Coy v. City of Duvall

Dwyer, J. ¶ 1 — Neal Coy appeals from the trial court’s summary judgment dismissal of his claim against the city of Duvall (City). Coy contends that, although the City ultimately approved his preliminary plat application, it acted in an arbitrary and capricious manner during the application process. Pursuant solely to the “final decision” prong of RCW 64.40.020(1), Coy seeks an award of money damages for claimed injuries resulting from the City’s purportedly arbitrary and capricious conduct. Because the statute provides no cause of action in such circumstances, we affirm the trial court’s dismissal of Coy’s claim. I ¶ 2 In May 2006, Coy submitted an application to the City for preliminary plat approval of a 32-unit residential subdivision on a 4.58-acre property. In his application, Coy proposed filling the entire on-site wetland. The City’s outside consultant peer reviewer, an ecologist at The Watershed Company, thereafter performed two site visits of the property to determine whether Coy’s proposal was consistent with the City’s code. He determined that Coy’s proposed mitigation plan was deficient and concluded that, because the wetland “serve [d] several functions,” it “appear [ed] that the code would not allow alteration of this wetland.” ¶ 3 On June 29, 2006, city planner Lara Thomas wrote to Coy’s consultant, David Evans & Associates Inc. (Evans), stating that the City’s wetland peer review process had been completed and that Coy’s wetland fill request did not meet the criteria set forth in the City’s code. On October 13, 2006, after receiving an extension of the period of time allowed for responding to the City’s letter, Evans suggested 275 to Doreen Booth, the City’s planning director, that the City’s response to the proposal was arbitrary and capricious and “constitute [d] a denial of rights afforded to others in the recent past.” Evans maintained that the City’s code allowed for the wetland fill proposed by Coy. On December 11,2006, Booth informed Evans by letter that the City’s planning staff could not “approve, or recommend approving, the filling of the wetland under the Sensitive Areas Regulations [Coy’s] project [was] vested in.” ¶ 4 In January 2007, Evans and the City explored the possibility of processing Coy’s application under the new city code, rather than the code in which the application had vested, and Coy submitted a wetland analysis based upon the new code. Ultimately, however, in May 2007, Coy decided not to pursue permit approval pursuant to the City’s new code; instead, he decided to remain vested in the prior code. ¶ 5 Then, in October, Coy’s attorney wrote to the City, requesting “the City’s prompt and immediate action to confirm that wetland alteration with off-site mitigation is authorized for this preliminary plat application.” The City’s outside counsel, Amy Pearsall, responded, maintaining that the City was not “prepared at this time to say that” Coy’s proposal was consistent with the City’s code. However, Pearsall proposed a compromise whereby the City would review a proposal consistent with Coy’s interpretation of the code if Coy could submit appropriate documentation demonstrating code compliance. ¶ 6 Following Coy’s submission of this documentation, the City’s outside consultant determined on July 14, 2008, that Coy had met the requirements for filling the wetland. However, an appropriate site for off-site mitigation could not be located; thus, the City allowed Coy to perform off-site mitigation by contributing to the Snohomish Basin Mitigation Bank. The hearing examiner approved Coy’s preliminary plat application on December 23, 2008. 276 ¶ 7 On January 22, 2009, Coy sued the City pursuant to RCW 64.40.020(1), which provides permit applicants with a cause of action for damages “to obtain relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority, or relief from a failure to act within time limits established by law.” Coy alleged that the City had both (1) failed to comply with the statutorily mandated time limit for processing the permit application and (2) acted in an arbitrary and capricious manner during the application process. The City moved for partial summary judgment, seeking dismissal of Coy’s claim for damages resulting from the alleged arbitrary and capricious conduct. On September 9, 2011, the trial court granted the City’s motion, dismissing that claim for relief. Coy thereafter stipulated to the dismissal of his claim asserting that the City had failed to comply with the application processing time limit. Thus, the trial court entered an order dismissing that remaining claim. The trial court thereafter granted the City’s motion for an award of attorney fees pursuant to RCW 64.40.020(2).1 ¶ 8 Coy appeals from the trial court’s dismissal of his claim for relief from the City’s alleged arbitrary and capricious conduct. II ¶ 9 Coy contends that he is entitled to delay damages due to the City’s purportedly arbitrary and capricious conduct during the application process, notwithstanding the fact that his permit application was ultimately approved. However, as we have recently held, the “final decision” prong of RCW 64.40.020(1), pursuant to which Coy seeks relief, provides for damages resulting only from an agency’s “final decision” — not from its conduct occurring prior to that decision. Thus, Coy did not state a viable cause of action pursuant to that statutory provision and the trial court did not err by dismissing the claim. 