Potala Vill. Kirkland, LLC v. City of Kirkland

• Citation: 183 Wash.App. 191,334 P.3d 1143
• Decision Date: 25 August 2014
• Docket Number: No. 70542–3–I.,70542–3–I.
• Court: Court of Appeals of Washington
• Parties: POTALA VILLAGE KIRKLAND, LLC, a Washington limited liability company, and Lobsang Dargey and Tamara Agassi Dargey, a married couple, Respondents, v. CITY OF KIRKLAND, a Washington municipal corporation, Appellant.

183 Wash.App. 191

334 P.3d 1143

POTALA VILLAGE KIRKLAND, LLC, a Washington limited liability company, and Lobsang Dargey and Tamara Agassi Dargey, a married couple, Respondents

v.CITY OF KIRKLAND, a Washington municipal corporation, Appellant.

No. 70542–3–I.

Court of Appeals of Washington, Division 1.

Aug. 25, 2014.

Stephanie Ellen Croll, Keating Bucklin & McCormack Inc. PS, Seattle, WA, Robin Jenkinson, City Attorney, Kirkland, WA, for Appellant.

Duana Theresa Kolouskova, Johns Monroe Mitsunga Kolouskova PLLC, Bellevue, WA, for Respondent.

Roger D. Wynne, Seattle City Attorney's Office, Seattle, WA, Amicus Curiae on behalf of Wa State Association of Municipal Attorneys.

Tim Trohimovich, Futurewise, Jeffrey M. Eustis, Aramburu & Eustis LLP, Seattle, WA, Amicus Curiae on behalf of Futurewise.

Opinion

COX, J.

¶ 1 Washington's vested rights doctrine originated at common law but is now statutory.¹ Under RCW 19.27.095(1), vesting occurs on the filing of a “valid and fully complete building permit application.” In such an event, the “zoning or other land use control ordinances in effect on the date of the application” shall control.²

¶ 2 Here, Lobsang Dargey, Tamara Agassi Dargey, and Potala Village Kirkland, LLC (collectively “Potala Village”) sought to develop certain real property in the City of Kirkland. Potala Village filed a complete application for a shoreline substantial development permit on February 23, 2011. But it did not file an application for a building permit before the City imposed a moratorium on the issuance of certain permits. The filing of the application for the shoreline substantial development permit is not a building permit application. Thus, it did not vest on February 23, 2011 rights to then-existing zoning or other land use control ordinances. We reverse the grant of summary judgment to Potala Village and remand with directions to grant summary judgment to the City.

¶ 3 The material facts are undisputed, as all parties expressly acknowledge in their appellate briefing.³

¶ 4 Potala Village sought to construct a large mixed-use project in the Neighborhood Business (“BN”) Zone of the City. The project is to include residential, retail, and commercial space.

¶ 5 Potala Village had two meetings with the City in 2009 and 2010. These meetings resulted in a determination that multiple permits for the project would be required. Because a small portion of the project is to be located within an area subject to state and local shoreline laws, Potala Village was required to file an application with the City for a shoreline substantial development permit.

¶ 6 On February 23, 2011, Potala Village filed an application for a shoreline substantial development permit for the portion of the proposed development within the shoreline area.⁴ It did not file an application for a building permit for the entire proposed development, although no law prohibited it from doing so. On May 11, 2011, the City issued a letter of completeness for the shoreline substantial development permit application.

¶ 7 An organized group of neighbors publicly voiced objections to the proposed development. The group particularly objected to the proposed residential density for Potala Village. It appears that surrounding residential properties are zoned for a maximum density of 12 units per acre.

¶ 8 On November 15, 2011, the City enacted an ordinance imposing an emergency development moratorium on the BN zone. The moratorium temporarily precluded the issuance of permits in the BN zone. As of the date of the moratorium, Potala Village still had not filed an application for a building permit.

¶ 9 On May 1, 2012, the City Council extended the moratorium for six months. Shortly thereafter, Potala Village commenced this action against the City, alleging multiple causes of action and seeking declaratory and other relief.

¶ 10 Potala Village attempted to file a building permit application on October 16, 2012. The City declined to accept it because of the existing moratorium. Later that same day, the City extended the moratorium for the final time.

¶ 11 On December 11, 2012, the City Council amended the city zoning code in a number of ways. For purposes of this action, the code changes to the BN zone placed a limit on residential density of 48 units per acre. As amended, the code limits Potala Village's project to 60 units instead of the 143 units that it sought to construct.

¶ 12 The City approved Potala Village's shoreline substantial development permit application on January 17, 2013.

¶ 13 All parties to this litigation moved for summary judgment. The City argued that Potala Village's failure to file a completed building permit application before the building permit moratorium of November 15, 2011 precluded vesting of rights to zoning or other land use control ordinances in effect prior to that date. It argued that the filing of the shoreline substantial development permit application on February 23, 2011 did not vest such rights.

¶ 14 Potala Village disagreed. It took the position that the filing of its completed shoreline substantial development permit application on February 23, 2011 for a portion of the project was sufficient to vest rights to the zoning or other land use control ordinances in effect on that date for the entire project. It sought a writ of mandamus directing the City to accept and process a building permit application for the project.

¶ 15 The trial court granted summary judgment to Potala Village and issued a writ of mandamus. The court denied the City's motion for reconsideration.

¶ 16 The City appeals.

VESTED RIGHTS DOCTRINE

¶ 17 The City argues that Potala Village did not file an application for a building permit and, thus, it had no right to vest to the zoning or other land use control ordinances that existed at the time it filed its shoreline substantial development permit application on February 23, 2011. We agree.

¶ 18 This court reviews the grant of summary judgment de novo.⁵ Summary judgment is appropriate only where there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law.⁶ This case presents a question of law, which this court reviews de novo.⁷

Background

¶ 19 The vested rights doctrine “originated at common law.”⁸ “Washington's vested rights doctrine strongly protects the right to develop property.”⁹ This doctrine uses a “date certain” standard.¹⁰ “Under the date certain standard, developers are entitled ‘to have a land development proposal processed under the regulations in effect at the time a complete building permit application is filed, regardless of subsequent changes in zoning or other land use regulations.’ ”¹¹

¶ 20 A date certain standard “ensures that ‘new land-use ordinances do not unduly oppress development rights, thereby denying a property owner's right to due process under the law.’ ”¹² This is the minority approach within the United States, and “ ‘it offers [greater] protection of [developers' ] rights than the rule generally applied in other jurisdictions.’ ”¹³

¶ 21 In the 1950s, the supreme court first adopted the common law vested rights doctrine. In Ogden v. City of Bellevue¹⁴ and Hull v. Hunt,¹⁵ the supreme court explained that the right to construct in accordance with the “zoning ordinances and building codes in force at the time of application for the permit” vests when a party applies for a “building permit. ”¹⁶

¶ 22 In cases that followed, Washington courts applied the vested rights doctrine to permit applications other than building permit applications.¹⁷ They included conditional use permit applications,¹⁸ grading permit applications,¹⁹ shoreline substantial development permit applications,²⁰ and septic permit applications.²¹

¶ 23 In 1987, the legislature enacted legislation regarding the vested rights doctrine. The session laws added two new sections to chapter 19.27 RCW and chapter 58.17 RCW, which were later codified at RCW 19.27.095(1) and RCW 58.17.033(1) respectively.²² The session laws provide in relevant part as follows:

NEW SECTION. Sec. 1. A new section is added to chapter 19.27 RCW to read as follows:

(1) A valid and fully complete building permit application for a structure, that is permitted under the zoning or other land use control ordinances in effect on the date of the application shall be considered under the building permit ordinance in effect at the time of application, and the zoning or other land use control ordinances in effect on the date of application.

...

NEW SECTION. Sec. 2. A new section is added to chapter 58.17 RCW to read as follows:

(1) A proposed division of land, as defined in RCW 58.17.020, shall be considered under the subdivision or short subdivision ordinance, and zoning or other land use control ordinances, in effect on the land at the time a fully completed application for preliminary plat approval of the subdivision, or short plat approval of the short subdivision, has been submitted to the appropriate county, city, or town official.²³

As shown by the emphasized language, these statutory sections only refer to building permit applications and subdivision applications.²⁴

¶ 24 In 1994, the supreme court considered whether the vested rights doctrine applied to master use permit (MUP) applications.²⁵ In Erickson & Associates, Inc. v. McLerran, a developer filed a completed MUP application.²⁶ After the application filing, a city ordinance became effective, which adversely impacted the proposed project that was the subject of the application.²⁷ The developer argued that the vested rights doctrine applied to the MUP application.²⁸ The supreme court disagreed, holding that the doctrine did not apply to the filing of MUP applications.²⁹

¶ 25 In its analysis, the court referred to the 1987 legislation that codified the common law doctrine, at least to the extent specified in the statutes.³⁰ The developer argued that the doctrine was not limited to building permit applications.³¹ In support, the developer cited a 1974 case...