Kenmore MHP LLC v. City of Kenmore
| Decision Date | 08 February 2022 |
| Docket Number | 54915-8-II |
| Citation | 504 P.3d 237 |
| Parties | KENMORE MHP LLC; Jim Perkins ; and Kenmore Village MHP, LLC, Respondents, v. CITY OF KENMORE, Appellant, Environmental Land Use Hearings Office; Growth Management Hearings Board for the Central Puget Sound Region, Respondents below. |
| Court | Washington Court of Appeals |
Curtis J. Chambers, Dawn Findlay Reitan, Inslee Best Doezie & Ryder P.S., 10900 Ne 4th St. Ste. 1500, Bellevue, WA, 98004-8345, Jeffrey Scott Myers, Law Lyman Daniel Kamerrer et al., P.O. Box 11880, 2674 R. W. Johnson Blvd. Sw., Olympia, WA, 98508-1880, for Appellant.
Lisa M. Petersen, WA State Attorney General's Office (LAL), 800 5th Ave. Ste. 2000, Seattle, WA, 98104-3188, for Other Parties.
PUBLISHED OPINION
¶1 The City of Kenmore (the City) appeals the superior court's order reversing the Growth Management Hearings Board's order for summary judgment that dismissed Kenmore MHP LLC, Jim Perkins, and Kenmore Village MHP, LLC's (collectively "MHP") petition for review of a city ordinance. MHP filed its petition for review within the statutory time limit but served the City after filing the petition with the Board, in violation of WAC 242-03-230. The Board ruled that MHP's failure to comply with WAC 242-03-230 deprived the Board of jurisdiction and did not substantially comply with service requirements. The Board also summarily denied MHP's request to amend its petition to add legal authorities. The superior court reversed and remanded to the Board, ruling that the Board's decision was arbitrary and capricious.
¶2 We hold that (1) we defer to the Board's interpretation of substantial compliance under WAC 242-03-230, (2) MHP did not substantially comply under the Board's interpretation because it had no justifiable excuse for late service, and (3) the Board's dismissal of MHP's petition was not arbitrary and capricious. Thus, we reverse the superior court and affirm the Board.
¶3 On April 15, 2019, the City implemented Ordinance No. 19-0481, which amended the municipal code and updated the City's zoning map to rezone certain areas as a "manufactured housing community" zoning district. Administrative Record (AR) at 25-27. The ordinance stated, among other things, that manufactured homes and mobile homes were "allowed only in manufactured housing communities." AR at 32. The ordinance was published on April 18.
¶4 MHP filed a petition for review with the Board on Friday, June 14. That same day, MHP attempted to serve the petition on the City via legal messenger. Apparently due to traffic, the legal messenger was unable to serve the City on June 14 before the close of business. The legal messenger served the petition on the City on the following business day, Monday, June 17. The City had no notice that the petition had been filed until June 17.
¶5 On July 17, MHP moved to amend its petition, requesting to add citations to two statutes in a single paragraph of its petition for review. The Board denied MHP's motion to amend, but made no written record of its analysis and concluded only, "This motion is denied." AR at 124.
¶6 On July 29, the City filed a motion for summary judgment. The City argued that MHP failed to comply with the Board's service requirements and that the Board should therefore dismiss MHP's petition. The City based this argument on WAC 242-03-230(2)(a), which requires a petitioner to the Board to serve "the respondent(s) on or before the date filed with the board." The City further argued that the Board should apply a test for substantial compliance that the Board had previously applied in its 2012 order on motions in the case of Your Snoqualmie Valley v. City of Snoqualmie , No. 11-3-0012 (Wash. Growth Mgmt. Hr'gs Bd. March 8, 2012). The City argued that under that test, MHP failed to comply with the mandated service requirements because MHP had no justifiable excuse for improper service and that the Board lacked jurisdiction to rule on the merits.
¶7 In opposition to the City's motion, MHP argued that it substantially complied with the service requirements of RCW 36.70A.290(2) of the Growth Management Act (GMA), which places a 60 day statute of limitation on service of a petition for review. MHP also argued that WAC 242-03-230(2)(a) does not create a jurisdictional issue, and if it does, then the regulation impermissibly conflicts with the statute of limitations by "shorten[ing] the statutory 60 day statute of limitations."1 AR at 269. In the alternative, MHP argued that the Board had no authority to adopt WAC 242-03-230 because that regulation impermissibly conflicts with the statute of limitations. MHP also noted that dismissing its petition would result in severe prejudice to its cause whereas the City suffered no prejudice by receiving service on the Monday following a Friday filing.
