Pacific County v. Sherwood Pac., Inc.

• Decision Date: 14 June 1977
• Docket Number: No. 2224-II,2224-II
• Court: Washington Court of Appeals
• Parties: PACIFIC COUNTY, a political subdivision of the State of Washington, Respondent, v. SHERWOOD PACIFIC, INC., and the Fidelity & Casualty Co. of New York, Appellants.

Page 790

17 Wn.App. 790

567 P.2d 642

PACIFIC COUNTY, a political subdivision of the State of Washington, Respondent, v. SHERWOOD PACIFIC, INC., and the Fidelity & Casualty Co. of New York, Appellants.

No. 2224-II.

Court of Appeals of Washington, Division 2.

June 14, 1977.

Gerald Reitsch, Longview, Arnold B. Robbins, Rodney G. Pierce, Breskin, Rosenblume & Robbins, Seattle, for appellants.

James B. Finlay, Long Beach, for respondent.

REED, Judge.

Sherwood Pacific, Inc. (Sherwood), and its surety, the Fidelity and Casualty Company of New York (Fidelity), appeal from a judgment in favor of Pacific County, in an action to recover the face amounts of two bonds furnished by Fidelity to secure Sherwood's installation of roads in its Terra Mar development. We resolve all issues in favor of the County and affirm.

In 1967 Sherwood subdivided its property on the Long Beach Peninsula in Pacific County, calling the development Terra Mar. Shortly thereafter, Sherwood applied to Pacific County for approval of plats for divisions 1 through 5. The plat was approved on May 20, 1968. As a condition to final approval of any plat, a Pacific County ordinance dated December 20, 1965 required either the prior construction of improvements under county supervision or the furnishing of a performance bond to assure that the improvements would be completed within the time limit specified and up to county specifications. Sherwood elected to post two bonds

sufficient to pay the construction costs of grading and surfacing to the approved grades and typical section the roadways of said plat and the installation of drainage structures and such other work as is incidental and necessary thereto all in accordance with those Plat Specifications to be placed on file in the County Engineers Office and to the satisfaction of the County Road Engineer; . . .

Upon failure of the Principal to comply with the requirements stated herein within the time authorized, the Obligee shall look to the Surety for Satisfaction to the extent of this bond.

(Emphasis added.)

In the case of one bond in the amount of $100,000 covering divisions 1 through 4 of the tract, such improvements were to be completed to the satisfaction of the county engineer not later than December 31, 1968. The bond covering division 5 was in the amount of $10,000 and had a completion date of September 12, 1969. The amounts of these bonds were arrived at by negotiation between Pacific County and Sherwood and were not based upon estimates of actual costs of construction.

Sherwood began construction of the roads, but portions of the work were unsatisfactory to the county engineer and had to be redone. Pacific County granted several extensions of time to Sherwood, which in the meantime became insolvent and could not complete the project. In 1971, the County passed new ordinances which imposed more stringent and expensive requirements for the roads, as well as the sewage disposal facilities within the platted area. Sherwood attempted but was unable to obtain refinancing and the roads were never completed. As a result, Pacific County brought suit in 1972 to compel completion of the platted road system or to be awarded the amount of the bonds, which was conceded prior to trial to be far less than the actual costs of completing the improvements in accordance with the original specifications. The court, sitting without a jury, awarded the full $110,000 plus interest from October 20, 1971, the extended date on which Sherwood was to resume road construction. Both Sherwood and Fidelity appeal.

Initially, defendants contend the County lacked legal authority to require the posting of the performance bonds, and that the bonds are therefore unenforceable. The County's 1965 ordinance recited that it was based upon Laws of 1937, ch. 186, as amended and as codified in RCW Chapter 58.16 at the time the bonds were executed. Former RCW 58.16.060 provided that a county could approve a plat upon a finding "that the plat, subdivision, or dedication makes appropriate provision for streets and other public ways." Former RCW 58.16.110 gave the county authority to establish reasonable regulations with respect to arrangement and improvement of streets:

To effectuate the policy of this legislation, every legislative or planning authority charged with the duty of passing upon and giving or withholding approval of plats, subdivisions and dedications shall establish reasonable regulations, with the continuing right of amendment thereof, controlling the form of plats, subdivisions and dedications to be filed, the minimum width of streets and alleys, the minimum lot or tract area, street arrangement, provision for improvement of streets and public places and for water supply, sewerage and other public services, dedications of parks, playgrounds and other public places.

