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Zink v. City of Mesa

Court of Appeals of Washington, Division 3

June 14, 2018

JEFF ZINK & DONNA ZINK, husband and wife, Appellants,
v.
CITY OF MESA, a Washington municipal corporation, Respondent.

          Siddoway, J.

         In this, the third appeal of Donna and Jeff Zink's 2003 Public Records Act (PRA)[1] lawsuit against the city of Mesa, we address whether a trial court may consider the small size of a jurisdiction and the disproportionate burden on its taxpayers of a penalty whose amount would be appropriate if imposed on a larger jurisdiction. Rejecting both parties' appeals, we hold that the trial court did not err or abuse its discretion in arriving at a preliminary penalty based on culpability and then reducing the penalty to an amount ($350 per taxpayer) deemed necessary and sufficient to deter future misconduct.

         We also address the application of legislation enacted in 2011 that eliminated a $5 floor on per-day penalties under the PRA and hold that as remedial legislation, it is retroactive. We affirm.

         FACTS AND PROCEDURAL BACKGROUND

         In August 2002, the city of Mesa took the position that a building permit granted to Donna and Jeff Zink for home repairs in April 2000 had expired for suspension or abandonment. Zink v. City of Mesa, 137 Wn.App. 271, 273-74, 152 P.3d 1044 (2007) (Zink I). After the city's board of appeals affirmed the city's decision, the Zinks filed a petition under LUPA[2] in which they prevailed following city concessions. Id. at 274. In Zink I, this court rejected the parties' cross appeals of the trial court's award of attorney fees.

         In the same month that the city deemed their building permit to have expired, the Zinks began filing public record requests for documents held by the city. Zink v. City of Mesa, 140 Wn.App. 328, 333, 166 P.3d 738 (2007) (Zink II). From August 2002 to January 31, 2005, the requests, by the city's count, totaled 172. Id. Many, but not all, related to the city's decision to terminate the Zinks' building permit; others related to the Zinks' "self-described 'watchdog type' role in the City." Id. In April 2003, the Zinks filed an action against the city alleging violations of the Public Disclosure Act, former chapter 42.17 RCW.[3] Id. at 334.

         At the first show cause hearing conducted in the matter, the trial court made no findings on specific alleged violations, finding instead in general terms that the city had "'more than substantially complied'" with the requests, that it was a "'practical impossibility'" for the city to strictly comply given the number of requests and its limited manpower, and that the Zinks' requests "'amounted to unlawful harassment.'" Id. at 335.

         In Zink II, this court reversed the trial court and remanded with directions to enter findings on whether the city strictly complied with the PRA in the instances identified by the Zinks. Where violations had occurred, this court directed the trial court to award penalties, costs, and attorney fees. Id. at 349.

         After a hearing following remand, the trial court ordered the city to pay the Zinks a total judgment of about $245, 940, consisting of $167, 930 in penalties, $5, 700 in costs, and $72, 309 in attorney fees. Zink v. City of Mesa, 162 Wn.App. 688, 701, 256 P.3d 384 (2011) (Zink III).

         The Zinks again appealed to this court and the city again cross appealed. Id. Before the matter was set for argument, however, the Washington Supreme Court accepted review of Division One's decision in Yousoufian v. Office of Ron Sims, 137 Wn.App. 69, 151 P.3d 243 (2007) (Yousoufian II[4]) on which the trial court in the Zinks' case had relied in arriving at its per-day penalty awards. The city's request for a stay of the appeal pending the issuance of the Supreme Court's decision was granted by this court and was lifted in May 2010 after the Supreme Court issued Yousoufian v. Office of Ron Sims, 168 Wn.2d 444, 229 P.3d 735 (2010) (Yousoufian III). Zink III, 162 Wn.App. at 702.

