IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
OOM LIVING, LLC, a Washington limited liability company, and No. 88426-3-I JENNIFER EGUSA WALDEN, DIVISION ONE
Respondents,
UNPUBLISHED OPINION
v.
CITY OF SEATTLE, a Washington municipal corporation, and SEATTLE PUBLIC UTILITIES,
Appellants.
MANN, J. — This case arises from Oom Living LLC’s application to the City of Seattle for a water service connection for a new residential development in West Seattle. To obtain a water availability certificate, the City, through Seattle Public Utilities (SPU), required that Oom Living construct a 173-foot water main line extension. Oom Living sued the City for declaratory and injunctive relief and sought damages. Oom Living argued that the City’s requirement to construct a water main extension violated city code, was an unconstitutional exaction, and violated RCW 82.02.020. On cross- motions for summary judgment, the trial court ruled in favor of Oom Living and entered a stipulated judgment for damages, attorney fees, and interest.
We affirm the trial court’s declaratory ruling that the City’s water main extension requirement conflicted with city code. We also affirm the ruling requiring that the City approve Oom Living’s connection of Parcel Y to the water main under SW Elmgrove Street.
We reverse the trial court’s conclusion that the City was liable under 42 U.S.C. § 1983 because the water main requirement was an exaction subject to Nollan/Dolan and Koontz. 1 We also reverse the trial court’s conclusion that the City was liable under RCW 82.02.020. We remand to the trial court to vacate the judgment awarding compensatory damages, attorney fees, and pre- and postjudgment interest under 42 U.S.C. § 1983 and RCW 82.02.020.
Affirmed in part, reversed in part, and remanded.
I. FACTS
A. Background
In May 2022, Oom Living 2 purchased two lots located at 8004 and 8014 39th Avenue SW in West Seattle. The properties span the entire east side of 39th Avenue
1 Nollan v. Cal. Coast Comm’n, 483 U.S. 825, 107 S. Ct. 3141, 97 L. Ed. 2d 677 (1987); Dolan v.
City of Tigard, 512 U.S. 374, 114 S. Ct. 2309, 129 L. Ed.2d 304 (1994); Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 133 S. Ct. 2586, 186 L. Ed. 2d 697 (2013).
2 Oom Living is a Washington limited liability company. Jennifer Egusa Walden is the managing
and majority member of Oom Living.
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SW between SW Monroe Street on the north and SW Elmgrove on the south. Each of the two lots were connected to water service provided by SPU—with 8004 connecting to the main under SW Monroe and 8014 connecting to the main under SW Elmgrove. There is no water main under this block of 39th Avenue SW.
In October 2022, Oom Living applied to subdivide the two lots into three lots, known as parcels X,Y, and Z. Before submitting the subdivision application, Oom Living sought direction from the Seattle Department of Construction and Inspection (SDCI) about the configuration of the lots. SDCI and Oom Living ultimately decided on the following configuration:
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The configuration of Parcel Y is known as a “flagpole lot” since it is shaped like a flag on a pole. This configuration was done at the recommendation of SDCI to facilitate a side sewer connection on SW Elmgrove Street.
State law required that Oom Living provide evidence of an adequate water supply, which is done through obtaining a valid water availability certificate from SPU. Seattle Municipal Code (SMC) 21.04.020; RCW 19.27.097(1)(a). Oom Living applied to SPU to obtain the water availability certificate for Parcel Y by connecting to the abutting water main on SW Elmgrove Street.
On April 6, 2023, SPU issued a water availability certificate that was conditioned on the requirement that Oom Living “design and install approximately 173 feet of 8-inch ductile iron pipe water main in 39th Ave SW extending from SW Elmgrove Street to northern parcel boundary [of Parcel Y].” SPU explained that SMC 21.04.061 authorizes the Director to implement rules relating to requiring the construction of water mains. SPU explained that Director’s Rule WTR-440 implements the city code and prohibits flagpole lots for water main connections.
Oom Living estimated the cost to construct a new water main extension under 39th Avenue SW would be approximately $355,000.
B. Procedural History
Oom Living first sought administrative review of the water main extension requirement. Oom Living argued that Parcel Y abuts a street with an existing suitable water main and should be connected to the water main under city code. Oom Living asserted that the City’s reliance on Director Rule WTR-440 as a basis for requiring the extension conflicted with city code and violated the state and federal constitutions. Oom
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Living also argued that the requirement constituted a violation of RCW 82.02.020. SPU rejected the appeal and upheld the water main extension requirement.
