Westmark Development Corp. v. City of Burien

166 P.3d 813
Court of Appeals of Washington·Decided September 4, 2007·No. 57958-4-I·Published·Cited by 15 cases

Opinion

166 P.3d 813 (2007)

WESTMARK DEVELOPMENT CORPORATION, a Washington corporation; Trizec Investment Corporation, a Washington corporation, Respondent,
v.
The CITY OF BURIEN, a municipal corporation, Appellant.

No. 57958-4-I.

Court of Appeals of Washington, Division 1.

September 4, 2007.

*815 Charles Kenneth Wiggins, Wiggins & Masters PLLC, Bainbridge Island, WA, Stephen Patrick Ryder, Kingman, Peabody, Fitzharris, & Ringer P, Seattle, WA, for Appellant.

John Maurice Groen, Groen Stephens & Klinge LLP, Bellevue, WA, Jon Peter Ferguson, Office of the Attorney General, Seattle, WA, for Respondents.

Published in Part Opinion

COLEMAN, J.

¶ 1 This case concerns the City of Burien's delay in issuing a SEPA[1] decision on a permit application and its misrepresentation that a settlement agreement was approved in an open public meeting. The jury was asked to decide claims of negligence, tortious interference with a business expectancy, and negligent *816 misrepresentation. On a general verdict form, the jury awarded the plaintiff, Westmark Development Corporation, $10,710,000. We affirm for the reasons stated below.

FACTS

¶ 2 In 1990, Westmark Development Corporation filed an application with King County for a permit to construct a 216-unit apartment building to be known as "Emerald Pointe on the Sound." It was to be built in what would later become the City of Burien. Pursuant to SEPA, King County made a threshold determination of probable significant environmental impacts of the project and issued a determination of significance (DS). The issuance of a DS meant that an environmental impact statement (EIS) would need to be prepared for the project.

¶ 3 Westmark decided to modify the project to reduce possible environmental impacts. In January 1992, King County sent a letter to Westmark outlining what would need to be done to mitigate the environmental impacts. In May 1992, Westmark submitted a new environmental checklist, revised site plans, civil drawings, a landscape plan, a wildlife report, a traffic study, and a complete resubmittal of building plans and structural drawings. Westmark's revised project eliminated two buildings from the plan and reduced the number of apartments from 216 to 176. In June 1992, King County sent a letter to Westmark stating, "The SEPA Section will review revised plans for the above-referenced permit application in accordance with the State Environmental Policy Act (SEPA, RCW 43.21C), the SEPA Rules (Washington Administrative Code Chapter 197-11), and the County Environmental Procedures (King County Code Chapter 20.44)." Ex. 50.

¶ 4 Burien officially incorporated on February 28, 1993. Under an interlocal agreement, King County would continue processing permit applications filed with the county before Burien's incorporation. On April 5, 1993, however, Burien assumed responsibility for the Emerald Pointe project, along with a few other projects, under an amendment to the interlocal agreement. Testimony at trial established that Westmark believed King County was close to issuing a decision on its revised application around the time the project was transferred to Burien.

¶ 5 Burien did not issue a decision on Westmark's revised application until August 17, 1996, when it issued a DS.[2] On June 24, 1996, before Burien issued the DS, Westmark filed this lawsuit alleging negligence and intentional interference with a business expectancy (Westmark I). When a trial was eventually held, the parties disputed why Burien took over three years to issue a decision on the revised application. Westmark argued that Burien intentionally delayed making a decision because it was opposed to the development of apartments and was influenced by Burien resident and then state representative Georgette Valle. Burien argued that the delay was due to Westmark's failure to pay fees and submit requested documents. It also argued to the trial court that it was not obligated to issue a new decision on the revised project. Some of the evidence the parties presented will be discussed below.

¶ 6 Westmark I did not proceed to trial, however, until 2005. It was close to trial in February 1998. Shortly before trial, though, the parties believed they had reached a settlement, based on an exchange of letters and phone calls. The Westmark I trial date was stricken and depositions were cancelled. The settlement fell apart, however, and Westmark sued Burien, arguing that it had breached the settlement agreement (Westmark II). Burien argued that there was no valid settlement agreement because the "`letters manifested the intent of the parties that their legal obligations would be deferred until a final "Settlement Agreement" was drafted, agreed upon, approved and executed by the proper authorities.'" City of Burien v. Westmark Dev. Corp., noted at 103 Wash. App. 1037, 2000 WL 1772501, at *4, 2000 Wash.App. LEXIS 2433, at *16. The trial *817 court in Westmark II ruled on summary judgment that the letters exchanged constituted a settlement and that Burien had breached the agreement. The Court of Appeals affirmed "the trial court's decision granting summary judgment in Westmark's favor as to the existence and enforceability of a settlement agreement with the City of Burien, but vacate[d] on the issue of breach." Westmark, 103 Wash.App. 1037, 2000 WL 1772501, at *8, 2000 Wash.App. LEXIS 2433, at *28.

¶ 7 On remand from the Court of Appeals, the parties attempted to implement the settlement agreement but were not successful. As part of their attempt to implement the agreement, Westmark I was dismissed. The parties never agreed on final settlement agreement terms, and Westmark II was set for trial in January 2004. A few months before trial, and over five years after the settlement agreement was reached, Burien advised Westmark that the agreement might be void because it violated the Open Public Meetings Act (OPMA), chapter 42.30 RCW. Under the OPMA, a city council can approve of a settlement agreement only in an open public meeting. The settlement agreement between Burien and Westmark had never been approved by the Burien city council in an open public meeting. Westmark requested that the court determine the validity of the settlement agreement under the OPMA. Noting that the Court of Appeals did not address this issue, the trial court voided the settlement agreement. It concluded that this resolved all claims for relief in Westmark II and dismissed the case with prejudice. It also vacated the prior dismissal of Westmark I and permitted Westmark to file and serve an amended complaint.

¶ 8 Westmark's amended complaint alleged violation of 42 USC section 1983, negligence, violation of chapter 43.21C RCW, negligent misrepresentation, and intentional or negligent interference with business relations or expectancies. Westmark named Burien, its attorney Mike Kenyon, and several city employees as defendants. The case was removed to federal court, which remanded the four state law claims but retained jurisdiction over the section 1983 claims. The federal court stayed further proceedings pending resolution of the state law claims.

¶ 9 The case proceeded in state court solely against Burien because the 42 USC section 1983 claims were the only claims that ran against the individual defendants. The trial court dismissed the chapter 43.21C RCW claim because "administrative review was not sought or has not been completed" as to this claim. The trial began on October 6, 2005.

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Westmark Development Corp. v. City of Burien, 166 P.3d 813 (Wash. Ct. App. 2007).

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