Nieto v. City of Talent

• Decision Date: 09 January 2019
• Docket Number: A168939
• Citation: 436 P.3d 82,295 Or.App. 625
• Parties: Tony NIETO and Tory Nieto, Petitioners, v. CITY OF TALENT, Respondent, and Vernon J. Davis, Trustee of the Rose Marie Davis Revocable Trust; Mary A. Tsui; and Laura E. Cuddy, Intervenors-Respondents.
• Court: Oregon Court of Appeals

295 Or.App. 625

436 P.3d 82

Tony NIETO and Tory Nieto, Petitioners,

v. CITY OF TALENT, Respondent,andVernon J. Davis, Trustee of the Rose Marie Davis Revocable Trust; Mary A. Tsui; and Laura E. Cuddy, Intervenors-Respondents.

A168939

Court of Appeals of Oregon.

Argued and submitted November 20, 2018.

January 9, 2019

Thommy A. Brooks argued the cause for petitioners. Also on the brief was Cable Huston LLP.

Rebekah Dohrman argued the cause for respondent. Also on the brief was Local Government Law Group PC.

Christian E. Hearn and Davis Hearn Anderson & Turner PC filed the brief for intervenors-respondents.

Before Lagesen, Presiding Judge, and DeVore, Judge, and James, Judge.

DeVORE, J.

Petitioners seek review of a referee’s decision affirming a city’s denial of their application for an expedited land division (ELD) and remanding the matter to be processed as a land use decision or limited land use decision. See ORS 197.375 (setting forth the ELD process of review before a referee and authorizing judicial review of the referee’s decision). In their first two assignments of error, petitioners argue that the referee exceeded his powers. In their third assignment, petitioners assert that the referee’s decision is unconstitutional under the Takings Clause of the Fifth Amendment to the United States Constitution.¹ We reject each of those arguments and, therefore, affirm.

The relevant facts, which we take from the referee’s order, are undisputed. Petitioners filed an application with the Community Development Department of the City of Talent seeking ELD approval to create 49 lots for single-family development from an existing 26.58 acre parcel. The application proposed an ELD pursuant to ORS 197.360, which would require quicker processing under ORS 197.365. The city determined that the application was ineligible for ELD review, primarily because it failed to meet street and other right-of-way requirements. It noted that the access issues required resolution prior to the subdivision’s approval, but set no specific requirements on how that would be accomplished. The request for ELD review was denied.

Petitioners appealed the city’s decision to a referee appointed to hear and decide ELD appeals in accordance with ORS 197.375. The referee denied petitioners’ appeal, ruling that the application did not qualify for ELD review. The referee remanded the subdivision application to the city for consideration through ordinary proceedings for a land use decision or limited land use decision.

Petitioners seek judicial review of the referee’s final order, raising three assignments of error. First, they challenge the referee’s statutory analysis in determining that the proposed development was not within an "area subject to an acknowledged refinement plan" under ORS 197.200, which, had the referee found otherwise, would have permitted ELD review. Second, petitioners contend that the standards upon which the referee relied in applying ORS 197.360 in remanding the application to the city violated other applicable statutes. Finally, petitioners assert that the referee erred in rejecting their argument that the city had imposed conditions amounting to an unconstitutional taking.

Our scope of review in this proceeding is unusually narrow, as circumscribed by ORS 197.375(8). That statute authorizes this court to review a referee’s ELD decision, but we can reverse or remand only if we find one of the circumstances listed:

"(a) That the decision does not concern an expedited land division as described in ORS 197.360 and the appellant raised this issue in proceedings before the referee;

"(b) That there is a basis to vacate the decision as described in ORS 36.705 (1)(a) to (d) , or a basis for modification or correction of an award as described in ORS 36.710 ; or

"(c) That the decision is unconstitutional."

ORS 197.375(8) (emphasis added).

Paragraph (b) cross-references ORS 36.705(1), a provision of the Uniform Arbitration Act that grants courts authority to vacate arbitrator awards in specified circumstances. ORS 36.705(1) provides, in relevant part:

"Upon petition to the court by a party to an arbitration proceeding, the court shall vacate an award made in the arbitration proceeding if:

"(a) The award was procured by corruption, fraud or other undue means;

"(b) There was:

"(A) Evident partiality by an arbitrator appointed as a neutral arbitrator;

"(B) Corruption by an arbitrator; or"(C) Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding;

"(c) An arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy or otherwise conducted the hearing contrary to ORS 36.665 so as to prejudice substantially the rights of a party to the arbitration proceeding;

"(d) An arbitrator exceeded the arbitrator’s powers[.] "

(Emphasis added.)

We have explained that "the grounds for obtaining the vacation of an [arbitration] award are extremely narrow in comparison with the scope of review available to litigants in court." Vasquez-Lopez v. Beneficial Oregon, Inc. , 210 Or. App. 553, 568, 152 P.3d 940 (2007). Courts can vacate arbitrator awards only under very limited circumstances, including when an "arbitrator exceeded the arbitrator’s powers." ORS 36.705(1)(d). Whether an arbitrator exceeds the arbitrator’s powers is a question of law. Couch Investments, LLC v. Peverieri, 270 Or. App. 233, 239, 346 P.3d 1299 (2015), aff’d , 359 Or. 125, 371 P.3d 1202 (2016) (applying the standard of review for determining whether an arbitrator exceeded the arbitrator’s powers from former ORS 36.355 (1997), repealed by Or. Laws 2003, ch. 598, § 57, to ORS 36.705 ).

When a statute empowers an arbitrator to decide a legal issue, "[t]he arbitrator acts within the bounds of his authority not only when he decides [that] question of law correctly according to judicial standards, but also when he applies the law in a manner which a court would regard as erroneous. * * * Neither a mistake of fact or law vitiates the award." Brewer v. Allstate Insurance Co. , 248 Or. 558, 561-62, 436 P.2d 547 (1968) (citation and internal quotation marks omitted). By incorporating that same standard, ORS 197.375(8) does not permit us to reverse a referee’s order simply because the decision was predicated on an error of law; rather, the error must relate to the referee’s authority .

In petitioners’ first two assignments of error, they urge the court to vacate the referee’s decision on the ground that he engaged in an improper statutory analysis resulting in a conclusion that failed to reflect favorable evidence. Petitioners also assert that the referee applied standards that ran afoul of other statutes and "exceeded his powers and resulted in error." Neither of those arguments demonstrates that the referee committed an error of law that caused him to act outside of his statutory powers.²

The text of ORS 197.375 itself outlines the legal questions under the referee’s purview. That law authorizes a referee to decide appeals of ELD applications based on allegations

"(A) Of violation of the substantive provisions of the applicable land use regulations;

"(B) Of unconstitutionality of the decision;

"(C) That the application is not eligible for review under ORS 197.360 to 197.380 and should be reviewed as a land use decision or limited land use decision; or"(D) That the parties’ substantive rights have been substantially prejudiced by an error in procedure by the local government."

ORS 197.375(1)(c) ; see also ORS 197.375(2) (requiring the appointment of a referee to decide such appeals). The statute places only a few restrictions on this authority, none of which are alleged to apply here.³

Based on the plain text of ORS 197.375, we conclude that the referee did not exceed his powers. He had broad discretion to construe the substantive provisions of land use regulations, to determine eligibility for ELD review, and to remand for land use decision or limited land use decision proceeding...