Oom Living sued the City in King County Superior Court seeking declaratory and injunctive relief and damages. Oom Living sought declaratory judgment concluding that the City’s water main extension requirement violated state and local law and/or the state and federal constitutions. While the matter was pending, the City allowed Oom Living to establish a temporary connection for Parcel Y to the water main under SW Elmgrove Street, subject to the requirement that Oom Living post a bond in the amount of $355,000.
The parties cross-moved for summary judgment. The trial court granted Oom Living’s motion and denied the City’s. The trial court entered declaratory judgment as follows:
a. The City’s conditioning of the Water Availability Certificate violated the plain language of Chapter 21.04 SMC and/or SPU Director’s Rule WTR-
440. To the extent the City interprets subsection VI.C.3.c of WTR-440 to authorize the water main extension condition, its interpretation of that subsection conflicts with the City code and does not follow from the subsection’s plain language.
b. To the extent that SPU has adopted an unwritten policy of prohibiting private service line connections to an abutting water main via a legally established flag lot configuration, its application of that unwritten policy to Oom Living’s application for a water availability certificate was arbitrary and capricious.
c. The City’s water main extension constitutes a fee or charge on development subject to RCW 82.02.020. The City has failed to meet its burden of showing that the extension was “reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.” Thus, the condition violates RCW 82.02.020.
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d. The City is enjoined from enforcing the water main extension condition and is directed to issue a water availability certificate approving Plaintiffs[’]
connection to the abutting water main under SW Elmgrove Street.
The court also granted Oom Living’s claim for liability under 42 U.S.C. § 1983 as follows:
a. The City’s demand that Plaintiffs fund the design and installation of a water main extension as a condition of issuing a water availability certificate is an exaction subject to Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987), Dolan v. City of Tigard, 512 U.S. 374 (1994), and Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013).
b. The City has not met its burden of demonstrating that the condition bears an essential nexus or is roughly proportionate to the impacts of Plaintiffs’ proposed connection to the abutting water main under SW Elmgrove Street. Thus, the condition violates the federal doctrine of unconstitutional conditions.
c. Plaintiffs suffered a cognizable constitutional injury the moment the City imposed the unconstitutional condition on the water availability certificate.
d. The City was acting under the color of state law when it placed the water main extension condition on Plaintiffs’ water availability certificate.
e. The City is liable for damages under 42 U.S.C. § 1983, the amount of which to be proven at trial.
The parties entered a stipulated judgment as to the amount of Oom Living’s damages and attorney fees while preserving the City’s right to appeal the trial court’s order on liability.
The City appeals.
II. ANALYSIS
A. Standard of Review
We review an order on summary judgment de novo. Meyers v. Ferndale Sch.
Dist., 197 Wn.2d 281, 287, 481 P.3d 1084 (2021). “Summary judgment is appropriate
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where there is no genuine issue as to any material fact, so the moving party is entitled to judgment as a matter of law.” Meyers, 197 Wn.2d at 287; see also CR 56.
Under the Uniform Declaratory Judgments Act, chapter 7.24 RCW, courts have the power to “declare rights, status and other legal relations whether or not further relief is or could be claimed.” RCW 7.24.010. On review of a declaratory ruling, we review conclusions of law involving the interpretation of statutes and municipal ordinances de novo. Nollette v. Christianson, 115 Wn.2d 594, 600, 800 P.2d 359 (1990).
B. City Code
The City argues that it is not violating city statutes or rules by prohibiting Oom Living from connecting to its water system via a flagpole lot configuration. We disagree.
As mentioned, state law requires that each applicant for a building permit needing potable water provide evidence of adequate water supply, which is done by obtaining a water availability certificate. See RCW 19.27.097(1)(a); SMC 21.04.020. New water connections are governed by SMC 21.04.050, which requires the City to connect a lot that abuts a street with an existing water main:
Upon the presentation at the office of the Director of Finance and Administrative Services’ receipt for the installation fees and the execution of the contract provided for in Section 21.04.030, the Director shall cause the premises described in the application, if the same abut upon a street in which there is a City water main, to be connected with the City’s water main by a service pipe extending at right angles from the main to the property line, except as provided in Sections 21.04.060, 21.04.061, 21.04.062, 21.04.070, and 21.04.080. The City connection, which shall include a union placed at the end of pipe, and a stopcock placed within the curbline, shall be maintained by and kept within the exclusive control of the City.
(Emphasis added.) Accordingly, absent an exception, if a property abuts a City’s water main, it shall be connected. SMC 21.04.050.
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The City argues that the exception in SMC 21.04.061.A applies. This exception provides:
A. In case of application to supply water service to a parcel not abutting a street(s) in which there is a standard or suitable City distribution water main to the extent of the parcel boundary, the Director will require construction of a standard distribution water main abutting the property before a connection is made, unless otherwise approved by the Director.
