Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co.

Supreme Court Clerk

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

CENTRAL PUGET SOUND REGIONAL

TRANSIT AUTHORITY, a regional transit

authority, d/b/a SOUND TRANSIT,

Respondent,

v.

NO. 91653-5

AIRPORT INVESTMENT COMPANY, a

Washington corporation, d/b/a Hampton Inn,

Petitioner,

and

ENBANC

HORIZON AIR INDUSTRIES, INC., a

Washington corporation; IBEW 77

INTERNATIONAL BOULEYARD, LLC, a

Washington limited liability company;

JPMORGAN CHASE BANK, N.A., f/k/a

The Chase Manhattan Bank, as Trustee for Filed AUG 0 '' 2016

the Registered Holders of Prudential

Securities Financing Corporation Commercial

Mortgage Pass-Through Certificates, Series

199-C2; KING COUNTY; and ALL

UNKNOWNOWNERSandUNKNOWN

TENANTS,

Defendants.

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

STEPHENS, J.----Central Puget Sound Regional Transit Authority (Sound

Transit) condemned property owned by Airport Investment Company (AI C) in order

to secure easements to construct and operate an elevated light rail. The parties could

not agree on the amount of just compensation for the taking, so the matter proceeded

to trial. AIC contends it is statutorily entitled to attorney fees because Sound Transit

failed to make a valid settlement offer 30 days before trial. Specifically, AIC argues

that the 30-day offer Sound Transit made did not reflect the reduced temporary

construction easement it ultimately obtained, making the offer ineffective or

resulting in a total abandonment of the condemnation. AIC also seeks a new trial,

alleging the trial court erroneously allowed Sound Transit's counsel to question

AIC's president, Sandra Oh, about the taking valuation of a nontesti:tying appraisal

expert.

We affirm the Court of Appeals. A condemnee is entitled to attorney fees

under RCW 8.25.070(l)(a) only "[i]f[the] condemnor fails to make any written offer

in settlement" at least 30 days before trial. Sound Transit made a timely settlement

offer, which was not rendered ineffective by subsequent revisions to reduce the

impact of its temporary construction easement. AIC's evidentiary objection is also

unavailing: the trial court properly admitted Oh's testimony under ER 80l(d)(2) as

an admission of a party opponent.

FACTS AND PROCEDURAL HISTORY

Sound Transit is a regional transit organization authorized to construct and

operate a high-capacity electric light rail system (Light Rail). RCW 81.112.010;

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Clerk's Papers (CP) at 1-2. Pursuant to its statutory authority to condemn real

property to construct the Light Rail, Sound Transit sought easements over property

owned by AIC. The property consists of approximately 112,626 square feet ofland

area and is developed with a 4-story, 130-room hotel constructed in 1988.

In the condemnation action, Sound Transit sought to take a portion of the

property for a permanent guideway easement (PGE) to construct the Light Rail along

the property's western boundary. It also sought a temporary construction easement

(TCE), which afforded Sound Transit a nonexclusive, three-year time period to

construct the Light Rail and encumbered up to 3,882 square feet of the property. 1

Except when Sound Transit required exclusive occupancy, the TCE afforded AIC

the right to use the TCE area for any purpose that did not interfere with Sound

Transit's construction activities.

In May 2012, Sound Transit sent AIC a valuation offer of$142,300 for both

easements. This offer was based on an initial valuation by its appraiser of $79,825

for the PGE, $46,600 for the TCE, and $15,875 for improvements. Sound Transit

advised AIC that it had the right to obtain its own appraisal at Sound Transit's

expense. Id. AIC exercised this right, and its appraiser valued the easements at

$485,000. AIC submitted its appraisal to Sound Transit in July 2012 in a letter

expressing its belief that it was entitled to $485,000 for the easements. Suppl. Br. of

1

The TCE area included a space Sound Transit's contractor would need only if the

guideway column placement required the property's driveway to be relocated. AlC was

concerned about the size of the TCE because it would reduce available parking at the hotel,

eliminating approximately 25 parldng spaces.

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Cent. Puget Sound Reg 'l Transit Auth. v. Airport lnv. Co., 91653-5

Resp't Sound Transit, App. A at 1. Rejecting AIC's valuation, Sound Transit asked

AIC to reconsider its original offer.

