Yakima County (West Valley) Fire Protection Dist. No. 12 v. City of Yakima

• Citation: 858 P.2d 245,122 Wn.2d 371
• Decision Date: 16 September 1993
• Docket Number: No. 59239-0,59239-0
• Parties: YAKIMA COUNTY (WEST VALLEY) FIRE PROTECTION DISTRICT NO. 12, a Washington Fire Protection District; Steven Puhrmann and Dianne L. Puhrmann, husband and wife; and Floyd T. Leitch and Marian R. Leitch, husband and wife, Appellants, v. CITY OF YAKIMA, a Washington municipal corporation, Respondent. En Banc
• Court: United States State Supreme Court of Washington

Page 371

122 Wn.2d 371

858 P.2d 245

YAKIMA COUNTY (WEST VALLEY) FIRE PROTECTION DISTRICT NO. 12, a Washington Fire Protection District; Steven Puhrmann and Dianne L. Puhrmann, husband and wife; and Floyd T. Leitch and Marian R. Leitch, husband and wife, Appellants, v. CITY OF YAKIMA, a Washington municipal corporation, Respondent.

No. 59239-0.

Supreme Court of Washington,

En Banc.

Sept. 16, 1993.

Thorner, Kennedy & Gano, P.S., David A. Thorner, Blaine T. Connaughton, Yakima, for appellants.

Preston, Thorgrimson, Shidler, Gates & Ellis, Elizabeth Thomas, Adam W. Gravley, Seattle, for respondent.

Clark B. Snure, Des Moines, amici curiae for appellants on Behalf of Washington Fire Commissioners Ass'n and Kitsap County Fire Protection Dist.

Peter L. Buck, Shelley Kneip, Seattle, Honorable C. Danny Clem, Kitsap County Prosecutor, Reinhold P. Schuetz, Deputy, Port Orchard, Paul Marshall Parker, Olympia, amici curiae for appellants on Behalf of Kitsap County and Washington Ass'n of Counties.

William L. Cameron, Kennewick City Atty., Kennewick, amicus curiae for respondent on Behalf of the Washington State Ass'n of Municipal Attorneys.

En Banc.

BRACHTENBACH, Justice.

In this declaratory judgment action, appellants challenge the validity of Outside Utility Agreements (OUA's) signed by appellant landowners as a condition of receiving sewer service from the City of Yakima (City), which required appellant landowners to sign a future petition for annexation when annexation of their property should become feasible. At issue in this case are: (1) whether the Yakima County Fire Protection District (Fire District) has standing to participate in this declaratory judgment action; (2) whether the City had a duty to provide sewer service to appellant landowners; (3) whether the City had authority to enter the OUA's; (4) whether the OUA's improperly required waiver of a future right; (5) whether the OUA's were invalid because based on misrepresentation or because mutual assent and/or consideration were lacking; (6) whether the OUA's were unconscionable, adhesion contracts, or against public policy; and (7) whether the OUA's deprived appellant landowners of their free speech rights guaranteed by the First Amendment. We hold that the OUA's are valid. We affirm the trial court's grant of summary judgment in favor of the City.

The City first announced its policy of requiring annexation of all areas to which sewer or water service is extended in a resolution adopted in 1965. The 1965 resolution provided that if annexation of a parcel was not feasible, sewer or water service would be extended to the parcel only if the landowner signed an "Outside Utility Agreement", which required the landowner to "sign any petition leading to the future annexation of said property to the City of Yakima". Clerk's Papers, at 9. The City's annexation policy was restated in a 1968 resolution, with the same requirement that an OUA be signed prior to extension of service to property that could not immediately be annexed.

In 1976, recognizing that "the existing sewage treatment facilities in the Yakima urban area do not meet the current water pollution control requirements", Clerk's Papers, at 104, the City, Yakima County, the Town of Union Gap, and the Terrace Heights Sewer District entered an agreement (4-party agreement) to deal with the situation. The agreement provided for the City's treatment plant to be upgraded to meet pollution control standards, and the City agreed to "accept sewage delivered to it" by the other three parties. Clerk's Papers, at 105. The upgrade, financed 75 percent by the Environmental Protection Agency, 15 percent by the State, and 10 percent by local funds, was completed in the early 1980's.