The standard distribution water main shall be constructed in the abutting street to the extent of the parcel boundary, as required by the utility for the orderly extension or efficient gridding of the public water system. The standard distribution water main shall be constructed in accordance with the City’s Standard Plans and Specifications and other applicable design standards and guidelines. The Director, pursuant to Chapter 3.02, shall establish criteria, rules, and procedures to implement this subsection 21.04.061.A.
(Emphasis added.) Therefore, if a property does not abut a street with a suitable water main, the Director will require construction of a water main. SMC 21.04.061.A. The Director is permitted to establish criteria, rules, and procedures to implement SMC 21.04.061.A. Relevant here, SPU Director’s Rule WTR-440 subsection VI.C.3.c provides that:
Any division, redivision, or lot boundary adjustment of land that has the effect of avoiding water main installation or other appurtenance requirements shall not change the installation requirements under this rule that would apply before the division, redivision, or lot boundary adjustment.
The City first argues that SMC 21.04.050 does not provide that Oom Living has an absolute right to be connected to the City’s water system because it expressly states that is limited by SMC 21.04.061.A. The City argues that under that provision the Director had authority to establish WTR-440, which provides in subsection VI.C.3.c that flagpole lots are prohibited. We disagree.
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Under the plain language of SMC 21.04.050, if a property abuts upon a street with an existing water main, the property shall be connected. Only if a property does not abut upon a street with an existing water main does the exception in RCW 21.04.061.A apply allowing the City to require construction of a new water main.
There is no dispute that flagpole lots are lawful lot configurations and that Parcel Y is a legal lot. SMC 23.22.100.C.3.c. Parcel Y abuts SW Elmgrove Street via the flagpole portion of the lot. Under SMC 21.04.050, because the legal Parcel Y lot abuts a street with a water main it shall be connected. Therefore, under the plain language of the code, Parcel Y shall be connected to the water main. The exception in SMC 21.04.061 applies for parcels that are not abutting a street with a main water line— which is not the case here. Parcel Y abuts SW Elmgrove Street via a legal lot configuration.
The City points to SMC 21.04.061.A and contends that the Director has the express authority to adopt rules implementing the new water main extension requirements under the SMC 21.04.061.A exception. And using that authority, Director’s Rule WTR-440 prohibits the creating of flagpole lots as a means to connect to an existing water main. But the City ignores that the Director’s authority to interpret and implement is limited to implementing the exception in SMC 21.04.061.A. On its face, SMC 21.04.061.A. states that “The Director, pursuant to Chapter 3.02, shall establish criteria, rules, and procedures to implement this subsection 21.04.061.A.” (Emphasis added.)
In contrast, SMC 21.04.050 does not provide the Director with the authority to interpret its requirements. As a result, the Director’s Rule WTR-440 cannot prohibit
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flagpole lots because the plain language of SMC 21.04.050 states that a lot abutting a water main must be connected. Also important, it was SDCI that recommended that Oom Living configure a flagpole lot to facilitate connection to the sewer line underlying SW Elmgrove Street. Therefore, even if WTR-440 applied, Oom Living did not design Parcel Y with the purpose of avoiding constructing a water main extension, rather it created the flagpole lot to connect to the existing sewer main.
For those reasons, the water main extension requirement conflicts with city code.
We agree with the trial court’s declaration that the City’s conditioning of the water availability certificate violated the plain language of SMC 21.04.050. The City was required to connect Parcel Y to the existing water main underlying SW Elmgrove Street.
C. Nollan/Dolan
The trial court concluded that the City was liable for damages and attorney fees under 42 U.S.C. § 1983 because the City’s condition that Oom Living construct a new water main extension was an exaction under Nollan/Dolan and Koontz. The City argues that Nollan/Dolan and Koontz are inapplicable to the City’s water main extension requirement. We agree with the City. 3 In Nollan, the plaintiffs acquired an oceanfront lot and sought to construct a home on it. 483 U.S. at 827-28. When they applied for the necessary permits, the California Coastal Commission required that they dedicate an easement for public use across the
3 The City assigns error to the trial court’s conclusion that the City was liable for damages under
42 U.S.C. § 1983 because water main extension requirement fell under Nollan/Dolan. The City also assigns error to the trial court’s conclusion that the water extension requirement violated RCW 82.02.020. While we affirm the trial court and conclude that the City’s condition requiring Oom Living to construct a new water main extension violated city code, because the court entered judgment against the City awarding Oom Living damages and attorney fees under 42 U.S.C. § 1983 and RCW 82.02.020, we address the City’s remaining assignments of error.