On June 14, 2013, 30 days before trial, Sound Transit made a written

settlement offer to AIC of $463,500. The offer was for both the PGE and the TCE,

and was marked "FOR SETTLEMENT PURPOSES ONLY." CP at 1334. The offer

provided that it "remain[ed] open until accepted, rejected, or until withdrawn by

Sound Transit" and was "made subject to Sound Transit's reservation of its right to

re-evaluate this offer and submit a revised 30-day offer if the pending trial date is

continued." !d. The parties could not agree on the amount ofjust compensation due,

and the matter proceeded to trial.

On July 1, 2013, Sound Transit informed AIC that it would change the

configuration of the TCE because it no longer needed to relocate the property's

driveway to construct the Light RaiJ.Z That same day, Sound Transit provided AIC

with an updated parcel map and updated right-of-way plan showing the change. The

modification reduced the total TCE area by approximately 1,000 square feet. Suppl.

Br. of Resp't Sound Transit at 3. These changes to the TCE were designed to

ameliorate AIC's loss of business costs from the property's use as a parking lot.

Notwithstanding the language in the TCE, Sound Transit communicated to AIC that

2

Sound Transit alleges that when it had made the 30-day offer, the parties had

already discussed Sound Transit's plan to reduce the TCE square footage and to use only

a limited number of exclusive-use days to partially accommodate AIC's parking concerns.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

its construction would require only sporadic use of the TCE area during the three-

year period. 3 Sound Transit did not revoke or reduce its settlement offer despite the

reduced easement.

AIC then filed a motion in limine, requesting that the trial court exclude any

evidence that Sound Transit intended to use the TCE area for less than the entire

three-year term. At oral argument on the motion, the trial court agreed with AIC

that if Sound Transit had the right to exclusive use of the TCE area for the entire

three-year term, it could not tell the jury that its actual use would be less. The trial

court granted AIC's motion, "provided, however, this ruling ... does not preclude

[Sound Transit] from submitting a revised form of [TCE] providing for the actual

time of use of the easement area." CP at 904. 4

On the first day of trial, Sound Transit withdrew its 30-day settlement offer.

With leave of the trial court, Sound Transit provided AIC with revised TCE language

regarding time of use. This occurred after jury selection, but before opening

statements. Although the revised TCE still provided a three-year easement term, it

limited Sound Transit's exclusive use of the TCE to a maximum of 160

nonconsecutive days.

AIC also moved in limine to exclude evidence of its July 2012 valuation letter

stating that it was entitled to $485,000 for the easements. Sound Transit responded

3

AIC claimed that Sound Transit refused to commit to any altered term description

at this time. Suppl. Br. by AIC at 3; Pet. for Review by AIC at 3-4.

4

The trial court agreed with Sound Transit that as a matter of law, the lost income

and consequential damages AIC claimed were not compensable.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

that it had no objection to AIC's motion so long as Sound Transit's first appraisal

would also be excluded on the grounds that both parties' appraisals were for

purposes of settlement negotiations. Finding that neither initial appraisal letter

constituted a settlement offer under ER 408 (and also rejecting AIC's claim of work

product privilege), the trial court ruled that AIC and Sound Transit could "figure out

if you want to get into this history [of the first appraisals]. If one of you does, the

other one can." Verbatim Report of Proceedings (VRP) (July 16, 20 13) at 53-54.

Accordingly, the trial court did not "grant[] this motion on either side." Id. at 55.

At trial, Sound Transit's appraisal expert, Murray Brackett, testified that the

PGE was worth $113,169, the TCE was worth $61,503, and AIC was not entitled to

severance damages. VRP (July 24, 2013) at 1072, 1094. AIC's appraisal expert,

Scott Biethan, testified that the PGE was worth $210,000, the TCE was worth

$32,124, and AIC was entitled to $1,457,000 for diminished value, totaling

$1,699,124 in just compensation due. VRP (July 29, 2013) at 1502-03.

During its case in chief, Sound Transit called AIC president, Oh, to testify

about the July 2012 valuation letter. Before doing so, Sound Transit inquired about

possible avenues to introduce the letter into evidence. The court advised, "I think to

get this document in you need to lay a foundation. I don't know how to be more

clear than that. I don't read the case law as saying that apparent authority is enough

to introduce a party admission. The whole policy of the rule here is it needs to be

the party's statement ...." VRP (July 25, 2013) at 1190.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

When Sound Transit began to question Oh about the contents of AIC's

valuation letter, the trial court excused the jury to voir dire the witness:

THE COURT: Was there a belief that you were entitled to $485,000

for just compensation?

