Manufactured Housing Communities v. State

13 P.3d 183, 142 Wash. 2d 347, 2000 Wash. LEXIS 830

Opinions

Ireland, J.

— Manufactured Housing Communities of Washington challenges the constitutionality of chapter 59.23 RCW, the mobile home parks—resident ownership act, which gives qualified tenants a right of first refusal to purchase a mobile home park. Finding an unconstitutional taking of private property for private use in violation of amended article I, section 16 of the Washington State Constitution, we reverse the Court of Appeals.

FACTS

In 1995, Manufactured Housing Communities of Washington (Park Owners), an association of mobile home park owners, commenced this declaratory judgment action. The Park Owners argued that the mobile home parks—resident ownership act (the Act) creates an unconstitutional taking of property in violation of amended article I, section 16 of the Washington State Constitution, as well as the Fifth Amendment of the United States Constitution.

The superior court denied the Park Owners’ motion for summary judgment and dismissed the complaint after granting summary judgment to the State. The Court of Appeals affirmed, holding the Act did not amount to an unconstitutional taking of property. Manufactured Hous. Cmtys. v. State, 90 Wn. App. 257, 259, 951 P.2d 1142 (1998).

With the permission of the Chief Justice, the Pacific Legal Foundation, the Building Industry Association of Washington and the Washington Association of Realtors filed amicus curiae briefs in support of the Park Owners. The Washington State Association of Municipal Attorneys filed an amicus curiae brief supporting the State.

THE ACT

In 1993, the Washington State Legislature, concerned with the availability of mobile home park housing, adopted chapter 59.23 RCW, the Act. RCW 59.23.005. This Act gives mobile home park tenants a right of first refusal when the park owner decides to sell a mobile home park. RCW 59.23.025.

To exercise a right of first refusal, the tenants must organize into a “qualified tenant organization”¹ and give the park owner written notice² of “a present and continuing desire to purchase the mobile home park.” RCW 59.23.015. Once the park owner has received such notice, the park owner must notify the tenants of any agreement to sell the park to a third party, as well as disclose the agreement’s terms. If the park owner fails to properly notify the qualified tenant organization, a pending third party sale is voidable. RCW 59.23.030.

Upon receiving proper notice, the tenants have 30 days in which to pay the park owner two percent of the third party’s agreed purchase price and to tender a purchase and sale agreement as financially favorable as the agreement between the owner and the third party. RCW 59.23.025. If the tenants meet these requirements within the 30-day period, the park owner must sell them the park. RCW 59.23.025. If, however, the tenants fail to meet these requirements or if, in the case of seller financing, the owner determines selling the park to the tenants would create a greater financial risk than selling to the third party, the owner may proceed with the sale to the third party. RCW 59.23.025.³

STANDARD OF REVIEW

When reviewing an appeal from summary judgment, an appellate court employs the same analysis as the trial court. Margola Assocs. v. City of Seattle, 121 Wn.2d 625, 634, 854 P.2d 23 (1993). Legal issues are reviewed de novo, and factual issues are reviewed in the light most favorable to the nonmoving party. Margola, 121 Wn.2d at 634. Because this is a facial challenge, no facts are in dispute and we, therefore, decide the Park Owners’ claim solely as a matter of law.

CLAIMS

The Park Owners contend chapter 59.23 RCW eviscerates fundamentally important ownership rights. Specifically, the Park Owners believe the Act’s mere existence destroys the right to (1) freely dispose of their property, (2) exclude others, and (3) immediately close the sale of a mobile home park. The Park Owners claim that if a park owner decides to sell, chapter 59.23 RCW allows the State to delay the sale and forcibly substitute the owner’s chosen buyer with a buyer selected by the State. According to the Park Owners, taking the right of first refusal and then granting this right to private mobile home park tenants, solely for the tenants’ private use, violates amended article I, section 16 of the Washington State Constitution, which expressly provides “Private property shall not be taken for private use . . . .” Const, art. I, § 16 (amend. 9). The Park Owners believe invalidation of chapter 59.23 RCW is the only appropriate remedy.⁴

The State argues that chapter 59.23 RCW is a legitimate exercise of the police power and makes several additional arguments against the Park Owners’ conclusion that chapter 59.23 RCW constitutes a taking prohibited by either the Washington State Constitution or the United States Constitution. First, the State argues that a right of first refusal is not subject to a takings analysis because it is not a property interest. Second, the State argues that a “total taking” has not occurred because chapter 59.23 RCW does not deny the park owners all economically beneficial use of their property. Third, the State argues that a taking has not occurred through physical invasion because chapter 59.23 RCW does not require the Park Owners to submit to the physical occupation of their land. Finally, the State argues that even if a taking has occurred, chapter 59.23 RCW achieves a legitimate “public use” and, therefore, article I, section 16 requires payment of just compensation rather than the statute’s automatic invalidation.

POLICE POWER

The government, through the police power, often regulates and restricts the use of private property in the interest of the public. Police power is inherent in the state by virtue of its granted sovereignty. Shea v. Olson, 185 Wash. 143, 153, 53 P.2d 615 (1936). “It exists without express declaration, and the only limitation upon it is that it must reasonably tend to correct some evil or promote some interest of the state, and not violate any direct or positive mandate of the constitution.” Shea, 185 Wash. at 153. However, as noted in Conger v. Pierce County, 116 Wash. 27, 35-36, 198 P. 377 (1921), the police power is not unlimited and, when stretched too far, is a power “most likely to be abused.” In Conger, an early Washington case which determined a county had exceeded the scope of the police power, this court said:

[The police power] has been defined as an inherent power in the state which permits it to prevent all things harmful to the comfort, welfare and safety of society. It is based on necessity. It is exercised for the benefit of the public health, peace and welfare. Regulating and restricting the use of private property in the interest of the public is its chief business. It is the basis of the idea that the private individual must suffer without other compensation than the benefit to be received by the general public. It does not authorize the taking or damaging of private property in the sense used in the constitution with reference to taking such property for a public use. Eminent domain takes private property for a public use, while the police power regulates its use and enjoyment, or if it takes or damages it, it is not a taking or damaging for the public use, but to conserve the safety, morals, health and general welfare of the public.

