Tiffany Family Trust Corp. v. City of Kent
| Decision Date | 11 August 2003 |
| Docket Number | No. 51184-0-I.,51184-0-I. |
| Citation | 119 Wn. App 262,77 P.3d 354,119 Wash. App. 262 |
| Court | Washington Court of Appeals |
| Parties | TIFFANY FAMILY TRUST CORPORATION, Appellant. v. CITY OF KENT, a municipal corporation, Respondent. |
Richard Michael Peterson, Stephen Howard Roos, Hillis Clark Martin & Peterson, Seattle, WA, for Appellant.
P. Stephen Di Julio, Attorney at Law, Ramsey Ramerman, Foster Pepper & Shefelman, Seattle, WA, for Respondent.
Property belonging to appellant Tiffany was included in a Local Improvement District and was assessed a sum Tiffany considers so disproportionate to the benefit received as to be a taking and a violation of substantive due process. But the assessment must be regarded as conclusive because Tiffany did not timely appeal it in the manner provided by statute. Judicial review is available only if there was a jurisdictional defect in the LID proceedings. Neither the City's manner of giving notice, nor the rationale by which the property was included in the LID, amounted to a jurisdictional defect. And Tiffany's effort to gain review through a federal civil rights cause of action is another form of prohibited collateral attack. Accordingly, we affirm the order dismissing Tiffany's suit.
Tiffany Family Trust Corporation owns a five-acre property in the City of Kent. In 1986 the property was zoned limited industrial, meaning that up to 25 percent of any industrial development could be devoted to retail, office, and service uses. Such uses could exceed 25 percent only by conditional use permit. In 1986, Tiffany applied for a conditional use permit allowing up to 35 percent of a seven-building industrial development to be occupied by retail, office, and service uses.
It was estimated that Tiffany's conditional use would generate an additional 17 peak hour vehicle trips impacting a nearby intersection. The Kent Hearing Examiner approved the conditional use permit effective October 15, 1986 subject to the condition that Tiffany participate in paying for street improvements:
Participation in the South 192nd/196th Street corridor project based upon an additional 17 p.m. peak hour trips generated by the facility as a result of the conditional use permit and impacting the intersection of East Valley Highway and S. 212th Street.
Tiffany and the City entered into an environmental mitigation agreement detailing that Tiffany's obligations as a developer would include paying a "proportionate share of all costs associated with" specific street improvements. Tiffany's proportionate share of the actual cost of the improvements was "currently estimated" in the agreement as $1,400 per trip for each of the 17 peak hour trips Tiffany's development was expected to generate, or a total of $23,800.
According to the agreement, Tiffany did not have to pay its share immediately. "The final cost shall be based on actual expenses incurred at the time said improvements are constructed." The agreement provided that payment would be pursuant to the formation of a Local Improvement District (LID). Tiffany agreed "to participate in and not protest the formation of" an LID that would incorporate the anticipated improvements. Tiffany also agreed that its property would be specially benefited by the improvements and its value increased thereby, in an amount "not less than" $23,800. The agreement provided that the minimum benefit of $23,800 would increase in proportion to any increase in the consumer price index until the final LID assessment roll was approved.
The agreement included the City's promise to notify Tiffany at least 180 days before the public hearing on the formation of the LID if it intended to use the "peak hour trips" generation method in establishing the assessment amounts. Tiffany would then have 120 days to submit a traffic study which, if concurred in by the City, would supersede the original estimate of 17 additional peak hour trips.
Tiffany and the City of Kent signed the environmental mitigation agreement in 1987. The City entered into over 100 agreements with other landowners requiring participation in the LID as a condition to development, most of which were in the form of environmental mitigation agreements.
