Tiegs v. Watts

• Decision Date: 23 April 1998
• Docket Number: No. 64675-9,64675-9
• Parties: Frank TIEGS, d/b/a Greenridge Farms; Fred Olberding and Allen Olberding, d/b/a LC Farms; and James Smith, Respondents, v. Donald R. WATTS, d/b/a Don Watts Farms; and Boise Cascade Corporation; et al., Petitioners.
• Court: Washington Supreme Court

Page 1

135 Wn.2d 1

954 P.2d 877

Frank TIEGS, d/b/a Greenridge Farms; Fred Olberding and Allen Olberding, d/b/a LC Farms; and James Smith Respondents, v. Donald R. WATTS, d/b/a Don Watts Farms; and Boise Cascade Corporation; et al., Petitioners.

No. 64675-9.

Supreme Court of Washington En Banc.

Argued June 24, 1997.

Decided April 23, 1998.

Davis, Wright & Tremaine, Richard W. Elliott, Cassandra L. Kinkead, Bellevue, Stephen M. Rummage, Seattle, for Petitioners

R. Crane Bergdahl, Pasco, Leavy, Schultz & Davis, John G. Schultz, George Fearing, Kennewick, Respondents.

Jodi C. Walker, Stephen H. Overstreet, Olympia, Amicus Curiae on behalf of Building Industry Association.

Preston, Thorgrimson et al., Ross A. MacFarlane, Lori A. Terry, Thomas H. Wolfendale, Seattle, Amicus Curiae on behalf of Northwest Pulp and Paper Association.

Marten & Brown Llp, Gillis E. Reavis, Beverlee E. Silva, Seattle, Amicus Curiae on behalf of Association of Washington Business.

Robert G. Beaumier Jr., Assistant City Attorney, Spokane, Amicus Curiae on behalf of City of Spokane.

Christine Gregoire, Attorney General, Ronald L. Lavigne Jr., Assistant Attorney General, Olympia, Amicus Curiae on behalf of Department of Ecology.

SMITH, Justice.

Petitioners Donald R. Watts and Boise Cascade Corporation seek review of a decision of the Court of Appeals, Division III, which affirmed a verdict and judgment in the Benton County Superior Court finding Petitioners liable for breach of a farm lease and for creating a nuisance by contaminating well water used for commercial farming. We granted review. We affirm.

QUESTIONS PRESENTED

The questions presented in this case are (1) whether the trial court properly instructed the jury that any discharge of contaminants or pollutants into Washington's waters is a nuisance per se in violation of the Washington Water Pollution Control Act without a determination by the Department of Ecology that a violation has been committed; (2) whether the Court of Appeals erred in using a part performance theory to enforce an unacknowledged farm lease; and (3) whether Respondents may recover lost future profits for breach of a farm lease option.

STATEMENT OF FACTS

Petitioner Boise Cascade Corporation (Boise Cascade) The Burlington Northern Railroad owned the property across the road from the Wallula mill on the west side of Highways 12 and 395. Petitioner Boise Cascade in 1967 leased that property from Burlington Northern for 20 years. Boise Cascade had considered using the leased property for alternative wastewater treatment projects, but did nothing to accomplish it. ⁷ The land remained unused for 20 years.

                owns and operates the Wallula paper and pulp mill in Wallula, Walla Walla County.  It holds a National Pollutant Discharge Elimnation System Permit initially issued by the Washington State Department of Ecology in 1972. 1  The permit, which has been periodically renewed, establishes the discharge limits of the mill into the Columbia River. 2  The mill is located between the east shore of the Columbia River and Highways 12 and 395. 3  It uses large volumes of water from the Columbia River in the papermaking and bleaching process. 4  Wastewater is routed to a treatment facility adjacent to the mill where the solids are removed.  The remaining wastewater is sent to an unlined pool in an artificial lagoon where aeration and bacterial action are used to reduce the papermaking chemicals and pollutants to permitted levels. 5  The treated water is discharged downstream into the Columbia River. 6
                

Petitioner Donald R. Watts has been farming potatoes commercially in the Franklin County and Walla Walla areas since 1978. ⁸ When the Burlington Northern/Boise Cascade lease expired in 1987, Petitioner Watts leased 650 In the fall of 1989, Petitioner Watts met and had a discussion with Respondents Fred and Allen Olberding and Frank Tiegs concerning their developing and leasing seven irrigation circles on the property for the 1990 potato crop year. ¹⁶ Respondent Frank Tiegs has been a commercial potato farmer since 1977 ¹⁷ and Respondents Fred and Allen Olberdings have been commercial potato farmers since 1982. ¹⁸ Petitioner Watts developed irrigation Circles 3 through 9 and drilled four new wells on the property to supply water On November 28, 1989, Respondents Fred and Allen Olberding leased irrigation Circles 3 through 9 from Petitioner Watts under a "farm lease" contract for the crop year 1990. ²⁰ The contract had a clause providing that the lease was contingent upon Petitioner Watts finding and supplying adequate water flow at a rate of 7.5 gallons per minute to Circles 3 through 9. The contract also granted Respondents Fred and Allen Olberding an option to lease Circles 3 thorough 9 for the crop year 1992.

