Central Puget Sound Regional Transit Authority V. Marymoor Storage Partners Llc

Court of Appeals of Washington·Decided December 26, 2023·No. 84466-1·Published

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

CENTRAL PUGET SOUND REGIONAL No. 84466-1-I TRANSIT AUTHORITY, a regional transit authority, dba SOUND TRANSIT, DIVISION ONE

Plaintiff,

v.

LMRK PROPCO 3 LLC, a Delaware limited liability company,

Appellant,

CCTMO LLC, a Delaware limited liability company; T-MOBILE WEST TOWER LLC, a Delaware limited liability company; and SPRINT SPECTRUM PUBLISHED OPINION L.P., a Delaware limited partnership,

Respondents,

MARYMOOR STORAGE PARTNERS LLC, a Washington limited liability company; PUGET SOUND ENERGY, INC., a Washington public utility corporation; AT&T INC., a Delaware corporation; KING COUNTY, a Washington municipal corporation; and ALL UNKNOWN OWNERS AND UNKNOWN TENANTS,

Defendants.

BOWMAN, J. — Central Puget Sound Regional Transit Authority (Sound Transit) paid $16.65 million as full and just compensation to condemn by eminent domain property owned by Marymoor Storage Partners LLC. The property

included a cell tower in which LMRK PROPCO 3 LLC (Landmark), CCTMO LLC, T-Mobile West Tower LLC (T-Mobile Tower), Sprint Spectrum LLC, and T-Mobile West LLC1 asserted compensable leasehold interests. Landmark appeals the trial court’s disbursement of just compensation funds to CCTMO, T-Mobile Tower, Sprint, and T-Mobile West. Landmark argues those entities were judicially estopped from moving for disbursement based on an agreement that their interests would be determined after an evidentiary hearing. It also argues that the trial court did not follow statutory procedures before disbursing the funds and that the disbursement was inequitable. We affirm.

FACTS

Marymoor owned 2.5 acres in Redmond. It used most of the property for a self-storage facility. But it leased a small section on the northwest corner of the property and several adjacent storage units to T-Mobile Tower. T-Mobile Tower then built and operated a 100-foot-tall cell tower on the land, leasing space on the tower for telecommunications antennae to several phone companies. Marymoor assigned Landmark the right to collect rent from T-Mobile Tower’s ground lease.

By 2018, AT&T, Sprint, and T-Mobile West each held leasehold interests in the cell tower, granting the companies access and utility easements for affixing and operating clusters of telecommunication antennae. AT&T, Sprint, and T- Mobile West also held leasehold interests in the storage facility, granting each company access to and use of a storage unit for equipment. T-Mobile Tower

1 T-Mobile Tower and T-Mobile West are different entities.

held a leasehold interest in the cell tower, authorizing it to rent space on the tower. T-Mobile Tower leased back its entire interest to CCTMO. And it granted CCTMO a power of attorney to act on its behalf on matters related to the cell tower leases. So, CCTMO held a sublease interest in the management of the tower and the rent paid by AT&T, Sprint, and T-Mobile West. Finally, Landmark held the ground lease for the cell tower site and the storage units. That interest gave Landmark the right to collect income from T-Mobile Tower for use of the site and from AT&T, Sprint, and T-Mobile West for rental of the storage units.

In early 2018, Sound Transit notified Marymoor that it intended to condemn by eminent domain Marymoor’s property to construct, operate, and maintain a portion of the “Downtown Redmond Link Extension” of its light rail project. In preparation, Sound Transit hired property advisors to appraise Marymoor’s property. The October 2018 appraisal valued the collective interests in the property at $16.65 million—$15.5 million for the land and $1.15 million for the cell tower interests.

In early 2019, Marymoor tried selling the property to Sound Transit to avoid condemnation proceedings. But to do so, it needed to free its title from all encumbrances. So, following mediation in June 2019, Marymoor and Landmark executed a settlement agreement. Marymoor agreed to pay Landmark $950,000, and Landmark agreed to secure releases of all the cell tower tenants’ leasehold interests. Marymoor then agreed to sell the property to Sound Transit for $16.7 million. But Landmark failed to clear the title, and in September 2019, Marymoor and Sound Transit’s purchase and sale agreement fell through. As a

result, Marymoor and Landmark sued each other for breach of the June 2019 settlement agreement. The case proceeded to arbitration.

In October 2019, Sound Transit petitioned to condemn by eminent domain Marymoor’s fee simple interest in the property as well as all encumbrances on the land. It named Marymoor, Landmark, and CCTMO as respondents.2 The court set the matter for trial in June 2020.

In January 2020, the court entered a stipulated order granting Sound Transit immediate use and possession of the property once it deposited $16.65 million into the court registry as just compensation for the taking. Soon after, T- Mobile Tower petitioned to intervene, which the court granted. After T-Mobile Tower intervened, CCTMO’s attorneys represented its interest because their interests were coextensive.3 In February 2020, Marymoor moved to release $15.5 million of the funds in the court registry. CCTMO objected, arguing the motion was premature because the parties had not yet determined their separate cell tower and land interests. Alternatively, CCTMO requested that the court leave $2 million in the registry to ensure compensation for the remaining interests. The court granted Marymoor’s motion but left $2 million in the registry. It ordered the release of $14.65 million to Marymoor.

A few weeks later, AT&T and Sprint joined as parties to the condemnation proceeding. In April 2020, Sound Transit filed a second amended eminent

2 It also named several other entities not involved in this appeal.

3 We refer to CCTMO and T-Mobile Tower collectively as CCTMO for the remainder of this opinion.

domain petition identifying the new parties’4 interests in the property. Although the amended petition did not name T-Mobile West, it was a cell tower tenant and became a claimant and interested party in the condemnation proceedings under RCW 8.04.140.5 In May 2020, the court entered a “Stipulated Judgment and Decree of Appropriation” between Sound Transit and Marymoor establishing $16.65 million as full and just compensation for the “Condemned Property and all rights, estates, and interests therein, and for termination of any and all leases and easements, recorded or unrecorded, that burden the Property.” The other parties did not sign the stipulation. But in July 2020, the remaining parties—Landmark, CCTMO, AT&T, Sprint, and T-Mobile West—entered a stipulated order with Marymoor to strike their June 2020 trial date and affirm the full condemnation value of the property as $16.65 million.

The stipulated order noted that $2 million was available to be appropriated between the remaining interests. The parties agreed to set a “post-trial briefing schedule” and an “evidentiary hearing . . . to determine allocation of the remaining funds” in the court registry and that the trial court could allocate the remaining funds “via post-trial motions.” The parties agreed on a briefing schedule that included a November 2020 deadline to exchange appraisals, a December 2020 discovery deadline, and a March 2021 evidentiary hearing.

4 T-Mobile Tower, AT&T, and Sprint.

5 Chapter 8.04 RCW governs eminent domain actions by the State. But under RCW 8.12.120, a person or entity unnamed in a city’s eminent domain petition and claiming an interest in the subject property may also be admitted as a party to the lawsuit.

CCTMO, Sprint, and T-Mobile West exchanged appraisals of their interests before the November 2020 deadline. CCTMO’s appraisal valued its interest at $1,045,000, Sprint’s appraisal valued its interest at $68,000, and T- Mobile West’s appraisal valued its interest at $125,000.

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