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Tan Phu Cuong Investment LLC v. King County

United States District Court, W.D. Washington, Seattle

November 12, 2019

TAN PHU CUONG INVESTMENT LLC, a Washington Limited Liability Company, and EMILIYA SHUPARSKAYA, a married woman as her separate property, Plaintiffs,
KING COUNTY, a political subdivision of the State of Washington, Defendant.



         This matter comes before the Court on Defendant's motion for summary judgment (Dkt. No. 40). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion in part and REMANDS Plaintiffs' state law claims for the reasons explained herein.

         I. BACKGROUND

         This case arises out of Plaintiffs' purchase of lots of land located in Lake Geneva Park Plats Nos. 3 and 4 in Federal Way, Washington. (See Dkt. Nos. 40 at 2, 41-6 at 2, 69 at 2-3.)[1] In the spring of 2015, Plaintiff Emiliya Shuparskaya purchased a lot (403120-0010) in Plat No. 4 for $15, 000-$20, 000 below the asking price. (Dkt. Nos. 41-6 at 2, 41-8 at 3-4, 65 at 2, 69 at 2.) In August 2015 and July 2016, Plaintiff Cuong LLC[2] purchased nine lots in Plat No. 3 (403110-0330, 403110-0340, 403110-0460, 403110-0470, 403110-0480, 403110-0550, 403110-0560, 403110-0570, and 403110-0580). (Dkt. Nos. 41-6 at 2, 67 at 2.) Plaintiff Cuong LLC paid $36, 000 or $40, 000 in total for Lots 46, 47, and 48, and paid $200, 000 in total for Lots 33, 34, 55, 56, 57, and 58. (Dkt. No. 41-9 at 15.) Plaintiff Cuong LLC has since sold Lots 55, 56, and 57. (See Dkt. No. 67 at 2.)

         A. Plat Nos. 3 and 4

         Plat Nos. 3 and 4 slope from north to south with the low point located at the boundary between the plats, causing water to naturally flow south toward Plaintiff Shuparskaya's Lot 01 and Plaintiff Cuong LLC's Lot 58. (Dkt. Nos. 45 at 2-3, 53 at 7-10.) The plats' natural drainage channel is a shallow open ditch or swale along the plats' north-south boundary. (Dkt. Nos. 45 at 4-5, 34, 36; 53 at 9-10.) Prior to development, water flowed across private parcels. (Dkt. No. 53 at 9.) Around 1939, a culvert was built to allow water flowing north-to-south to go under a street and continue its natural drainage path. (Dkt. No. 53 at 4, 7-10, 64; see Dkt. No. 45 at 3-4.)

         Many lots in the plats are underpinned by “hardpan” that sits close to the ground's surface and restricts the downward flow of water, which causes percolation issues and generally precludes having a septic system safely installed on individual lots. (See Dkt. Nos. 44 at 2, 48 at 2-4, 49 at 1-2.) The King County Assessor's Office has historically categorized Plaintiffs' lots as “non-buildable parcels” and assigned them low appraisal values. (Dkt. No. 43 at 3-4.)[3] In 2003, prior to Plaintiffs' purchase of their lots, the City of Federal Way designated Plaintiff Shuparskaya's Lot 01 and Plaintiff Cuong LLC's Lot 58 “as containing wetlands.” (Id. at 2.)

         Plat Nos. 3 and 4 were privately developed, and Plat No. 3's developer reserved the right to allow surface water to flow west to the drainage channel on the western border of the plat. (See Dkt. Nos. 40 at 4; 41-6 at 2; 45 at 32; 53 at 9, 66.) A storm drainage system, including a north-south concrete drainage pipe (the “main line”), was installed on the plats to collect and convey runoff to the drainage ditch. (See Dkt. Nos. 40 at 4; 45 at 3-4; 53 at 8, 70; 71 at 4.) The main line sits close to the ground's surface and is vulnerable to damage caused by heavy items driving over or falling onto it. (Dkt. No. 46 at 4.) Beginning in 1972, Defendant obtained several drainage easements to allow it to make necessary repairs to the main line. (Dkt. No. 53 at 7-8, 44-62.) The easements referenced drainage issues on several lots that would be alleviated. (See Dkt. No. 66 at 4-5, 184-192.) Since obtaining the easements, Defendant has performed general maintenance on the drainage system and responded to specific issues on three occasions. (See Dkt. Nos. 46 at 3; 53 at 10; 64 at 17-18; 68 at 59, 69, 74; 69 at 57.)