(Emphasis added.) Defendants argue the County had no authority to require such performance bonds until the legislature subsequently chose to bestow that power when it enacted RCW 58.17.130, effective July 16, 1969. ¹ We would first note that "the passage of a statute expressly conferring power on a political subdivision does not necessarily preclude the pre-existence of the power." Gordon v. Board of Supervisors, 207 Va. 827, 831, 153 S.E.2d 270, 274 (1967). For example, it is difficult for us to conceive that the County had no authority to require that certain structures be designed and certified by or under the supervision of a registered civil engineer prior to enactment of RCW 58.17.130.

Municipal corporations cannot exercise powers except those expressly granted or necessarily implied therefrom, Pacific First Fed. Sav. & Loan Ass'n v. Pierce County, 27 Wash.2d 347, 178 P.2d 351 (1947). A statute expressly granting general authority to achieve a lawful objective includes by implication the right to do such acts as may be reasonably necessary to achieve that objective. State v. Melton, 41 Wash.2d 298, 248 P.2d 892 (1952); State ex rel. Hunter v. Superior Court, 34 Wash.2d 214, 208 P.2d 866 (1949); State ex rel. Becker v. Wiley, 16 Wash.2d 340, 133 P.2d 507 (1943); 56 Am.Jur.2d §§ 195, 226 (1971); 2A C. Sands, Statutes and Statutory Construction § 55.04 (4th ed. 1973). Legislation authorizing municipalities to make non-discriminatory regulations for the public health and welfare is usually given a liberal interpretation. 3 C. Sands, Statutes and Statutory Construction § 64.02 (3d rev.ed. 1974). And if a power is grant to a municipality by statute and the law is silent as to the mode of exercising such power, the municipal corporation has reasonable discretion to determine how to exercise the power. 2 E. McQuillin, Municipal Corporations § 10.29 (3d rev.ed F. Ellard 1966).

In the instant case, former RCW 58.16.110 conferred upon counties a general grant of authority to establish "reasonable regulations" governing the form of plats and subdivisions and the width, arrangement and improvement of streets which were to be appropriately provided for if the plat or subdivision was to be approved pursuant to former RCW 58.16.060. Inherent in this general grant of power is the implied authority to adopt such means as are reasonable to insure that a developer will deliver on its promise to install proper streets. An approving body's authority should be flexible, and it should not always be required to withhold plat approval until the improvements are actually constructed. We hold it was not only reasonable for Pacific County to accept a performance bond to effectuate its statutory authority to provide for street improvements incidental to final approval of Sherwood's plat, but that the authority to negotiate and accept a performance bond was necessarily implied from the powers expressly granted to the County. Genesee County Bd. of Road Comm'rs v. North American Dev. Co., 369 Mich. 229, 119 N.W.2d 593 (1963); Bellefontaine Neighbors v. J. J. Kelley Realty & Bldg. Co., 460 S.W.2d 298 (Mo.App.1970).

Defendants next argue that, although the improvements within the plat were dedicated to and officially approved by the County, the County never acquired a legal interest in the streets or any legal obligation with respect to the construction and maintenance, and therefore cannot enforce the bonds. We do not agree. The authorities are divided on whether the approval of a plat, without more, constitutes acceptance of a dedication and vests certain rights in the public. ² 11 E. McQuillin, Municipal Corporations § 33.24 (3d rev.ed. F. Ellard 1964). The reluctance to find acceptance of a dedication without affirmative action by the public authority is explained by the belief that property owners should not be allowed to impose a street upon a municipality against its will and thus compel it to make improvements. See, e. g., Mathis v. Thunderbird Village, Inc., 236 Or. 425, 389 P.2d 343 (1964); Cf. Bellefontaine Neighbors v. J. J. Kelley Realty & Bldg. Co., supra. It is also the prevailing view that even after acceptance, the time when and extent to which streets are opened and improved, is within the discretion of the municipal authorities. 11 Municipal Corporations, supra § 30.31; 1A C. Antieu, Municipal Corporation Law § 918 (Supp.1976).

In the instant case, however, the actions of Pacific County went far beyond an acceptance of mere "paper streets," cf. Basil v. Pope, 165 Wash. 212, 5 P.2d 329 (1931), such as would be contained upon the face of the ordinary plat. Here, the county commissioners approved the plat in all its aspects and accepted the dedication of the improvements depicted thereon, upon the condition that the streets be completed to their specifications and satisfaction. In lieu of such completion, they accepted performance bonds, thus evincing their intent to assume dominion and control over such streets and thus the duty to maintain them when completed. In effect, the County was accepting a dedication of completed streets; the bonds were...