Chapter § 17.2 - Statutory Claims Under Chapter §64.40 RCW

• Jurisdiction: Washington

§17.2 STATUTORY CLAIMS UNDER CHAPTER 64.40 RCW

In 1982, the legislature adopted Chapter 64.40 RCW to create a new claim for recovery of damages for "[o]wners of a property interest who have filed an application for a permit" who are damaged by certain improper "acts" related to governmental agencies' land use permitting decisions and processes. Laws of 1982, ch. 232. "'Permit' means any governmental approval required by law before an owner of a property interest may improve, sell, transfer, or otherwise put real property to use." RCW 64.40.010(2). "'Act' means a final decision by an agency which places requirements, limitations, or conditions upon the use of real property in excess of those allowed by applicable regulations in effect on the date an application for a permit is filed." RCW 64.40.010(6).

A permit applicant is granted a limited cause of action under RCW 64.40.020 for damages to obtain (1) "relief from acts of an agency which are arbitrary, capricious, unlawful, or exceed lawful authority," or (2) relief from the failure to act within time limits established by law. RCW 64.40.020(1). See generally Birnbaum v. Pierce Cnty., 167 Wn. App. 728, 732, 274 P.3d 1070 (2012), review denied, 175 Wn.2d 1015 (2012); Coy v. City of Duvall, 174 Wn. App. 272, 277, 298 P.3d 134 (2013), review denied, 178 Wn.2d 1007 (2013). The Act also permits recovery of attorney fees by the prevailing party. RCW 64.40.020(2). The scheme created by Chapter 64.40 RCW supplements preexisting claims for allegedly wrongful land use permitting acts by governmental entities and does not purport to provide an exclusive procedure or remedy for such acts. See RCW 64.40.040; Westmark Dev. Corp. v. City of Burien, 140 Wn. App. 540, 548, 166 P.3d 813 (2007), review denied, 163 Wn.2d 1055 (2008).

An application for a site-specific rezone is not an "application for a permit," and denial of such an application is not actionable under Chapter 64.40 RCW. Manna Funding, LLC v. Kittitas Cnty., 173 Wn. App. 879, 295 P.3d 1197, review denied, 178 Wn.2d 1007 (2013).

(1) Legislative history of Chapter 64.40 RCW

The bill that became Chapter 64.40 RCW (HB 1006, 47th Leg. Sess., 1982), was introduced and passed the House of Representatives as a measure to supplement existing law relating to regulatory takings claims alleging damages resulting from inappropriate actions of governmental agencies during a permitting process. The Senate substituted the house bill with the form that eventually found approval in both branches of the legislature, under the title: "An Act relating to property rights." SHB 1006, 47th Leg. Sess., 1982. As revised and adopted, the new law did not modify or extend preexisting law governing governmental takings of property. Instead, it created a new and supplemental action for damages caused by improper governmental land use permitting actions. See Westmark Dev. Corp., 140 Wn. App. at 550.

Since its enactment in 1982, Chapter 64.40 RCW has not had any amendments. However, RCW 64.40.050, which provided that a local government would not be liable for a violation of the time limits established by RCW 36.70B.090 (a "regulatory reform" provision adopted as part of the Growth Management Act), was added by Laws of 1995, ch. 347, §421. It then expired in 1998 by its own terms, as set forth in Laws of 1995, ch. 347, §433.

In Wilson v. City of Seattle, 122 Wn.2d 814, 825, 865 P.2d 1336 (1993), the Washington Supreme Court stated that the purpose of Chapter 64.40 RCW is to "provide a swift remedy for property damage caused by governmental agency action."

(2) Persons who may bring claims under Chapter 64.40 RCW

Potential plaintiffs under Chapter 64.40 RCW are limited to "[o]wners of a property interest who have filed an application for a permit ...." RCW 64.40.020(1). A "property interest" is "any interest or right in real property in the state." RCW 64.40.010(3). An owner of property who is not a permit applicant does not have standing under Chapter 64.40 RCW. Westway Constr, Inc. v. Benton Cnty., 136 Wn. App. 859, 151 P.3d 1005 (2006). Nor does a permit applicant who lacks an interest in the real property have standing. Id.

(3) Entities that may be liable under Chapter 64.40 RCW

RCW 64.40.010(1) defines a potentially liable "[a]gency," as the "state of Washington" and "any of its political subdivisions, including any ... public body exercising regulatory authority or control over the use of real property in the state." RCW 64.40.010(1). "Agency" under the statute does not include judges performing judicial functions. See Lutheran Day Care v. Snohomish Cnty., 119 Wn.2d 91, 110-11, 829 P.2d 746 (1992), cert. denied, 506 U.S. 1079 (1993). Individual elected officials and administrators may be individually liable for damages. Mission Springs Inc. v. City of Spokane, 134 Wn.2d 947, 954 P.2d 250 (1998).

(4) Claims that may be made under Chapter 64.40 RCW

The availability of damages for statutory land use actions under Chapter 64.40 RCW is discussed below.

(a) Authorized claims

Authorized claims under Chapter 64.40 RCW arise from an "act" by an "agency." A "final decision by an agency which places requirements, limitations, or conditions upon the use of real property in excess of those allowed by applicable regulations in effect on the date an application for a permit is filed" is an actionable "act" under Chapter 64.40 RCW. So too is a "failure ... to act within time limits established by law in response to a property owner's application for a permit." RCW 64.40.010(6).

But if an applicant "agrees in writing to extensions of time, or to the conditions or limitations imposed upon an application for a permit," there is no actionable "act" under Chapter 64.40 RCW for delay. Id. Nor is there such an "act" under the statute for "lawful decisions of an agency which are designed to prevent a condition which would constitute a threat to the health, safety, welfare, or morals of residents in the area." Id. The last-quoted provision may have been an attempt to protect agencies from litigation that was underway in 1982 relating to the regulation of adult entertainment enterprises. See House Journal, 47th Leg., Point of Inquiry, at 514 (1982).

Comment: Because regulations enacted pursuant to the police power under Article XI, §11, of the Washington Constitution have as their core purpose the protection of public health, safety, and welfare the legislature apparently intended that something more must be shown to exempt a decision from liability under RCW 64.40.010(6) See Weden v. San Juan Cnty., 135 Wn.2d 678, 700, 958 P.2d 273 (1998); 17 William B. Stoebuck & John W. Weaver, Washington Practice, Real Estate: Property Law §4.1, at 167 (2d ed 2004).

(b) Actionable acts under Chapter 64.40 RCW

Actionable "acts" under Chapter 64.40 RCW are those that are

(a)	arbitrary or capricious;
(b)	unlawful or exceed lawful authority, when the agency made its final decision with knowledge of its unlawfulness or that it was in excess of lawful authority, or the agency should reasonably have known the decision was unlawful or in excess of lawful authority or that
(c)	constitute a failure to act within time limits established by law.

RCW 64.40.020(1). Knowledge of unlawfulness is not required for a claim based on arbitrary or capricious action. Lutheran Day Care, 119 Wn.2d at 112.

Despite the disjunctive...