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beach portion of their lot. Nollan, 482 U.S. at 828. The United State Supreme Court held that there must be an “essential nexus” between the easement and any problem created by their new development. Nollan, 482 U.S. at 837.
In Dolan, an owner of a building wanted to remove the building and replace it with a larger one and expand the parking lot. 512 U.S. at 379. The City conditioned permit approval on the owner dedicating a portion of the property lying within the 100- year floodplain for improvement of a storm drainage system and on her dedicating a portion of land adjacent to the floodplain as a pedestrian pathway. Dolan, 512 U.S. at 379-80. The court held that there must be rough proportionality between the required demand and the impact of the proposed development. Dolan, 512 U.S. at 391.
Together, Dolan and Nollan hold that the government may not condition approval of a land-use permit on the owner’s relinquishment of a portion of their property unless there is rough proportionality between the government’s demand and the effects of the proposed land use, and a nexus between the condition and the state interest served. Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 599, 133 S. Ct. 2586, 186 L. Ed. 2d 697 (2013); Church of Divine Earth v. City of Tacoma, 194 Wn.2d 132, 138, 449 P.3d 269 (2019). A city’s uncompensated requirement to dedicate private property as public is unlawful where it fails to fulfill both requirements. Divine Earth, 194 Wn.2d at 138.
In Koontz, a landowner sought to develop property in a manner that would impact protected wetlands. 570 U.S. at 600-01. Under Florida law, the landowner had to obtain a wetland resource management permit because “applicants wishing to build on protected wetlands offset the resulting environmental damage by creating, enhancing or
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preserving wetlands elsewhere.” Koontz, 570 U.S. at 601. Accordingly, to mitigate the effect of his proposal, the landowner offered to deed to the water management district (District) a conservation easement over his property. Koontz, 570 U.S. at 601. The District responded and conditioned the approval for the land permits on one of two conditions: (1) the owner had to substantially reduce the size of the planned development and deed the District a larger conservation easement, or (2) the owner had to grant the government the conservation easement he initially proposed and also pay for contractors to conduct off-site mitigation construction at a site miles away that would enhance the District-owned wetlands. Koontz, 570 U.S. at 601-02.
The Florida Supreme Court concluded that a Nollan/Dolan review was not required because it was a monetary exaction rather than a tangible interest in real property. Koontz, 570 U.S. at 612. The United States Supreme Court disagreed and concluded that the demand for money operated upon an identified property interest by directing the landowner to make a monetary payment and burdened their ownership of a specific parcel of land. Koontz, 570 U.S. at 613. Therefore, the demand for funds was a monetary exaction, meaning “the government must pay just compensation when it takes a lien—a right to receive money that is secured by a particular piece of property.” Koontz, 570 U.S. at 613. The Court explained:
The fulcrum this case turns on is the direct link between the government’s demand and a specific parcel of real property. Because of that direct link, this case implicates the central concern of Nollan and Dolan: the risk that the government may use its substantial power and discretion in land-use permitting to pursue governmental ends that lack an essential nexus and rough proportionality to the effects of the proposed new use of the specific property at issue, thereby diminishing without justification the value of the property.
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Koontz, 570 U.S. at 614. The Court rejected the argument that a governmental demand for money rather than an interference with tangible property rights did not constitute a taking, explaining:
. . . [I]f we accepted this argument it would be very easy for land-use permitting officials to evade the limitations of Nollan and Dolan. Because the government need only provide a permit applicant with one alternative that satisfies the nexus and rough proportionality standards, a permitting authority wishing to exact an easement could simply give the owner a choice of either surrendering an easement or making a payment equal to the easement’s value. Such so-called “in lieu of” fees are utterly commonplace . . . and they are functionally equivalent to other types of land use exactions. For that reason . . . we reject respondent’s argument and hold that so-called “monetary exactions” must satisfy the nexus and rough proportionality requirements of Nollan and Dolan.
Koontz, 570 U.S. at 612. The District’s request for money was therefore subject to Nollan/Dolan scrutiny, and the Court remanded to the state court for consideration of the merits. Koontz, 570 U.S. at 619.
Here, the City required that Oom Living purchase, design, and install 173 feet of 8-inch ductile iron pipe and fixtures to install as a water main under 39th Avenue SW. After the installation, Oom Living was then required to convey to water pipe to the City as a donated asset. Parcel Y would not be approved as a residential lot unless it had the water availability certificate. The certificate was available only if Oom Living constructed the water main.
