Lutheran Day Care v. Snohomish County

• Decision Date: 14 May 1992
• Docket Number: No. 57610-6
• Citation: Lutheran Day Care v. Snohomish County, 119 Wn.2d 91, 829 P.2d 746 (Wash. 1992)
• Court: Washington Supreme Court
• Parties: LUTHERAN DAY CARE, a nonprofit corporation, Appellant, v. SNOHOMISH COUNTY; the Snohomish County Council; and the Snohomish County Hearing Examiner, Respondents.

Page 91

119 Wn.2d 91

829 P.2d 746

LUTHERAN DAY CARE, a nonprofit corporation, Appellant, v. SNOHOMISH COUNTY; the Snohomish County Council; and the Snohomish County Hearing Examiner, Respondents.

No. 57610-6.

Supreme Court of Washington En Banc.

May 14, 1992.

Reconsideration Denied July 30, 1992.

Bertram & Hyde, P.C., Sally M. Hyde, Edmonds, Bertram & Hyde, P.C., Gregory L. Bertram, Bellevue, for appellant.

Seth R. Dawson, Pros. Atty., and Carol J. Weibel, Deputy Pros. Atty., Everett, for respondents.

BRACHTENBACH, Justice.

This land use case involves the following issues:

(1) Does RCW 64.40.020 abolish municipal quasi-judicial immunity for certain land use decisions as described in that statute? Yes.

(2) Does the doctrine of collateral estoppel apply against the County in this damages action wherein the trial court in a prior hearing held the County's actions to be arbitrary and capricious? Yes.

(3) Does plaintiff have a cause of action under 42 U.S.C. § 1983? Yes.

(4) Does plaintiff have a state tort action for intentional interference with a business expectancy? No.

(5) Is plaintiff entitled to attorney fees under RCW 64.40.020(2) and 42 U.S.C. § 1988? Yes.

This action for damages arises from the protracted efforts of a property owner, Lutheran Day Care (appellant), to obtain a conditional use permit to build a "rest home" on its property. After denial of its first application by the hearing examiner, appellant submitted a second application. After denial of the second application by the hearing examiner, affirmed by the Snohomish County Council, the Snohomish County Superior Court held the denial was erroneous as a matter of law. On appeal, Division One of the Court of Appeals affirmed. Lutheran Day-Care v. Snohomish Cy., noted at 50 Wash.App. 1058 (1988).

Yet another application was then denied by the hearing examiner and, again, the hearing examiner's decision was affirmed by the county council. Appellant then filed a complaint in the Superior Court, naming Snohomish County (County), the Snohomish County Council (county council), and the Snohomish County Hearing Examiner (hearing examiner) as defendants. This complaint stated two causes of action, one requesting the court to issue a writ of certiorari and order requiring that the permit be issued, and the other requesting damages, under RCW Ch. 64.40, as a remedy for the arbitrary and capricious conduct of the hearing examiner and the county council members. The complaint was later amended to include a third cause of action for tortious interference with a business expectancy and a fourth cause of action for violation of civil rights under 42 U.S.C. § 1983.

Judge Thibodeau of the Snohomish County Superior Court issued a writ of certiorari to review the most recent decision not to grant the permit. Judge Kershner heard the case (the second superior court hearing to this point) and held that there was no factual basis for the hearing examiner's conclusions, nor was "there reference to standards, if any, that support the Examiner's decision." Order on Writ of Certiorari, Clerk's Papers of Plaintiff, at 303. The Superior Court therefore remanded the matter to the hearing examiner for detailed findings of fact and identification of the standards being applied. The hearing examiner, without further hearing, filed supplemental findings of fact and conclusions in support of denial.

Upon review of this action, Judge Kershner held

[the] findings and conclusions by the Hearing Examiner constitute wilful and unreasonable action without consideration and in disregard of the relevant facts and circumstances. The denial of the Conditional Use Permit on these grounds is arbitrary, capricious and unlawful.

Clerk's Papers of Plaintiff, at 304. He therefore ordered the immediate issuance of the permit. The County did not appeal this holding and the permit was issued.

Thus, the Superior Court has held relative to the denial of appellant's conditional use permit: (1) that the second denial was erroneous as a matter of law (affirmed by the Court of Appeals), (2) that the third decision of the hearing examiner was without factual basis and without identifiable standards, and (3) that the findings and conclusions ultimately made constituted willful and unreasonable action and thus were arbitrary, capricious and unlawful.