Conger, 116 Wash. at 36.

REGULATORY TAKINGS

Under existing Washington and federal law, a police power measure can violate amended article I, section 16 of the Washington State Constitution or the Fifth Amendment of the United States Constitution and thus be subject to a categorical “facial” taking challenge when: (1) a regulation effects a total taking of all economically viable use of one’s property, Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1019, 112 S. Ct. 2886, 120 L. Ed. 2d 798 (1992); or (2) the regulation has resulted in an actual physical invasion upon one’s property, Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S. Ct. 3164, 73 L. Ed. 2d 868 (1982); or (3) a regulation destroys one or more of the fundamental attributes of ownership (the right to possess, exclude others and to dispose of property), Presbytery of Seattle v. King County, 114 Wn.2d 320, 330, 787 P.2d 907 (1990); or (4) the regulations were employed to enhance the value of publicly held property, Orion Corp. v. State, 109 Wn.2d 621, 651, 747 P.2d 1062 (1987).

Regulations have also been found unconstitutional because they violate substantive due process, whether or not a total taking or physical invasion has actually occurred.⁵ See Guimont v. Clarke, 121 Wn.2d 586, 608, 854 P.2d 1 (1993); Margola, 121 Wn.2d at 649.

STATE CONSTITUTIONAL ANALYSIS

We must determine, based upon a Gunwall6 analysis, whether a regulatory taking rather than lawful use of police power has occurred under the Washington State Constitution.⁷ This undertaking requires us first to examine six nonexclusive neutral criteria to determine whether the Washington State Constitution extends broader rights to its citizens than does the United States Constitution. Gunwall, 106 Wn.2d at 61.

The Text of the State Constitution and its Parallels with the Federal Document

The first two Gunwall factors are: (1) the textual lan guage of the state constitutional provision at issue and (2) differences in the parallel texts of the federal and state constitutions.

Amended article I, section 16 of the Washington State Constitution provides:

§ 16 EMINENT DOMAIN. Private property shall not be taken for private use, except for private ways of necessity, and for drains, flumes, or ditches on or across the lands of others for agricultural, domestic, or sanitary purposes. No private property shall be taken or damaged for public or private use without just compensation having been first made, or paid into court for the owner, and no right-of-way shall be appropriated to the use of any corporation other than municipal until full compensation therefor be first made in money, or ascertained and paid into court for the owner, irrespective of any benefit from any improvement proposed by such corporation, which compensation shall be ascertained by a jury, unless a jury be waived, as in other civil cases in courts of record, in the manner prescribed by law. Whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such, without regard to any legislative assertion that the use is public: Provided, That the taking of private property by the state for land reclamation and settlement purposes is hereby declared to be for public use.

On the other hand, the takings clause of the Fifth Amendment states simply: “nor shall private property be taken for public use, without just compensation.” A striking textual difference between these two constitutions is the sheer detail of article I, section 16. A second significant difference is the addition of the word damaged in the state version and the requirement that compensation must first be made. Neither of these differences, however, are key to this analysis.⁸ What is key is article I, section 16’s absolute prohibition against taking private property for private use. The Fifth Amendment provides similar protections only by inference. Moreover, unlike the Fifth Amendment, article I, section 16 expressly renders the question of public versus private a judicial question: “Whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such, without regard to any legislative assertion that the use is public .. . Const, art I, § 16 (amend. 9).

This court has consistently focused on textual differences between related state and federal constitutional provisions. Additional language in the state constitution has led to greater protections of individual liberties in several cases. See, e.g., State v. Brayman, 110 Wn.2d 183, 201, 751 P.2d 294 (1988) (addition of gender in state equal rights amendment provides more protection than federal equal protection clause); State v. Boland, 115 Wn.2d 571, 580, 800 P.2d 1112 (1990) (additional language in state search and seizure clause provides greater protection than federal Fourth Amendment). Hence, as Justice Utter explained, “Ordinary rules of textual and constitutional interpretation, as well as the logic of federalism, require that meaning be given to the differences in language between the Washington and United States Constitutions . . . .” Robert F. Utter, Freedom and Diversity in a Federal System: Perspectives on State Constitutions and the Washington Declaration of Rights, 7 U. Puget Sound L. Rev. 491, 515 (1984) (footnotes omitted). The key differences between the Fifth Amendment and article I, section 16 are significant and support a literal interpretation of “private use” as employed in the Washington State Constitution.

State Constitutional and Common Law History

The third Gunwall factor requires an examination of Washington constitutional and common law history. The Park Owners contend that because the federal constitution predates the state constitution, the state drafters presum ably knew the contents of the federal document and deliberately chose to make the state constitutional provision more detailed, providing greater protection for the property owner. Br. of Pet’r at 17.