But, unlike in Koontz, the City was not demanding any land or fee in lieu of it. In Koontz, the Court wanted to address the loophole where a land use permitting authority wishing to exact an easement could simply give the owner a choice of surrendering an easement or making a payment equal to the easement. It did not want governments to be able to require a conveyance of land as a condition of a permit and requiring a
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money exaction as a supposed alternative. This is not the case here. There is no supposed alternative or land that the City is trying to take. Rather, the City required that Oom Living construct the necessary water infrastructure to serve their development. To hold otherwise would extend Koontz to virtually all requirements that developers must follow before having necessary permits.
For those reasons, the City’s water main requirement is not an unconstitutional condition subject to a Nollan/Dolan review. We reverse the trial court to the extent that it concluded there was an unconstitutional exaction under Nollan/Dolan.
The City next argues that the trial court erred in concluding that it was liable under RCW 82.02.020. The City contends that RCW 82.02.020 is not applicable to the water main extension requirement because (1) the requirement is not a direct or indirect tax, fee, or charge and (2) even if it was, the statute does not limit municipal authority that predates the statute’s enactment. We agree.
RCW 82.02.020 states, “[e]xcept as provided in . . . RCW 82.02.050 through 82.02.090, no county, city, town, or other municipal corporation shall impose any tax, fee, or charge, either direct or indirect, on . . . the development, subdivision, classification, or reclassification of land.” But the statute does not prohibit any charge authorized by a statute in effect before the legislature amended RCW 82.02.020 in 1982. Tapps Brewing, Inc. v. City of Sumner, 106 Wn. App. 79, 85, 22 P.3d 280 (2001).
The City relies on Southwick, Inc. v. City of Lacey, 58 Wn. App. 886, 795 P.2d 712 (1990). In that case, Southwick sought a permit to expand its cemetery and funeral
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home complex. Southwick, 58 Wn. App. at 888. The City approved the plan but imposed several conditions including:
(1) Construction of street improvements, including street widening, paving, curb, gutter, sidewalk, and street lights; . . . (3) installation of a street light at the driveway access to a road; . . . (5) submission of plans, prepared by a registered professional engineer, for the street improvements and the water line extension to the Public Works Department.
Southwick, 58 Wn. App. at 888 (alterations in original).
On appeal, the court first held that the conditions imposed on the development were not taxes because they were “not equivalent to fixed charges that automatically apply to the activities proposed” but were “tied to the property in question” and “not aimed at general social ills.” Southwick, 58 Wn. App. at 890. The court explained, “[w]hile fulfillment of the conditions will require the expenditure of money, cost alone does not make the requirements a tax.” Southwick, 58 Wn. App. at 890. The court also held that the conditions did not violate RCW 82.02.020 as an illegal fee or charge. Southwick, 58 Wn. App. at 891. The court explained, “RCW 82.02.020 was not aimed at development-specific conditions such as those imposed here. Instead, the statute was aimed at the imposition of the general social costs of development on developers.” Southwick, 58 Wn. App. at 893.
We conclude the water main extension requirement is not subject to RCW 82.02.020. First, similar to Southwick, SMC 21.04.061.A’s requirement is directly tied to the development of Oom Living’s property. The requirement is not aimed at resolving general social ills. Instead, the requirement is necessary for the development of the property to provide an adequate water supply. SMC 21.04.061.A does not impose a direct tax, fee, or charge because it does not require any payment to the City. The fact
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that Oom Living was required to spend money to build the necessary infrastructure does not mean it is an indirect tax, fee, or charge.
Second, the authority for the City to impose the water main extension requirement predates RCW 82.02.020. In Westridge-Issaquah II LP v. City of Issaquah, 20 Wn. App. 2d 344, 370, 500 P.3d 157 (2021), this court held that RCW 35.92.095, which authorizes cities to charge property owners seeking to connect to the water and drainage system, predates RCW 82.02.020, and thus is not subject to the statute’s restrictions.
For those reasons, the City’s water main extension requirement is not subject to RCW 82.02.020. We reverse the trial court’s ruling to the contrary.
E. Conclusion
We affirm the trial court’s declaratory ruling that the City’s water main extension requirement conflicted with city code. We also affirm the ruling requiring that the City approve Oom Living’s connection of Parcel Y to the water main under SW Elmgrove Street.
We reverse the trial court’s conclusion that the City was liable under 42 U.S.C. § 1983 because the water main requirement was an exaction subject to Nollan/Dolan and Koontz. We also reverse the trial court’s conclusion that the City was liable under RCW 82.02.020. We remand to the trial court to vacate the judgment awarding compensatory damages, attorney fees, and pre- and postjudgment interest.
Affirmed in part, reversed in part, and remanded.
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WE CONCUR: