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Harbor Lands, L.P. v. City of Blaine

December 5, 2008

HARBOR LANDS, L.P., ET AL., PLAINTIFFS,
v.
CITY OF BLAINE, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Honorable Richard A. Jones

ORDER

I. INTRODUCTION

This matter comes before the court on Defendants' motion for summary judgment (Dkt. # 36). Neither party has requested oral argument, and the court finds the motion suitable for disposition on the basis of the parties' briefing and supporting evidence. For the reasons explained below, the court GRANTS the motion as to all claims, except as to the two claims that the court REMANDS to the superior court.

II. BACKGROUND

Plaintiff Harbor Lands, L.P., is a real estate development business. In July 2003, Harbor Lands purchased from Donald Richmond the property located at 1300 Peace Portal Drive (the "Property") in the City of Blaine (the "City"). Harbor Lands intended to develop condominiums known as the "Seascape" project on the Property.

Before Harbor Lands purchased the Property from Richmond, the City had been negotiating with Richmond to acquire additional right-of-way from the Property ("Additional ROW"). The City obtained an April 5, 2002 summary appraisal of the Additional ROW, which valued it at $35,600. Kennedy Decl. (Dkt. # 47), Ex. A at 9A.

In a letter dated June 9, 2003, the City offered to purchase the purchase the Additional ROW from Richmond for approximately $6,700. The terms of the offer included the extinguishment of certain delinquent assessments owed to the City. Attached to the letter was a legal description of the specific Additional ROW that the City wanted to acquire. See id., Ex. A at 9A-10A. This purchase was never finalized. See Peterson Decl. (Dkt. # 37) ¶ 3.

After Harbor Lands purchased the Property from Richmond, Harbor Lands' principal, Plaintiff Joel Douglas,*fn1 met with the City regarding the Seascape project. In July 2003, The City offered to buy the same portion of the Property that it had tried to obtain from Richmond, but Harbor Lands did not accept.

After Harbor Lands rejected the City's offer regarding the Additional ROW, both the value of the Additional ROW and the amount of delinquent assessment debt increased, with the debt outstripping the property value. In July 2004, the City informed Harbor Lands that, due to the increased debt on the Property, if it wished to reconsider the Additional ROW offer it had previously rejected, it would now owe the City approximately $5,200. See Peterson Decl. ¶ 4. Douglas indicated that he would prefer that the property transfer not require the payment of any money to the City, even if that meant conveying more land to the City. Id. ¶¶ 6-7. As part of this discussion, the City invited Harbor Lands to obtain an updated appraisal of the Property, but Harbor Lands did not do so. Id. ¶ 6.

In March 2005, the City sent to Harbor Lands an updated proposal for a transfer of a wider piece of property than had been described in previous proposals, inviting Harbor Lands to propose revisions if desired. See Peterson Decl., Ex. 6. The updated proposal contained a legal description of the Additional ROW to be conveyed, but did not otherwise emphasize the change. The updated proposal required no payment for the transfer. Without obtaining an appraisal or proposing any changes, Douglas signed the deed attached to the City's proposal. The City forwarded the agreement to Harbor Lands' building designer, who then forwarded the legal description to Douglas, noting that the legal description would be needed to "restake the south end of Douglas' site." Second Roy Decl. (Dkt. # 50), Ex. 5. Douglas claims that he did not realize that the property description in the 2005 deed was different from previous proposals until months after he had signed the agreement. See Douglas Decl. (Dkt. # 48) ¶ 5.

In April 2005, the City issued Harbor Lands a building permit for the construction of the foundation of the Seascape project. On June 10, 2005, City Manager Gary Tomsic entered the property and ordered the contractors to stop work because their work exceeded the foundation-only permit. On June 13, 2005, Harbor Lands acquired a full building permit, which effectively mooted the June 10 stop-work order. Though the building permit had been issued to Harbor Lands, the City had never approved a site plan. Over the next few months, the City continued to request site-plan information from Harbor Lands, and Harbor Lands made many changes to its initial site-plan proposal.

