Narrowsview Preservation Ass'n v. City of Tacoma

• Decision Date: 26 September 1974
• Docket Number: No. 43187,43187
• Citation: 526 P.2d 897,84 Wn.2d 416
• Parties: NARROWSVIEW PRESERVATION ASSOCIATION and William M. Douge, Appellants, v. The CITY OF TACOMA, a municipal corporation organized and existing under the laws of the State of Washington, Respondent, and Sydney C. Selden et al., Respondents.
• Court: Washington Supreme Court

Page 416

84 Wn.2d 416

526 P.2d 897

NARROWSVIEW PRESERVATION ASSOCIATION and William M. Douge, Appellants, v. The CITY OF TACOMA, a municipal corporation organized and existing under the laws of the State of Washington, Respondent and Sydney C. Selden et al., Respondents.

No. 43187.

Supreme Court of Washington, En Banc.

Sept. 26, 1974.

Rehearing Denied Dec. 17, 1974.

Binns, Petrich, Mason, Hester & Robson, James J. Mason, Tacoma, for appellants.

Mann, Copeland, King, Anderson, Bingham & Scraggin, Quinby R. Bingham, Robert A. Hamilton, City Atty., F. H. Chapin, Jr., William J. Barker, Tacoma, for respondents.

UTTER, Associate Justice.

The Narrowsview Preservation Association and William M. Douge on his own behalf and on behalf of a class similarly situated, brought a writ of certiorari before the superior court. They sought to review the actions of the planning commission and city council of the City of Tacoma who had adopted an ordinance which rezoned an 89-acre tract. The rezone was from single-family dwelling to planned residential development. The superior court upheld the validity of the amendment to the zoning ordinances of the City of Tacoma.

The issues raised by Narrowsview on appeal are whether the zoning ordinance amendment constituted illegal spot zoning, whether there was a conflict of interest by one or more members of the planning commission and city council resulting in a violation of the appearance of fairness doctrine, whether the city failed to comply with the requirements of the State Environmental Policy Act of 1971, requiring an environmental impact statement in major actions significantly affecting the environment, and whether the city improperly failed to require a shoreline development permit from the developer.

We find there was a violation of the appearance of fairness doctrine and reverse the trial court.

The tract in question is 89 generally unimproved acres sloping down toward the Tacoma Narrows. A portion of it is within 200 feet of Puget Sound although a railroad line runs between the Sound and the upper portion of the property. Forty-five acres of the tract are owned by Sydney C. Selden and Selden's, Inc., a wholly owned family corporation. The remaining 44 acres are owned by Thomas W. Anderson, as trustee for members of his family, and by members of a Barnett family. In 1972, respondents filed their application to have the property rezoned to a planned residential development to allow them to build approximately 1,100 apartment units in 3-story structures. The city planning commission approved the petition by a vote of 4 to 3 and this action was later affirmed by a unanimous vote of the city council in adopting the challenged ordinance. Two of the four affirmative votes cast at the planning commission were voted by Mr. Nathaniel Green and Mr. Phillip Schroeder.

Appellants allege the appearance of fairness doctrine was violated insofar as Mr. Green was involved, by virtue of the fact that the property owned by Sydney C. Selden and Selden's, Inc. was pledged to the bank Mr. Green was employed by to secure a large indebtedness of Selden's, Inc. The property is subject to first and second mortgages of $547,000. The indebtedness was past due and interest was accumulating on it. At the trial, the only security shown to be held by the bank to secure that indebtedness was the rezoned property. There was testimony that Selden's, Inc. last showed a profit in 1969. After trial, but prior to entry of judgment, Selden's, Inc. filed a petition of bankruptcy under chapter 11 of the Bankruptcy Act. 11 U.S.C. § 701 et seq. (1970).

Prior to rezone, testimony placed the value of the subject tract at $8,000 an acre with the rezone increasing the value to $17,000 per acre. The latter figure is the figure which the property was agreed to be sold for if the rezone were accomplished. The effect of the rezone was to more than double the value of the bank's collateral for the delinquent indebtedness.