         B. Plaintiff Shuparskaya

         Plaintiff Shuparskaya purchased Lot 01 as a vacant lot intending to build a house on the land. (See Dkt. No. 41-8 at 4.) Plaintiff Shuparskaya walked Lot 01 to inspect it but did not have an inspection done prior to purchasing it. (Id. at 5-6.; Dkt. No. 65 at 4.) Plaintiff Shuparskaya obtained a clearing permit, and in the summer of 2015 she cleared leaves and foliage from Lot 01. (See Dkt. Nos. 41-8 at 9-11, 53 at 35-36.) Plaintiff Shuparskaya was aware of Defendant's easement for the main line but did not see the main line itself before Lot 01 was cleared. (See Dkt. No. 41-8 at 6.) In the winter of 2015, after clearing Lot 01, Plaintiff Shuparskaya noticed flooding on the land when it rained and found water flowing from the main line. (Id. at 13.) Plaintiff Shuparskaya asked various employees of Defendant for assistance but did not receive substantive help. (See Dkt. No. 65 at 5-6.)

         In the summer or fall of 2016, Plaintiff Shuparskaya hired a contractor from Craigslist known as “Vasily, ” who connected two pipes to the main line: one in the northwest corner of Lot 01 and one running from north to south and terminating in the culvert. (See Dkt. Nos. 40 at 6; 41-8 at 11, 14-16, 31-32; 53 at 2-7, 14, 16, 18, 31, 40; 65 at 6.)[4] Vasily's work created a “tight line” that caused water that would have flowed off Plaintiffs' lots to instead pool on their property. (See Dkt. Nos. 45 at 5-6, 53 at 4.) Plaintiff Shuparskaya later sought a grading permit for Lot 01 from Defendant. (See Dkt. Nos. 41-8 at 10, 33; 65 at 2.) Although Plaintiff Shuparskaya did not obtain the permit, Defendant's employees gave her 10 trucks' worth of fill dirt for free. (See Dkt. No. 65 at 6, 8.)[5] Following complaints from her neighbors about the dirt, an employee of Defendant told Plaintiff Shuparskaya that she needed a permit. (See Dkt. Nos. 49 at 2; 65 at 8, 72-73.) When Plaintiff Shuparskaya attempted to obtain a permit, she was told that Lot 01 contained a wetland and was directed to remove the dirt. (Id. at 8-9; Dkt. No. 41-8 at 27.) In December 2018, a wetland reconnaissance on Lot 01 identified and delineated a wetland through the eastern half of the lot. (Dkt. No. 50 at 3.) Plaintiff Shuparskaya has not removed the dirt, sought a reasonable use exception, or performed a wetlands analysis on Lot 01. (See Dkt. Nos. 41-8 at 22-25, 51 at 3.) Instead, she has filed a tort claim for damages against Defendant relating to Lot 01's water issues. (See Dkt. No. 65 at 10, 76-81.)

         C. Plaintiff Cuong LLC

         Plaintiff Cuong LLC's Lots 33, 34, 46, 47, and 48 have faced issues with their suitability for septic tank installation. (See Dkt. Nos. 41-2 at 2, 41-3 at 2, 41-9 at 37-40.) Plaintiff Cuong LLC's requests for septic permits have been denied, and Plaintiff Cuong LLC has filed two pending Land Use Petition Act appeals challenging the denials in Snohomish County Superior Court. (See Dkt. Nos. 40 at 9, 41 at 2, 41-7, 51 at 2.)

         Plaintiff Cuong LLC's Lot 58 has proven difficult to develop. In 2014, a wetland delineation concluded that Lot 58 “likely contained a wetland.” (Dkt. No. 50 at 2.) In November 2016, around the time Plaintiff Cuong LLC purchased its lots, Robert King inspected the lots on Plaintiff Cuong LLC's behalf and determined that Lot 58 was encumbered by a wetland and was likely unbuildable. (See Dkt. No. 47 at 2.) Plaintiff Cuong LLC applied for a single-family residence building permit for Lot 58 and a subsequent environmental review conducted by Defendant concluded that both Lot 58 and Plaintiff Shuparskaya's Lot 01 were encumbered by a wetland and its buffer. (See Dkt. No. 42 at 2-3, 6.) To satisfy its obligation under the King County Code to perform a wetland study, Plaintiff Cuong LLC filed a hydrology report prepared by Stephen Neugebauer, which concluded that none of Plaintiff Cuong LLC's lots contained wetlands. (See Dkt. Nos. 40 at 10, 42 at 3-4, 51 at 4.) Defendant rejected Neugebauer's report for failing to comply with applicable provisions of the King County Code and Washington law. (See Dkt. No. 42 at 5-6.) Plaintiff Cuong LLC did not apply for a reasonable use exception or continue in the building permit application process; instead, it notified Defendant of its intent to file suit. (See Dkt. Nos. 40 at 10, 41-9 at 24, 41-5 at 2, 42-3 at 2-3, 51 at 4-5.) During a site inspection conducted in December ...

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