The City and Harbor Lands corresponded regarding numerous concerns, specifically that Seascape's garage building significantly encroached on the City's right-of-way and that Harbor Lands had failed to submit a storm water drainage plan for the Property. In early October 2005, Harbor Lands submitted an amended site plan. The City found the plan to be incomplete and requested specific additional information, including information regarding the storm water system and how to solve the encroachment problem.

On October 26, 2005, the City issued a partial stop work order requiring that "all site work shall stop until site plan approval has been achieved." Galvin Decl. (Dkt. # 38), Ex. 12. The order also specified that certain structures installed in the City's right-of-way shall be removed, that no further work shall take place in the City's right-of-way without City approval, that no work on the storm water system shall be performed without City approval. Id. The order noted that work on the existing structures other than the maintenance building (the building that encroached on the City's right-of-way) could continue. Id. It was ordered to stop the unapproved site work, but work on the nonencroaching buildings could continue.

On November 4, 2005, Harbor Lands appealed the order to the City hearing examiner on the grounds that (1) the issuance of the building permit demonstrated that the City had either approved or waived review of the site plan, and (2) BMC 17.17 did not authorize a stop work order. Four days later, Harbor Lands began diverting Property storm water into a City sanitary sewer trench. Later that day, in order to prevent the untreated storm water from entering the sanitary sewer system, a City official instructed a Harbor Lands contractor to install a clay dam in the City sewer trench at the Property line. According to Harbor Lands, water that would have otherwise drained off the Property was prevented from doing so as a result of the dam, which created, inter alia, flooding and drainage problems on the Property. The Property eventually drained after Harbor Lands implemented a temporary storm water plan. See Galvin Decl. ¶ 17.

While the City continued to process Harbor Lands' site plan and compliance review, City Manager Tomsic requested a status update from Terry Galvin, the City's Community Development Director. On November 12, 2005, Galvin sent an e-mail to Tomsic, and copied certain City staff members and the entire City Council. See Galvin Decl. ¶¶ 23-25. This e-mail, titled "Joel Douglas issues," includes statements that: (1) Douglas would face monetary penalties and perhaps criminal charges if Harbor Lands violated the stop work order, (2) that Douglas was engaged in "ongoing noncompliant or illegal land use actions," and (3) that "each and every one of [Galvin's] staff has had to spend an inordinate amount of time responding to Mr. Douglas's compliance issues, his faxes and his abrasive and demanding phone calls." Id., Ex. 14.

Hearings on Harbor Lands' stop work order appeal were held during January, February, and March 2006. In March 2006, the City and Harbor Lands negotiated a lifting of the stop work order. The City hearing examiner denied Harbor Lands' appeal in April 2006. Harbor Lands then appealed the hearing examiner's decision to the City Council on May 1, 2006. On May 8, 2006, the City Council adopted an ordinance providing specific authority for the issuance of stop work orders for violations of BMC Title 17.

On July 24, 2006, the City Council affirmed the hearing examiner's decision. The next month, Harbor Lands filed a Land Use Petition Act ("LUPA") appeal in Whatcom County Superior Court. While pursuing its LUPA appeal, Harbor Lands brought a separate suit in superior court against the City and Galvin, raising claims of inverse condemnation, trespass, unlawful collection and discharge of surface water, tortious interference with a business expectancy, negligence, violation of RCW 64.40.020, violation of state and federal due process, defamation, and outrage. The City removed that case to this court.

This matter was stayed pending a decision on the LUPA appeal in superior court. Whatcom County Superior Court Judge Ira Uhrig reversed the hearing examiner's decision, ruling that the City did not have authority to issue the stop work order. The City appealed to the Washington State Court of Appeals, which vacated Judge Uhrig's ruling on the ground that the dispute was moot at the time of the ruling. See Harbor Lands, L.P. v. City of Blaine, 191 P.3d 1282 (2008).*fn2

III. ANALYSIS

A. Standard of Review on Summary Judgment

Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party meets its initial burden, the opposing party must then set forth specific facts showing that there is a genuine issue of fact for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The opposing ...


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