The 4-party agreement included a provision relating to the City's annexation policy:

Except for the area served by the Terrace Heights Sewer District or the Town of Union Gap, now or in the future, property owners within the Yakima urban area who seek sewer service, through the formation of LID's or otherwise, shall be subject to the condition that any property owner seeking sewer service whose land is located within the urban boundary ... shall, as a condition precedent to the receipt of sewer service by the City, be required to immediately annex to the City, if feasible to do so, or to sign an agreement, as a covenant running with the land, to the effect that a petition to annex to the City of Yakima will be signed if and when the landowner is asked by the City to do so.

Clerk's Papers, at 115.

Yakima County was not involved in the collection of sewage for delivery to the sewage treatment plant at the time the 4-party agreement was entered. However, the 4-party agreement left open a narrow option under which Yakima County could become involved in the collection of sewage.

The County of Yakima agrees that it will not, in the Yakima urban area, enter the service of sewage delivery unless all other entities involved have been unable or have refused to serve the area concerned on a basis acceptable to the residents, and an impasse has been reached. In that event, and if a necessity for such service for the health and welfare of the people in the area involved is determined to exist, the County agrees that it will not provide sewer service to such area without a delaying period of 90 days after the impasse has developed....

Clerk's Papers, at 115.

In December 1981, the City, Yakima County and Union Gap adopted a comprehensive plan for the Yakima urban area. The City adopted the comprehensive plan through ordinance 2579. This plan summarized the 4-party agreement and restated the provisions of the 4-party agreement quoted above, relating to the requirement of annexation to the City and the right of Yakima County to provide sewage collection services.

Floyd T. and Marian R. Leitch were the first of the two couples who are appellants in this action to enter an OUA with the City. They entered their OUA on May 20, 1981, prior to the City's adoption of the comprehensive plan through ordinance 2579 in December 1981. In 1981, the Leitches and their neighbors were having problems with their septic systems and their drainfields. One neighbor had sewage backing up into their tub, and another neighbor's home was condemned by the County Health Department because sewage was backing up when they ran their washing machine. The Leitches sought sewer service from the City, and the City required the Leitches to sign an OUA with the following provision concerning annexation:

The undersigned owner(s) further agrees (agree) that he (they) will sign any and all notices, petitions and any other documents requested at any time by the City leading to the annexation to the City of Yakima of the property affected by this agreement, and will actively promote and participate in any such annexation proceedings; and that he (they) will not protest the future formation of any local improvement district for domestic water and/or sewer for any district which includes the property affected by this agreement.

Clerk's Papers, at 462. The OUA also required the Leitches to pay "all connection charges, service fees, future local improvement district assessments, if any, and any and all other charges and fees required by law to be paid for the service hereby applied for." Clerk's Papers, at 462.

Steven B. and Dianne L. Puhrmann, the second set of appellant landowners in this case, entered their OUA with the City in 1986. They signed their OUA at the closing on their purchase of a home within the Yakima urban area. Mr. Puhrmann stated in his deposition that he was aware, prior to closing, that the home they were purchasing was hooked up to the sewer system. The Puhrmanns explained that the OUA was represented to them as a closing document, that they were told signing it was necessary for them to be hooked up to the sewer, that they were told closing could not be completed unless they signed it, and that they signed it without reading it. The OUA signed by the Puhrmanns contained terms identical to the terms in the Leitches' OUA.

On April 10, 1991, the City sent letters to appellant landowners informing them of the City's intent to annex their area and requesting them to sign a "Notice of Intent to Initiate Annexation Proceedings", as required by their OUA's. The Fire District provides fire protection services to the area the City is seeking to annex. This action was filed by the appellant landowners, together with the Fire District, seeking a declaration that the OUA's entered by appellant landowners are void.

The City moved to have the Fire District dismissed from the action for lack of standing. The court granted the City's motion and dismissed the Fire District. The parties then filed cross motions for summary judgment. The trial court entered summary judgment in favor of the City. Following the entry of summary judgment, the City moved for and was granted voluntary dismissal of its counterclaims. Appellants' motion for reconsideration was denied. Appellants then sought and were granted direct review by this court.

The first issue in this declaratory judgment action is whether the Fire District has standing to participate. The persons entitled to seek a declaratory judgment are described in RCW 7.24.020:

A person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status or other legal relations thereunder.

Parties whose financial interests will be affected by the outcome of a declaratory judgment action have standing. See Seattle Sch. Dist. 1 v. State, 90 Wash.2d 476, 493, 585 P.2d 71 (1978) (holding that a school district...