Woods View II, LLC v. Kitsap Cnty.
| Citation | 352 P.3d 807,188 Wash.App. 1 |
| Decision Date | 14 April 2015 |
| Docket Number | No. 44404–6–II.,44404–6–II. |
| Court | Court of Appeals of Washington |
| Parties | WOODS VIEW II, LLC, a Washington limited liability company; and Darlene A. Piper, a single woman, Appellant and Cross–Respondent, v. KITSAP COUNTY, a Washington municipality, Respondent and Cross–Appellant. |
Guy William Beckett, Berry & Beckett, PLLP, Seattle, WA, for Appellant/Cross–Respondent.
Mark Robert Johnsen, Karr Tuttle Campbell, Seattle, WA, Neil Robert Wachter, Auburn, WA, for Respondent/Cross–Appellant.
¶ 1 Appellants Woods View II, LLC (WVII) and Darlene Piper appeal from the superior court's grant of summary judgment in Kitsap County's (the County) favor on WVII's claims of negligence, tortious interference, and takings. These claims arise from the alleged delay of several permits and governmental decisions required for a project of WVII. WVII and Piper argue that (1) their claims are not barred by the statute of limitations, (2) Piper has individual standing, (3) the County's communications were not immunized as petitioning activity, (4) the County, negligently delayed processing their development permit, (5) the County tortiously interfered with the various permitting processes involved in the project, and (6) the County's actions constituted a taking. On cross appeal, the County argues that (7) the Land Use Petition Act (LUPA), ch. 36.70C RCW, barred WVII's claims. Although we agree with WVII that its claims are not barred by the statute of limitations, the trial court's summary dismissal of WVII's claims is affirmed.
¶ 2 This case involves a failed residential development, four decisions concerning the real property, and the timeliness of these decisions. Because this case is factually complex with a voluminous record, we begin by establishing the basic factual background and explaining the applicable administrative framework. Then, we discuss the facts that give rise to WVII's claims. Finally, we. discuss the procedural history.
¶ 3 The appellants are WVII and its managing member, sole owner, and agent Piper. WVII intended to build a residential development called “Woods View” on 19.76 acres in small “legacy lots”1 in south Kitsap County. Piper was personally invested in the project: she was the sole owner of the construction company that would have served as the general contractor, she personally funded $350,000 in development expenses, and she personally guaranteed a $2,927,000 loan to WVII.
¶ 4 The Woods View project was highly controversial in the community. The county commissioners received many complaints about the development. Concerned citizens wrote to the County to complain about the project. One constituent characterized the development as a “mobile home park.” Clerk's Papers (CP) at 445. The Woods View project was subjected to scrutiny by not only the county commissioners, but also the governor's office, state legislators, and state agencies.
¶ 5 The County was sensitive to these concerns because it had faced frequent criticism for its land use decisions in the past. CP at 1265 (). In fact, it had very recently been challenged before the Growth Management Hearings Board for failing to regulate “urban service” in rural areas.2 See Harless v. Kitsap County, No. 07–3–0032, 2007 WL 4181033 (Cent. Puget Sound Growth Mgmt. Hr'gs Bd. Nov. 15, 2007).
¶ 6 In an e-mail to a constituent who was upset about Woods View, County Commissioner Steve Bauer indicated that CP at 436 (emphasis added).
¶ 7 At issue are four decisions regarding (1) a “Site Development Activity Permit” (SDAP), (2) a State Environmental Policy Act (SEPA), ch. 43.21C RCW, review, (3) state approval of a “Large On–Site Sewer System” (LOSS), and (4) a modification to the LOSS decision. All four decisions were made in WVII's favor and WVII does not challenge the decisions themselves. Rather, WVII alleges that the permits or decisions were granted too slowly as a direct and indirect result of the County's actions. We briefly explain the pertinent history below.
