Stevens Cnty. ex rel. Rasmussen v. Travelers Sur. & Cas. Co. of Am.

• Decision Date: 31 March 2022
• Docket Number: 37812-8-III
• Citation: 507 P.3d 417
• Parties: STEVENS COUNTY, Washington EX REL. Tim RASMUSSEN; and Tim Rasmussen, in his Official Capacity as Prosecuting Attorney of Stevens County, Washington, Respondents, v. TRAVELERS SURETY AND CASUALTY COMPANY OF AMERICA; and United States Fire Insurance Company, Defendants, Donald L. Dashiell, in his Personal Capacity; Wesley Lewis McCart, in his Personal Capacity; and Steven Lynn Parker, in his Personal Capacity, Appellants.
• Court: Washington Court of Appeals

507 P.3d 417

STEVENS COUNTY, Washington EX REL. Tim RASMUSSEN; and Tim Rasmussen, in his Official Capacity as Prosecuting Attorney of Stevens County, Washington, Respondents,

v. TRAVELERS SURETY AND CASUALTY COMPANY OF AMERICA; and United States Fire Insurance Company, Defendants,Donald L. Dashiell, in his Personal Capacity; Wesley Lewis McCart, in his Personal Capacity; and Steven Lynn Parker, in his Personal Capacity, Appellants.

No. 37812-8-III

Court of Appeals of Washington, Division 3.

FILED MARCH 31, 2022

Todd R. Startzel, Luke Wesley O'Bannan, Kirkpatrick & Startzel PS, 108 N Washington St. Ste. 201, Spokane, WA, 99201-5133, Julie Christine Watts, The Law Office of Julie C. Watts, PLLC, 505 W Riverside Ave., Ste. 210, Spokane, WA, 99201-0518, for Appellants.

George M. Ahrend, Luvera Law Firm, 457 1st Ave., Nw, P.O. Box 816, Ephrata, WA, 98823-0816, Pamela Beth Loginsky, Pierce County Prosecuting Attorney's Office, 930 Tacoma Ave., S Rm. 946, Tacoma, WA, 98402-2171, for Respondents.

PUBLISHED OPINION

Pennell, J.

¶ 1 The Washington Constitution prohibits gifts of public funds. Historically, challenges to improper gifting have involved predisbursement injunctive actions or post payment requests for disgorgement. But when the Stevens County prosecutor suspected the Stevens County Board of Commissioners of improper gifting, he took a novel approach. He sued the commissioners individually, on their official bonds. At the trial court level, the effort was successful. The court granted summary judgment in favor of the prosecutor and held the three commissioners and their sureties financially liable. As a result of the judgment on their bonds, the commissioners were statutorily removed from office.

¶ 2 We reverse. The alleged unconstitutional gifting was not something the Stevens County commissioners did in their individual capacities. It was done collectively by the board as a legislative body. As such, individual bond liability was not available. Furthermore, because the commissioners were not alleged to have been involved in collecting or receiving public funds, they could not be held individually liable on their bonds without some sort of culpable misconduct. No such allegation has been made. The commissioners are therefore entitled to judgment in their favor. The orders on summary judgment are reversed. We remand to vacate the judgment issued against the commissioners and for entry of summary judgment in their favor.

BACKGROUND

¶ 3 Donald L. Dashiell, Wesley Lewis McCart, and Steven Lynn Parker served as Stevens County commissioners. Each was elected to office and executed a $20,000 public official bond. The surety for Mr. Dashiell's bond was United States Fire Insurance Company. Mr. McCart and Mr. Parker were both bonded through Travelers Surety and Casualty Company of America.

¶ 4 The bonds all contained identical language, naming the elected commissioners as principals and obliging them to

faithfully perform the duties of his/her said office or position during the said term, and shall pay over to the persons authorized by law to receive the same all moneys that may come into his/her hands during the said term without fraud or delay, and at the expiration of said term, or in case of his/her resignation or removal from office, shall turn over to his/her successor all records and property which have come into his/her hands, then this obligation to be null and void; otherwise to remain in full force and effect.

Clerk's Papers at 170, 172, 174, 178, 182, 186.

¶ 5 In early 2019, the Office of the Washington State Auditor published a report on a routine accountability audit of Stevens County's financial affairs for the years 2016 and 2017. The auditor opined that three transfers of funds under the county's homeless plan were unallowable gifts of public funds or unallowable uses of restricted funds. The funds had been approved by the Stevens County Board of Commissioners pursuant to a public vote.

¶ 6 Armed with the auditor's report, Stevens County Prosecuting Attorney Tim Rasmussen sued on behalf of the county against the commissioners in their personal capacities, and each commissioner's bond surety. The prosecutor alleged the commissioners were individually liable on their bonds for voting to approve unconstitutional gifts.

