South Hollywood Hills Citizens Ass'n v. King County

677 P.2d 114, 101 Wash. 2d 68

• Court: Washington Supreme Court
• Decided: February 2, 1984
• Docket: 49250-6
• Status: Published

Opinions

Rosellini, J.

Respondent, South Hollywood Hills Citizens Association for the Preservation of Neighborhood Safety and the Environment (Association), sought a writ of review challenging the King County Council's approval of a plat. The trial court ruled that the Association had failed to exhaust administrative remedies and had untimely joined indispensable parties. It dismissed the writ, the Court of Appeals reversed and we granted review. The decision of the Court of Appeals is reversed. South Hollywood Hills Citizens Ass'n v. King Cy., 33 Wn. App. 169, 653 P.2d 1324 (1982).

I

This dispute arises from the following facts:

The Association is composed of individual families who reside in an unincorporated area of King County between Redmond and Woodinville. The Association was formed after the individuals learned that a subdivision (Bristol View) of about 40 homes was planned for the neighborhood. The instant case arises from the Association's attempts to stop the Bristol View development. Burnstead Construction Company (Burnstead), the original owner of the property in question, first filed the preliminary plat in early 1978. The April 12, 1978, edition of The Daily Journal-American contained notice of the public hearing to consider the proposal. That hearing was held on May 4, 1978. In addition, 2 weeks before the hearing, three notices were posted on the property itself.

Burnstead then filed the necessary documents. The King County Department of Public Health, expressing concern over the development's sewage system, asked for a revised preliminary plat. The hearing was continued until August 27, 1979, to allow for the preparation of the new proposal. At the continued hearing, Burnstead submitted a revised plat which provided that the development would take place in two parts denominated Bristol View One and Two.

After the public hearing in August 1979 (at which no one testified), the hearing examiner forwarded his recommendation to the King County Council. The recommendation approved the plat proposal for Bristol View One. No appeal was taken from this ruling. The King County Council granted preliminary conditional approval of the plat on October 15, 1979.

In May 1980, Burnstead submitted the plat for Bristol View Two. An additional public hearing was scheduled for July 17, 1980. Notice of this hearing was published on June 25 in the Northshore Citizen. Although the Association was not in existence at the time of this hearing, several individuals who later became members were present and given the opportunity to express their views regarding the subdivision. These individuals, including the Association's attorney, were sent, by certified mail, copies of the hearing examiner's recommendation in favor of the development. Along with the recommendation, these individuals received the following notice:

Notice of Right To Appeal

Pursuant to Chapter 20.24.190 of the King County Code, notice of appeal must be filed in writing on or before August 27, 1980. If a notice of appeal is filed, the original and 15 copies of a written appeal statement specifying the basis for the appeal and arguments in support of the appeal must be filed with the Clerk of the King County Council on or before September 3, 1980. If no written appeal statements or arguments are filed within 21 calendar days of the date of this Report and Recommendation, the Clerk of the Council shall place a proposed ordinance which implements the Examiner's recommended action on the agenda of the next available Council meeting.

Notice that King County Council Ordinance No. 4461 has made the timely filing of written appeal arguments a jurisdictional requirement for consideration of an appeal by the Council.

Pursuant to Chapter 20.24.210 of the King County Code: "Action of the Council Final. The action of the Council approving or rejecting a decision of the Examiner shall be final and conclusive unless within twenty (20) days from the date of the action, an aggrieved party or person obtains a writ of certiorari from the Superior Court in and for the County of King, State of Washington, for the purpose of review of the action taken."

Clerk's Papers, at 121. No appeal was filed and on September 2, 1980, the King County Council granted preliminary approval of Bristol Two.

On September 11, 1980, the Association applied for a writ of review. The original pleadings failed to name the project applicant, Burnstead, and the action was dismissed. Respondent corrected this oversight by filing an amended application for writ of review, naming Burnstead but not the property owners, David and Linda Mowat. After the 30-day appeal period had expired, tie Association's attorney learned that the property had been sold to the Mowats in July 1980. The Mowats' real estate contract had been properly filed prior to the time the Association filed its original pleadings but counsel apparently did not attempt to ascertain ownership of the property in question. Counsel then filed an amended complaint naming the Mowats and sought to have it relate back to the date of the original pleading.

The trial judge dismissed the Association's action, holding (1) that the Association had failed to exhaust its administrative remedies by not appealing the hearing examiner's recommendation and (2) that the failure to join the Mowats, who are admittedly indispensable parties by virtue of their ownership of the property, was inexcusable neglect which prevented the relationship back of the amendment.