During the Washington State Constitutional Convention in 1889, concern was publicly voiced over the taking of private property for private enterprise. Washington Standard (Olympia), Aug. 9, 1889, p. 1, col. 4. Moreover, certain constitutional delegates were strongly opposed to various exceptions to the absolute prohibition against taking private property for private use.⁹

Preexisting State Law

The fourth Gunwall factor addresses preexisting state law. The State of Washington has a long history of extending greater protections against governmental takings of private property by literally defining what constitutes “private use.” Before examining preexisting Washington law concerning private versus public use, we first compare the use of terms in relevant federal case law. While Washington case law concerns “private/public use” the federal cases concern “private/public purposes.” Case law demonstrates these terms are not synonymous.

The United States Supreme Court has repeatedly stated “one person’s property may not be taken for the benefit of another private person without justifying public purpose, even though compensation be paid.” Thompson v. Consol. Gas Utils. Corp., 300 U.S. 55, 80, 57 S. Ct. 364, 376, 81 L. Ed. 510 (1937); Cincinnati v. Vester, 281 U.S. 439, 447, 50 S. Ct. 360, 362, 74 L. Ed. 950 (1930); Madisonville Traction Co. v. St. Bernard Mining Co., 196 U.S. 239, 251-52, 25 S. Ct. 251, 255-56, 49 L. Ed. 462 (1905); Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112, 159, 17 S. Ct. 56, 63, 41 L. Ed. 369 (1896). However, if the legislature’s purpose is legitimate and its means not irrational, a legislative taking can and will withstand a public use challenge provided just compensation is paid. Haw. Hous. Auth. v Midkiff, 467 U.S. 229, 242, 104 S. Ct. 2321, 81 L. Ed. 2d 186 (1984) (citing W.&S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 671-72, 101 S. Ct. 2070, 2084, 68 L. Ed. 2d 514 (1981)).

Washington courts, on the other hand, have provided a more restrictive interpretation of public use. In fact, this court has consistently held that a “beneficial use is not necessarily a public use.” In re Petition of City of Seattle, 96 Wn.2d 616, 627, 638 P.2d 549 (1981) (citing State ex rel. Or.-Wash. R.R. & Navigation v. Superior Court, 155 Wash. 651, 657-58, 286 P. 33 (1930) and Hogue v. Port of Seattle, 54 Wn.2d 799, 825, 831, 837-38, 341 P.2d 171 (1959)). Accordingly, preexisting state law provides a literal definition of “private use.” Washington state courts thus provide Washington citizens with enhanced protections against taking private property for private use.

Differences in Structure Between the State and Federal Constitutions

The fifth Gunwall factor, structural differences between the federal and state constitutions, also favors enhanced protections to Washington citizens by maintaining a literal interpretation of “private use.” As previously noted, there are marked differences between the two relevant provisions. But, because the United States Constitution is a grant of enumerated powers to the federal government and the Washington State Constitution serves to limit the otherwise plenary powers of the state government, the state constitution can be looked at as a source of great protections directly reserved in the people. Gunwall, 106 Wn.2d at 62. Thus, the structural differences allow Washington courts to forbid the taking of private property for private use even in cases where the Fifth Amendment may permit such takings.

Matters of Particular State Interest or Local Concern

The sixth and last Gunwall factor asks whether the clause deals with matters of particular state or local concern. It suffices to say that taking private property for private use is clearly a matter of local concern consistently recognized by Washington courts. State ex rel. Convention & Trade Ctr. v. Evans, 136 Wn.2d 811, 822, 966 P.2d 1252 (1998); In re Seattle, 96 Wn.2d 616; Healy Lumber Co. v. Morris, 33 Wash. 490, 509, 74 P. 681 (1903).

APPLICATION

Having concluded on the basis of the foregoing analysis that “private use” under amended article I, section 16 is defined more literally than under the Fifth Amendment, and that Washington’s interpretation of “public use” has been more restrictive, we next apply these terms to the present case.

Chapter 59.23 RCW authorizes the State to take from the park owner the right to sell to anyone of choice, at any time, and gives tenants a right to preempt the owner’s sale to another and to substitute themselves as buyers. This is apparent from RCW 59.23.015, which says that if a qualified tenant organization expresses a “desire” to purchase, “the park may then be sold only according to this chapter.” Moreover, RCW 59.23.025 provides that, if the tenant organization tenders two percent of the price plus a purchase and sale agreement comparable to the third party’s offer, “the mobile home park owner must sell the mobile home park to the qualified tenant organization.” Therefore, the legislature takes from the park owner the right to freely dispose of his or her property and gives to tenants a right of first refusal to acquire the property by blocking the owner’s sale to the third party and substituting themselves as buyers. The result is that the Legislature has authorized the taking of private property from the owner for the tenants’ private use in direct violation of the first sentence of article I, section 16.

Public Benefit Not Necessarily Public Use

The alleged public benefit in this case is even more tenuous than the alleged public use in other Washington cases, which concluded alleged public uses were actually private uses. For example, unlike the proposed development in In re Seattle, discussed more fully below, the public here will not own the land. In fact, no member of the general public can even use the parks as would the shoppers envisioned in In re Seattle. See In re Seattle, 96 Wn.2d at 619-20. The statute’s design and its effect provide a beneficial use for private individuals only.

The eminent domain provision of the Washington State Constitution provides a complete restriction against taking private property for private use: ’’Private property shall not be taken for private use . . . .” Const, art. I, § 16 (amend. 9). This absolute language is further strengthened by the enumeration of specific, but here inapplicable, exceptions “for private ways of necessity, and for drains, flumes, or ditches on or across the lands of others for agricultural, domestic, or sanitary purposes.” Const, art. I, § 16 (amend. 9). These specific exceptions are incorporated into an otherwise absolute prohibition precluding taking private property for private use. This prohibition is not conditioned on payment of compensation. Whether or not a tenant organization might ultimately pay the owner the same price he or she is to receive from a third party buyer is irrelevant. Hence, this absolute prohibition against taking private property for private use bars any additional inquiry about compensation and requires invalidation of chapter 59.23 RCW.

Public Purpose Not Necessarily Public Use

Some commentators have criticized Washington’s exist ing takings analysis, particularly insofar as it relies on an ad hoc inquiry into the specific “purpose of the infringement” to distinguish police power from a regulatory taking. Stanley H. Barer, Comment, Distinguishing Eminent Domain from Police Power and Tort, 38 Wash. L. Rev. 607, 609-10 (1963). Professor Richard Settle urges the court to adopt an approach with a higher predictive value. See Richard L. Settle, Regulatory Taking Doctrine in Washington: Now You See It, Now You Don’t, 12 U. Puget Sound L. Rev. 339, 386-95 (1989). He proposes that the court recognize, as a threshold principle when examining regulatory challenges to police power,

that there are two categories of police power regulation that are subject to quite different taking standards. These categories divide regulations, on the basis of their purpose and effect, into those that effectively deprive a property owner of a fundamental attribute of property and those that do not.

Settle, supra, at 386-87 (footnotes omitted). Professor Settle further notes,

[r]egulations that deprive an owner of a fundamental attribute of ownership generally are held to be takings without applying the ripeness requirement or distinguishing between facial and as applied challenges; without balancing public gain and private loss; and without considering diminution in property value, disappointment of investment-backed expectations, whether value lost is offset by reciprocal benefits, and whether reasonable value remains. In short, such regulations are subject to essentially the same doctrine as that applicable to government exercises of eminent domain and government physical invasions traditionally characterized as inverse condemnations.

Settle, supra, at 387 (footnote omitted).

Fundamental Attribute of Property Ownership

In the present case, the Park Owners believe that a valuable property right has been taken. Before engaging in a takings analysis, however, it must first be determined if “property’ has actually been taken. William B. Stoebuck, Nontrespassory Takings in Washington § 1.7, at 7 (1980).

As the Park Owners point out,

“Property in a thing consists not merely in its ownership and possession, but in the unrestricted right of use, enjoyment and disposal. Anything which destroys any of these elements of property, to that extent destroys property itself. The substantial value of property lies in its use. If the right of use be denied, the value of the property is annihilated and ownership is rendered a barren right.”

Ackerman v. Port of Seattle, 55 Wn.2d 400, 409, 348 P.2d 664 (1960) (emphasis added) (quoting Spann v. City of Dallas, 111 Tex. 350, 355, 235 S.W. 513, 514-15 (1921)), overruled on other grounds by Highline Sch. Dist. No. 401 v. Port of Seattle, 87 Wn.2d 6, 548 P.2d 1085 (1976). Washington courts have consistently recognized that “the right to possess, to exclude others, or to dispose of property” are “fundamental attribute [s] of property ownership.” Guimont, 121 Wn.2d at 595; Robinson v. City of Seattle, 119 Wn.2d 34, 50, 830 P.2d 318 (1992); Presbytery, 114 Wn.2d at 329-30. This notion is not unique. The United States Supreme Court has long held property consists of a “group of rights inhering in the citizen’s relation to the physical thing, as the right to possess, use and dispose of it.” United States v. Gen. Motors Corp., 323 U.S. 373, 378, 65 S. Ct. 357, 89 L. Ed. 311 (1945). Similarly, other jurisdictions recognize “[t]he constitutional guaranty securing to every person the right of‘acquiring, possessing, and protecting property,’. . . includes the right to dispose of such property in such innocent manner as he pleases ....” Ex Parte Quarg, 149 Cal. 79, 80, 84 P. 766, 766 (1906); Tennant v. John Tennant Mem’l Home, 167 Cal. 570, 575, 140 P. 242, 245 (1914); Laguna Royale Owners Ass’n v. Darger, 119 Cal. App. 3d 670, 681, 174 Cal. Rptr. 136, 143 (1981).

Although a right of first refusal has no binding effect until the offeror decides to sell, at such time it then legally constrains the owner. “A right of first refusal to purchase is a valuable prerogative, limiting the owner’s right to freely dispose of his property by compelling him to offer it first to the party who has the first right to buy.” N. W. Television Club, Inc. v. Gross Seattle, Inc., 26 Wn. App. 111, 116, 612 P.2d 422 (1980), rev’d in part on other ground by 96 Wn.2d 973, 634 P.2d 837 (1981) (citing 11 Samuel Williston, A Treatise on the Law op Contracts § 1441A, at 949-50 (Walter H. Jaeger ed., 3d ed. 1968)).

Cases from other jurisdictions are also instructive. For example, a right of first refusal contained in by-laws of a condominium was deemed a property interest sufficient to constitute a covenant running with the land. Anderson v. 50 E. 72nd St. Condo., 129 Misc. 2d 295, 296, 492 N.Y.S.2d 989, 990 (1985); see also Taormina Theosophical Cmty., Inc., v. Silver, 140 Cal. App. 3d 964, 968, 190 Cal. Rptr. 38, 40 (1983) (striking down a right of first refusal in covenants as illegal restraint on alienation). A right of first refusal between joint owners was a sufficient interest in land to constitute a covenant running with the land which could be enforced against the co-owner’s successors in interest so long as joint owner continued to own his interest in the property. HSL Linda Gardens Props., Ltd. v. Seymour, 163 Ariz. 396, 788 P.2d 129 (1990).