¶ 7 The trial court agreed with the prosecutor's allegations and concluded on summary judgment that the commissioners and their sureties were liable. The court entered judgment against the commissioners and their sureties for $130,326.25, plus prejudgment interest, taxable costs, and attorney fees. As a result of the judgment against the bonds, the commissioners were statutorily removed from office.

¶ 8 The commissioners now appeal. No appeal has been initiated by the sureties.

ANALYSIS

¶ 9 The central issue before us is whether the county commissioners can be held personally liable on their bonds for official action taken collectively as a board. This is a question of law that we review de novo. Riddle v. Elofson , 193 Wash.2d 423, 430, 439 P.3d 647 (2019) (plurality opinion). The Washington Constitution and several statutes are relevant to our analysis. When analyzing statutes, our overarching goal is to discern legislative intent. The first and best resource for discerning legislative intent is the language used by the legislature. In re Estate of Haselwood v. Bremerton Ice Arena, Inc. , 166 Wash.2d 489, 498, 210 P.3d 308 (2009).

Governing legal provisions

¶ 10 The Washington Constitution provides that "[t]he legislature ... shall provide for the strict accountability of [county] officers for all fees which may be collected by them and for all public moneys which may be paid to them, or officially come into their possession." WASH. CONST. art. XI, § 5. Our state constitution further prohibits counties and other municipalities from gifting public moneys "except for the necessary support of the poor and infirm." WASH. CONST. art. VIII, § 7.

¶ 11 The legislature has adopted multiple statutes guarding against misuse of public funds by county officials. Under RCW 36.16.050, all elected county officials are required to furnish public bonds before entering office, obliging the official to

faithfully perform the duties of his or her office and account for and pay over all money which may come into his or her hands by virtue of his or her office, and that he or she, or his or her executors or administrators, will deliver to his or her successor safe and undefaced all books, records, papers, seals, equipment, and furniture belonging to his or her office.

The statute sets required bond amounts for various county officials. The amount required of county legislative officials ranges from $5,000 to $25,000, depending on county population. RCW 36.16.050(5).

¶ 12 RCW 36.32.060 further addresses the conditions of a county commissioner's official bond, specifying that the bond shall be payable to the county and "it shall be conditioned that the commissioner shall well and faithfully discharge the duties of his or her office, and not approve, audit, or order paid any illegal, unwarranted, or unjust claim against the county for personal services."

¶ 13 RCW 42.08.020 identifies a method for injured parties to sue a public officer who has forfeited their official bond, providing that an injured party may sue the officer and their surety when the officer forfeits the bond "by official misconduct or neglect of duty."

¶ 14 Under RCW 42.12.010(8), an elected official shall be removed from office when a judgment is obtained against the official "for breach of the condition of his or her official bond."

Bond liability unavailable for actions taken by the board

¶ 15 The terminology in the bonds at issue in this case incorporates the conditions required by RCW 36.16.050. Under the language used, a commissioner is bonded in their individual capacity. Separate bonds are taken out for each commissioner. And the language in both the bonds and RCW 36.16.050 discusses actions taken by commissioners with the singular pronouns "his or her" and "he or she."

¶ 16 This reference to the commissioners in their individual capacities is significant. Washington case law has long recognized that actions taken by a legislative body are distinct from those taken by individual legislative officials. In Stoddard v. King County , 22 Wash.2d 868, 158 P.2d 78 (1945), our Supreme Court held that an individual county commissioner could not bind a board of county commissioners to a contract. "[A] ‘board of county commissioners can act authoritatively only by resolutions properly spread upon the minutes and joined in by a majority of the board.’ " Id . at 882, 158 P.2d 78 (quoting Kelly v. Hamilton , 76 Wash. 576, 583, 136 P. 1148 (1913) ). Conversely, in State v. Levy , 8 Wash.2d 630, 649-50, 113 P.2d 306 (1941), the court held that an individual county commissioner cannot be held liable for actions taken by the board as a body.

¶ 17 The current statutory scheme governing county commissioners reflects the distinction between individual commissioners and the board acting as a legislative body. Under Washington law, boards of county commissioners are generally¹ made up of "three qualified electors, two of whom shall constitute a quorum to do business." RCW 36.32.010. A board of county commissioners cannot decide a matter with only one vote. RCW 36.32.130. The care for county property and management of county funds is the responsibility of the board as a legislative authority. RCW 36.32.120(6) ; RCW 36.40.100. Nowhere under Washington law are individual commissioners authorized to make official appropriations.

¶ 18 This is also consistent with how Washington law treats the issue of immunity from suit. When elected officials make legislative decisions as a governing body, their decisions are immune from civil liability. Miller v. Pacific County , 91 Wash.2d 744, 747-48, 592 P.2d 639 (1979). Immunity applies "even where the government legislates arbitrarily, with...