State v. Costich

• Decision Date: 07 October 2004
• Docket Number: No. 74464-5.
• Citation: State v. Costich, 98 P.3d 795, 152 Wn.2d 463, 152 Wash.2d 463 (Wash. 2004)
• Court: Washington Supreme Court
• Parties: STATE of Washington, Petitioner, v. Elroy COSTICH; Elroy Costich as trustee under the Costich Living Trust, Respondents, Spokane County, Defendant.

98 P.3d 795

152 Wash.2d 463

152 Wn.2d 463

STATE of Washington, Petitioner, v. Elroy COSTICH; Elroy Costich as trustee under the Costich Living Trust, Respondents, Spokane County, Defendant.

No. 74464-5.

Supreme Court of Washington, En Banc.

Argued June 24, 2004.

Decided October 7, 2004.

James P. Emacio, County Pros Office Civil Div, Spokane, John F. Salmon, Steve Edwin Dietrich, Olympia, for Petitioner.

Robert Allan Dunn, Kevin W. Roberts, Dunn & Black PS, Spokane, for Respondents.

Susan Paula Jensen, Mark Von Wahlde, Pierce Co Pros Office Civil Div, Tacoma, for Amicus Curiae (Washington Association of Prosecuting Attorneys).

Milton G. Rowland, Spokane, Daniel Brian Heid, Auburn, for Amicus Curiae (Washington State Association of Municipal Attorneys).

SANDERS, J.

This is a condemnation action brought by the State to acquire Mr. Phillip Costich's property in north Spokane County. The Court of Appeals affirmed a trial court's award of reasonable attorney and expert witness fees to Mr. Costich based on the trial court's invalidation of the State's settlement offer because the State did not (1) itemize in the settlement offer the State's estimation of the property's fair market value and (2) leave the offer open for a 30-day period prior to trial. At issue is whether invalidation of the settlement offer was appropriate. We hold it was not. Accordingly we reverse.

FACTS

The underlying facts are, for the most part, undisputed. In September 2000 the State notified Mr. Costich¹ that it needed to acquire his property to begin highway construction improvements to State Route 395 in north Spokane County. The Washington State Department of Transportation (DOT) had the property appraised and offered $134,000 as just compensation, which Mr. Costich ultimately refused, thus prompting the instant condemnation action. Following the relevant statutory procedures,² the State paid the amount of its offer, $134,000, into the court registry, and both parties stipulated to an order adjudicating public use and granting the State immediate possession and use of the property. Mr. Costich withdrew the funds and demanded a jury valuation trial, which the court scheduled for March 4, 2002.

The DOT had the Costich property appraised again in August 2001, this time by a different appraiser, Bruce Jolicoeur. He ultimately appraised the Costich property at $191,200. Mr. Costich received Mr. Jolicoeur's appraisal on November 29, 2001. However the State did not raise its original offer until January 30, 2002, when it mailed an offer of settlement to Mr. Costich's attorney, which was received the following day. The letter offered "$282,500 as its all-inclusive offer in full settlement" but was to expire on February 8, 2002. Clerk's Papers (CP) at 36 (emphasis added). Mr. Costich responded the next day by requesting an itemization of the offer, claiming he was "unable to ascertain what the State is offering as Fair Market Value for Mr. Costich's property." CP at 395. The State answered by stating the offer was "the written settlement offer referred to in RCW 8.25.070." CP at 396. The parties continued to exchange correspondence over the next several days. Mr. Costich continued to reiterate his demand for an itemization, a demand the State consistently refused, maintaining its position that it did not itemize the categories specified by Mr. Costich when calculating the sum of the amount offered.

Dissatisfied with the State's refusal to break down the January 30 offer, Mr. Costich filed a motion seeking a pretrial declaratory ruling that the offer was invalid under RCW 8.25.070. He argued the offer failed to comply with the statute because (1) it did not specify the State's offer of just compensation, thereby leaving the offer inadequate for purposes of comparing it to the jury award, and (2) it did not remain open for a 30-day span. The trial court agreed on both counts and granted the motion on February 14, leaving the State's original $134,000 offer as the lone offer in effect on the date of trial.

The jury valuation trial was held, resulting in an award of $252,000 as just compensation for the taking. Despite the State's $282,500 offer on January 30, the net effect of the trial court's declaratory ruling left the $134,000 as the sole offer to compare the judgment to determine whether an additional award of reasonable attorney fees and expert witness fees was warranted. RCW 8.25.070. Because the State's offer was easily exceeded by over 10 percent, the trial court entered judgment in the amount of $365,669.20, comprised of the $118,000 difference between the $252,000 jury determination of just compensation and the $134,000 Mr. Costich had already withdrawn from the court registry,³ $88,157.75 in reasonable attorney fees, $12,582.35 in expert witness fees, $11,714.58 in prejudgment interest, and $1,214.52 in costs.