Although a right of first refusal to purchase property is a “preemptive” right it has nonetheless been held to be an interest in property as well. “It [a right of first refusal] is an interest in property, and not merely a contractual right, whereby the preemptioner acquires an equitable right in the property, which vests only when the property owner decides to sell.” Ayres v. Townsend, 324 Md. 666, 674-75, 598 A.2d 470, 474 (1991) (citing Ferrero Constr. Co. v. Dennis Rourke Corp., 311 Md. 560, 565, 536 A.2d 1137, 1139 (1988)). In noting the practical effects of a right of first refusal, the Ferrero court observed:

The third type of right of first refusal permits the preemptioner to purchase the property at a price equal to any bona fide offer that the owner, his heirs or assigns desire to accept. In this situation, however, many prospective purchasers, recognizing that a matching offer from the preemptioner will defeat their bids, simply will not bid on the property. This in turn will depress the property’s value and discourage the owner from attempting to sell.

Ferrero, 536 A.2d at 1144.

That a right of first refusal, even one created by statute, can create an interest in property is illustrated by the case of Crowell v. Delafield Farmers Mut. Fire Ins. Co., 463 N.W.2d 737, 740 (Minn. 1990). Minnesota created a statutory right of first refusal for owners of farms to protect them against a sale by a creditor enforcing a debt by requiring the creditor agency or corporation to give notice to the former owner and permitting that owner to meet the terms of a third party offer. Minn. Stat. Ann. § 500.24, subd. 5, at 568 (West 1990). The right of first refusal was a sufficient interest in land to provide the basis of an insurable interest for a debtor holding over even after expiration of the period of redemption. Unlike the present case, the Minnesota statute does not implicate takings because it regulates a creditor-debtor relationship.

The diverse array of cases above clearly demonstrates that a right of first refusal, although a preemptive right for the grantee, can also constitute a property interest even as to a grantee. For the grantor, the power to grant a right of first refusal is part and parcel of the power to dispose of property. Until granted, such right remains indivisible from the “bundle of sticks” representing the valuable incidents of ownership along with the right to possess, use and exclude others.

Relying on Robroy Land Co. v. Prather, 95 Wn.2d 66, 622 P.2d 367 (1980), the State attempts to avoid the inevitable conclusion that the right of first refusal in the hands of the property owner is a valuable property right. The State’s reliance on Robroy is erroneous for three reasons. First, unlike the present case, the right of first refusal in Robroy was voluntary and given for consideration. 95 Wn.2d at 67. Second, the holding of Robroy deals with the definition of property for purposes of the rule against perpetuities. 95 Wn.2d at 69-70. It is inapplicable to a takings question. Third, Robroy analyzes the right of first refusal in the hands of the grantee, which is inapplicable when analyzing the grantor’s property rights.

Distinguishing a right of first refusal in the hands of a grantee is important because such a right is generally regarded as only preemptive. However, the right to grant first refusal is a part of “the bundle of sticks”¹⁰ which the owner enjoys as a vested incident of ownership. As Philip Nichols explains, in The Law of Eminent Domain, “property is often used to describe the corporeal object that is the subject of ownership, as well as the aggregate rights that an owner possesses in or with respect to such a corporeal object.” 2 Julius L. Sackman, Nichols’ The Law of Eminent Domain § 5.01[2][d], at 5-10 (3d rev. ed. 1999) (footnote omitted). Property is not one single right, but is composed of several distinct rights, which each may be subject to regulation. “[T]he right of property includes four particulars: (1) right of occupation; (2) right of excluding others; (3) right of disposition, or the right of transfer in the integral right to other persons; (4) right of transmission. .. .” Nichols, supra, § 5.01[5][b], at 5-30 to 5-31 (citing Jeremy Bentham, The Principles of Morals and Legislation 248 (1948)).

In holding the owner of an unexercised option to purchase land possessed a compensable property right, the Supreme Court of California observed:

“[T]he right to compensation is to be determined by whether the condemnation has deprived the claimant of a valuable right rather than by whether his right can technically be called an ‘estate’ or ‘interest’ in the land.”

County of San Diego v. Miller, 13 Cal. 3d 684, 691, 532 P.2d 139, 143, 119 Cal. Rptr. 491 (1975) (quoting United States v. 53 ¼ Acres of Land, 139 F.2d 244, 247 (2d Cir. 1943)); cf. Spokane Sch. Dist. No. 81 v. Parzybok, 96 Wn.2d 95, 633 (1981) (holding optionee suffered a loss of property—be it only a contract right—and was therefore entitled to share in condemnation award).

In Gregory v. City of San Juan Capistrano, 142 Cal. App. 3d 72, 191 Cal. Rptr. 47 (1983),¹¹ several mobile home park owners challenged an ordinance which required owners planning to sell mobile home parks to first offer it to the residents. Finding this provision in the ordinance constituted an impermissible taking, the court reasoned:

This part of the ordinance effects an outright abrogation of well-recognized property rights. The ability to sell and transfer property is a fundamental aspect of property ownership. Property consists mainly of three powers: possession, use, and disposition. (U.S. v. General Motors Corp., supra, 323 U.S. [373,] at pp. 377-378 [65 S. Ct. 357, 89 L. Ed. 311, 318 (1945)].). . . This part of the ordinance simply appropriates an owner’s right to sell his property to persons of his choice. City has thus “extinguish[ed] a fundamental attribute of ownership,” in violation of federal and state Constitutions. (See Agins v. [City of] Tiburon, supra, 447 U.S. [255,] at p. 262 [100 S. Ct. 2138, 65 L. Ed. 2d 106, 113 (1980)].)