         In Yousoufian III, the Supreme Court recognized that trial courts would be well served by guidance on how the high court believed they should exercise their broad discretion to impose PRA penalties, given the dearth of reported cases. Yousoufian III, 168 Wn.2d at 463. It announced 16 nonexclusive mitigating and aggravating factors trial courts should use as a guide in determining penalty amounts. Id. at 467-68.[5]

         In the decision in this matter issued after the stay was lifted, dozens of challenges to the trial court's calculations of the penalty days for the city's 33 violations were resolved. Zink III, at 706-22, 730. Recognizing that the trial court had used a now-rejected method for calculating the amount of the per-day penalties, however, this court vacated the penalties and remanded with directions to determine penalty amounts in accordance with the guidance provided by Yousoufian III. Id. at 705-06, 730.

         Four-and-a-half years later, in December 2015, the city filed a motion for partial summary judgment. Among the relief it requested was a ruling that Substitute House Bill 1899 (SHB 1899), enacted in May 2011, applied retroactively to the penalty phase of the PRA proceeding. The 2011 legislation removed what had formerly been a $5 floor on per-day penalties. Laws of 2011, ch. 273, § 1 (effective July 22, 2011) amending RCW 42.56.550(4). A new trial court to whom the matter was assigned following remand ruled that SHB 1899, being remedial, applied retroactively.

         The Zinks then filed a motion for assessment of penalties, attorney fees, and costs against the city, supported by extensive documentation. The parties agreed that since this court had resolved the number of penalty days in Zink III, all that remained was for the trial court to set penalty amounts.

         The trial court held a three-day hearing in which it used individual worksheets to assess the Yousoufian factors for each violation, indicating, with respect to each factor, whether it was "strongly present, " "moderately present, " "not present, " or " NA [not applicable]." Clerk's Papers (CP) at 2437-69 (some capitalization omitted).

         A few weeks thereafter, the trial court convened a hearing to deliver an oral ruling. It provided the parties with copies of its 33 penalty worksheets. The preliminary penalties identified as appropriate ranged from $1 per day on the low end to $100 per day on the high end. Some of the penalties were adjusted for four periods falling between the start dates established in Zink III and November 7, 2008, the date that findings, conclusions and an order for the second show cause hearing were entered.[6]

         After identifying a calculation error, it was determined that the total penalty based on the 33 worksheet amounts and the four calculation periods was $352, 955. The trial court told the parties it was "a little unsettled" by the $352, 955 figure and would reserve a final ruling until the presentment of proposed findings and conclusions. Report of Proceedings (RP) (May 10, 2016) at 55. It rejected a party's reference to the court as having "aimed" for a different range, explaining, "I have not aimed at any number, any gross number. I anticipated a methodology where I would just apply the factors as objectively as I could and let the chips fall where they may." Id. at 54-55. The court added, "I also told you that my intentions were to then look at that number to see if I was uncomfortable with it." Id. at 55. The court told the parties it was going to give thought to the legal question of whether it had authority to "go back and do a wholesale adjustment to the total. And I don't know the answer to that question." Id. at 56-57. It invited the parties to brief the issue in connection with their presentation of proposed findings of fact and conclusions of law. Id.

         The city's submissions thereafter included a declaration from its clerk/treasurer identifying the amounts and restrictions on its 2015 and 2016 tax revenues, and its counsel's illustration of the impact of the trial court's preliminary penalty figure, given the city's small size and limited resources. Comparing Mesa with another city in Benton County, the city explained:

If Pasco had treated Ms. Zink the way Mesa treated Ms. Zink, the Court's preliminary penalty award of $352, 955 might be warranted. But a penalty of that size would "only" amount to $5 per resident for Pasco, whereas that same penalty will cost each resident of Mesa $718. If Pasco was penalized at $718-per-resident, the total penalty would top $49 million. The City of Mesa suggests that no one would support giving away $49 million of tax payer dollars based on the statutory violations of a handful of government employees.

CP at 2899-2900 (footnotes omitted).

         At the hearing on entry of the final order, the trial court told the parties it had concluded that a $175, 000.00 penalty was "sufficient to deter future conduct . . . . It is such an amount that would avoid this windfall to the plaintiffs. It will certainly sting the city but will not, in my judgment, cripple them." RP (June 29, 2016) at 59. Its written findings and conclusions state:

After reaching the preliminary total of $352, 954, the Court has considered whether that amount was appropriate, taking into account Mesa's small size, limited resources, and the deterrent purposes of PRA penalties. Based on this consideration, the Court finds that the preliminary penalty award was greater than needed to serve the purposes of PRA penalties and should be reduced to $175, 000.