MS. OH: Whatever was in the appraisal and what the appraiser

came up with with -

THE COURT: Is that an accurate statement, Ms. Oh? Did you

believe you're entitled to $485,000? When you said it in July, was that an

accurate statement about what your belief was?

MS. OH: My belief was whatever the appraiser said was -

THE COURT: Yes. Focus on the letter and the date and tell me if

this was your belief.

MS.OH: Well, that was my belief from the information from

the appraiser.

THE COURT: Okay. Thank you. May I have this?

MS.OH: Oh, sorry.

THE COURT: I'm going to let you question her about this letter-

THE COURT: ... I do think it's clear that this is a statement of

something that she believed at the time and you can bring it in as her party

admission.

Id. at 1202-03.

AIC's counsel objected, argumg, "I don't think we meet the hearsay

exception." I d. at 1203. The trial judge responded, "She just said that this was her

belief at the time. That's not hearsay. It's her belief. Let's bring in our jury." I d.

Showing Oh AIC's July 2012 valuation letter, Sound Transit's counsel asked

whether it was ''[AIC's] and your belief, strong belief, that [AIC] was entitled to a

total of $485,000 for just compensation?" I d. at 1205. When instructed by the trial

judge to answer "yes or no," Oh responded, "Yes." Id. at 1205-06.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

Sound Transit then moved to admit the AIC's valuation letter as an exhibit.

The trial court denied the motion, stating, "You have her testimony." Id. at 1206.

The cross-examination and redirect examination did not address Oh's testimony

concerning the $485,000 valuation figure. In closing argument, AIC's counsel

referred the jury back to Oh's testimony as well as an earlier valuation estimate by

Sound Transit's appraiser, saying, "If you're going to hold Ms. Oh to her number,

then you hold Mr. Brackett to his first number as well." VRP (July 30, 20 13) at

1766.

At the close of trial, the jury awarded AIC $225,000 in just compensation for

the two easements ($163,497 for the PGE and $61,503 for the ICE). The jury did

not award diminished value damages. CP at 1000-04. AIC then filed a postverdict

motion for attorney fees and costs under RCW 8.25.070(1)(a) and RCW

8.25.075(l)(b), arguing that when Sound Transit changed the size of the ICE and

the durationallanguage of the ICE, it either nullified the 30-day offer or abandoned

the condenmation proceeding altogether. The trial court denied AIC's motion. AIC

also moved for a new trial, which the trial court denied as untimely.

AIC appealed the judgment and the trial court's order denying its motion for

a new trial. The Court of Appeals affirmed. Cent. Puget Sound Reg'! Transit Auth.

v. Airport Inv. Co., noted at 185 Wn. App. 1033, 2015 WL 321435 (2015). We

accepted review. Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 185

Wn.2d 1017 (2015).

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Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co., 91653-5

ANALYSIS

This case presents two unrelated issues:

(I) Whether AIC is statutorily entitled to attorney fees for going to trial on

the just compensation issue because Sound Transit modified the TCE after it made

its 30-day offer.

(2) Whether the trial court erred by allowing Oh to be questioned about the

taking valuation of a nontestifying expert contained in the July 2012letter.

Award ofFees under RCW 8.25.070(J)(a)

The Washington State Constitution provides that "[n]o private property shall

be taken or damaged for public or private use without just compensation having been

first made." WASH. CONST. art. I, § 16. "Originally the determination of 'just

compensation' was limited to an inquiry of the fair cash market value of the property

involved." State v. Roth, 78 Wn.2d 711, 712, 479 P.2d 55 (1971). As "[t]he

necessary expense of litigation often forced property owners to accept the

condenmor's offer even though they felt it was not just compensation," the

legislature in 1965 "enacted several statutory changes to rectify the situation."5 Id.