In 1993, in an unrelated case, the Washington Supreme Court held that the "trip generation" formula for distributing costs was not a proper method of determining LID assessments because it bore no relationship to the special benefits conferred upon on property being assessed. Bellevue Plaza, Inc. v. City of Bellevue, 121 Wash.2d 397, 418, 851 P.2d 662 (1993). In 1998, the City of Kent formed the LID anticipated by its agreement with Tiffany. With respect to Tiffany's property and other properties subject to similar environmental mitigation agreements, the City appraiser did not use the "trips generation" methodology and instead undertook to determine their fair market values before and after the special benefit attached.1
The City appraiser's methodology took into account the fact that the agreements had allowed the owners to develop their properties without immediately paying for specific infrastructure improvements and without having to wait for the formation of the LID. On the other hand, the appraiser also took into consideration the fact that the financial obligations imposed by the mitigation agreements tended to depress the properties' sales prices. Based on this analysis, the appraiser determined that the appropriate assessment against Tiffany's property was $364,939 (increase in value from $1,787,500 to $2,234,400, less a downward adjustment of 18 percent). This assessment was about 10 times the amount that had been estimated as Tiffany's proportionate share of the cost of improvements, even after adjusting for inflation.
Certificates of mailing in the City's records show that the City sent notices to Tiffany throughout the proceedings by regular mail at the Kirkland address listed on the county assessor's rolls and in the environmental mitigation agreement. Although Tiffany claims it did not receive any such notices, a statute provides that the mailing of notices "shall be conclusively proved" by such certificates. RCW 35.44.180. Tiffany did not attend any hearings on the formation of the LID nor did it protest the assessment derived from the City's appraisal. The City confirmed the assessment roll on January 19, 1999. The City mailed notice of the final assessments by certified mail. When the assessment mailed to Tiffany was returned unclaimed, the City mailed notice of the assessment to the development's property manager, and then, on the property manager's advice, to an address in Tacoma. In July 1999, the City sold the bonds that were secured by the assessments.
Tiffany claims to have learned of the LID assessment coincidentally in April 1999, through a supplemental title report ordered in connection with refinancing. In February 2000, Tiffany filed suit in superior court alleging that the assessment was an unlawful taking and that it violated substantive and procedural due process. Tiffany asserted the same claims as civil rights violations under 42 U.S.C. § 1983. The suit asked the court to nullify the assessment and order the City to pay just compensation and damages.
Tiffany filed a motion for summary judgment. The City responded with a motion to dismiss under CR 12(b)(1) (lack of jurisdiction) and CR 56 (summary judgment). The trial court granted the City's motion to dismiss. The court concluded that there were no jurisdictional defects in the assessment proceedings; therefore, there was no basis for allowing a collateral attack upon the assessment. Tiffany appeals. The issues raised are purely questions of law, which we review de novo.
Challenges to LID proceedings are governed by statute. RCW 35.44.110. Once an assessment is final, it is conclusive, and cannot be contested or questioned in any further proceeding, unless the party challenging the assessment followed the statutory procedures for making objections and filing an appeal:
Whenever any assessment roll for local improvements has been confirmed by the council, the regularity, validity, and correctness of the proceedings relating to the improvement and to the assessment therefor, including the action of the council upon the assessment roll and the confirmation thereof shall be conclusive in all things upon all parties. They cannot in any manner be contested or questioned in any proceeding by any person unless he filed written objections to the assessment roll in the manner and within the time required by the provisions of this chapter and unless he prosecutes his appeal in the manner and within the time required by the provisions of this chapter.
RCW 35.44.190 (emphasis added). This statutory provision is the reason why Douglass v. Spokane County, 115 Wash.App. 900, 907-08, 64 P.3d 71 (2003), cited by Tiffany as supplemental authority, does not apply. The appellant in that case participated in the LID proceedings, appealed in the manner provided by statute, and was thereby entitled to argue that the assessment stood upon "a fundamentally wrong basis". Douglass, 115 Wash.App. at 907, 64 P.3d 71. That argument is not available to Tiffany because Tiffany did not participate in the LID proceedings.
Tiffany acknowledges that a direct appeal from the confirmation of the assessment roll is not available, because Tiffany did not challenge the LID assessment through the statutory objection and appeal procedures provided in RCW Ch. 35.44. Tiffany contends, however, that the courts have broad "inherent or equity jurisdiction" to review LID assessments other than through statutory appeals. This is not so. If a...
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Tiffany Family Trust Corp. v. City of Kent
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