[No. 24472-5-III. Division Three. February 15, 2007.]
[1] Judgment Summary Judgment Review Absence of Factual Dispute. Matters of law in a summary judgment proceeding are reviewed de novo if there are no disputed material facts. [2] Government Parties Standing Taxpayer's Suit In General. An individual taxpayer who is not specially injured by a governmental act does not have standing to challenge the lawfulness of the act on behalf of all taxpayers if the Attorney General has not been appropriately requested to take action on the matter and it is not shown that such a request would be useless. [3] Government Public Funds Management and Accounting Taxpayer Challenge Right of Action Auditor Statute. chapter 43.09 RCW, which creates a state auditor and authorizes the auditor to enforce state auditing laws, does not create a taxpayer right of action to challenge a government agency's financial transactions and accounting entries in court. All judicial enforcement is by the Attorney General. A taxpayer may sue under the auditor statute only after the Attorney General has decline the taxpayer's request to sue. [4] Judgment Collateral Estoppel Purposes. The purpose of the doctrine of collateral estoppel is to prevent endless relitigation of disputes that have already been litigated by the parties and decided by the court. Collateral estoppel promotes judicial economy and prevents inconvenience to and harassment of parties. [5] Judgment Collateral Estoppel Elements In General. The doctrine of collateral estoppel will prevent the relitigation of an issue if (1) the issue is identical to one decided in a prior proceeding, (2) a final judgment on the merits was entered in the prior proceeding, (3) the party against whom the doctrine is asserted was a party or was in privity with a party to the prior proceeding, and (4) application of the doctrine will not work an injustice on the party against whom it is asserted. [6] Parties Joinder Necessary Party Test. CR 19 requires joinder of a party if the party has an interest relating to the subject of the action and disposition of the action in the party's absence may impair the party's ability to protect its interest in the litigation. [7] Judgment Summary Judgment Burden on Nonmoving Party Averment of Specific Facts Necessity. A defense motion for summary judgment based on a claim supported by factual averments in the record is properly granted if the plaintiff fails to set forth specific facts that would establish the existence of a genuine issue of material fact as to any element of the defendant's claim. The plaintiff may not rely solely on the allegations set forth in the pleadings. [8] Judgment Summary Judgment Burden on Nonmoving Party Averment of Specific Facts Elements of Claim In General. A defendant is entitled to a summary judgment if the plaintiff fails to aver sufficient facts to establish any of the pleaded claims. The plaintiff may not rely solely on the allegations set forth in the pleadings. [9] Statutes Application to Facts Question of Law or Fact Review. Whether a statute applies to a particular set of facts is a question of law that is reviewed de novo. [10] Municipal Corporations Parking Off-Street Parking Municipal Development Transfer to Private Party Validity Statutory Provisions. Nothing in RCW 35.86.030 of the municipal off-street parking facilities statute suggests a legislative intent to prohibit cities from turning parking facilities over to private hands if the city council lawfully passes an ordinance declaring that city ownership no longer serves the city's interests. [11] Compromise and Settlement Settlement Agreement Formation Consideration Sufficiency Question of Law or Fact. The sufficiency of consideration supporting a settlement agreement is a question of law that may be decided by summary judgment. [12] Constitutional Law Gift or Loan of Money or Credit Consideration Sufficiency Question of Law or Fact. For purposes of Const. art. VIII, § 7, which generally prohibits a municipality from engaging in a transaction benefiting private parties for which the municipality does not receive adequate consideration, the adequacy of consideration is a question of law that may be decided by summary judgment. [13] Utility Services Municipal Corporations Utilities Powers Nature Governmental or Proprietary Function. Municipalities own and operate their public utilities in a proprietary rather than governmental capacity. [14] Municipal Corporations Powers Proprietary Function Right To Contract In General. Contract law applies to a municipal corporation when it acts in a proprietary capacity. [15] Compromise and Settlement Settlement Agreement Formation Consideration Sufficiency Good Faith Settlement of Dispute. A good faith settlement of a dispute can be sufficient consideration for a compromise to settle the claim. [16] Constitutional Law Gift or Loan of Money or Credit Donative Intent Necessity. The Const. art. VIII, § 7 prohibition on gifts or loans of public funds is not implicated absent donative intent. [17] Government Communication to Government Agency Immunity From Action Anti-SLAPP Immunity Statutory Provisions Interpretation Review. A trial court's interpretation and application of RCW 4.24.510, the anti-SLAPP statute, are reviewed de novo. [18] Government Communication to Government Agency Immunity From Action Anti-SLAPP Immunity CR 11 Motion. A motion for CR 11 sanctions does not constitute a strategic lawsuit against public participation within the meaning of RCW 4.23.510, the anti-SLAPP