§19.4 - Judicial Review of LID Formation and Assessments

• Jurisdiction: Washington

§19.4 JUDICIAL REVIEW OF LID FORMATION AND ASSESSMENTS

This section discusses the constitutional authority for LIDs in Washington as well as legal challenges to LIDs in the Washington courts.

(1) The constitutional basis for LIDs and special assessments

The Washington Constitution, art. VII, §9, grants the legislature authority to enable cities and towns the power to create local improvement districts: "The legislature may vest the corporate authorities of cities, towns and villages with power to make local improvements by special assessment, or by special taxation of property benefited." This provision is not applicable to counties or other municipal corporations, such as sewer or water districts. The legislature is not precluded, however, from granting other municipal corporations the power to construct local improvements and to pay for those improvements by special assessments. Foster v. Comm'rs of Cowlitz County, 100 Wash. 502, 171 P. 539 (1918).

(2) Legal challenges

The LID statutes for cities and counties (and other municipal corporations with the power to levy special assessments) contain explicit provisions requiring that challenges to either an LID formation or the subsequent adoption of the final assessment roll be presented and resolved expeditiously.

(a) Overview: timing is critical

Challenges to the jurisdiction or authority of a municipality to form an LID or proceed with an improvement must be both served and filed in superior court within 30 days after the passage (not effective date) of the ordinance ordering the improvements and creating the LID. When applicable, the time to serve and file a challenge to the LID's formation is 30 days after the expiration of the 30-day protest period provided by RCW 35.43.180. See RCW 35.43.100. This relatively brief statutory limitation for bringing suit to contest a municipality's jurisdiction to proceed with the formation of an LID has been held not to violate due process. Hulo v. City of Redmond, 14 Wn.App. 568, 544 P.2d 34 (1975), overruled on other grounds by Appeal of Des Moines Sewer Dist., U.L.I.D. No. 29, 97 Wn.2d 227, 643 P.2d 436 (1982).

The statutory requirements for perfecting a challenge to a proposed final assessment are even more rigorous. Written protests to a proposed final assessment must be filed with the municipality within a few days of the mailing (not receipt) of the notices by the local government and in no event later than at the hearing itself. Following confirmation of the final assessment roll and passage of the enabling ordinance, suit must be brought in superior court within 10 days of the effective date of the ordinance if a city, RCW 35.44.210, or within 10 days from the date of publication of the county resolution confirming the final assessment roll, RCW 36.94.290.

The superior court will hear and determine an LID appeal without a jury. Such appeals have precedence over all other civil causes except eminent domain proceedings and actions of forcible entry and detainer. RCW 35.44.250. Even the normal time to take an appeal from the superior court to a court of appeals or the Supreme Court is abbreviated. An appeal must be taken within 15 (rather than the usual 30) days after entry of the judgment in superior court. RCW 35.44.260.

(b) Challenges to LID formation

A property owner's ability to challenge the formation of an LID in the courts is limited to challenges to a municipality's jurisdiction or authority to proceed with the creation of an LID. Such challenges may include the municipality's failure to include certain properties within the LID, challenges to the scope of the improvements or the nature of the improvements, and challenges based upon the municipality's failure to follow the procedures prescribed by statute. For example, the ordinance forming an LID will be declared invalid if the municipality has failed to provide statutory notice of the LID's establishment to affected property owners. Pratt v. Water Dist. No. 79, 58 Wn.2d 420, 363 P.2d 816 (1961). In the absence of statutory notice requirements, however, constitutional due process does not require notice and a hearing prior to LID formation or a property's inclusion within an LID's territory. Carlisle v. Columbia Irrig. Dist., 168 Wn.2d 555, 571‑72, 229 P.3d 761 (2010).

A word of caution with regard to formation challenges is appropriate. Washington courts have regularly refused to interfere in matters involving the legislative judgment of municipalities relating to local improvements. See, e.g., State ex rel. Frese v. City of Normandy Park, 64 Wn.2d 411, 392 P.2d 207 (1964). For example, property owners frequently challenge the proposed boundary lines for an LID, but a court will disturb the boundaries only upon a showing that the municipality's determination is "clearly arbitrary." Forsgreen v. City of Spokane, 28 Wn.App. 919, 922, 627 P.2d 118, review denied, 95 Wn.2d 1029 (1981). Further, any arguments concerning special assessments, whether as to their validity or amount, can only be raised at the subsequent hearing on the assessment roll. This includes any arguments as to whether benefits conferred by the contemplated improvement will be special or general. Citizens for Underground Equality v. City of Seattle, 6 Wn.App. 338, 492 P.2d 1071, review denied, 80 Wn.2d 1009 (1972).

There is one area in which the courts have been more willing to invalidate the formation of an LID. This has occurred when a municipality's action may be found to dilute the power of property owners to prevent or protest the formation of an LID. Thus, the Supreme Court has ruled that when certain property owners within an LID were otherwise obligated to construct some or all of the proposed LID improvements, their "vote" could not be considered when determining whether the 60 percent protest level (which would divest the municipality of its power to proceed with the LID improvements) had been reached. Esping v. Pesicka, 92 Wn.2d 515, 598 P.2d 1363 (1979); Kasper v. City of Edmonds, 69 Wn.2d 799, 420 P.2d 346 (1966). The courts are loathe to let a municipality restrict the limited voice of property owners in LID formation proceedings. The following is an example of one court's expression of concern:

The formation of ULID's [utility local improvement districts] is under the control of the landowners only at the initiation stage. Landowners can force the commission into adopting a resolution to form a ULID by using the petition method, or they can prevent the Commissioners from forming a ULID by using the protest procedure. Once a resolution of intent has been validly passed and no protest has been successful, however, landowner control over whether a ULID is formed is effectively at an end. If the Commissioners are permitted to exclude land from the calculations necessary to determine if the requisite number of landowners has signed a petition for formation of a ULID, they can seriously lessen the ability of landowners to control whether or not a ULID, for which they may be assessed, will be formed.

Schmitt v. Cape George Sewer Dist. No. 1, 61 Wn.App. 1, 6, 809 P.2d 217 (1991) (footnotes omitted). Protest and implied‑consent provisions alone, however, do not give rise to constitutionally protected free and equal election rights under article I, §19 of the Washington Constitution. Carlisle, 168 Wn.2d at 578‑80.

(c) Commencing litigation against the assessment roll

Only "property owners" within an LID may object to an LID assessment. A purchaser who takes possession of real property under an executory real estate contract is deemed the "owner" of the property for purposes of filing a protest against the creation of an LID or the assessment roll. The seller has no such standing. Comm. of Protesting Citizens v. Val Vue Sewer Dist., 14 Wn.App. 838, 545 P.2d 42 (1976). Likewise, the mortgagee of a leasehold interest in real property has no standing to challenge an LID assessment. First Fed. Sav. & Loan Ass'n of Walla Walla v. City of West Richland, 39 Wn.App. 401, 693 P.2d 171 (1985). As previously discussed, notice is required to be sent to the party of record on the county tax rolls.

A property owner has only 10 days following the effective date of the ordinance confirming the assessment roll to commence his or her legal challenge in superior court. The notice of appeal must be filed both with the clerk of the court and the clerk of the legislative authority. A $200 cost bond also must be posted. RCW 36.94.290 (counties); RCW 35.44.200, .220 (cities). Once the notice of appeal is filed, the appellant has 10 days in which to file a transcript consisting of the assessment roll, objections, the ordinance confirming the final assessment roll, and the balance of the record of the legislative authority with reference to the assessment. The transcript is obtained by filing a request for transcript with the clerk of the legislative authority. It is best to file this request at the same...