The Court of Appeals reversed the trial court as to the Bristol Two development, holding that the Association did not need to exhaust the administrative remedies because the hearing examiner's recommendation was not final. The court also ruled that the failure to name the Mowats prior to the expiration of the appeal period was not inexcusable neglect. We granted King County's petition for review. We hold the Court of Appeals erred on both issues and reverse.

II

The doctrine of exhaustion of administrative remedies is well established in Washington. The rule provides that " [i]n general an agency action cannot be challenged on review until all rights of administrative appeal have been exhausted." Spokane Cy. Fire Protec. Dist. 9 v. Spokane Cy. Boundary Review Bd., 97 Wn.2d 922, 928, 652 P.2d 1356 (1982). The test for imposition of the doctrine was spelled out recently in State v. Tacoma-Pierce Cy. Multiple Listing Serv., 95 Wn.2d 280, 622 P.2d 1190 (1980). There, the court said:

[A] dministrative remedies must be exhausted before the courts will intervene: (1) "when a claim is cognizable in the first instance by an agency alone"; (2) when the agency's authority " 'establishes clearly defined machinery for the submission, evaluation and resolution of complaints by aggrieved parties"; and (3) when the "relief sought . . . can be obtained by resort to an exclusive or adequate administrative remedy".

95 Wn.2d at 284 (quoting from Retail Store Employees Local 1001 v. Washington Surveying & Rating Bur., 87 Wn.2d 887, 906-07, 909, 558 P.2d 215 (1976)).

The principle is founded upon the belief that the judiciary should give proper deference to that body possessing expertise in areas outside the conventional experience of judges. Retail Employees, at 906. The underlying policy which supports the doctrine was discussed in McKart v. United States, 395 U.S. 185, 23 L. Ed. 2d 194, 89 S. Ct. 1657 (1969). There, the Court observed that the doctrine (1) insured against premature interruption of the administrative process; (2) allowed the agency to develop the necessary factual background on which to base a decision; (3) allowed exercise of agency expertise in its area; (4) provided a more efficient process; and (5) protected the administrative agency's autonomy by allowing it to correct its own errors and insuring that individuals were not encouraged to ignore its procedures by resorting to the courts.

Washington courts have recognized exceptions to the exhaustion requirement in circumstances in which these policies are outweighed by consideration of fairness or practicality. For example, if resort to the administrative procedures would be futile, exhaustion is not required. Zylstra v. Piva, 85 Wn.2d 743, 539 P.2d 823 (1975). Similarly, if the party is challenging the constitutionality of the agency's action or of the agency itself, the exhaustion requirement will be waived. Ackerley Communications, Inc. v. Seattle, 92 Wn.2d 905, 602 P.2d 1177 (1979), cert. denied, 449 U.S. 804 (1980); Higgins v. Salewsky, 17 Wn. App. 207, 562 P.2d 655 (1977). Also, if the aggrieved party has no notice of the initial administrative decision or no opportunity to exercise the administrative review procedures, the failure to exhaust those procedures will be excused. Gardner v. Pierce Cy. Bd. of Comm'rs, 27 Wn. App. 241, 243-44, 617 P.2d 743 (1980).

Respondent urges that it should not be barred from seeking judicial review because it did not receive adequate notice of the hearings. Since the Association was not in existence at the time, the adequacy of the notice given in this case must be examined in light of the notice given to the Association's members. We find that the notice was sufficient and reject this argument.

Respondent's notice argument rests on the assertion that the notice provisions of RCW 58.17.090 are constitutionally inadequate. We disagree. First, respondent mistakes the notice required in such situations. As the, Court of Appeals observed, "[d]ue process requires only that notice be reasonably calculated under the circumstances to inform a party of the pendency of proceedings affecting him or his property." South Hollywood Hills Citizens Ass'n v. King Cy., 33 Wn. App. 169, 172, 653 P.2d 1324 (1982); Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 94 L. , 70 S. Ct. 652 (1949). The circumstances involved in a plat approval make personal notice to all property owners who may potentially be affected by the council's action impractical. Thus, RCW 58.17.090's provision that notice may be given by publication in a local newspaper is reasonable under the circumstances. RCW 58.17.090 does provide additional protection to those directly affected by a plat. Thus, measures to provide notice to adjacent property owners are to be developed by the local authorities. Here, although members of the Association do not appear to qualify as adjacent property owners, additional notice procedures were provided for by King County ordinance 4460. This ordinance requires publication plus posting of notices on the property itself. King County Code 19.36.050. The notice procedures outlined above were implicitly approved in Seattle Shorelines Coalition v. Justen, 93 Wn.2d 390, 398, 609 P.2d 1371 (1980). The record clearly indicates these procedures were followed. In addition, at least two individuals who are members of the Association plus its attorney attended and participated in the public hearing conducted in July 1980. We can therefore infer that notice procedures were effective.

