case concerns whether the city of Tacoma (City) can be held
liable for damages for imposing an unlawful condition on a
building permit. In an appeal brought under the Land Use
Petition Act (LUPA), chapter 36.7OC RCW, the superior court
ruled that the City acted unlawfully when it placed a
condition on the Church of the Divine Earth's (Church)
building permit, requiring an uncompensated-for dedication of
land for right-of-way improvements. However, the court denied
the Church's action for damages under RCW 64.40.020, and
the Court of Appeals affirmed. We reverse and remand for a
September 20, 2013, the Church submitted an application to
the City to build a parsonage on property it owned. A
single-family residence had previously been located on the
property, but it had been demolished in 2012. City staff
reviewed the permit application and placed a number of
conditions on it, including, at issue here, a requirement
that the Church dedicate a 3 0-foot-wide strip of land for
right-of-way improvements to a street abutting the property.
While the existing street was generally 60 feet wide in other
areas, it was 30 feet wide next to the Church's property.
This lack of uniformity had existed for around 100 years.
Church challenged the permit conditions, and the City
eventually removed most of them but kept the requirement for
a dedication. The Church appealed the decision to the
City's hearing examiner, and the hearing examiner granted
summary judgment in favor of the City.
Church filed a timely appeal under LUPA, in which it
challenged the hearing examiner's decision and also
sought damages under RCW 64.40.020. In addressing the
propriety of the dedication, the court confined its review to
the administrative record that had been before the hearing
examiner and acknowledged that, in that record, the stated
purpose by the City for imposing the dedication requirement
was to create a uniform street. The court held that this
reason was insufficient to justify the requirement and
reversed the hearing examiner, invalidating the condition.
case then proceeded to trial on the issue of damages. The
court issued an order prohibiting the City from entering
evidence to show the dedication was imposed for any reason
other than uniformity. However, during trial, City officials
testified that the dedication was intended to address a
variety of issues, including to alleviate impacts to traffic,
visibility, parking, and pedestrian safety, as well as to
bring the street into compliance with city codes and industry
best practices. The trial court apparently considered the
evidence and found that the City imposed the dedication to
address increased vehicular and pedestrian traffic and
related safety impacts, and to ensure adequate visibility. It
then concluded (a) "[t]he City reasonably believed that
the development conditions it attached to the permit had a
nexus to the project and were proportional" and (b) the
City "did not know and should not have reasonably known
that its requirement for a dedication of right of way would
be considered violative of Nollan/Dolan" Clerk's Papers
(CP) at 2408. The court denied the Church's request for
damages, and the Church appealed.
Court of Appeals affirmed the trial court, holding that
"[b]ecause the City reasonably believed that it
satisfied the requirements of NollanlDolan, it did
not know and should not have known that its action was
unlawful." Church of Divine Earth v. City
of Tacoma, 5 Wn.App. 2d 471, 494, 426 P.3d 268 (2018).
The Court of Appeals also awarded attorney fees to the City.
The Church petitioned this court, and we granted limited
review. Church of Divine Earth v. City
of Tacoma, 192 Wn.2d 1022, 435 P.3d 285 (2019).
Whether the City knew or should reasonably have known its
requirement for a dedication of land was unlawful.
should first settle what this case is not about. This is not
a case challenging the constitutionality of a land use
decision; the propriety of the permit condition was already
resolved by the lower court and is not before us on appeal.
And because the superior court invalidated the permit
condition, this is not a claim for just compensation for a
taking. Instead, what we have before us is a claim for
damages under RCW 64.40.020 for an attempted exaction of land
through an unlawful permit condition.
64.40.020(1) allows a property owner who files an application
for a permit to bring an action for damages
to obtain relief from acts of an agency which are arbitrary,
capricious, unlawful, or exceed lawful authority, or relief
from a failure to act within time limits established by law:
PROVIDED, That the action is unlawful or in excess of lawful
authority only if the final decision of the agency was made
with knowledge of its unlawfulness or that it was in excess
of lawful authority, or it should reasonably have been known
to have been unlawful or in excess of lawful authority.
statute does overlap to some degree with LUPA insofar as, to
obtain damages under RCW 64.40.020, the land use decision
must, necessarily, be invalid. But not every successful LUPA
appeal will justify damages, as is expressly acknowledged in
RCW 36.7OC. 130(2) (stating that "[a] grant of relief by
itself may not be deemed to establish liability for monetary
damages"). To establish liability for such damages under
RCW 64.40.020, a plaintiff must meet a higher burden than is
required in LUPA, establishing actual or constructive
knowledge, or that the government entity acted in an
arbitrary or capricious manner.
review here is limited to the question of whether the Church
may obtain damages for the City's unlawful action. As the
statute indicates, the City incurs liability for an unlawful
action "only if the final decision of the
agency was made with knowledge of its unlawfulness ... or it
should reasonably have been known to have been
unlawful." RCW 64.40.020(1) (emphasis added). The City
argued, and the trial court held, that the final decision was
that of the hearing examiner. Therefore, the issue in this
case is whether the City knew or should reasonably have known
the hearing examiner's decision to allow the permit
condition was unlawful. The trial court appears to ...