In addition, this part of the ordinance appropriates the owner’s legally recognized right to sell a right of first refusal or preemptive right in the mobilehome park. It is well established that a preemptive right is a valuable property right which may be bought, sold, and enforced in a court of law.

Gregory, 142 Cal. App. 3d at 88-89, 191 Cal. Rptr. at 58 (some citations omitted).

Viewed in the context of an owner’s rights, it is apparent that Robroy should not control the outcome of this case. It is irrelevant whether the tenants gain a “vested interest” in the property. The question is not what the tenants gain, but what the park owner loses. Here, the statute deprives park owners of a fundamental attribute of ownership.

Statutory Transfer

The instant case falls within the rule that would generally find a taking where a regulation deprives the owner of a fundamental attribute of property ownership. See Guimont, 121 Wn.2d at 605 n.7; Settle, supra, at 387. However, we are persuaded that a taking has occurred in this case not only because an owner is deprived of a fundamental attribute of ownership, but also because this property right is statutorily transferred. In Ackerman, this court said:

When restrictions upon the ownership of private property fall into the category of “proper exercise of the police power,” they, validly, may be imposed without payment of compensation. The difficulty arises in deciding whether a restriction is an exercise of the police power or an exercise of the eminent domain power. When private property rights are actually destroyed through the governmental action, then police power rules are usually applicable. See State ex rel. Miller v. Cain (1952), 40 Wn. (2d) 216, 242 P. (2d) 505. But, when private property rights are taken from the individual and are conferred upon the public for public use, eminent domain principles are applicable. See, generally, Conger v. Pierce County (1921), 116 Wash. 27, 198 Pac. 377, 18 A. L. R. 393.

55 Wn.2d at 408; see also Brazil v. City of Auburn, 93 Wn.2d 484, 490-91, 610 P.2d 909 (1980); Highline, 87 Wn.2d at 17. Here, the actual effect of chapter 59.23 RCW is more closely akin to the exercise of eminent domain, and not the police power, because the property right is not only taken, but it is statutorily transferred to a private party for an alleged public use.

“Eminent domain” is defined as “[t]he power to take private property for public use by the state, municipalities, and private persons or corporations authorized to exercise functions of public character.” Black’s Law Dictionary 523 (6th ed. 1990). Similarly, “condemnation” is the “[p]rocess of taking private property for public use through the power of eminent domain.” Id. at 292. Washington law recognizes that “ ‘[t]he authority to condemn must be expressly given or necessarily implied.’ ” State ex rel. Wauconda Inv. Co. v. Superior Court, 68 Wash. 660, 662, 124 P. 127 (1912) (emphasis added) (quoting 1 John Lewis, A Treatise on the Law of Eminent Domain § 371, at 679 (3d ed. 1909)). While chapter 59.23 RCW says nothing about condemnation, its condemnatory effect is necessarily implied.

Chapter 59.23 RCW provides that when a “qualified tenant organization” gives written notice of “a present and continuing desire to purchase the mobile home park, the park may then be sold only according to this chapter.” RCW 59.23.015 (emphasis added). Once a park owner thus enters into a purchase and sale agreement with a third party, the park owner “must” notify the tenants and disclose the terms of the agreement. If within 30 days the tenants pay the owner two percent of the third party’s agreed purchase price and tender a purchase and sale agreement at least as favorable as the agreement between the owner and the third party, the owner “must” sell the park to the tenants.¹² RCW 59.23.025. In effect, chapter 59.23 RCW takes a fundamentally important property right from the Park Owners and then transfers that right to private parties for an alleged public use.

Public Use Required

We conclude that a right of first refusal in the hands of the Park Owners is a fundamental attribute of ownership and a valuable property right, and that the forced transfer of this right under chapter 59.23 RCW constitutes a taking. We next consider whether the proposed use of the property is constitutionally permitted.

Both the state and federal constitutions give citizens the guarantee that private property shall not be taken for “public use” without just compensation. U.S. Const, amend. V; Wash. Const, art. I, § 16 (amend. 9). “The Fifth Amendment’s guarantee that private property shall not be taken for public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U.S. 40, 49, 80 S. Ct. 1563, 4 L. Ed. 2d 1554 (1960). While the eminent domain provision of the Washington State Constitution similarly recognizes the requirement of just compensation when private property is taken for a public use, this constitutional provision also expressly provides that “Private property shall not be taken for private use . . . .” Const, art I, § 16 (amend. 9). Thus, unless a private use falls within article I, section 16’s specifically articulated exceptions, the Washington State Constitution explicitly prohibits taking private property solely for a private use—with or without compensation. See generally Evans, 136 Wn.2d at 825-32. (Sanders, J., dissenting).

The State argues that even if chapter 59.23 RCW takes the Park Owners’ private property, this taking is for a “public use,” requiring payment of just compensation for any resulting damage and not automatic invalidation of the statute. According to the State, chapter 59.23 RCW achieves a valid public use by “maintaining a significant source of low income and elderly housing.” Br. of Resp’t at 36. The State thus contends that even though a right of first refusal benefits private mobile home park tenants, an important public use is involved because “the Legislature found that mobile home parks provide ‘a significant’ but increasingly insecure source of homeownership for ‘many Washington residents.’ ” Br. of Resp’t at 36 (quoting RCW 59.23.005). In short, the State argues that it “has used its police power for a valid public use of preserving dwindling housing stocks for an important and particularly vulnerable segment of society.” Br. of Resp’t at 38.

