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Tiegs v. Boise Cascade Corp.

September 5, 1996


Appeal from SUPERIOR COURT BENTON COUNTY. Superior Court No: 91-2-00035-0. Date filed in Superior Court: 4/13/94. Superior Court Judge signing: FRED STAPLES.

Petition for Review Granted April 2, 1997,

Author: John A. Schultheis. Concurring: Ray E. Munson & Philip J. Thompson

The opinion of the court was delivered by: Schultheis

SCHULTHEIS, A.C.J. -- Boise Cascade Corporation and Donald Watts, d/b/a Don Watts Farms, appeal a jury verdict in excess of $2.5 million entered in favor of the plaintiff potato farmers in their action for nuisance and breach of lease. Boise and Mr. Watts raise multiple issues, including whether (1) a violation of the water pollution control act, RCW 90.48, is a nuisance per se; (2) an unacknowledged lease is enforceable on an estoppel theory; and (3) an award of lost profits due to breach of an option to lease for another year is speculative. We affirm.

Mr. Watts owned 650 acres of farm property in Walla Walla County. The acreage is situated across Highway 12 from a pulp and paper mill owned and operated by Boise. In 1988, Mr. Watts planted one irrigation circle in potatoes and leased another circle to James Smith, who did the same. Both men drew water from a single well.

On November 28, 1989, Mr. Watts leased the remaining acreage to partners Frank Tiegs, d/b/a Greenridge Farms, and Fred and Allen Olberding, d/b/a LC Farms. The lease was for the 1990 crop year. It was "contingent on [ Mr. Watts] finding adequate water for [the] property," and provided the irrigation for the acreage would apply 7.5 gallons per minute. The lease also gave the lessees an option for 1992. *fn1 Mr. Watts subsequently installed four more wells for circles three through nine. He also leased circles one and two to Mr. Smith for crop year 1990. That spring, the lessees planted Russet Burbank potatoes in the circles, save for circle two, which Mr. Smith planted in Norkotahs, another potato variety. Mr. Tiegs and the Olberdings testified the circles they leased had not been planted in potatoes before, a fact that promised higher than average yields.

In June 1990, Mr. Tiegs and the Olberdings noticed abnormalities in the potato leaves, including leaf curl or fiddlenecking. They called in several consultants to look at the fields. One consultant, Dr. William Cobb, took water samples for analyses. The symptoms continued all season, and the harvest yielded potatoes of poorer quality, and less quantity, than the lessees had expected. Dr. Cobb concluded the symptoms exhibited by the potato plants were caused by the well water used for irrigation. The well drew on groundwater that Dr. Cobb believed was contaminated by chemicals from the paper mill's wastewater "lagoon," which is part of its water treatment system. Boise maintained extreme heat and wind were responsible for the symptoms and the decreased yield.

In January 1991, Mr. Tiegs and the Olberdings sued Boise and Mr. Watts, alleging Boise had contaminated the wells and Mr. Watts had breached his agreement to supply adequate water for the circles. *fn2 Mr. Smith, whose crop had exhibited the same symptoms, intervened in the action in March 1992. In August 1991, Mr. Tiegs and the Olberdings attempted to exercise their option to lease the same property for 1992. In the meantime, Boise had purchased all 650 acres from Mr. Watts. Under the terms of the purchase agreement, Boise agreed to assume any liability Mr. Watts might have pursuant to the leases. It took the position the plaintiffs' lawsuit was inconsistent with exercise of the option.

Trial took place in February and March 1994, over a period of nine weeks. The jury entered special verdicts in favor of the plaintiffs against Boise on a nuisance theory and against Mr. Watts for breach of the lease. For crop year 1990, the jury awarded Mr. Tiegs and the Olberdings $878,069 and Mr. Smith $563,467, dividing liability for these amounts between Boise and Mr. Watts. It also awarded Mr. Tiegs and the Olberdings $1,147,258 in lost profits for breach of the 1992 option.

Boise and Mr. Watts have appealed the judgment entered on the jury's verdicts. Additional facts are set forth below in the analyses of the issues.

First, did the court properly instruct the jury on the law of nuisance? Boise contends it was error for the court to (a) instruct the jury a violation of RCW 90.48, Washington's water pollution control act, constitutes a nuisance and (b) refuse Boise's proposed instruction that the jury must find a lawful business's use of its land is unreasonable before it can conclude such use is a nuisance.

In Washington, the law of nuisance is codified in RCW 7.48. Hostetler v. Ward, 41 Wash. App. 343, 355-57 & n.10, 704 P.2d 1193 (1985), review denied, 106 Wash. 2d 1004 (1986). Actionable nuisances are defined broadly as "whatever is injurious to health or indecent or offensive to the senses, or an obstruction to the free use of property, so as to . . . interfere with the comfortable enjoyment of . . . life and property . . . ." RCW 7.48.010; RCW 7.48.120. A public nuisance "affects equally the rights of an entire community or neighborhood, although the extent of the damage may be unequal." RCW 7.48.130; Kitsap County v. Kev, Inc., 106 Wash. 2d 135, 139, 720 P.2d 818 (1986). A private nuisance is "every nuisance not included in the definition of RCW 7.48.130 . . . ." RCW 7.48.150. Remedies include abatement and/or damages. RCW 7.48.180, .200. In the case of a public nuisance, a private person may maintain a civil action only if the nuisance is "specially injurious to [ him] ." RCW 7.48.210.

