Lincoln Shiloh Associates, Ltd. v. Mukilteo Water Dist.

• Decision Date: 25 August 1986
• Docket Number: No. 15301-3-I,15301-3-I
• Citation: 724 P.2d 1083,45 Wn.App. 123
• Parties: LINCOLN SHILOH ASSOCIATES, LTD., a Washington partnership, Respondent, v. MUKILTEO WATER DISTRICT, a Washington municipal corporation, Appellant.
• Court: Washington Court of Appeals

Page 123

45 Wn.App. 123

724 P.2d 1083

LINCOLN SHILOH ASSOCIATES, LTD., a Washington partnership, Respondent, v. MUKILTEO WATER DISTRICT, a Washington municipal corporation Appellant.

No. 15301-3-I.

Court of Appeals of Washington Division 1.

Aug. 25, 1986.

Note: Also See 742 P.2d 177.

Michael P. Ruark, Breskin, Robbins & Merkel, Seattle, for Mukilteo water dist.

James J. Ragen, Hillis, Cairncross Clark & Martin P.S., Seattle, for Lincoln Shiloh Associates Ltd.

RINGOLD, Judge.

Lincoln Shiloh Associates Limited (Lincoln) brought an action to recover a general facilities charge assessed against its housing development by the Mukilteo Water District (District). The trial court granted Lincoln judgment based on one of five theories presented at trial. The District appeals. Lincoln assigns error to the trial court's conclusions of law, and all five issues presented to the trial court are therefore reargued on appeal. We reverse.

Lincoln is the owner-developer of a 208-unit apartment complex known as Shiloh Village located in Everett, Washington. ¹ Sometime before October 1980, Lincoln acquired an option on the property upon which it intended to develop Shiloh Village. Lincoln retained an engineering firm to assist in planning the water, sewer, and storm systems for Shiloh Village.

One of the engineers Lincoln hired was informed by the manager of the District that Lincoln would have to pay two charges to connect to the District's water system: (1) a meter connection charge; and (2) an area charge of 4 cents per square foot of the buildings to be constructed. The area charge was also known as a capital improvement fee, as provided for in Water District Resolution A-562 dated July 20, 1977.

This information was conveyed to Lincoln, which used the quoted charges to develop plans for Shiloh Village, determine its economic feasibility, and obtain financing. Lincoln calculated that the area charge would amount to $6,400.

Although Shiloh Village is located inside the boundaries of the District, it is served directly by an Everett water main. In order to bring water from the Everett water main to Shiloh Village, Lincoln had to construct a water main extension. Between October 1980 and January 1981 Lincoln developed detailed plans for the entire water distribution system, including the water main extension. Normally, water provided to Shiloh Village flows through no facilities owned by the District other than the water system constructed by Lincoln.

Before constructing the water system for Shiloh Village, Lincoln applied to Everett for permission to tap into Everett's water main. On January 21, 1981, Lincoln submitted building permit applications to Everett, which were later approved. The same day, Lincoln sent plans for the water system to the District. Lincoln's engineers modified those plans in response to requests by the District.

On February 18, 1981, Lincoln submitted to the District an application for permission to extend the water main. As of that date, Lincoln had paid approximately $19,000 in fees related to the design of the project. On March 13, 1981, the District approved the water system plans and gave permission to construct the water main extension.

Partially in reliance on the charges specified by the District and its permission to construct the water main extension, Lincoln closed the purchase for the Shiloh Village property in late March 1981. In May 1981, Lincoln began construction on the water main extension, which ultimately cost $90,000.

On June 3, 1981, at a public meeting of the District Commissioners, the District adopted Resolution A-717. That resolution created a general facilities charge and increased the charges for connecting to existing facilities. The new connection charge, based on the type and number of dwelling units rather than square footage, applied to all customers connecting to the District water system after June 3, 1981. When applied to Shiloh Village, the general facilities charge imposed a connection fee of $95,680, rather than the $6,400 area charge that applied before June 3, 1981.

On September 15, 1981, Lincoln applied to the District for water and paid under protest the increased charge. Lincoln filed suit on September 15, 1982, alleging five different theories to recover the fees paid. After a bench trial, the trial court concluded that Lincoln's "right to connect to the water system under connection requirements and regulations vested on February 18, 1981, when its application for permission to extend the water main was filed." The trial court awarded Lincoln $89,280, representing the difference between the general facilities charge (GFC) Lincoln paid and the area charge payable on February 18, 1981.

