Olympic Pipe Line Co. v. Thoeny
| Decision Date | 23 November 2004 |
| Docket Number | No. 31613-7-II.,31613-7-II. |
| Citation | 124 Wash.App. 381,101 P.3d 430 |
| Parties | OLYMPIC PIPE LINE COMPANY, Respondent, v. George and Peggy THOENY, Appellants. |
| Court | Washington Court of Appeals |
Mark Robert Johnsen, Attorney at Law, Seattle, WA, for Respondent.
Steven B. Tubbs, Attorney at Law, Vancouver, WA, for Appellant.
Property owners appeal a superior court order condemning a portion of their property in favor of Olympic Pipe Line Company under RCW 81.88.020 and chapter 8.20 RCW. They contend that the trial court erred in denying their motion to dismiss Olympic's action because Olympic's statutory authority violates article I, section 16 of the Washington Constitution.1 Correspondingly, they argue that the trial court erred in dismissing their inverse condemnation and trespass claims and in denying them interest on their stipulated damages and attorney fees.
We hold that RCW 8.20.160 is constitutionally valid. We also hold that dismissal of George and Peggy Thoeny's inverse condemnation claim was proper but that the parties' agreement regarding just compensation does not preclude the Thoenys from bringing their claims for an additional trespass in a separate tort action. Further, although we hold that the Thoenys are entitled to interest from the date Olympic's possession of the right-of-way became non-permissive until compensation was paid into the court, we also hold that because the Thoenys failed to satisfy the necessary criteria, they are not entitled to attorney fees at trial or on appeal. Thus, we affirm in part and reverse in part.
In 1965, the Northern Pacific Railway Company granted Olympic permission to place an underground pipeline on the railroad's property for $300 per year. In early 1998, the annual fee was raised to $600. Six months later, the then-owner of the railroad2 sold the 5.59-acre parcel to the Thoenys for $13,000.3 In October 2000, the Thoenys told Olympic they were raising the fee to $2,000 per month.4 At that time, the Thoenys also informed Olympic that they intended to terminate their agreement on April 12, 2001.5
Olympic disputed the Thoenys' right to unilaterally raise the fee and sought mediation, which was unsuccessful. In April 2001, the Thoenys sent Olympic a letter terminating the agreement, but the parties later agreed to extend the agreement until July 12, 2001. In the meantime, the parties attempted to negotiate an easement for the portion of its pipeline running over their property, but negotiations failed.6
On July 23, 2001, 11 days after the expiration of the parties' temporary agreement, Olympic filed a petition for eminent domain. On August 13, the Thoenys filed an answer, challenging Olympic's authority to institute the proceedings and asserting counterclaims for breach of contract, trespass, and inverse condemnation. In October 2001, the court entered an order finding that the appropriation was necessary for public use. The Thoenys did not appeal the order. Then, on January 14, 2002, the trial court denied the Thoenys' motion to dismiss Olympic's condemnation action. A trial for compensation was set and, after considering the parties' pretrial conference statements, on July 10, 2002, the trial court dismissed the Thoenys' counterclaims with prejudice. But on February 20, 2003, before the trial to determine compensation was held, the parties stipulated: "[J]ust compensation in this case is determined by the difference between the fair market value of the owners' property without the pipeline easement and the fair market value of the ... property subject to the easement," or $10,000. Clerk's Papers (CP) at 28-29.
On February 28, 2003, the trial court entered a "Judgment and Decree of Appropriation of Easement" under RCW 81.88.020 and chapter 8.20 RCW7 granting Olympic a 15-foot pipeline easement over the Thoenys' property "with all reasonable rights to operate, access, maintain, service, and repair the pipeline without interference." CP at 33. The court ordered the $10,000 be paid over8 to the Thoenys and it awarded them $750 in statutory costs under RCW 8.25.020.9 Apparently the trial court denied the Thoenys' request for interest and attorney fees because such fees were not awarded in the written judgment and decree.
On March 18, 2003, the Theonys appealed the superior court's January 14 and July 10, 2002 orders (denial of motion to dismiss Olympic's petition and dismissal of Thoeny's counterclaims) and February 28, 2003 judgment directly to our Supreme Court, which transferred the appeal to this court.
