State v. Lundgren

971 P.2d 948, 94 Wash. App. 236
CourtCourt of Appeals of Washington
DecidedFebruary 19, 1999
Docket22715-1-II
StatusPublished
Cited by15 cases

This text of 971 P.2d 948 (State v. Lundgren) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Lundgren, 971 P.2d 948, 94 Wash. App. 236 (Wash. Ct. App. 1999).

Opinion

971 P.2d 948 (1999)

STATE of Washington, DEPARTMENT OF ECOLOGY, Respondent,
and
Ketron Island Homeowners Association, Intervenor,
v.
Gary LUNDGREN and Ketron Island Enterprises, Inc., Appellants.

No. 22715-1-II.

Court of Appeals of Washington, Division 2.

January 11, 1999.
Publication Ordered February 19, 1999.

*949 Greg W. Haffner, Vandeberg, Johnson & Gandara, Tacoma, for Appellants.

Ronald L. Lavigne Jr., Attorney General's Office-Ecology Div., Olympia, for Respondent.

ARMSTRONG, J.

Gary Lundgren is the sole owner and officer of Ketron Island Enterprises (KIE), which for many years owned the sewage treatment plant on Ketron Island. When the plant failed, causing raw sewage to discharge into Puget Sound, the Department of Ecology fined both KIE and Lundgren for violating Washington's Water Pollution Control Act, RCW 90.48. Lundgren appealed to the Pollution Control Hearings Board (PCHB), which held him not personally liable. On appeal by Ecology, the superior court ruled that Lundgren was personally liable. Lundgren contends the trial court erred by (1) failing to limit its application of the law to the facts found by the PCHB, and (2) concluding he is personally liable for violations of the Water Pollution Control Act. We affirm.

*950 FACTS[1]

Ketron Island is a small island in south Puget Sound. A sewage treatment system has existed on the island since the 1960's to provide waste treatment for Ketron's community of 11 residents. Ketron Island Enterprises (KIE) acquired the sewage treatment system in 1980. Gary Lundgren is president and sole owner of KIE.

In November 1988, Lundgren informed the Department of Ecology (Ecology) that the sewage treatment facility was not operating and that sewage was flowing into Puget Sound. On June 23, 1990, Ecology canceled the National Pollution Discharge Elimination System (NPDES) permit for the facility and ordered KIE to cease all discharges of pollutants into state waters.[2] The permit was canceled because KIE failed to pay permit fees due for 1988-1989. Lundgren appealed the cease discharge order to the PCHB, but the PCHB rejected the appeal.

In response to citizen complaints regarding raw sewage on Ketron Island, Ecology inspected the facility in September 1993. Leaks in a line allowed sewage to discharge to the ground, to the slope that leads into the estuary, and to the waters of Puget Sound. Photographs showed vegetation, including an alder tree, growing up through the treatment facility. The wastewater treatment plant was rusted and the ground was saturated with raw sewage sludge. The fecal coliform readings greatly exceeded the effluent limits for the facility.

Lundgren expressed a willingness to correct the long-term sewage problem. But Ecology ultimately determined that Lundgren was not acting in good faith to comply with its requests. Consequently, Ecology ordered Lundgren and KIE to dismantle the sewage treatment facilities and plug the outfall to prevent further discharges of sewage into Puget Sound. Ecology also assessed a $250,000 penalty to Lundgren and KIE.[3]

In December 1994, less than two months after the assessed penalty, Lundgren, KIE, and Alaska-Northwest Industries executed a purchase agreement with Ketron Island Utility Company (KIU).[4] KIU agreed to correct the sewage problems on the island, in exchange for all of KIE's assets. The value of the assets received by KIU was recorded at $250,000.[5] Lundgren personally received a deed of trust against real property owned by KIU as security for KIU's performance.

Lundgren and KIE appealed the penalty to the PCHB. The PCHB affirmed the penalty against KIE, but held that Lundgren was not personally liable. Ecology appealed, arguing that the PCHB erroneously interpreted or applied the law when it held Lundgren not personally liable.

The trial court concluded the PCHB committed an error of law when it held Lundgren not personally liable; it therefore reversed the PCHB's decision. Lundgren appeals.

Standard of Review

Appellate review of administrative action is governed by RCW 34.05.570, part of the Administrative Procedure Act. An appellate court reviews an administrative decision on the record of the administrative agency and does not rely upon the trial court's findings of fact and conclusions of law. Citizens for a Safe Neighborhood v. *951 City of Seattle, 67 Wash.App. 436, 439, 836 P.2d 235 (1992).

The reviewing court reviews conclusions of law under the error of law standard, RCW 34.05.570(3)(d), and may substitute its judgment for that of the agency. Department of Ecology v. United States Bureau of Reclamation, 118 Wash.2d 761, 767, 827 P.2d 275 (1992).[6]

Application of Law

Lundgren argues the trial court erred by failing to apply the law only to the facts found by the PCHB because Ecology did not challenge these factual findings.

In its petition for judicial review, Ecology asserted the PCHB erroneously applied the law and that the PCHB's order was not supported by substantial evidence. As the party challenging the order, Ecology bore the burden of demonstrating the order was not supported by substantial evidence. Christianson v. Snohomish Health Dist., 82 Wash.App. 284, 287, 917 P.2d 1093 (1996), aff'd, 133 Wash.2d 647, 946 P.2d 768 (1997). But Ecology did not argue the evidence was insubstantial, but instead it stated, "[t]he only issue in this appeal is the Board's erroneous Conclusion of Law that Mr. Lundgren is not personally liable for the penalty."

Because Ecology did not challenge any of the PCHB's factual findings, they are verities. Seatoma Convalescent Ctr. v. Department of Social and Health Servs., 82 Wash. App. 495, 505, 919 P.2d 602 (1996), review denied, 130 Wash.2d 1023, 930 P.2d 1230 (1997); Tapper v. State Employment Sec. Dep't, 122 Wash.2d 397, 407, 858 P.2d 494 (1993). Accordingly, we apply the law to the facts as found by the PCHB. And because we review the PCHB record, not the trial court's findings of fact and conclusions of law, we need not decide whether the trial court limited its application of the law to the facts found by PCHB. Citizens for a Safe Neighborhood, 67 Wash.App. at 439, 836 P.2d 235.

Personal Liability

Lundgren argues that the trial court erred in reversing the PCHB's decision and holding him personally liable for the penalty. Lundgren asserts two distinct arguments in support of his claim of error.

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Bluebook (online)
971 P.2d 948, 94 Wash. App. 236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-lundgren-washctapp-1999.