[Nos. 58113-9-I; 58782-0-I. Division One. July 23, 2007.]
In the Matter of the Petition of the Seattle Popular Monorail Authority, a City Transportation Authority, To Acquire by Condemnation Certain Real Property for Public Use as Authorized by Resolution No. 04-16.
[1] Eminent Domain — Authority — Limitations — Constitutional Limitations. The state's power of eminent domain is an attribute of sovereignty; it is an inherent power. The limits of this power are set out in Const. art. I, § 16. [2] Municipal Corporations — Eminent Domain — Statutory Authority — Legislative Delegation — Construction — Strict Construction. The legislature's delegation of its power of eminent domain to a special purpose municipal corporation is strictly construed. [3] Municipal Corporations — Eminent Domain — Statutory Authority — Legislative Delegation — Redelegation — Validity — In General. A special purpose municipal corporation may not redelegate its legislatively granted power of eminent domain to another entity. [4] Municipal Corporations — Eminent Domain — Statutory Authority — Legislative Delegation — Assignment of Uncompleted Condemnation to Private Party — Validity. A special purpose municipal corporation may not assign its rights in an uncompleted condemnation proceeding to a private party. [5] Eminent Domain — Abandonment of Condemnation — Test. A condemnation proceeding initiated by a government agency in the exercise of the power of eminent domain will be deemed abandoned if the agency has the intent to abandon and performs an external act giving effect to such intent. A condemnation proceeding may be abandoned by the passage of a resolution or the repeal of the initial ordinance that permitted the commencement of the condemnation action. The intent necessary for an abandonment may be shown by actions, conduct, or declarations. [6] Administrative Law — Agency Authority — Source — Equity — Validity. Equity cannot be used to confer upon a government agency powers that are without legal authorization. [7] Eminent Domain — Abandonment of Condemnation — Assignment of Condemnation Rights to Private Owner — Effect. A government agency effectively abandons a proceeding to condemn private property for a public use by approving an assignment of its rights to the property to the private owner thereof. The act of approving the assignment to the private owner indicates an intent to abandon the condemnation and, because such approval qualifies as an abandonment of the condemnation, the assignment is not legally permissible. Condemnation means that the government actually takes privately owned property and assigns it to a public use. Where the government, by its own admission, does not intend to take the property at all by assigning its rights in an uncompleted condemnation proceeding to the private owner of the property, the government thereby abandons the condemnation and has no rights to assign. Equity will not lie to enforce the assignment. [8] Appeal — Mandate — Subsequent Ruling by Trial Court — Validity. Under RAP 12.2, an appellate court's mandate of a case on review from a trial court does not prevent the trial court from subsequently ruling on an issue in the case so long as the ruling does not challenge issues decided by the appellate court. [9] Eminent Domain — Attorney Fees — Abandonment of Condemnation — In General.Under RCW 8.25.075(1)(b), a condemnee that succeeds in having a condemnation judgment vacated on the grounds that the condemnation proceeding has been abandoned by the condemning authority is entitled to an award of attorney fees and costs therefor. [10] Eminent Domain — Attorney Fees — Abandonment of Condemnation — Prepetition Expenses. When a condemnor abandons an eminent domain proceeding, RCW 8.25.070 and .075 do not authorize a condemnee to be reimbursed for attorney fees and expert witness fees incurred before the petition for condemnation was filed. [11] Courts — Stare Decisis — Court of Appeals — Court of Appeals Holding — Review Denied by Supreme Court. A decision of the Court of Appeals that the Supreme Court has declined to review constitutes binding law that must be followed in analogous cases. [12] Costs — Attorney Fees — Review — Basis in Record — Necessity. An award of attorney fees will not be sustained on appeal if the record before the court is insufficient to demonstrate the basis for the award or to allow meaningful review. Nature of Action: The owner of property that a city transportation authority had sought to condemn for a monorail transportation project sought entry of a stipulated judgment for condemnation of the property. The property owner had negotiated the stipulated judgment with the transportation authority and then been assigned the transportation authority's rights in the stipulated judgment after the monorail project was terminated by the transportation authority following a negative public vote. Entry of the stipulated judgment was opposed by two parties: the holder of a long-term lease on the property and a sublessee that operated a parking garage thereon. Superior Court: The Superior Court for King County, No. 04-2-10035-6, Jeffrey M. Ramsdell, J., on April 6, 2006, entered a judgment vacating the stipulated judgment and dismissing the condemnation action and, on