The State, apparently assuming “public purpose” and “public use” are always the same thing under existing Washington law, argues that preserving a declining hous ing resource so greatly benefits the public that chapter 59.23 RCW plainly converts the private use to a public use. It does not.

Washington courts have a long history of restricting governmental takings of private property under eminent domain by literally defining “private use.” This court has often held that a “beneficial use is not necessarily a public use.” In re Petition of City of Seattle, 96 Wn.2d 616, 627, 638 P.2d 549 (1981) (citing State ex rel. Or.-Wash. R.R. & Navigation v. Superior Court, 155 Wash. 651, 657-58, 286 P. 33 (1930) and Hogue v. Port of Seattle, 54 Wn.2d 799, 825, 831, 837-38, 341 P.2d 171 (1959)).

In re Seattle, for example, addressed the City of Seattle’s ordinance implementing a large urban improvement project designed to guard against urban decay. The project required Seattle to acquire all properties necessary for the project and then transfer large portions of the property to private retailers. Recognizing that impeding urban decay and providing shopping areas, owned by private individuals but used by the general public, provide substantial benefits to the public, this court stated: “ [i]t may be conceded that the Westlake Project is in ‘the public interest.’ However, the fact that the public interest may require it is insufficient if the use is not really public.” In re Seattle, 96 Wn.2d at 627. This court further stated that “ [i]f a private use is combined with a public use in such a way that the two cannot be separated, the right of eminent domain cannot be invoked.”¹³ In re Seattle, 96 Wn.2d at 627.

As Justice Dunbar, a convention delegate and member of the Judicial Department responsible for the final proposal of article I, section 16 to the convention stated, “the use under consideration must be either a use by the public, or by some agency which is quasi public, and not simply a use which may incidentally or indirectly promote the public interest or general prosperity of the state.” Healy Lumber Co. v. Morris, 33 Wash. 490, 509, 74 P. 681 (1903). This court has often followed a similar line of reasoning. In Hogue, for example, this court concluded “it is the duty of the courts to uphold the rights of private property owners against the inroads of public bodies who seek to acquire it for private purposes which they honestly believe to be essential for the public good.” Hogue, 54 Wn.2d at 838.

Chapter 59.23 RCW authorizes the State to take from the park owner the right to sell to anyone of choice, at any time, and gives tenants a right to preempt the owner’s sale to another and to substitute themselves as buyers. Then, after a mobile home park has been forcibly sold to a “qualified tenant organization,” no member of the public can use the park. In fact, only the park tenants can freely use it. Although preserving dwindling housing stocks for a particularly vulnerable segment of society provides a “public benefit,” this public benefit does not constitute a public use. See In re Seattle, 96 Wn.2d at 638; Hogue, 54 Wn.2d at 825; Or.-Wash. R.R. & Navigation, 155 Wash. at 657-58.

The conclusion that chapter 59.23 RCW results solely in a private use is further supported by the Legislature’s silence concerning public entitlement to occupy and use the park after the private tenants buy it. To the contrary, chapter 59.23 RCW would vest ownership (and, by extension the new owners’ and former tenants’ right to possess, exclude others, and dispose of it) in a “qualified tenant organization” with membership requiring “(a) Payment of reasonable dues; and (b) being a tenant in the park.” RCW 59.23.020(3). On the face of the Act, the public would not be entitled to “use” the park if a “qualified tenant organization” became the owner.

Although White Bros. & Crum Co. v. Watson, 64 Wash. 666, 671, 117 P. 497 (1911), is factually distinct from this case, the late Judge Ellis very clearly and persuasively set out the dangers inherent in the reasoning argued by the State:

If it is something in which he has the actual right of property there is no rule of law nor principle of equity which would warrant a court in taking it from him against his will for the benefit of another. No amount of hardship in a given case would justify the establishment of such a precedent. The next step in the invasion of the right of property would be to invite the courts to measure the comparative needs of private parties, and compel a transfer to the one most needing and who might best utilize the property. If a man may be required to surrender what is his own, because he does not need it and cannot use it, and because another does need it and can use it, then there is no reason why he may not be required to surrender what he needs but little because another needs it much. A doctrine so insidiously dangerous should never find lodgment in the body of the law through judicial declaration.

CONCLUSION

We have found that the statutory grant of a right of first refusal to tenants of mobile home parks, amounts to a taking and transfer of private property without a judicial determination of public necessity and without just compensation having been first paid as required by amended article I, section 16. Moreover, the transfer is legislatively granted to the tenants who are private persons, not the public. Giving the provision in article I, section 16 that “Private property shall not be taken for private use . ...” its deserved effect, chapter 59.23 RCW must be invalidated. The state constitution’s absolute prohibition against taking private property solely for a private use is not conditioned on payment of compensation. Whether or not a tenant organization might ultimately pay the owner the same price he or she is to receive from a third party is irrelevant. Hence, this absolute prohibition against taking private property for private use bars any additional inquiry about compensation and requires invalidation of chapter 59.23 RCW.

Here, the well-intentioned effort of the Legislature to encourage the conversion of mobile home parks to resident ownership conflicts with Washington State’s constitutional prohibition against taking private property solely for a private use. We therefore reverse the Court of Appeals.

Guy, C.J., and Alexander and Bridge, JJ., concur.

Madsen, J., concurs in the result.