A second argument for rejecting respondent's allegation that inadequate notice excuses the failure to exhaust administrative remedies is the fact that those individuals who participated at the public hearing were sent actual notice of the hearing examiner's decision. This notice specifically informed those individuals of the need to appeal the hearing examiner's recommendations. Respondent has not explained why those who received actual notice of the decision (including respondent's counsel) did not appeal. Under these circumstances, the Court of Appeals properly rejected respondent's allegation that notice was inadequate.

On the other hand, the Court of Appeals did excuse respondent's failure to exhaust administrative remedies. The Court of Appeals, following Ace Delivery Serv., Inc. v. Boyd, 100 So. 2d 417 (Fla. 1958), created an exception to the exhaustion of remedies doctrine for those agency decisions which are merely recommendations rather than final decisions.

The regulatory scheme discussed in Ace Delivery, however, differs significantly from that used by King County. The system there under consideration did not make the filing of an appeal jurisdictional. Here, the parties were specifically informed of this requirement. Thus, the Court of Appeals reliance on this case was misplaced. In addition, we find the reasoning of Ace Delivery unpersuasive and therefore decline to adopt an exception for administrative recommendations, when the individuals are informed of the need to appeal that recommendation.

To begin with, this exception conflicts with the basic policy rationale for the rule. As noted above, the rule exists to insure, inter alia, that an adequate factual record is created, and that the agency's autonomy is protected. Here, allowing the exception created by the Court of Appeals thwarts these goals. Had any of the individuals who attended the public hearing appealed the hearing examiner's recommendation, the King County Council could have acted accordingly, either by holding hearings itself or remanding to the hearing examiner for further hearings. Without the benefit of an appeal of that decision, the Council was entitled to assume that objections to the proposal had subsided. Furthermore, the exception suggested by the Court of Appeals discourages citizen participation in the administrative process in favor of judicial adjudication of the issue. The courts are an inappropriate forum for these disputes. Thus, we hold that respondent's failure to appeal the decision of the hearing examiner precludes judicial review of the King County Council's decision.¹

III

As there is no question that the property owners in a plat dispute are indispensable parties, the sole issue here is whether the amended pleadings should relate back to the date the original pleadings were filed. We find that the delay was caused by inexcusable neglect, and reverse on this issue as well.

The issue of when an amended pleading should relate back was most recently discussed in North St. Ass'n v. Olympia, 96 Wn.2d 359, 635 P.2d 721 (1981). North Street adopts a test similar to that required in federal courts. That test combines the requirements of CR 15(c) with an evaluation of whether the failure to join the proper parties was due to inexcusable neglect. Thus, the court must determine first whether the requirements of CR 15(c) have been met. That rule provides:

Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.

After discussing this rule, the court in North Street observed: "The amended rule, however, still does not permit joinder if the plaintiff's delay is due to inexcusable neglect." North Street, at 368. Here, petitioners admit that the requirements of CR 15(c) have been met but urge that the failure to name the property owners was inexcusable, since their identity was a matter of public record. The Court of Appeals disagreed, apparently influenced by the fact that only Burnstead was named during the hearings. We find this factor unpersuasive. The property was sold and the contract recorded during July 1980, while the pleadings were filed in September 1980. Thus, had the respondent or its counsel checked the county records, the proper parties would have been immediately evident. This obviously was not done.

Generally, inexcusable neglect exists when no reason for the initial failure to name the party appears in the record. See Professor Orland's comment to CR 15, in 3A L. Orland, Wash. Prac., Rules Practice § 5185 (Supp. 1982). For example, the neglect was held to be inexcusable in North Street because the "applicants were at all times aware of the [indispensable] parties and yet still failed originally to name them." North Street, at 368-69. Here, the information necessary to properly implead the parties was readily available. Respondent's attorney simply did not inquire. This omission was inexcusable.

Respondent relies upon the time limitations contained in RCW 4.16.170 and RCW 43.21C.080(2)(a) to support an alternative theory that the amendments were timely. RCW 58.17.180 contains the applicable time limitation, therefore respondent's argument that these other provisions apply is without merit.

The decision of the Court of Appeals is reversed and the trial court's order of dismissal is reinstated.

Williams, C.J., and Stafford, Utter, Brachtenbach, and Dolliver, JJ., concur.

1 RCW 58.17.180's provision allowing judicial review does not alter this conclusion. Although a party has the right to judicial review, that right may be forfeited or waived by not following the proper procedures such as exhausting administrative remedies. See Spokane Cy. Fire Protec. Dist. 9 v. Spokane Cy. Boundary Review Bd., 97 Wn.2d 922, 652 P.2d 1356 (1982).