The vice-chairman of the City of Tacoma Planning Commission, Mr. Green, was a loan officer of the Pacific National Bank of Washington. The bank was aware of Mr. Green's position on the planning commission, and, prior to voting, Mr. Green had inspected the property. The bank also knew that the property was owned by Sydney Selden, that Selden's, Inc. was an account of the bank, and that the rezone would increase the value of the property. Mr. Green testified he did not identify the Sydney Selden, who owned the property, with Selden's, Inc. at the time he voted.

The court found that Mr. Green was not an officer of the bank at the time the application for the rezoning was submitted to the planning commission of the City of Tacoma and was not in a policy-making position with the bank at the time of the proceedings here involved. It further found that none of the members of the council or the planning commission of the City of Tacoma were shown to have an interest whereby they would benefit by either granting or denying the petition for rezoning in this case. The court therefore concluded that the hearings involved did not lack an appearance of fairness.

The record shows that Mr. Green's position with the bank did not involve him in decisions regarding the Selden account. His only acquaintance with that account was an awareness that there was a loan account maintained by Selden stores with the bank and an occasional delivery of loan files to credit officers of the bank. His primary duties were as a credit researcher and a loan interviewer at various branches of the bank with authority to make personal loans up to $1,000 only. Mr. Green left the employment of the bank in January of 1973 to enter the retail grocery business and had started negotiations for purchase of this business in August of 1972, prior to the planning commission hearing. The funds for purchase of his grocery business were obtained from another bank in the Tacoma area after Pacific National Bank denied his request.

The record does reveal that one of the owners of a portion of the rezoned property, Mr. Thomas Anderson, was at the time of rezoning, a director of Pacific National Bank of Washington, but further reflects that Mr. Green was unaware of this fact and had never met Mr. Anderson.

The development of the appearance of fairness doctrine in this state is closely tied to our recognition that restrictions on the free and unhampered use of property imposed by planning and zoning compel the highest public confidence in governmental processes bringing about such action. Members of commissions with the role of conducting fair and impartial fact-finding hearings must, as far as practical, be open-minded, objective, impartial, free of entangling influences, capable of hearing the weak voices as well as the strong and must also give the appearance of impartiality. Buell v. Bremerton, 80 Wash.2d 518, 523, 495 P.2d 1358 (1972). The doctrine is applicable to show an interest which might have substantially influenced a member of the commission even if that interest did not actually affect him.

While the findings of fact make it clear Mr. Green would not personally benefit from either the granting or denial of the petition for rezone, the equally undeniable major benefit to his employer from the approval of this rezone brings this case squarely within the holding in Buell. Mr. Green recognized the apparent conflict. He stated that had he known the Seldens who were involved in the rezone were the same Seldens who had an account with the bank and owned the store, or that the Thomas W. Anderson involved in the rezone was the same Thomas W. Anderson who was a bank director, he would have disqualified himself. It must be stressed that there is no evidence or inference that either the bank or Mr. Anderson applied any improper pressure of any nature on Mr. Green. It is the appearance to those affected, however, that is determinative under these facts.

Complaint was further made that the presence of Mr. Phillip A. Schroeder on the planning commission as a representative of the city council violated the appearance of fairness doctrine. Mr. Schroeder voted adversely to appellants and for the rezone as a planning commission member and also again as a member of the city council. The facts show that Mr. Schroeder had at one time worked for the Seldens but was now engaged in his own business of carpet, rug and furniture cleaning. He had customers who were members of appellant-Narrowsview Preservation Association and had many customers among the several hundred residents who signed the petitions of appellants. A mere acquaintance with, or casual business dealings in a minimal sense with the Seldens, would not be of such a nature that we could say, absent a finding of fact to the contrary, that Mr. Schroeder could not both in fact and appearance be open-minded, objective, impartial and free of entangling influences.

Appellants urge the change in zone from R--I, single-family residence, to R--3, planned residential development, constituted spot zoning and was, therefore, illegal. We have recently stated that illegal spot zoning is arbitrary and unreasonable zoning action by which a smaller area is singled out of a larger area of district and specially zoned for use classification totally different from and inconsistent with the classification of the surrounding land, not in...