statute. To satisfy the statute's requirements, a person must in good faith complain or provide information to a government agency about a matter reasonably of concern to the agency. The claim must be on a substantive issue. A CR 11 motion is not a claim on a substantive issue. The anti-SLAPP statute does not divest the court of the power of sanctions when appropriate to the orderly conduct of proceedings; nor does the anti-SLAPP statute insulate an attorney from CR 11 sanctions simply because the attorney's client is suing the government. [19] Costs Attorney Fees On Appeal Frivolous Appeal Court's Own Motion. Under RAP 18.9(a), an appellate court, on its own motion, may require an appellant to pay the respondent's attorney fees for defending against a frivolous appeal. [20] Appeal Frivolous Appeal Terms. An appellant's pursuit of a frivolous appeal may justify the imposition of terms and compensatory damages. [21] Appeal Frivolous Appeal What Constitutes In General. For purposes of awarding attorney fees and costs under RAP 18.9(a), an appeal is frivolous if it fails to present any debatable issues upon which reasonable minds might differ and is so totally devoid of merit that there is no reasonable possibility of reversal. Nature of Action: Action challenging the validity of several aspects of a settlement agreement between a city and the developer of a parking garage, the development and operation of which was financed with city help. Superior Court: The Superior Court for Spokane County, No. 05-2-00001-0, Linda G. Tompkins, J., on September 1, 2005, entered a summary judgment in favor of the city and denied the plaintiff's claim of an unlawful strategic lawsuit against public participation that he had raised against the city's motion for CR 11 sanctions. Court of Appeals: Holding that the plaintiff lacked standing to bring the action, that the settlement agreement is not statutorily barred, that the statute prohibiting strategic lawsuits against public participation does not divest the trial courts of the power to impose sanctions when appropriate to the orderly conduct of proceedings, and that the plaintiff's appeal was frivolous, the court affirms the judgment and orders the plaintiff to pay the city's reasonable attorney fees. Stephen K. Eugster- (of Eugster Law Office, PSC), pro se. Milton G. Rowland -(of Foster Pepper, PLLC), for respondent. Ά1 SWEENEY, C.J. This is the latest of a series of lawsuits arising from the River Park Square garage project in Spokane, Washington. Stephen K. Eugster sued the city of Spokane (City) to challenge the legality of several aspects of the settlement between the City and developers. Ά2 The trial court granted the City's motion for summary judgment based on the undisputed facts, plain statutory language, and well-settled common law. Mr. Eugster is appealing three of the court's rulings. We affirm. On our own, we also award the City its attorney fees and costs for responding to Mr. Eugster's appeal because we conclude it is frivolous. FACTS Ά3 In 1997, the Spokane City Council committed its support to the development of River Park Square, a downtown retail mall. As part of the project, the City arranged financing for the parking garage. The financing scheme for the garage was complex and eventually collapsed, resulting in a plethora of lawsuits. We set out only those facts essential to the issues presented here. A more complete recitation of the facts is set out in our opinion in Eugster v. City of Spokane, 118 Wn. App. 383, 76 P.3d 741 (2003), review denied, 151 Wn.2d 1027 (2004). Ά4 As part of the scheme, the City borrowed $22,650,000 from the United States Department of Housing and Urban Development (HUD) against Spokane's future HUD community development block grant funds. The City loaned this money to a developer. Ά5 The garage revenues fell short. And the developer demanded the promised parking meter funds. The City resisted. It claimed that the developer's experts gave highly inflated forecasts of garage revenues based on imaginary numbers. Mr. Eugster was a plaintiff in a successful mandamus action to force the City to turn over the parking meter funds. See Eugster, 118 Wn. App. 383. Those funds were placed in escrow with the superior court and were released as part of the settlement agreement. Mr. Eugster challenges the transfer of the funds from the parking meter fund to the escrow account. Ά6 The City issued bonds to buy the garage from the developer. The City was to receive title once the bonds were paid off. A group of bondholders bought the bonds. But the market value of the garage turned out to be a fraction of the price the City paid, and the bonds lost value. A multitude of lawsuits were filed in both state and federal courts. Ά7 The City and the developer eventually reached a global settlement under the guidance of the courts. Two key elements of the settlement were specifically ordered by the court. One, in a single pass-through transaction, the City was to receive title to the garage from the current holder and quitclaim it immediately to the developer. Two, the City was to release to the developer the funds from the escrow account. The City and the developer executed a settlement agreement and performed on it. Ά8 Mr. Eugster filed this action in the superior court, challenging the legality of the settlement. Among other objections, Mr. Eugster raised statutory and constitutional objections to the release of the parking meter funds and the pass-through transfer of the title. Both the City and Mr. Eugster