July 21, 2006, entered a judgment awarding the lessee and sublessee costs and attorney fees. Court of Appeals: Holding that the transportation authority had abandoned the condemnation and had no authority to assign its rights therein to the private property owner and that the record was insufficient to review the attorney fee award, the court affirms the judgment vacating the stipulated judgment and the dismissal of the condemnation action and remands the case for further proceedings on the issue of attorney fees. George Kresovich- and Timothy D. Benedict- (of Hillis Clark Martin & Peterson) and P. Stephen DiJulio- and Sharon E. Cates- (of Foster Pepper, PLLC), for appellants. Richard C. Yarmuth- and Jordan Gross- (of Yarmuth Wilsdon Calfo, PLLC) and Paul A. Harrel-, Daniel W. Ferm-, and Megan L. Pedersen- (of Williams Kastner & Gibbs, PLLC), for respondents. ¶1 GROSSE, J. — The power of eminent domain is an inherent power of the state and redelegations of that power to private parties are invalid. Here, the Seattle Monorail Project agreed to assign its rights in an uncompleted condemnation proceeding to a private party. Because the Seattle Monorail Project did not have the power to make such an assignment, and because the Seattle Monorail Project's actions evidenced its intent to abandon the condemnation proceedings, we affirm the trial court on this issue. FACTS ¶2 In April 2004, the Seattle Popular Monorail Authority, a/k/a Seattle Monorail Project (SMP), filed a petition to condemn property owned by HTK Management, LLC (HTK). The subject property contains a parking garage. Rokan Partners (Rokan) holds a long-term lease on the property and AMPCO System Parking (AMPCO) operates the garage as a sublessee of Rokan. HTK challenged the trial court's finding of public use to the Supreme Court. ¶3 The parties reached a mediated settlement agreement contingent upon the outcome of the Supreme Court case. The settlement agreement called for the entry of a stipulated judgment if SMP prevailed in the suit. The stipulated judgment called for SMP to take title of the property through condemnation in return for a $10,400,000 just compensation award, inclusive of all fees and costs. ¶4 On October 20, 2005, the Supreme Court in In re Petition of Seattle Popular Monorail Authority ¶5 In light of SMP's changed fortunes, negotiations were conducted between the parties to arrive at another settlement. In December 2005, the SMP board of directors approved a settlement between HTK and SMP where SMP assigned its rights in the stipulated judgment to HTK. In return, HTK waived any claims that it might have against SMP and indemnified and held SMP harmless from any other claims arising from this action. When the stipulated judgment was presented for entry, Rokan and AMPCO filed motions to block its entry. ¶6 The trial court found in favor of Rokan and AMPCO. Specifically, the trial court concluded that SMP had abandoned the condemnation proceedings when it agreed to assign its rights to HTK under the stipulated judgment. The court dismissed the condemnation action and vacated the stipulated judgment. Furthermore, the trial court concluded that because SMP abandoned the condemnation, Rokan and AMPCO were entitled to costs and fees under RCW 8.25.075(1)(b). ¶7 At a subsequent hearing, Rokan and AMPCO requested costs and fees. AMPCO requested a total award of $311,780.97 and Rokan asked for $295,724.20. HTK and SMP opposed the requested fees. The trial court awarded AMPCO $247,609 and Rokan $194,170. ¶8 HTK and SMP appeal the trial court's decisions vacating the stipulated judgment and awarding Rokan and AMPCO fees. Rokan cross-appeals the trial court's decision awarding it less than the full amount of its requested fees. AMPCO does not cross-appeal the decision to award it less than the full amount of its requested fees but asks that its fee award be affirmed. ANALYSIS ¶9 This case presents the issue of whether a public entity's agreement to assign its rights as a condemnor to a private party under an uncompleted eminent domain proceeding constitutes an abandonment of the condemnation by the public entity. The trial court concluded that SMP lacked the power to assign its rights as condemnor to HTK. Furthermore, SMP had abandoned the condemnation proceedings when it agreed to assign its rights to HTK under the stipulated judgment. For the reasons stated below, we agree with the trial court. Private property shall not be taken for private use, except for private ways of necessity, and for drains, flumes, or ditches on or across the lands of others for agricultural, domestic, or sanitary purposes. No private property shall be taken or damages for public or private use without just compensation having been first made, or paid into court for the owner, and no right-of-way shall be appropriated to the use of any corporation other than municipal until full compensation therefor be first made in money, or ascertained and paid into court for the owner, irrespective of any benefit from any improvement proposed by such corporation, which compensation shall be ascertained by a jury, unless a jury be waived, as in other civil cases in courts of record, in the manner prescribed by law. Whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such, without