5

In 1965, the legislature enacted RCW 8.25.010 (requiring condemnor to serve on

condemnee a written offer showing the amount oftota1 compensation it will settle for 30

days before trial), RCW 8.25.020 (requiring condemnor to cover, in addition to the fair

market value of the property, actual and reasonable expenditures incurred by the

condemnee in the process of evaluating the condemnor's offer), former RCW 8.25.030

(repealed by LAWS OF 1971, Ex. Sess., ch. 240, § 22) (giving trial court discretion to award

the condemnee reasonable attorney and expert witness fees if the condemnor abandons the

proceedings after entry of an order of public use and necessity), and former RCW 8.25.040

(repealed by LAWS OF 1971, ch. 240, (requiring condemnor to pay a limited amount for the

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Jnv. Co., 91653-5

Two years later, in 1967, the legislature "took further steps to attain a measure

of equality between 'just compensation' and the condemnee's net compensation" by

passing RCW 8.25.070. !d. at 713. RCW 8.25.070(1) governs the award of attorney

fees, providing in pertinent part:

[I]f a trial is held for the fixing of the amount of compensation to be awarded

to the owner or party having an interest in the property being condemned, the

court shaW 6l award the condemnee reasonable attorney's fees and reasonable

expert witness fees in the event of any of the following:

(a) If condemnor fails to make any written offer in settlement to

condemnee at least thirty days prior to commencement of said trial; or

(b) If the judgment awarded as a result of the trial exceeds by ten

percent or more the highest written offer in settlement ... by condemnor in

effect thirty days before the trial.

Relying on RCW 8.25.070(1)(a), AIC argues it is entitled to attorney fees

because Sound Transit did not make a written offer for the precise interest in the

property it ultimately condemned. Suppl. Br. by AIC at 5-6. Specifically, AIC

contends that Sound Transit did not make an offer that matched the revised TCE.

As a result, AIC complains it was prevented from having "the opportunity to receive

and consider a settlement offer for the reduced taking and from evaluating Sound

Transit's case as it would be presented to the jury." !d. at 2.

Statutory interpretation presents a legal question we review de novo. State v.

Costich, 152 Wn.2d 463, 470, 98 P.3d 795 (2004). Our analysis ofRCW 8.25.070

begins with the plain language employed by the legislature. !d. The plain meaning

actual reasonable expenses necessarily incurred by the condemnee in removing his

[personal property] from the appropriated property).

6

In 1971, the legislature amended RCW 8.25.070 to state that the court "shall"

award fees instead of the court "may" award fees. LAWS OF 1971, Ex. SESS., CH. 39, § 3.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

of a statute may be discerned "from all that the Legislature has said in the statute and

related statutes which disclose legislative intent about the provision in question."

Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 11,43 P.3d 4 (2002).

Our primary goal is to give effect to the legislature's intent, which we derive by

construing the language as a whole, giving effect to every provision. State v. J.P.,

149 Wn.2d 444, 450, 69 P.3d 318 (2003). If the language is unambiguous, we give

effect to that language and that language alone because we presume the legislature

says what it means and means what it says. State v. Radan, 143 Wn.2d 323, 330, 21

P.3d 255 (2001).

The trial court correctly denied AIC attorney fees under RCW 8.25.070(1)(a).

This provision entitles a condemnee to attorney fees under RCW 8.25.070(1 )(a) only

if the condemnor fails to make any written offer in settlement at least 30 days before

trial to fix compensation. Because it is undisputed that Sound Transit made a timely

written settlement offer to AIC for $463,500, AIC's claim for attorney fees fails

under the plain meaning of the statute. The text does not allow for an interpretation

that vitiates the meaning of "any offer" when the scope of the taking is modified

subsequent to the offer. AIC cannot invoke RCW 8.25.070(l)(a) for an award of

attorney fees.

AIC contends that Sound Transit's settlement offer was effectively no offer at

all because it was based on a different property interest than the one Sound Transit

ultimately sought to condemn per the revised TCE. But this argument runs contrary

to the overall statutory scheme: RCW 8.25.070(l)(a) awards attorney fees to the

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

condemnee only if condemnor fails to make "any written offer in settlement" of the

condemnation action, anticipating ongoing attempts at settlement. (Emphasis

added.) AIC's proposed interpretation renders the statute unworkable. It would

prevent a condemnor from making any change to the property interests comprising

the overall taking any time after the initial 30-day offer, at the risk of paying the

condemnee's attorney's fees and expert witness fees (unless perhaps the condemnor

is able to have the trial continued and submit a new offer for the modified taking).

