County (County) appeals the trial court's orders denying
its motions for summary judgment, judgment as a matter of
law, and for a new trial, and the jury's verdict in favor
of Maytown Sand and Gravel, LLC (MSG) and the Port of Tacoma
(the Port).Maytown's lawsuit against the County
involved claims for tortious interference, negligence,
negligent misrepresentation, and a violation of substantive
due process arising out of the County's
interference with MSG's ability to begin gravel mining on
property MSG had purchased from the Port. We conclude that
the trial court did not err because neither the Land Use
Petition Act (LUPA) nor collateral estoppel barred the
tortious interference claim, and MSG presented sufficient
evidence of a substantive due process violation to avoid
judgment as a matter of law.
cross-appeals the trial court's order granting the
County's motion in limine to exclude evidence of attorney
fees as damages. Because the "American rule, "
which generally precludes a prevailing party from recovering
attorney fees, does not apply to attorney fees incurred in a
different proceeding that are claimed as damages, the trial
court erred by granting the motion.
affirm the jury's finding of liability and award of
damages for the tortious interference claim, but remand
solely on the issue of attorney fees as damages on
Maytown's tortious interference claim.
Gravel Mine Property
Port owned property in Thurston County. The property had a
final, vested special use permit (SUP) that the County had
issued to the Port in January 2006. The SUP allowed gravel
mining on the property if certain conditions were satisfied.
The SUP had a 20-year duration from the date mining began and
included a mandatory review by a hearing examiner every five
included explicit preconditions before mining could begin. In
particular, condition 6 required the permittee to adhere to
the "Maytown Aggregates Groundwater Monitoring
Plan." Condition 6A required field verification of
off-site supply wells within a year of the SUP issuing.
Condition 6C required installation of 17 monitoring wells to
check on water levels, water temperature, and water quality.
The monitoring was to begin within 60 days of the SUP's
issuance. The Port did not comply with these deadlines.
Discussions Before Purchase
2009, MSG became interested in purchasing the property from
the Port. MSG wanted to develop and operate a gravel mine on
October, the owners of MSG and their attorney, John
Hempelmann, met with Mike Kain, the County's Resource
Stewardship Department planning manager. Kain told MSG that
the SUP was valid, and that "minor staff approvals and
things . . . needed to be done." 10 Report of Proceedings
(RP) at 2148. He further stated that after MSG filed an
application for amendments, the staff would handle them
administratively. According to MSG, Kain stated that the SUP
had no "skeletons in the closet, " and it could be
mining within 30-60 days. 10 RP at 2227. Kain denied making
this meeting, MSG and the Port entered into a purchase and
sale agreement on the property. MSG agreed to pay $17 million
to purchase the property.
December, Kain e-mailed MSG and informed it of its lack of
compliance with the conditions of the SUP. The e-mail stated
that staff could approve minor amendments to the SUP, but
major amendments would need approval by a Thurston County
February 16, 2010, Kain sent Maytown a memorandum outlining
its compliance status with each of the SUP's conditions.
When referencing a condition that required a minor timeline
change, Kain stated it "may be approved by staff upon
submittal of an application for amendment." Ex. 62, at
5. The document provided that "it is the staff
assessment that the applicant is substantially in compliance
with the conditions of [the State Environmental Policy Act of
1971] SEPA and the SUP at this time." Ex. 62, at 22.
April 1, MSG and the Port closed on the purchase and sale
agreement for the property. MSG made a $1 million down
payment to the Port.
Request for SUP Amendments
April, MSG requested eight amendments to the SUP, including
condition 6.Specifically, MSG requested an amendment of
the missed deadlines in conditions 6A and 6C and the
elimination of the background testing required in condition
Because it only asked for minor amendments, MSG asked the
County to process the amendments administratively.
wrote to Maytown's lawyers that after County staff
reviewed the application for amendments, they determined the
amendments were major and required hearing examiner approval.