regard to any legislative assertion that the use is public: Provided, that the taking of private property by the state for land reclamation and settlement purposes is hereby declared to be for public use. Abandonment has two elements: the intent to abandon and the performance of an external act giving effect to the intent. Condemnation may be abandoned by the passage of a resolution or the repeal of the initial ordinance that permitted the commencement of the condemnation action. The intent necessary for an abandonment may be shown by actions, conduct, or declarations. SMP's intent to abandon the condemnation is expressed in its resolution approving the assignment. By its own words, SMP approved the assignment because it "would permit the owner of that property to keep the property while at the same time protecting the Seattle Monorail Project and its taxpayers from any further liability, cost or expense related to the acquisition of that property." ¶13 HTK argues that the basis for the trial court's ruling was CR 60(b)(11). Rokan's motion cited as authority CR 60(b)(1), (b)(3), (b)(6), and (b)(11), while AMPCO's motion cited CR 60(b)(3) and (b)(11) as grounds for relief. The trial court's order does not state which rule it applied. CR 60(b)(11) states, "On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for . . . [a]ny other reason justifying relief from the operation of the judgment." ¶14 However, equity cannot be used to confer upon a city transportation authority like SMP powers that are without legal authorization. ¶16 In sum, because SMP had no authority to confer upon HTK its rights as a condemnor, and because the evidence establishes that SMP intended to abandon the condemnation and took affirmative steps to abandon the condemnation, the trial court did not err when it vacated the stipulated judgment, found SMP had abandoned the condemnation, and dismissed the condemnation proceeding. Costs and Attorney Fees (1) A superior court . . . shall award the condemnee costs including reasonable attorney fees and reasonable expert witness fees if: (a) There is a final adjudication that the condemnor cannot acquire the real property by condemnation; or (b) The proceeding is abandoned by the condemnor. . . . . (4) Reasonable attorney fees and expert witness fees as authorized in this section shall be subject to the provisions of subsection (4) of RCW 8.25.070 as now or hereafter amended. RCW 8.25.070(4) states: Reasonable attorney fees as authorized in this section shall not exceed the general trial rate, per day customarily charged for general trial work by the condemnee's attorney for actual trial time and his or her hourly rate for preparation. Reasonable expert witness fees as authorized in this section shall not exceed the customary rates obtaining in the county by the hour for investigation and research and by the day or half day for trial attendance. The court has reviewed the submissions of the parties and finds that the fees and costs awarded to AMPCO and Rokan represent the reasonable attorney fees and reasonable expert witness fees authorized by RCW 8.25.075 and RCW 8.25.070(4). The court has made adjustments to the requested award amounts by subtracting fees not reasonably related to trial preparation in this matter. It is not entirely clear from the court's decision, but it is possible to assume based on the arguments of the parties below that the trial court relied on State v. Trask ¶19 In Port of Grays Harbor, the Supreme Court concluded that under RCW 8.25.070 and .075 the condemnee was not entitled to attorney fees incurred prior to the condemnation petition being filed. ¶20 In Trask, Division Two of the Court of Appeals held that the legislature, through RCW 8.25.070, intended to award fees incurred by a condemnee to establish just compensation, but not fees incurred solely to apportion such compensation between condemnees. Assuming that the compensation portion of condemnation proceedings contains a just compensation phase and an allocation phase, the court explained it reached its decision based on the concern that the fees incurred at the allocation phase (where the condemnees determined the division of the just compensation award) would be incurred in the State's absence, depriving the State of the opportunity to challenge their reasonableness. The court further held "that fees incurred to establish just compensation include fees paid to produce evidence relevant in any way to the amount of just compensation." ¶21 Rokan challenges the Trask court's reasoning, stating that the distinction drawn between the just compensation and allocation phases is a false one because the issues are often litigated together (and were so even in Trask) and, therefore, the State is often continuously in a position to challenge the reasonableness of the fees. Rokan argues the evil the Trask court wished to prevent in its decision does not justify its decision even under the facts in Trask and, therefore, should not justify the same result in this case where SMP remained a party to the suit and thus was able to challenge the reasonableness of the fees throughout the lawsuit. ¶24 For the above reasons, we affirm in part and remand in part. APPELWICK, C.J., and DWYER, J., concur.