The State appealed to Division Three of the Court of Appeals which affirmed by a divided court. State v. Costich, 117 Wash.App. 491, 72 P.3d 190 (2003),review granted, 151 Wash.2d 1009, 88 P.3d 964 (2004). In addition to holding the settlement offer was invalid because it "did not establish the State's determination of just compensation," id. at 502, 72 P.3d 190, the Court of Appeals majority "mention[ed] in passing — purely as dictum — that, as we read this statute, the State is required to keep its offer in effect for a full 30 days," id. at 499, 72 P.3d 190.⁴

ANALYSIS

At the outset it is important to note we are not examining the extent of the State's eminent domain power, see Washington Constitution article I, section 16, since neither party disputes the State's condemnation of Mr. Costich's property was for public use and that the just compensation amount was properly determined by a jury. Rather this case solely concerns the issue of whether a party is entitled to an award of reasonable attorney fees and expert witness fees incurred through litigation. See Petersen v. Port of Seattle, 94 Wash.2d 479, 487, 618 P.2d 67 (1980) (constitutional right to just compensation upon public taking of private property does not include reasonable attorney fees and expert witness fees); City of Everett v. Weborg, 39 Wash.App. 10, 12, 691 P.2d 242 (1984) (same). Entitlement to such an award does not exist in Washington, which follows the American Rule, unless provided otherwise in contract, statute, or recognized equitable principles. Dayton v. Farmers Ins. Group, 124 Wash.2d 277, 280, 876 P.2d 896 (1994). Mr. Costich claims his right to reasonable attorney and expert witness fees exists in RCW 8.25.070. As such we engage in a de novo review of the purely legal question of statutory interpretation. Restaurant Dev., Inc. v. Cananwill, Inc., 150 Wash.2d 674, 681, 80 P.3d 598 (2003).

Our analysis of RCW 8.25.070 begins with the plain language employed by the legislature. Restaurant Dev., 150 Wash.2d at 682, 80 P.3d 598; State v. J.P., 149 Wash.2d 444, 450, 69 P.3d 318 (2003). Recalling our primary goal is to give effect to the legislature's intent, we derive such intent by construing the language as a whole, giving effect to every provision. J.P., 149 Wash.2d at 450, 69 P.3d 318. If the language is unambiguous, we give effect to that language and that language alone because we presume the legislature says what it means and means what it says. State v. Radan, 143 Wash.2d 323, 330, 21 P.3d 255 (2001). The plain meaning of the statute is derived not only from the statute at hand, but also "all that the Legislature has said in the ... related statutes which disclose legislative intent about the provision in question." Dep't of Ecology v. Campbell & Gwinn, L.L.C., 146 Wash.2d 1, 11, 43 P.3d 4 (2002), quoted in J.P., 149 Wash.2d at 450, 69 P.3d 318.

I. Segregating just compensation offered

Under various circumstances a condemnee may recover reasonable attorney fees and expert witness fees in addition to the just compensation which is constitutionally required. E.g., RCW 8.25.070(1), .075(1). One such circumstance is when:

the judgment awarded as a result of the trial [held for purpose of fixing of the amount of compensation] exceeds by ten percent or more the highest written offer in settlement submitted to those condemnees appearing in the action by condemnor in effect thirty days before the trial.

RCW 8.25.070(1)(b) (emphasis added).⁵ On its face RCW 8.25.070(1)(b) recognizes two factors a trial court compares to determine whether the condemnee is entitled to reasonable attorney fees and expert witness fees incurred as a result of litigating the just compensation amount: (1) "the judgment awarded as a result of the trial," and (2) "the highest written offer in settlement ... in effect thirty days before the trial." When the former exceeds the latter by 10 percent or more, the court is required to award reasonable attorney fees and expert witness fees. State v. Roth, 78 Wash.2d 711, 715-16, 479 P.2d 55 (1971) (holding inter alia award of fees under RCW 8.25.070 mandatory if condemnee meets all statutory prerequisites).

Relying on State v. Swarva, 86 Wash.2d 29, 541 P.2d 982 (1975), the State contends the trial court and Court of Appeals erred by holding the $282,500 offer invalid "because that figure exceeded the State's evidence of just compensation." Supp'l Br. of Pet'r at 9. In Swarva the State offered roughly $123,000 as compensation for the condemned property, which it deposited into the court registry upon the condemnees' rejection thereof. Swarva, 86 Wash.2d at 30, 541 P.2d 982. After the jury returned a verdict of $107,000, the trial court granted an additur, reasoning the State impermissibly introduced evidence lower than the amount it deposited as an offer of just compensation. Id. We reversed, holding:

[T]he State may not offer in settlement an amount less than the fair market value established by the State's appraisal. However, nothing in the statute prohibits the State from offering an amount in excess of its

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