moved for summary judgment. Neither side disputed the material facts; each asserted the right to judgment as a matter of law. Ά9 The City asked the superior court to impose CR 11 sanctions against Mr. Eugster. The City alleged the complaint was frivolous because Mr. Eugster knew the disputed settlement terms were court ordered. Mr. Eugster had, in fact, been a party to the successful suit to force the City to turn over the funds. And he had not opposed the court order in that case. Mr. Eugster characterized the CR 11 motion as a retaliatory action prohibited by the anti-SLAPP DISCUSSION Ά10 Mr. Eugster contends on appeal that the court-ordered transfer of parking meter funds and the court-ordered title pass-through transaction violated the state auditor statute, RCW 43.09.210. This statute requires cities to apply generally accepted accounting principles to interdepartmental transfers of assets. Here, as part of the settlement, parking funds were transferred to a City parking authority. Mr. Eugster also contends the pass-through of title violated the off-street parking facilities act, RCW 35.86.030. It prohibits disposal of garage property only if the council determines by ordinance that the garage is no longer necessary. Mr. Eugster also appeals the rejection of his anti-SLAPP claim. AUDITOR STATUTE CLAIM Ά12 Mr. Eugster contends that the City parking meter fund disbursed assets without receiving anything in return. He contends this violates RCW 43.09.210. Mr. Eugster contends the statute requires that every transfer of assets out of a city department must be balanced by a corresponding transfer of assets in. The City raises a number of procedural bars to Mr. Eugster's auditor statute claim. Ά13 First, the City challenges Mr. Eugster's standing. The City contends the auditor statute does not create a private right of action. In his complaint, Mr. Eugster did not assert individual standing under the auditor statute. He asserted standing under the off-street parking facilities act, chapter 35.86 RCW, and as a taxpayer. Ά15 Neither does Mr. Eugster have individual standing to sue under the auditor statute. chapter 43.09 RCW creates a state auditor to monitor government agencies and enforce the act's provisions. It does not create a right for an individual taxpayer to haul a city into court to defend every transaction and accounting entry. All judicial enforcement is by the attorney general. Again, the taxpayer can sue under the auditor statute only after the attorney general has declined the taxpayer's request to sue. Ά16 Mr. Eugster did not submit his complaint to the attorney general. Rather, he filed a complaint, then invited the attorney general to join as a coplaintiff. The tone of Mr. Eugster's letter to the attorney general suggests that he did not believe the attorney general's office would have agreed to file its own action. But, without a request and a refusal, the statutory prerequisite for individual standing is not met. Ά17 The City also asserts that Mr. Eugster is estopped from complaining about the release of parking meter funds because he was a party to the mandamus suit that resulted in the court order to release these funds. Ά19 Mr. Eugster is silent on the City's assertion that the City was forced to turn over the parking meter funds by a lawsuit to which he was a party. The order approving release of the funds bears Mr. Eugster's name as the only plaintiff. Clerk's Papers (CP) at 288. Mr. Eugster needed to address this to avoid summary judgment. Ά20 CR 19 requires joinder of a party with an interest relating to the subject of the action where disposition in the party's absence may impair the party's ability to protect its interest in the litigation. Dep't of Corr. v. City of Kennewick, 86 Wn. App. 521, 531, 937 P.2d 1119 (1997). Ά21 The City contends that all parties to the settlement agreement should have been joined. All have already fully performed and have interests at stake. Therefore, all parties to the settlement are necessary parties to this litigation. Moreover, the City points out that these essential parties were before the court in the earlier mandamus litigation. Ά22 Again, Mr. Eugster does not respond to the City's contention that he failed to join necessary parties. The sole defendant named in this lawsuit is the City. The interests of the other parties to the settlement were not represented. Ά23 But Mr. Eugster plainly cannot succeed on the merits of his auditor statute claim. He was required to respond to the City's summary judgment motion with more than the allegations he set forth in his pleadings. Mr. Eugster needed to set forth specific facts establishing a genuine issue for trial. CR 56(e); Tiffany Family Trust Corp. v. City of Kent, 155 Wn.2d 225, 230, 119 P.3d 325 (2005). Mr. Eugster provided no evidence to support his claims of accounting irregularities. This record does not show how the disputed assets were entered on the City's books. Mr. Eugster presented neither expert nor lay testimony as to what the approved accounting methods are when a City transfers or releases an asset to satisfy a judgment or court order, or why the City's accounting practices were objectionable. Mr. Eugster does not dispute the City's power to settle claims and release assets to pay judgments. See, e.g., Medina v. Pub. Util. Dist. No. 1 of Benton County, 147 Wn.2d 303, 310, 53 P.3d 993 (2002). He does not support his assertion that generally accepted accounting principals require every debit entry to be balanced by a corresponding