CP at 2430. The total judgment awarded was $200, 746.47: $175, 000.00 for PRA penalties, and $25, 746.47 in attorney fees and costs incurred in the prior appeal.

         The Zinks appeal and the city cross appeals.

         ANALYSIS

         The Zinks' extensive briefing describes each of the city's 33 public record violations, but their assignments of error are more limited, requiring us to address only two legal issues: (1) Does the 2011 legislative amendment eliminating the $5 floor on the per-day penalty amount apply retroactively, and (2) does a trial court have discretion under the PRA to globally reduce penalties based on an agency's size, limited resources, and the deterrent purposes of PRA penalties. Br. of Appellant at 2.[7]

         The city raises two issues in its cross appeal: (1) whether the trial court abused its discretion by imposing a penalty that exceeds 100 percent of the city's 2015 annual general fund unrestricted tax revenue and amounts to an averaged cost of approximately $350 per resident, and (2) whether insufficient evidence supports the trial court's finding that a municipal research agency's memo should have put the city on notice of the impropriety of some of its document redactions. Br. of Resp't at 4.

         In the published portion of this decision, we address the second issue raised by the Zinks and the first issue raised by the city: a trial court's discretion (and perhaps its duty) to adjust what would be an appropriate penalty amount in a typical case, where that penalty amount is more than necessary to deter a small jurisdiction or agency, to the point of being financially crippling. We also address the Zinks' challenge to the trial court's ruling that the 2011 amendment was remedial. We address the remaining issues in the unpublished portion of the decision.

         I. Issues arising from the trial court's adjustment of its total penalty based on the size of the agency and the facts of the case

         APPEAL

         A. A trial court does not abuse its discretion by treating the ninth "deterrence" Yousoufian aggravating factor as the most important aggravating factor in an appropriate case

         The PRA mandates an award of "all costs, including reasonable attorney fees" to a person who prevails against an agency in an action in the courts seeking the right to inspect or copy a public record or to receive a response to a public record request within a reasonable amount of time. RCW 42.56.550(4). In addition,

it shall be within the discretion of the court to award such person an amount not to exceed one hundred dollars for each day that he or she was denied the right to inspect or copy said public record.

Id. (emphasis added). We review a trial court's award of penalties under the PRA for an abuse of discretion. Bricker v. Dep't of Labor & Indus., 164 Wn.App. 16, 21, 262 P.3d 121 (2011). An abuse of discretion occurs when a decision is manifestly unreasonable or exercised on untenable grounds or for untenable reasons. Graves v. Emp't Sec. Dep't, 144 Wn.App. 302, 309, 182 P.3d 1004 (2008).

         Our Supreme Court has stated that the PRA penalty "is intended to 'discourage improper denial of access to public records and [encourage] adherence to the goals and procedures dictated by the statute.'" Yousoufian v. Office of King County Exec., 152 Wn.2d 421, 429-30, 98 P.3d 463 (2004) (Yousoufian I) (alteration in original) (quoting Hearst Corp. v. Hoppe, 90 Wn.2d 123, 140, 580 P.2d 246 (1978)), quoted in Yousoufian III, 168 Wn.2d at 461. The PRA's goals and procedures, as we often repeat, serve as a "strongly worded mandate for broad disclosure of public records." Hoppe, 90 Wn.2d at 127.

         In Zink III, this case was remanded so that the trial court could arrive at a penalty with the guidance provided by Yousoufian III. By employing its worksheet, the trial court scrupulously considered each of the aggravating and mitigating factors identified in that decision. But the Supreme Court emphasized in Yousoufian III that the trial court was not required to weigh each factor equally:

We emphasize that the factors may overlap, are offered only as guidance, may not apply equally or at all in every case, and are not an exclusive list of appropriate considerations. Additionally, no one factor should control. These factors should not infringe upon the ...

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