. Whether the trial court erred as a matter of law when it granted summary judgment to the Hospital District;

2. Whether the trial court erred by assuming subject matter jurisdiction under the Uniform Declaratory Judgments Act;

3. Whether the valid creation of a hospital district requires that district boundary lines bear a rational relationship between the tax burden and the geographical area of usage in a multi-county hospital district; and

4. Whether the decision of the Grant County Commissioners not to exclude the property owners in rural Hartline and Hartline precincts was arbitrary and capricious.

1. Summary Judgment

Appellants argue that Respondent Hospital District was not entitled to summary judgment as a matter of law because the trial court's review was limited to the administrative record of the Grant County Commissioners. They assert that pleadings and affidavits presenting material issues of fact indicate that there were actions taken in more than one county, but the administrative record was limited to the actions taken in Grant County; and that the affidavit of Ms. Carol Peterson relating to all issues was excluded from judicial review. 4

Respondent notes that Appellants had requested consideration of the administrative record of only Grant County in the summary judgment proceedings. Respondent notes also that Ms. Peterson did not submit her affidavit until the summary judgment proceedings, long after the Commissioners' boundary decision was made and the Hospital District election was held; and that Appellants did not request relief pursuant to CR 56(f). 5

The moving party in a summary judgment motion must show that judgment should be granted as a matter of law. There must be no genuine issue of fact upon which the trial would depend either in whole or in part. 6 Once the moving party establishes that there is no genuine issue of material fact, the burden shifts to the nonmoving party to establish specific facts which demonstrate the existence of a genuine issue for trial. 7 The trial court should grant a motion for...

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