VESTED RIGHTS

Washington has adopted a minority rule governing building permit applications under which an applicant's rights vest at the time of application as long as the application is approved and the project conforms to codes and regulations existing at the time of the application. Mercer Enter. Inc. v. Bremerton, 93 Wash.2d 624, 627, 611 P.2d 1237 (1980); Hull v. Hunt, 53 Wash.2d 125, 130, 331 P.2d 856 (1958). "Under this doctrine, developers who file a timely and complete building permit application obtain a vested right to have their application processed according to the zoning and building ordinances in effect at the time of the application." West Main Assocs. v. Bellevue, 106 Wash.2d 47, 50, 720 P.2d 782 (1986). The District contends that this rule of law should not be extended to govern applications to build a water main extension. The District asserts that it had the absolute discretion to deny Lincoln's application. Because approval of a building permit is ministerial and not discretionary, the District argues that the building permit cases are distinguishable.

The Supreme Court has held:

A vested right, entitled to protection from legislation, must be something more than a mere expectation based upon an anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property, a demand, or a legal exemption from a demand by another.

Godfrey v. State, 84 Wash.2d 959, 963, 530 P.2d 630 (1975). If in compliance with existing codes and ordinances, a building or use permit must issue as a matter of right. State ex rel. Ogden v. Bellevue, 45 Wash.2d 492, 495, 275 P.2d 899 (1954). Thus, in the context of building permits, an owner has more than a "mere expectation" and has a vested right to use the land in accordance with regulations at the time the application is made. State ex rel. Ogden, at 495, 275 P.2d 899. The trial court analogized to this doctrine in determining that Lincoln's right to connect to the water system vested on February 18, 1981, before the GFC went into effect.

The Supreme Court, however, has indicated that the vested rights doctrine does not pertain to plat applications. Norco Constr. Inc. v. King Cy., 97 Wash.2d 680, 684-85, 649 P.2d 103 (1982). In Burley Lagoon Imp. Ass'n v. Pierce Cy., 38 Wash.App. 534, 686 P.2d 503 (1984) review denied 103 Wash.2d 1011 (1985), the court held that the vested rights doctrine applicable to building permits did not govern preliminary site plans filed with a county for approval. The court noted that processing a building permit is a ministerial act, whereas processing a preliminary site plan for approval is a discretionary act. Burley Lagoon Imp. Ass'n, at 540, 686 P.2d 503.

The time the trial court selected to vest Lincoln's rights was inappropriate, because the District could have refused to accept the application when it was made. While there are due process limits on the District's exercise of discretion, these limits do not convert a discretionary act into a ministerial act. Burley Lagoon Imp. Ass'n, at 540, 686 P.2d 503 and see Norco Constr. Inc. Lincoln could not, with a writ of mandamus, force the District to approve the application as an individual may do with a building permit. See State ex rel. Ogden, 45 Wash.2d at 495, 275 P.2d 899.

We also believe it is inappropriate to apply the vesting doctrine to fees. The building permit cases cited by Lincoln give an owner a vested right to build according to regulations which existed at the time of the permit application. Mercer Enter. Inc. Here Lincoln wishes to have the fees frozen at the time of application. Unless by valid contract, a municipal corporation should not be bound to a fee schedule for actions to be performed at a future time. The building permit cases are inapposite.

Lincoln is not being forced to use its land or build differently from that which Lincoln was able to do at the time its plans were approved by the District. Instead, the cost is increased. Lincoln had no more than an expectation that the connecting charges would remain at $6,400. There is no vested right here to the connection fee remaining $6,400. See Godfrey v. State, supra.

APPLICATION OF THE GFC

Lincoln contends that the District's GFC is unreasonable and discriminatory as applied to Shiloh Village. Lincoln argues that Shiloh Village created no additional demand, because the water it received came from Everett. ²

Under Resolution A-717, the District charges customers connecting to the system after June 3, 1981, a GFC to cover the cost of improvements the District intends to construct by 1990. Those customers who had...