As a preliminary matter, Olympic argues that in a condemnation action, once public use and necessity are determined, only the amount of damages awarded may be appealed — and because here the parties stipulated to the compensation, there is nothing for this court to review. We disagree.
An eminent domain, or condemnation, proceeding consists of three phases: (1) adjudication of public use and necessity; (2) determination of compensation; and (3) payment of award with entry into possession. Orion Corp. v. State, 109 Wash.2d 621, 667, 747 P.2d 1062 (1987) (citing State ex rel Lange v. Superior Court, 61 Wash.2d 153, 156, 377 P.2d 425 (1963)), cert. denied, 486 U.S. 1022, 108 S.Ct. 1996 (1988); City of Seattle v. Loutsis Inv. Co., 16 Wash.App. 158, 166, 554 P.2d 379 (1976), review denied, 88 Wash.2d 1016 (1977).
Condemnation proceedings are entirely statutory. Pelley v. King County, 63 Wash.App. 638, 641, 821 P.2d 536 (1991) (citing In re Southwest Suburban Sewer Dist., 61 Wash.2d 199, 201, 377 P.2d 431 (1963)), review denied, 119 Wash.2d 1003, 832 P.2d 487 (1992). After the public use and necessity judgment is entered and final, the sole remaining issue is the "compensation and damages to be paid." Pelley, 63 Wash.App. at 641, 821 P.2d 536 ().
Here, a private corporation instituted the condemnation action, so the procedures for condemnation fall under chapter 8.20 RCW, "Eminent Domain by Corporations." See Taylor v. Greenler, 54 Wash.2d 682, 684, 344 P.2d 515 (1959)
. RCW 8.20.120 states in part:
344 P.2d 515 ()
In this appeal the Thoenys claim that the statutory authority Olympic seeks to exercise is unconstitutional. We may review such an assertion. See RAP 2.5(a)(3). The Thoenys' other assignments, even those regarding dismissal of claims, all deal with the amount of damages. We will therefore address each of the Thoenys' assignments of error in turn.
The Thoenys contend that the trial court erred by failing to dismiss Olympic's condemnation petition and instead proceed under the Thoenys' inverse condemnation claim. Its argument as to why this is error has two parts.
First, they argue, Olympic derived authority to condemn from RCW 81.88.020, which confers the power of eminent domain on "[a]ll corporations having for one of their principal purposes the construction, maintenance and operation of pipelines and appurtenances for the conveyance and transportation as common carriers of oils, gas, gasoline and other petroleum products." The statute provides:
The power of eminent domain is hereby conferred upon such corporations to be used for acquiring rights of way for common carrier pipelines and they shall have the right to condemn and appropriate lands and property and interests therein for their use under the same procedure as is provided for the condemnation and appropriation of private property by railway companies, but no private property shall be taken or damaged until the compensation to be made therefor shall have been ascertained and paid as provided in the case of condemnation and appropriation by railway companies.
RCW 81.88.020 (emphasis added). They argue that because Olympic took the property before invoking the statute, it had no authority under this statute.
Second, they argue that to the extent that Olympic's taking occurred under the purported statutory authority of RCW 8.20.150 or .160, its action conflicts with both RCW 81.88.020, and article I, section 16 of the Washington constitution. Article I, section 16, provides in part:
No private property shall be taken or damaged for public or private use without just compensation having been first made, or paid into court for the owner, and no right-of-way shall be appropriated to the use of any corporation other than municipal until full compensation therefor be first made in money, or ascertained and paid into court for the owner.
The Thoenys argue that two statutes, RCW 8.20.150 and .160, purport to grant Olympic the authority to take their property before paying compensation, and therefore they violate the Washington constitution.
RCW 8.20.150 states:
No corporation authorized by law to condemn property for public use, which has heretofore entered or shall hereafter enter upon property for a public use with the consent of the record owner or the person or corporation in possession, shall be ousted from such possession or prevented from continuing the putting of such property to public use if before entry of judgment of ouster it shall institute proceedings in...
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