¶ 8 The Woods View project required the County Department of Community Development (DCD) to issue a SDAP. Kitsap County Code (KCC) 12.10.030. Similarly, local government is obliged to carry out a SEPA review and issue a determination of significance (DS), a determination of nonsignificance (DNS), or a mitigated determination of nonsignificance (MDNS). City of Fed. Way v. Town & Country Real Estate, LLC, 161 Wash.App. 17, 53, 252 P.3d 382 (2011) (citing Moss v. City of Bellingham, 109 Wash.App. 6, 15, 31 P.3d 703 (2001), review denied, 146 Wash.2d 1017, 51 P.3d 86 (2002) ); WAC 197–11–310(5)(a), (b), –340, –350(3) ; RCW 43.21C.030. Under the existing County ordinances, the County was required to provide a final decision within 78 days of the date it deemed the application complete.3 Former KCC 21.04.110(A) (1998).4
¶ 9 WVII completed its SEPA “application” on April 14, 2006, and its SDAP application on May 5, 2006.5 The County issued a MDNS on January 4, 2007. The SDAP was issued on December 10, 2007. Community groups appealed both decisions to the hearing examiner and the Kitsap County Superior Court, but their appeals were rejected.6 According to WVII, the hearing examiner was also tardy, hearing argument on March 20, 2008, and filing a decision on June 6, 2008.7
¶ 10 A LOSS is a type of waste treatment system that serves multiple lots. Unlike the SDAP and SEPA review, the LOSS was not absolutely necessary for the project to move forward, but it would have allowed Woods View to double its density. With the LOSS, Woods View could support 78 single-family homes. Without the LOSS, Woods View could support only 39 homes using individual septic systems.
¶ 11 The state Department of Health (DOH) is responsible for evaluating LOSS applications. WAC 246–272B–02150. The County has no direct authority to approve or disapprove a LOSS system. Nevertheless, the then-existing administrative code required a LOSS to comply with local land use standards. See former WAC 246–272B–08001(2)(a)(ii) (2003).8 Accordingly, while the DOH always had primary responsibility for passing on a LOSS application, it communicated with the County regarding WVII's application for a LOSS permit, as we explain further below.
¶ 12 At the relevant time, the DOH rules imposed requirements on the LOSS system's management depending on how the land serviced by the LOSS would be used. Where the lots were individually owned, a LOSS could only be managed by a public entity or a private operator guaranteed by a public entity. Former WAC 246–272B–08001(2)(a)(vi)(A)(I) (2003), But if the lots were under single ownership, either a public entity or a private entity could manage the LOSS. Former WAC 246–272B–08001(2)(a)(vi)(A)(II) (2003). One such public entity was the Karcher Creek Sewer District (KCSD). WVII initially approached KCSD to manage the LOSS for Woods View, and on September 29, 2006, KCSD issued a “Binding Sewer Availability” letter good for one year. But on December 1, 2006, WVII indicated that it had decided to use a “DOH approved private management entity” instead. CP at 135.
¶ 13 WVII requested a LOSS permit at some time in 2006. DOH granted the LOSS permit on March 19, 2008, conditioned on the Woods View lots being held by a single owner. At first, WVII agreed to the condition and recorded a “Covenant to Retain Single Ownership” on the same day. But WVII soon found the single-owner condition a barrier to financing: it approached the Legacy Group (Legacy) for a business loan, but Legacy “liked the project as depicted with an individual owner model” and found DOH's conditions made the project a “non-starter.” CP at 125. As such, WVII decided to petition DOH for a modification to its LOSS permit that would allow the lots to be sold individually.9
¶ 14 WVII submitted all necessary documents for its modified LOSS proposal in November 2009. Richard Benson, the DOH engineer who initially worked on the Woods View permit, indicated that DOH could make the change “in a matter of a week to two weeks except that if the county had objections to it, he said, quote-unquote, ‘I'm going to have to dot my i's and cross my t's and we'll have to go through the full process and it could take up to six months to a year.’ ” CP at 1846. The modified LOSS was not approved until August 24, 2010.
¶ 15 WVII alleges that the County caused the aforementioned delays as part of a deliberate plan to undermine the Woods View project. While WVII points to many instances of the County's alleged intermeddling, its facts can be reduced to three main courses of conduct: communications with DOH, communications with third parties, and internal delays. We explore these courses of conduct in turn.
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