County staff also planned to require SEPA review of the
already issued "Mitigated Determination of
Non-Significance" (MDNS) for the SUP. MSG appealed the
County's decision to a hearing examiner and challenged
the need to conduct a SEPA review.
withdrew some of the proposed amendments in an effort to have
the remaining amendments classified as minor. It did not
withdraw the amendments to conditions 6A and 6C, which Kain
had labeled in his February memorandum as minor timeline
changes to be approved upon application for amendments.
17, Kain informed Maytown that the requested amendments could
not be addressed at the administrative level and would be
deemed major, which meant that they would be referred to a
hearing examiner for a decision. Hempelmann said that Kain
told him that the attorney for the Board of County
Commissioners (BOCC) directed Kain to label MSG's
requested amendments as major.
April 2011, the Hearing Examiner issued a decision on the SUP
amendment requests.The Hearing Examiner approved the SUP
amendment application, which the County supported, and
adopted Maytown Sand's water monitoring plan to replace
the 2005 groundwater monitoring plan and conditions 6A and
6C. The Hearing Examiner did not approve any other
Year Review Hearing
2010, the County's Resource Stewardship Department issued
a summary report on MSG's pending five year review. The
report expressed an opinion that because no land disturbing
activity had yet occurred, the new 2009 critical area
ordinance (CAO) should apply. The County took this same
position before the Hearing Examiner at the five year review
hearing. The report stated that complying with the new
critical area ordinance would likely reduce the mining area,
potentially by 100 acres.
Hearing Examiner conducted the five year review hearing in
December 2010. The Hearing Examiner issued a written decision
at the end of the month. In its findings of fact, the Hearing
Examiner stated that:
The County asserted that entire site should be re-reviewed
for compliance with new codes every five years. In the
alternative, the County argued that if the interim CAO
provisions are held not to apply to the mine, the entire
[property] should be studied for critical areas that
currently meet or in 2002 would have met the 2002 CAO
definitions and that any areas determined to be critical
areas in those studies should be excluded from the mine
Ex. 11, at 30. The Hearing Examiner concluded this
interpretation of the Thurston County Code, "would have
the same effect as requiring mines to re-apply every five
years, " and that "credible evidence supports the
conclusion that no critical areas that should have been
protected pursuant to the 2002 CAO were missed." Ex. 11,
at 46. The Hearing Examiner granted the five year review
subject to minor conditions. "The Applicant has
demonstrated compliance with all conditions except MDNS 6.A,
6.C, and 10. Compliance with those conditions can be ensured
by new conditions of approval." Ex. 11, at 47.
of the Rocky Prairie (FORP) and the Black Hills Audubon
Society (BHAS), groups opposed to the mine, appealed the
Hearing Examiner's decision to the BOCC, arguing that the
BOCC should reverse the decision in its entirety.
Sandra Romero, Karen Valenzuela, and Cathy Wolfe comprised
the BOCC. Commissioners Romero and Valenzuela belonged to and
were donors of BHAS. Generally, the BOCC commissioners became
involved in a permit only if it was appealed to them from the
Hearing Examiner. The commissioners did not direct the staff
on permit issues. However, the BOCC directed staff in this
case to continue to determine whether the permit was
"considered active" or valid because the property
had not been used for mining yet. 15 RP at 3042.
the commissioners conducted private meetings with Sharon
Coontz, FORP's representative, about the SUP and the
property. However, Coontz denied conspiring with the
commissioners to "kill" or "delay" the
mine. 17 RP at 3396.
did not disclose her membership in BHAS or her frequent
correspondence with Coontz about the SUP to Maytown. After a
BOCC meeting and learning about FORP's position from
Coontz, Romero expressed interest in submitting a written
request to open the SEPA review process for the SUP.
also had meetings with Coontz about the SUP, but did not
inform Maytown of those meetings. In particular, Valenzuela
invited Coontz, but not Maytown, to attend a BOCC meeting to
explain why FORP believed the SUP was illegal. Valenzuela
told the County staff that she wanted "strict adherence
to SEPA" because it was "meaningful" to her
that BHAS objected to the requested amendments to the
SUP. 8 RP at 1701. Valenzuela also signed a
petition to rezone part of MSG's property.
Wolfe denied ever directing staff on a permit issue. She did
meet with Coontz about Maytown once.