Footnotes

1

“A ‘qualified tenant organization’ means a formal organization of tenants in the park in question, organized for the purpose of purchasing the park, with membership made available to all tenants with the only requirements for membership being: (a) Payment of reasonable dues; and (b) being a tenant in the park.” RCW 59.23.020(3).

2

“ ‘Notice’ for the purposes of this section means a writing signed by sixty percent of the tenants in the park indicating that they desire to participate in the purchase of the park, and that they are contractually bound to the other signators of the notice to participate by purchasing an ownership interest that will entitle them to occupy a mobile home space for the remainder of their life or for a term of at least fifteen years.” RCW 59.23.015.

3

The Act exempts the transfer or sale of a mobile home park to a relative if the relative signs a written agreement to maintain the property as a mobile home park. RCW 59.23.025, .035.

4

The Park Owners make two additional claims. First, they claim chapter 59.23 RCW violates the takings clause of the United States Constitution. Second, the Park Owners argue that even if chapter 59.23 RCW does not violate the federal takings clause, chapter 59.23 RCW still violates the Washington State Constitution because the addition of the word “damaged” in amended article I, section 16 provides greater protections against governmental takings than the Fifth Amendment of the United States Constitution. Resolving these issues is unnecessary for the disposition of this case. Finding adequate relief under the Washington State Constitution, it is unnecessary to rely on the United States Constitution for guidance in this case. See Allied Daily Newspapers v. Eikenberry, 121 Wn.2d 205, 209, 848 P.2d 1258 (1993) (Because a Substitute House Bill violated article I, section 10 of the Washington State Constitution, it was unnecessary to determine whether that Bill also violated the Fourteenth Amendment of the United States Constitution.).

5

This case concerns only a takings challenge because the Park Owners voluntarily dismissed their substantive due process claim.

6

State v. Gunwall, 106 Wn.2d 54, 61, 720 P.2d 808 (1986).

7

In his dissent, in addition to many political arguments, Justice Talmadge argues that we should follow the “proper course” as outlined in Guimont, 121 Wn.2d 586, and “continue to apply the ample, well-established federal law of regulatory takings.” Dissent at 406 (also citing Highline Sch. Dist. No. 401 v. Port of Seattle, 87 Wn.2d 6, 11, 548 P.2d 1085 (1976); and Orion Corp. v. State, 109 Wn.2d 621, 657-58, 747 P.2d 1062 (1987), cert. denied, 486 U.S. 1022 (1988)). However, the Guimont court specifically declined to undertake a state constitutional Gunwall analysis. See 121 Wn.2d 586. The same was true in Orion. See 109 Wn.2d at 657-58. Furthermore, Highline nowhere states the proposition for which it is cited—that the takings’ provisions in our state and federal constitutions are identical. See 87 Wn.2d at 11. Finally, although Orion was decided 18 months after Gunwall, it makes no reference to Gunwall and, therefore, any assertion that Orion holds that federal and state constitution takings analyses are coextensive is without benefit of the analysis required by Gunwall.

Consequently, in this case, we answer the call to conduct a Gunwall analysis for the first time and should not be limited to prior pronouncements of parallelism between our state and federal takings’ clauses. We would further note that if Gunwall holds any significance in civil cases, pre-Gunwall decisions, or decisions sans a Gunwall analysis, are not binding. Absent a proper analysis on the Gunwall factors, a procedural hurdle we invariably impose upon parties who assert that greater protections exist under our state constitution, the question remains an open one. To ask less of this court than we ask of litigants who come before it would be hypocritical and ill advised.

8

While the Park Owners claim the addition of the word “damaged” in article I, section 16 provides greater protections against government takings than the Fifth Amendment, resolving this issue is unnecessary for the disposition of this case.

9

Delegate Turner, for instance, moved to strike “except for private ways of necessity.” “Turner said such private ways should not be made at the expense of other private property, but that such a right of way should be included in the purchase of isolated land.” The Journal of the Washington State Constitutional Convention, 1889, at 504, (Beverly Paulik Rosenow ed., 1962).

10

“In the words of Morris R. Cohen, ‘Anyone who frees himself from the crudest materialism readily recognizes that as a legal term property denotes not material things but certain rights.’ ” William B. Stoebuck, A General Theory of Eminent Domain, 47 Wash. L. Rev. 553, 600 (1972) (quoting Morris R. Cohen, Property and Sovereignty, 13 Cornell L.Q. 8, 11 (1927)).

11

Although subsequent cases have disapproved of Gregory’s takings analysis related to rent control ordinances, these cases have not criticized Gregory’s takings analysis relative to a right of first refusal. See Fisher v. City of Berkeley, 37 Cal. 3d 644, 686 n.43, 693 P.2d 261, 295 n.43, 209 Cal. Rptr. 682 (1984); Cotati Alliance for Better Hous. v. City of Cotati, 148 Cal. App. 3d 280, 288-89, 195 Cal. Rptr. 825, 830-31 (1983); Oceanside Mobilehome Park Owners’ Ass’n v. City of Oceanside, 157 Cal. App. 3d 887, 900, 204 Cal. Rptr. 239, 247-48 (1984).

12

As previously noted, if the tenants fail to meet these requirements, or if, in the case of seller financing, the owner determines selling the park to the tenants would create a greater financial risk than selling to the third party, the owner may proceed with the sale to the third party. RCW 59.23.025.

13

This court has held that condemnation for both public and private use is permissible under the state constitution if the proposed private use is subordinate and incidental to the public use, requiring no more property be condemned than necessary for the public use. State ex rel. Convention & Trade Ctr. v. Evans, 136 Wn.2d 811, 822, 966 P.2d 1252 (1998).