Pac. Coast Shredding, L.L.C. v. Port of Vancouver, USA

Decision Date01 September 2020
Docket NumberNo. 52020-6-II,52020-6-II
Parties PACIFIC COAST SHREDDING, L.L.C., a Washington limited liability company, Appellant/Cross-Respondent, v. PORT OF VANCOUVER, USA, a Washington municipal corporation, Respondent/Cross-Appellant.
CourtWashington Court of Appeals

David Laurence Blount, Landye Bennett Blumstein LLP, 1300 Sw 5th Ave. Ste 3600, Portland, OR, 97201-5621, Christine Nichole Esq. Moore, Attorney at Law, 805 Sw Broadway Ste 470, Portland, OR, 97205-3327, for Appellant/Cross-Respondent.

Kelly M. Walsh, Schwabe, Williamson & Wyatt, 700 Washington St Ste 701, Vancouver, WA, 98660-3338, Jill Suzanne Gelineau, Attorney at Law 18160 Cottonwood Rd., Sunriver, OR, 97707-9317, Colin Jeffrey Folawn, Schwabe, Williamson & Wyatt, P.C., 1211 Sw 5th Ave. Ste 1900, Portland, OR, 97204-3719, for Respondent/Cross-Appellant.

PUBLISHED OPINION

Glasgow, J. ¶1 The Port of Vancouver USA (Port) condemned a portion of land it leased to Pacific Coast Shredding LLC (PCS) and informed PCS of its right under federal and state law to receive financial compensation for any reasonable and necessary costs that PCS incurred as a result of the taking. PCS made a number of significant modifications to its operations and requested reimbursement for each of them. The Port largely rejected the request and paid PCS only for the cost of moving some of its personal property out of the condemned area.

¶2 PCS appealed to an administrative panel, which upheld the Port's decision. PCS then appealed to the superior court, which reversed. The court ruled that the panel erred in denying additional compensation because it failed to consider which of PCS's actions were reasonable and necessary responses to the taking. The court held that the taking required PCS to do more than simply move personal property out of the condemned area in order to continue its operations. The Port did not further appeal this decision.

¶3 On remand, the administrative panel again denied additional compensation to PCS. The panel found that none of PCS's actions were reasonable and necessary and that any increased operational costs incurred as a result of the taking were minimal. PCS again appealed to the superior court. The court ruled that the panel violated its remand instructions from the initial appeal and erred in denying any additional compensation. The court determined that PCS was entitled to the cost of reconfiguring one piece of heavy equipment and increased costs of moving shred material that PCS had incurred up until it reconfigured the equipment. But PCS was not entitled to reimbursement for any other operational changes.

¶4 PCS appeals, seeking reimbursement for the cost of its full site reconfiguration. It argues that the panel's decision violated the law of the case and was unsupported by substantial evidence, contrary to law, and arbitrary and capricious. The Port also filed a notice of appeal from the superior court's decision but does not assign error to any aspect of the panel's decision.

¶5 We hold that although the panel's challenged factual findings were supported by substantial evidence, the panel erred in denying additional compensation to PCS because it misapplied the law. First, the panel was bound by the superior court remand order, which the Port did not appeal, to award some level of compensation beyond only reimbursement for moving personal property out of the condemned area. Second, although the panel's findings were supported by substantial evidence, it was a misapplication of the law and arbitrary and capricious for the panel to reject some additional compensation when the panel established that the taking required periodic relocation of shred material and, therefore, the taking impacted PCS's operations beyond simply necessitating a move of personal property out of the condemned area.

¶6 We reverse the panel's decision in part and conclude that PCS is entitled to some additional compensation for reasonable and necessary relocation of shred material, as well as reasonable and necessary reconfiguration of one piece of equipment, the conveyor. The panel's alternative findings establish that the amounts awarded by the superior court are appropriate. This matter is therefore remanded to the panel for entry of a final order awarding PCS $347,800 in expenses for reconfiguration of the conveyor and an additional $46,000 in tramming costs incurred to move shred material prior to reconfiguration, in addition to the $68,259 already paid. We otherwise affirm the panel's decision rejecting all other claims. Consistent with the superior court's order, the panel may consider any requests related to costs and fees.