                acres of the property from the Glacier Park Company, a successor to Burlington Northern. 9  He developed two irrigation crop circles on the property.  He drilled a well into the aquifer adjacent to the Columbia River to set up an irrigation system for the two crop circles. 10  He planted crop Circle 1 in potatoes and leased the second circle to Respondent James Smith. 11  Respondent Smith is a commercial potato farmer.  He planted potatoes in Circle 2 and used water from the well.  Petitioner and Respondent were satisfied with the potato crop yields from the circles in 1988. 12  Potatoes were not grown in 1989 because they are only planted every other year. 13  Petitioner Watts grew wheat and corn on the property in the crop year 1989. 14  He bought the 650 acre property from the Glacier Park Company on December 18, 1989. 15
                to the new circles. 19  The seven circles had never been farmed for potatoes and were considered "virgin" ground.  Virgin ground always yields a higher than normal potato harvest because the ground does not have any established potato diseases or fungus
                

Respondent Smith exercised his 1988 option to lease Circles 1 and 2 for the 1990 crop year. ²¹ His farm lease did not contain a promise to deliver water.

In April 1990, Respondents Fred and Allen Olberding and Frank Tiegs planted Russet Burbank potatoes on Circles 3 through 9 and Respondent Smith planted Russet Burbank potatoes on Circle 1 and Nortokah potatoes on Circle 2.

In June 1990, Respondents noticed potato foliage abnormalities. They brought in several consultants who visited the fields on various occasions. The consultants observed that the potato foliage abnormalities occurred from circle to circle. They concluded plant growth regulating herbicides were involved. Respondents engaged the services of a plant pathologist, Dr. William T. Cobb, Ph.D. ²² Dr. Cobb visited the fields several times and took water In late 1990 Petitioner Boise Cascade met with Respondents Fred and Allen Olberding and Frank Tiegs to discuss the 1990 crop damage and an estimate of anticipated crop damage for 1992. ²⁹

                samples. 23  He concluded the plants exhibited typical symptoms of exposure to plant growth regulating herbicides. 24  The analyzed water samples did not show traces of herbicides, but did show unusual levels of chlorides and total organic halides or TOX. 25  TOX are indicators of chemical compounds that do not occur in nature. 26  Dr. Cobb concluded the well water was contaminated, causing the potato foliage abnormalities. 27  The potato crops were harvested in October 1990.  Respondents had expected to harvest 42.5 tons of potatoes per acre, but harvested only 31 tons per acre. 28
                

On November 26, 1990, Petitioner Boise Cascade purchased the property from Petitioner Donald R. Watts. ³⁰ Boise Cascade agreed to assume any liability Petitioner Watts might have under the farm leases on the property. ³¹

On January 11, 1991, Respondents Fred and Allen Olberding and Frank Tiegs filed an action against Petitioners Donald R. Watts and Boise Cascade in the Benton County Superior Court. They claimed Petitioner Watts breached his contract by not providing an adequate well and water On August 16, 1991, Respondents Fred and Allen Olberding and Frank Tiegs sent a letter to Petitioner Boise Cascade advising that they wanted to exercise the November 28, 1988 contract option to lease Circles 3 through 9 for the crop year 1992 payable on or before January 20, 1992. ³⁶ Petitioner Boise Cascade had not expected them to exercise their option because Respondents earlier in January 1991 sued Boise Cascade for purportedly contaminating the irrigation water which thy claimed had led to loss of their option. ³⁷ On September 18, 1991, Petitioner Boise Cascade sent a written notice to Respondents terminating the option. ³⁸ Respondents did not farm the property in 1992.

                system free of contaminants and pollutants. 32  Respondent Frank Tiegs claimed the reduction in the potato crop yield, quality and tonnage was caused by the contaminated well water. 33  Respondents Olberdings and Tiegs claimed Petitioners breached the contract by not allowing them to exercise their option to lease the property for the 1992 crop year. 34  They claimed Petitioner Boise Cascade violated the Water Pollution Control Act, RCW 90.48, the Water Resources Act of 1971, RCW 90.54, and water quality standards for groundwaters. 35
                

On March 19, 1992, Respondent James Smith intervened in the case, contending that Petitioner Donald R. Watts had breached his contract by not providing an adequate well and water system free of contaminants and pollutants The case was tried before a jury in February and March 1994 in the Benton County Superior Court. The trial court, the Honorable Fred R. Staples, instructed the jury on a nuisance per se theory over Petitioners' objections. Instruction 12 quoted in its entirety the statutory definition of nuisance in RCW 7.48.120:

and that Petitioner Boise Cascade had violated water quality standards for groundwaters. ³⁹

Nuisance defined. Nuisance consists in unlawfully doing an act, or omitting to perform a duty, which act or omission either annoys,...