277 ¶ 10 RCW 64.40.020(1) grants to property owners who apply for land use permits a cause of action (1) “for damages to obtain relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority” or (2) for damages to obtain “relief from a failure to act within time limits established by law.” Such a cause of action arises only where there is an “act” by the agency, defined by statute as either (1) “a final decision by an agency which places requirements, limitations, or conditions upon the use of real property in excess of those allowed by applicable regulations” or (2) “the failure of an agency to act within time limits established by law in response to a property owner’s application for a permit.” RCW 64.40.010(6). The statute further provides that the recoverable “damages” are the “reasonable expenses and losses ... incurred between the time a cause of action arises and the time a holder of an interest in real property is granted relief as provided in RCW 64.40.020.” RCW 64.40-.010(4). Thus, the statute allows a permit applicant to recover damages in two circumstances — when those damages result from an agency’s “final decision” and when the damages are caused by an agency’s failure to act within statutorily prescribed time limits. ¶ 11 Here, Coy asserts that the City acted in an arbitrary and capricious manner by determining that Coy’s proposal to fill the wetland was inconsistent with the City’s code and, thus, that its approval could not be recommended by city planning staff. Coy contends that the City’s conduct was arbitrary and capricious because, he asserts, the City had previously approved other such wetland fills under the same code language. Thus, Coy sought damages to obtain relief from an allegedly arbitrary and capricious “act” of the City — not from an alleged failure of the City to act.2 See 278 RCW 64.40.010(6). Moreover, Coy does not contend that the hearing examiner’s ultimate approval of his preliminary plat application was itself arbitrary and capricious. Rather, he asserts that the hearing examiner’s decision — the “final decision” contemplated by RCW 64.40.020(1) — was the result of an “arbitrary process.” ¶ 12 However, as we recently decided in Birnbaum v. Pierce County, 167 Wn. App. 728, 274 P.3d 1070, review denied, 175 Wn.2d 1018 (2012), the “final decision” prong of RCW 64.40.020(1) does not provide a cause of action in such circumstances. There, Pierce County approved Birnbaum’s conditional use permit application five years after its submission. Birnbaum, 167 Wn. App. at 730-31. Thirty days after the approval of her permit application, Birnbaum sued Pierce County pursuant to RCW 64.40.020(1), alleging that the County had both exceeded the statutorily prescribed time limit for action on her application and made arbitrary and capricious requests for additional information prior to approving that application. Birnbaum, 167 Wn. App. at 731-32. The trial court dismissed Birnbaum’s action pursuant to CR 12(b)(6), and we affirmed. Birnbaum, 167 Wn. App. at 731-37. ¶ 13 As relevant here, we determined that Birnbaum had not “stated a claim for damages based on arbitrary and capricious actions or delays under the final decision prong of the statute.” Birnbaum, 167 Wn. App. at 735-37. We noted that “Birnbaum’s complaint [did] not allege that the final 2010 permit approval place [d] requirements, limitations, or conditions upon her real property that gave rise to her damages” — thus, the permit approval itself was not the “act” for which Birnbaum sought damages. Birnbaum, 167 Wn. App. at 735. Rather, Birnbaum sought “damages for costs and delays that occurred while the County processed the application, before the permit issued.” Birnbaum, 167 279 Wn. App. at 735. We held that, pursuant to its plain meaning, the statutory definition of “damages” set forth in RCW 64.40.010(4) “authorizes damages only for expenses and losses that are incurred after a cause of action under the statute arises.” Birnbaum, 167 Wn. App. at 735-36. Thus, the damages alleged by Birnbaum, which were incurred prior to the final decision giving rise to a cause of action, were not recoverable. Birnbaum, 167 Wn. App. at 736. We rejected Birnbaum’s assertion that “a claim for arbitrary delay occurring prior to a final decision ... may be brought once the permit decision is final.” Birnbaum, 167 Wn. App. at 736. Rather, we held: Under the final decision prong, the final decision is the act which triggers the cause of action. The definition of “damages” limits recovery to those damages that occur after the cause of action accrues. Simply put, the statute does not contemplate damages — for delay or otherwise — under the final decision prong that occurred prior to the final decision. Birnbaum, 