¶8 In a divided decision, the Board granted the City's motion to dismiss the petition on summary judgment on August 29. The Board ruled that it had the statutory authority to create a service deadline by regulation. The Board also applied the test for substantial compliance it had referred to in Your Snoqualmie Valley . This test included four parts: (1) The party that had to be served personally had actual notice, (2) the respondent would suffer no prejudice from the defect in service, (3) there is a justifiable excuse for the failure to serve properly, and (4) the petitioner would be severely prejudiced if its Petition were dismissed. The Board then ruled that MHP did not substantially comply with WAC 242-03-230(2)(a) because it had "no justifiable excuse" for improper service. Clerk's Papers (CP) at 19. The Board concluded, "The service provisions in the Board's rules are jurisdictional, not just procedural, and absent effective service, the Board has no authority and the case must be dismissed."2 CP at 22.
¶9 In September 2019, MHP petitioned for review with the superior court. MHP argued that it was prejudiced by the Board's decision to dismiss, that the Board erroneously interpreted or applied the law when it applied the Your Snoqualmie Valley test, and that the Board's decisions to dismiss and deny MHP's motion to amend its petition were arbitrary and capricious.
¶10 In a July 2020 "Ruling on Merits," the superior court reversed and remanded the Board's dismissal. CP at 427. The court assumed without deciding that the Board properly promulgated WAC 242-03-240 and adopted the Your Snoqualmie Valley substantial compliance test. However, the court reversed the Board's decision because of the prejudice to MHP, and the lack of prejudice to the City. The court specifically ruled that the Board's decision that MHP did not substantially comply was arbitrary and capricious. The court also ruled that the record was insufficient for it to determine whether the Board properly denied MHP's motion to amend and ordered the Board to articulate its reasoning on remand.
¶11 The City appeals the superior court's ruling on the merits.
¶12 The City argues that the Board's dismissal of MHP's petition was not arbitrary and capricious. The City argues that the Board has the authority to interpret its regulation and adopt its own legal test for whether a party substantially complies with its regulation. The City then argues that we should give deference to the Board's interpretation of its own regulation and hold that the Board properly acted within its discretion when it dismissed MHP's petition for failure to substantially comply with WAC 242-03-230.
¶13 MHP argues that the Board improperly determined that the service requirement in WAC 242-03-230 was a jurisdictional requirement. MHP further argues that substantial compliance should be determined by Washington case law and not a different standard adopted by the board. Thus, although MHP admits that it did not strictly comply with the service requirements in WAC 242-03-230, it argues that it substantially complied with the service requirements because it strictly complied with the statute of limitations and did not frustrate the purpose of the statute.
¶14 Although we agree with MHP that WAC 242-03-230 creates a procedural requirement and not a jurisdictional one, we also defer to the Board's interpretation of its own regulation and application of its own test for substantial compliance. Accordingly, we agree with the City that the Board properly dismissed MHP's petition.
¶15 The Administrative Procedures Act (APA) governs our review of the Board's decisions. RCW 34.05.570(3) ; Clark County v. Growth Mgmt. Hr'gs Bd., 10 Wash. App. 2d 84, 100-01, 448 P.3d 81 (2019) review denied sub nom. Clark County Citizens United, Inc. v. Growth Mgmt. Hr'gs Bd. , 194 Wash.2d 1021, 455 P.3d 130 (Table) (2020). We review the record before the Board and sit in the same position as the superior court. Concrete Nor'West v. W. Wash. Growth Mgmt. Hr'gs Bd. , 185 Wash. App. 745, 751, 342 P.3d 351 (2015). We review the Board's legal conclusions de novo but grant "substantial weight to the Board's interpretation of the GMA." Clark County , 10 Wash. App. 2d at 98-99, 448 P.3d 81 (quoting Whatcom County v. W. Wash. Growth Mgmt. Hr'gs Bd. , 186 Wash.2d 648, 667, 381 P.3d 1 (2016) ); see also chapter 36.70A RCW.
¶16 " ‘An agency acting within the ambit of its administrative functions normally is best qualified to interpret its own rules, and its interpretation is entitled to considerable deference by the courts.’ " D.W. Close Co. v. Dep't of Lab. & Indus. , 143 Wash. App. 118, 129, 177 P.3d 143 (2008) (quoting Pac. Wire Works v. Dep't of Labor & Indus. , 49 Wash. App. 229, 236, 742 P.2d 168 (1987) ). The party challenging the Board's decision has the burden of establishing that the decision is improper. Clark County , 10 Wash. App. 2d at 99, 448 P.3d 81. Because MHP is challenging the Board's decision, it has the burden of persuasion here.
¶17...
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