March 3, 2011, the BOCC heard the appeal by FORP and BHAS.
During the BOCC hearing, Romero disclosed that she was
"sympathetic" to FORP during her election, but said
she could make a "fair and impartial decision." 9
RP at 1904. When asked to declare that she could fairly and
impartially judge the case, Valenzuela did not disclose any
of her communications with FORP or her membership in BHAS.
None of the commissioners disclosed their meetings with
Coontz about the property on the record.
The BOCC affirmed the Hearing Examiner, but determined that
matter shall be remanded back to the hearing examiner for
purposes of determining whether critical areas, as specified
below, and as defined in the 2002 CAO, are protected within
the mine area. ... If the hearing examiner determines that
the supplemental habitat management plan reveals the above
identified jurisdictional critical areas, the final site plan
shall be amended to delineate the jurisdictional critical
areas and their buffers before mining can commence. The
hearing examiner shall also determine whether or not any
other conditions need to be amended or added as a result of
the supplemental habitat management plan.
Ex. 7, at 5.
to Valenzuela, before the hearing on the five year review,
the BOCC did not have verifiable facts to support the
County's suspicion that critical areas were missed, and
the staff repudiated Coontz's statement that there were
streams on the property (critical areas) for months. Wolfe
knew the Hearing Examiner had found that the critical areas
were studied thoroughly in 2002 through 2005, but she
remanded the case to "ask[ ] the Hearing Examiner to
look at anything that could have happened, since that
decision was made, because there were indications of new
vegetation." 18 RP at 3658.
filed a LUPA petition in Lewis County Superior Court
appealing the BOCC's decision requiring a
remand. In the alternative, it petitioned for
declaratory judgment and constitutional writ, injunctive
relief, and a complaint for damages against Thurston County
for a review of a land use decision made by the County
pursuant to LUPA.
trial court granted summary judgment on Maytown's LUPA
petition and reinstated the Hearing Examiner's decision
from December 30, 2010. The trial court also ruled that the
disposition of the LUPA petition did not render Maytown's
complaint for damages moot.
filed an amended complaint for damages. The amended complaint
asserted the same causes of action as the original complaint:
negligence, negligent misrepresentation, tortious
interference with a business expectancy, and violations of
chapter 64.40 RCW and 42 U.S.C. § 1983. The complaint
excluded the LUPA petition because Maytown deemed the issue
tortious interference with a business expectancy claim
alleged that Maytown had a business relationship or
expectancy with a probability of future economic benefit, the
County knew of the expectancy and improperly and
intentionally induced or caused the termination of the
expectancy, and caused damages to Maytown. MSG's
substantive due process claim under 42 U.S.C. § 1983
alleged that while acting under color of state law, the BOCC
actions deprived MSG of its valuable property right (the SUP)
without due process, and MSG was entitled to damages and
attorney fees under 42 U.S.C. § 1988 as a result.
County filed an answer and counterclaim to Maytown's
amended complaint. The County pleaded some affirmative
defenses and defenses, including that some or all of the
claims were barred by statutes of limitations, failure to
exhaust remedies, lack of standing, res judicata and/or
collateral estoppel, and immunity. In addition, the County
alleged that Maytown did not suffer compensable damages.
County's Motion for Summary Judgment On All Claims
County filed a motion for summary judgment on all claims. The
trial court heard arguments on the County's motion for
summary judgment and denied the motion.
Maytown's Motions for Partial Summary Judgment
Arbitrary and Capricious Acts
filed a motion for partial summary judgment seeking a finding
of liability by the County for "arbitrary and capricious
actions and for knowingly unlawful actions." 4 CP at
1413, 1767. The trial court granted Maytown's motion for
partial summary judgment, concluding that the BOCC's
actions were arbitrary and capricious. It also denied the
County's motion for summary judgment.
MSG's Motion on Substantive Due Process Claims
filed another motion for partial summary judgment on the
County's violations of MSG's substantive due process
rights. The County also cross-moved for summary judgment. The
trial court denied both motions because disputed issues of
material facts existed.
Motions in Limine
motions in limine, the County sought to exclude testimony and
argument for any attorney fees sought as damages because the