Following Judge Kershner's decision in the certiorari proceeding, defendants moved for summary judgment dismissal of appellant's three remaining causes of action for damages. Appellant also moved for summary judgment, seeking to establish defendants' liability under the second and fourth causes of action (RCW Ch. 64.40; 42 U.S.C. § 1983). Judge Thibodeau granted summary judgment for defendants on all three causes of action. The court held that appellant's causes of action under RCW Ch. 64.40 and for tortious interference must fail because the actions of the hearing examiner and county council in denying the conditional use permit were quasi-judicial and therefore protected by quasi-judicial immunity. Even if they were not, the court concluded, appellant failed to meet the statutory requirements of RCW Ch. 64.40. Further, the court held that, as to the § 1983 claim, appellant "has not shown that the denial [of the permit] was made with 'purposeful discrimination or at least an allegation that the misdeeds were knowing or reckless.' " Clerk's Papers of Plaintiff, at 16.

We accepted certification of the appeal (RCW 2.06.030(d)) and now reverse.

I. RCW 64.40.020

This is an "official capacity" lawsuit. In other words, appellant is suing only the County; the hearing examiner and individual county council members have been named defendants only in their official capacities as representatives of the County. This aspect of the case is important because appellant relies on RCW 64.40.020 for its recovery and that statute only creates liability for an "agency" such as the County. RCW 64.40.020(1), .010(1). The statute does not purport to address the liability of individual governmental officials and we, therefore, do not address any question of the individual officials' liability.

RCW 64.40.020 provides:

(1) Owners of a property interest who have filed an application for a permit have an action for damages to obtain relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority ... Provided, That the action is unlawful or in excess of lawful authority only if the final decision of the agency was made with knowledge of its unlawfulness or that it was in excess of lawful authority, or it should reasonably have been known to have been unlawful or in excess of lawful authority.

(2) The prevailing party in an action brought pursuant to this chapter may be entitled to reasonable costs and attorney's fees.

(3) No cause of action is created for relief from unintentional procedural or ministerial errors of an agency.

(4) Invalidation of any regulation in effect prior to the date an application for a permit is filed with the agency shall not constitute a cause of action under this chapter.

Appellant alleges that the hearing examiner and the county council acted in an "arbitrary, capricious, [and] unlawful" manner when they denied appellant its conditional use permit and that therefore the County, as the relevant "agency", is clearly liable under RCW 64.40.020(1). The trial court, however, concluded that the county council and the hearing examiner were protected by quasi-judicial immunity. It concluded that RCW 64.40.020 did not evidence sufficient legislative intent to change the common law rule of immunity and therefore ruled that the County could not be liable under the statute.

Quasi-judicial immunity attaches to persons or entities who perform functions that are so comparable to those performed by judges that it is felt they should share the judge's absolute immunity while carrying out those functions. See Butz v. Economou, 438 U.S. 478, 512-14, 98 S.Ct. 2894, 2913-15, 57 L.Ed.2d 895 (1978). Thus, quasi-judicial immunity is absolute. Babcock v. State, 116 Wash.2d 596, 606-08, 809 P.2d 143 (1991). It should be made clear, however, that such immunity is not to be confused with absolute judicial immunity. The phrase "quasi-judicial" employs the word "judicial" only in comparing the function of a nonjudicial person or entity to the functions of a judge. True judicial immunity of judges and of those to whom courts have accorded extended judicial immunity are not here involved.

The trial court relied for its conclusion that quasi-judicial immunity applies in this case on a number of Court of Appeals opinions and a footnote in one opinion of this court which seem to indicate that absolute quasi-judicial immunity is available. See Pleas v. Seattle, 112 Wash.2d 794, 805 n. 1, 774 P.2d 1158 (1989); Layne v. Hyde, 54 Wash.App. 125, 773 P.2d 83, review denied, 113 Wash.2d 1016 (1989); Grader v. Lynnwood, 53 Wash.App. 431, 442, 767 P.2d 952, review denied, 113 Wash.2d 1001, 777 P.2d 1050, cert. denied, 493 U.S. 894, 110 S.Ct. 243, 107 L.Ed.2d 193, reh'g denied, 493 U.S. 986, 110 S.Ct. 527, 107 L.Ed.2d 527 (1989); Jensen v. Torr, 44 Wash.App. 207, 213, 721 P.2d 992, review denied, 107 Wash.2d 1004 (1986); Rayburn v. Seattle, 42 Wash.App. 163, 709 P.2d 399 (1985), review denied, 105 Wash.2d 1007 (1986).

We note that these cases, where they contain any analysis of the issue at all, have generally based their holdings on conclusory citation of authority and not on the detailed policy-oriented factual inquiry which we will later show is necessary to decide the immunity question. "When a governmental action is characterized as 'legislative' or 'adjudicative,' there is the risk that the characterization will be carried beyond the specific issue being decided." Strawberry Hill 4 Wheelers v. Board of Comm'rs, 287 Or. 591, 602, 601 P.2d 769 (1979). Thus, strict reliance on case law to determine the extent of immunity carries...