FACTS

¶7 PCS operates a scrap metal recycling operation on land leased from the Port. Prior to the taking at issue in this case, PCS bought scrap metal and collected it at the north end of the property, where it fed the metal into a shredder. The machine broke the scrap metal into smaller pieces and separated ferrous and nonferrous material. Nonferrous shred was deposited into piles, while ferrous shred was conveyed through a " ‘Z box,’ " which filtered out impurities, to a picking station where employees checked for additional impurities. Clerk's Papers (CP) at 6. At this point, a conveyor picked up the shred and deposited it into a large, partial annulus shaped " ‘conveyor-stacked shred’ " pile near the southern edge of the property. CP at 187. Depending on the size of this pile, PCS occasionally used front-end loaders to push some of the shred into another pile at the southwest corner of the property. Trucks entered the property from the east and then moved counterclockwise around the property, loading and unloading at various piles.

¶8 The Port condemned a 47,598-square foot strip of the 13-acre leasehold, left of the orange dotted line in the image below, of which 7,332 square feet was used by PCS for its operations. The condemned area overlapped with the truck traffic path and some of the area PCS used to pile shred material. The following image is a demonstrative exhibit depicting a portion of PCS's operations prior to the taking, with the dotted line depicting the boundary of the taking:

Administrative Record (AR) at 1155. The condemnation required PCS to move its truck traffic path several feet to the north of where it was previously located, which then encroached into another area where PCS would pile shred material. Around 45 times a year, this shred pile grew big enough that it would block or partially block the new truck traffic path, creating a choke point.

¶9 The Port informed PCS of its right under federal and state law to receive financial assistance to relocate or reconfigure its operations in light of the taking. A relocation specialist for the Port, Martyn Daniel, determined that PCS was eligible for reimbursement only for the cost of moving the shred and other materials out of the condemned area. The Port accordingly paid PCS $68,259.

¶10 PCS disputed the Port's conclusion that it was entitled only to payment for moving personal property from the condemned area. PCS contended that the taking required more substantial changes to its operations to maintain the traffic path necessary for trucks to travel along the south side of the property, as well as the space necessary for piling shred. To make room for the relocation of the truck traffic path, PCS reconfigured the conveyor by turning it 90 degrees to the west and extending it 77 feet, and PCS built a new shred pad in the new conveyor-stacked shred location. The following is a demonstrative exhibit depicting a portion of PCS's operations after the taking:

AR at 1160. In addition, PCS relocated a rail spur to the west, upgraded some storm water facilities, expanded and improved employee parking, added a new picking conveyor, and made substantial changes to its office space and the property entrance. Together these changes cost over $6.1 million.

¶11 PCS sought full reimbursement for all of these changes, arguing that they were all reasonable and necessary consequences of the taking. The Port rejected the claim. PCS appealed, and the Port convened a three-person panel to consider the evidence, hear testimony, and resolve the appeal.

¶12 Neil Fitzpatrick, an operations manager at PCS, authorized the site reconfigurations. He testified about PCS's reasons for the reconfiguration, although he admitted that he did not understand the full scope of the taking until the hearing. Three engineers—Dr. Adam Aleksander, Neil Alongi, and Valerie Uskoski—testified to the safety and efficiency concerns facing PCS in terms of maintaining the truck path. In particular, Aleksander and Alongi both testified that prior to the taking, PCS maintained a truck path width of at least 20 feet. The panel received conflicting testimony and photographic evidence, however, that PCS had maintained the truck path at a minimum width of 14.9 feet. Moreover, PCS's initial construction plans for the reconfiguration that were submitted to the city provided for a 15-foot wide truck path.

¶13 The panel upheld the Port's decision not to reimburse PCS for moving shred out of the new truck traffic path or the reconfigurations it made to adjust its operations after the taking. The panel determined that the issue presented was an "all or nothing proposition"—whether PCS's full site reconfiguration was a reasonable and necessary response to the taking. CP at 17. The panel did not enter formal findings of fact, but it did note that the site remained "virtually unchanged" after the taking except that the taking infringed on the area containing the shred pile. CP at 6. The panel recognized that, after the taking, the shred pile could occasionally spill onto the truck path and create a potential " ‘choke point’ " in the circulation of truck traffic. CP at 6. However, the panel noted that there was evidence that the truck path was at times as narrow as 14.9 feet wide before the taking, so...

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