167 Wn. App. at 737. ¶ 14 Similarly, here, Coy seeks damages for delays resulting from the City’s allegedly arbitrary conduct prior to the City’s final decision — in this case, the hearing examiner’s ultimate approval of Coy’s preliminary plat application. Coy does not allege that the hearing examiner’s approval of the permit application “places requirements, limitations, or conditions” upon Coy’s use of his property “in excess of those allowed by applicable regulations.” RCW 64.40.010(6). Thus, the conduct at issue — from which Coy contends his alleged damages flow — is the City’s conduct during the application process, not the hearing examiner’s final decision approving the application. But, as Birnbaum makes clear, damages resulting from such conduct are not recoverable pursuant to chapter 64.40 RCW. Rather, damages must result from either a final decision (which Coy does not challenge) or a failure by the agency to act within the statutorily prescribed time limit (which Coy no longer alleges). RCW 64.40.010(4). Just as we stated in Birnbaum, 280 “the statute does not contemplate damages — for delay or otherwise — under the final decision prong that occurred prior to the final decision.” 167 Wn. App. at 737. ¶ 15 Pursuant to RCW 64.40.020, where a permit applicant challenges an act of an agency — rather than the agency’s failure to act — the applicant’s damages must flow from the agency’s final decision. Because, here, Coy challenges the agency’s conduct prior to the final decision, he has not stated a viable claim for relief pursuant to that statute. Accordingly, the trial court properly dismissed his claim. Ill ¶ 16 Coy additionally contends that the trial court erred by granting an award of attorney fees to the City. We disagree. ¶ 17 Coy first asserts that the trial court’s grant of an award of attorney fees to the City was improper because, he contends, the City prevailed on “jurisdictional” grounds rather than “on the merits” of the claim. However, RCW 64.40.020(2), which provides for an award of attorney fees to the prevailing party in an action brought pursuant to that chapter, does not require that a party prevail on any particular ground. Nevertheless, Coy contends that RCW 4.84.370 is a “similar, almost parallel, statute” and that, pursuant to that statute, Washington courts have determined that an award of fees is precluded where a party does not prevail on the merits of a claim. But that statutory language — which provides that “the county, city, or town whose decision is on appeal is considered a prevailing party if its decision is upheld at superior court and on appeal,” RCW 4.84.370(2) (emphasis added) — bears little resemblance to the language of RCW 64.40.020(2). It does not inform our decision. Under the plain language of the applicable statutory provision, the trial court had the discretion to award fees to the prevailing party, regardless of the basis for its victory. 281 ¶ 18 Coy additionally asserts that, even if the grant of an award of fees was proper, the trial court abused its discretion in determining the amount of that award. Specifically, he asserts that, “considering the City prevailed on jurisdictional grounds and not the merits, the number of hours spent on this case were extraordinary.” However, Coy fails to note that the City addressed “the merits” of the arbitrary and capricious claim in its motion for partial summary judgment, even though the trial court dismissed that claim on other bases. Moreover, Coy does not address the fact that the City prevailed on his claim regarding the timeliness of the application process; although Coy eventually stipulated to the dismissal of that claim, he did not do so until after a motion for partial summary judgment on that issue had been submitted to the trial court. ¶ 19 “The amount of a fee award is discretionary, and will be overturned only for manifest abuse.” Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 65, 738 P.2d 665 (1987). The trial court did not abuse its discretion in either determining to make an award of fees or in determining the amount of the award it entered. IV ¶ 20 Finally, the City requests an award of attorney fees on appeal pursuant to RCW 64.40.020(2). The City is the prevailing party on appeal. Accordingly, upon proper application, our commissioner will enter an appropriate order awarding appellate attorney fees to the City. ¶ 21 Affirmed. Spearman, A.C.J., concurs. Footnotes [1] “The prevailing party in an action brought pursuant to this chapter may be entitled to reasonable costs and attorney’s fees.” [2] Although Coy’s complaint alleged that the City had both acted in an arbitrary and capricious manner and failed to act on his application within the statutorily prescribed time limit, Coy stipulated to the dismissal of his claim based upon the City’s alleged noncompliance with the application processing time limit. He 278 appeals only from the trial court’s dismissal of his claim for relief from the City’s alleged arbitrary and capricious conduct. Thus, only the “final decision” prong of RCW 64.40.020(1) is at issue here.