Here, the trial court's instruction 12 used the language of RCW 7.48.120: "Nuisance consists in unlawfully doing an act, or omitting to perform a duty, which act or omission . . . in any way renders other persons insecure . . . in the use of property." (Emphasis added.) Instruction 16 recited the provisions of RCW 90.48.080 of the water pollution control act:

It shall be unlawful for any person to throw, drain, run, or otherwise discharge into any of the waters of this state, or to cause, permit or suffer to be thrown, run, drained, allowed to seep or otherwise discharged into such waters any organic or inorganic matter that shall cause or tend to cause pollution of such waters . . . .

The instruction then stated: "A violation of this statute constitutes a nuisance."

Instruction 14 defined "pollution," as found at RCW 90.48.020, to mean "contamination . . . of any waters of the state, including . . . discharge of any liquid . . . into any waters of the state as will or is likely to create a nuisance . . . ." Finally, jury instruction 13 set forth the policy of the state, as found at RCW 90.48.010:

It is declared to be the public policy of the state of Washington to maintain the highest possible standards to insure the purity of all waters of the state consistent with public health and public enjoyment thereof, . . . and to that end require the use of all known available and reasonable methods by industries and others to prevent and control the pollution of the waters of the state of Washington. Consistent with this policy, the state of Washington will exercise its powers, as fully and as effectively as possible, to retain and secure high quality for all waters of the state.

Boise excepted to these instructions. It complains the instructions were improper because RCW 90.48 does not create a private cause of action for enforcement of its provisions. Hence, it reasons the act cannot be used as a basis for a jury finding Boise's alleged violation of its provisions amounted to a nuisance. Boise contends the court should have given its proposed instructions 40 and 41, which stated the plaintiffs had the burden of proving Boise's use of its property unreasonably interfered with their use. *fn3

In Miotke v. City of Spokane, 101 Wash. 2d 307, 309, 678 P.2d 803 (1984), the court held the city's discharge of raw sewage into the Spokane River violating a water disposal permit was a wrongful act that gave rise to an action for nuisance by private landowners seeking damages. The court reasoned: "In short, it is clear from the federal and state statutory schemes [ including RCW 90.48] . . . that the discharge of pollutants into state waters is prohibited unless authorized by a permit." Miotke, 101 Wash. 2d at 329. In addition, although RCW 90.48 (the act at issue here) does not provide a private right of action, a discharge violating the statute "constitutes a nuisance . . . and entitled plaintiffs to recover damages." Miotke, 101 Wash. 2d at 330.

Miotke's recognition of an action for nuisance based upon a defendant's violation of a statute is supported by 8 Thompson on Real Property, Thomas Edition sec. 67.03(a)(1), at 94-95 (David A. Thomas ed., 1994):

When a statute or a local ordinance [ declares] conduct . . . illegal, without . . . label[ ing it] as a nuisance, it will be considered a nuisance as a matter of law only if that conduct interferes with others' use and enjoyment of their lands. . . .

Although a rather wide range of landowner activity could conceivably be declared illegal and thus considered nuisances as a matter of law because forbidden by law, in fact only a few distinct categories of such conduct have emerged from the cases. . . .

(Footnotes omitted, emphasis added.)

The treatise cites Branch v. Western Petroleum, Inc., 657 P.2d 267 (Utah 1982). There, a landowner sued a neighboring landowner whose oil wells, in violation of statute, polluted groundwater that supplied plaintiff's well. The appellate court sustained the judgment in favor of the plaintiff, holding the facts established a nuisance per se. It reasoned:

When the conditions giving rise to a nuisance are also a violation of statutory prohibition, those conditions constitute a nuisance per se, and the issue of the reasonableness of the defendant's conduct and the weighing of the relative interests of the plaintiff and defendant is precluded because the Legislature has, in effect, already struck the balance in favor of the innocent party. Defendant's violation of sec. 73- 14-5 . . . and sec. 76-10-801 removed the issue of the reasonableness of its conduct compared with the nature of the injury inflicted from consideration in this case. The declaration of the Legislature is conclusive, and its determination will not be second guessed. The result for practical purposes is the same as strict liability.

Branch, 657 P.2d at 276 (citations omitted, emphasis added). The court also observed that "it is of no consequence that a business which causes a nuisance is a lawful business." Branch, 657 P.2d at 274.

Boise attempts to distinguish Miotke on the basis the city's dumping raw sewage into the Spokane River was clearly in violation of its wastewater permit. Boise contends its operation was authorized by the Department of Ecology (DOE) when it approved and renewed Boise's national pollutant discharge elimination system (NPDES) permit. Boise points out instruction 16 (supra) omitted what it regards as a crucial phrase present in RCW 90.48.080; i.e., that the deposit of material that causes pollution in state waters, "according to the determination of the [ DOE]," is unlawful. (Emphasis added.)

We agree with Boise that specific conduct which is approved and authorized by the agency charged with enforcing the act in question does not constitute a nuisance per se. Miotke and Branch both involved illegal activity. Nevertheless, Boise did not present any evidence that DOE approved the amount of seepage that occurred here. At trial, Boise relied upon the fact DOE notified it in 1979 "that [ it required] both primary and secondary ponds be constructed or modified to achieve a leakage rate not exceeding 0.25 inches per day." But Michael Pelko, who is in charge of DOE's Industrial Section, testified he did not know whether DOE had ever "made any calculation or done any study or testing to find out if the lagoon [ meets] that criteria." Further, evidence at trial showed Boise's own geohydrologists expressed concern as early as 1978 that the ...

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