credit. CHAPTER 35.86 RCW Ά24 Mr. Eugster contends that the City acquired the River Park Square garage pursuant to the off-street parking facilities statute, chapter 35.86 RCW. Therefore, he contends, the City may dispose of title to the garage solely as provided by this statute. And RCW 35.86.030 permits cities to dispose of garage property only when the council has determined by ordinance that the property is no longer necessary for parking purposes. Mr. Eugster contends that the garage is still necessary for parking purposes and will be for the foreseeable future. He therefore concludes that the City could not possibly comply with chapter 35.86 RCW and was barred from divesting itself of ownership of the garage. Ά25 The City responds that chapter 35.86 RCW does not apply because it did not acquire the garage pursuant to the statute. The City was obeying a court order. The City argues that by the order it was deemed to hold title for a fleeting instant before immediately transferring it. Moreover, the city council satisfied RCW 35.86.030 by including in the ordinance factual findings that city ownership of the River Park Square garage was no longer necessary. Ά27 RCW 35.86.030 applies to parking property obtained "by lease, purchase, donation and/or gift, or by eminent domain." For purposes of the settlement, the property at issue here was "obtained" by a court order that the City assume and immediately transfer legal title, not for parking purposes but to resolve complex litigation. Ά28 The statute's purpose is simply to authorize cities to provide parking facilities. RCW 35.86.010. Nothing in RCW 35.86.030 suggests a legislative intent to prohibit cities from turning parking facilities over to private hands if the city council lawfully passes an ordinance declaring that city ownership no longer serves the city's interests. The City passed ordinance C33565, which does that. Again, the statute was not a bar to complying with the order of the court. Ά30 The City responds that the settlement of disputes is sufficient consideration for a compromise settlement. Ά31 Sufficiency of consideration is a question of law that may be decided by summary judgment. Nationwide Mut. Fire Ins. Co. v. Watson, 120 Wn.2d 178, 195, 840 P.2d 851 (1992). Ά32 Municipalities own and operate their public utilities in a proprietary rather than governmental capacity. Scott Paper Co. v. City of Anacortes, 90 Wn.2d 19, 28, 578 P.2d 1292 (1978) (citing 12 EUGENE MCQUILLIN, MUNICIPAL Corporations §35.35, at 465 (3d ed. 1966)). Contract law applies. Id. Ά33 "A good faith settlement of a dispute has been held to be sufficient consideration for a compromise to settle that claim." Watson, 120 Wn.2d at 195. The consideration for the City's performance of its obligations was settlement and compromise of all claims. CP at 284 (federal order). The constitution is not implicated absent donative intent. Scott Paper, 90 Wn.2d at 33. Mr. Eugster does not deny that the City benefited from the settlement. There was, then, no gift. ANTI-SLAPP CLAIM Ά34 Mr. Eugster contends that a court is a government agency such that filing a complaint in the superior court constitutes communication of a complaint or information as contemplated by RCW 4.24.510. Mr. Eugster therefore contends that the City's motion for CR 11 sanctions alleging his complaint was frivolous entitled him to attorney fees for defending the CR 11 motion and damages under RCW 4.24.510. Ά35 The City responds that the anti-SLAPP statute does not apply by its plain language. RCW 4.24.510 provides remedies to people who have communicated matters of reasonable concern to government agencies if they prevail in an action against them using the statute as a defense. The City argues that filing a lawsuit lacking any basis in law or fact is not communicating a matter of reasonable concern. And the anti-SLAPP statute does not preclude the City from asking the court for relief from frivolous litigation. Moreover, the City notes that it voluntarily dismissed its CR 11 claim. Ά38 The CR 11 motion was not a claim on a substantive issue. This court has held in a previous case to which Mr. Eugster was a party that RCW 4.24.510 does not preclude the court from considering a defense motion for relief from the costs of defending frivolous litigation. Reid, 124 Wn. App. 113. Ά39 Moreover, Mr. Eugster was both lawyer and client in this lawsuit. The City's CR 11 motion was filed against the lawyer. The rule authorizes sanctions against a person who signs a frivolous pleading. The allegedly frivolous pleading here was the complaint. The complaint was not signed by the plaintiff; it was signed by "Attorney for Plaintiff," Steven K. Eugster, an officer of the court. CP at 2, 25. Mr. Eugster cites no authority for the proposition that RCW 4.24.510 insulates attorneys from CR 11 sanctions simply because their clients are suing the government. Ά40 We conclude that the court properly dismissed Mr. Eugster's RCW 4.24.510 motion. The anti-SLAPP statute does not divest the court of the power of sanctions when appropriate to the orderly conduct of proceedings. ATTORNEY FEES ON APPEAL Ά42 This court is persuaded that Mr. Eugster's action was frivolous from the outset. The City is, then, entitled to its attorney fees and costs for responding to this appeal. It is so ordered. Ά43 We affirm the superior court's order granting summary judgment to the City and order Mr. Eugster to pay the City's reasonable attorney fees on appeal subject to RAP 18.1(d). BROWN and KULIK, JJ., concur.