AIC had a full and fair opportunity to accept Sound Transit's settlement offer-

which offer remained unchanged despite the reduced size and scope of the TCE. 7

AIC worries that RCW 8.25.070(l)(a) will be subject to abuse---through

gamesmanship or bad faith-if condemnors are allowed to modify the scope of a

taking at trial after making a settlement offer. We find AIC's concerns misplaced.

Our precedent requires a condemnor to present an adequate taking description to

allow the landowner time to prepare for trial. See In re Municipality ofMetropolitan

Seattle, 67 Wn.2d 923, 928, 410 P.2d 790 (1966). Here, AIC has not shown that the

modified TCE was inadequately described or otherwise resulted in prejudice to its

trial preparations. Nor did AIC present evidence that Sound Transit committed bad

7

AIC relies on State v. Basin Development & Sales Co., 53 Wn.2d 201, 204-05, 332

P.2d 245 (1958), for the proposition that '"the burden is on the condemnor to present

sufficient construction plans to understand the extent of the loss to the owner.'" Pet. for

Review by AIC at 15 (quoting Basin, 53 Wn.2d at 204-05). But Basin is inapposite. In

Basin, the trial court denied the condemnor's motion to stipulate to a new condemnation

after the verdict had already been rendered. Basin, 53 Wn.2d at 204. Here, AIC had the

opportunity to accept Sound Transit's unchanged settlement offer even after Sound Transit

indicated there would be a downward modification of the TCE.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

faith or engaged in gamesmanship in its settlement negotiations. Instead, the record

discloses that Sound Transit reduced the scope of the TCE based on a changed

understanding of its construction needs and to ameliorate AIC's concerns about

decreased parking. Despite the scaled-back TCE, it kept the same settlement offer

on the table until trial.

An additional statutory safeguard exists against the risk of gamesmanship and

abuse from condemnors proffering unreasonable settlement offers to avoid paying

fees. RCW 8.25.070(l)(b) separately awards fees to the condemnee when the

condemnor's offer is less than 90 percent of the jury's just compensation verdict. In

this case, the jury awarded AIC more compensation for the revised TCE than AIC's

appraiser testified it was worth. CP at 1415. AIC suggests condemnors will have

an incentive to make an inflated pretrial settlement offer based on a greater taking

than ultimately sought at trial in order to avoid an award of fees under RCW

8.25.070(l)(b). Not only did AIC not rely on this provision in its fee motion, but

the argument also overlooks the counterincentive a condemnor has to offer in

settlement only that amount justified by the taking it actually needs. It is difficult to

imagine that condemnors will generally be motivated to make artificially high

settlement offers.

Alternatively, AIC argues that it is entitled to fees and costs under RCW

8.25.075(l)(b) because Sound Transit's change to the scope of the TCE constituted

an abandonment of the condemnation proceedings altogether. Suppl. Br. by AIC at

6-7; see RCW 8.25.075(1)(b) (providing for reasonable attorney and expert witness

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

fees if "[t]he proceeding is abandoned by the condemnor"). AIC contends that

Sound Transit abandoned its taking by modifYing the TCE after its settlement offer

and putting before the jury a different taking from the one for which it petitioned and

obtained possession and actual use. Suppl. Br. by AIC at 6-7. In support of this

argument, AIC cites to the TCE's reduction in square footage and duration of use.

Id. at 9.

We find this argument unpersuasive. The very fact that the parties litigated to

judgment over just compensation establishes that the proceeding was never

abandoned. AIC advocates for a rule that would consider a condemnation

proceeding to be abandoned whenever the taking "materially changes." But such a

rule is contrary to established precedent holding that a proceeding is abandoned

when the condemnor never takes any property. See Port of Grays Harbor v. Citifor,

Inc., 123 Wn.2d 610, 619, 869 P.2d 1018 (1994) (holding condemnor "clearly

abandoned the condemnation proceedings" under RCW 8.25.075(l)(b) because it

never acquired property). 8

8

In accord with Washington precedent, courts have narrowly construed

"abandonment" in 42 U.S.C. § 4654(a)(2), the federal analog to RCW 8.25.075. United

States v. 122.00 Acres, 856 F.2d 56 (8th Cir. 1988) (proceeding deemed abandoned when

condenmor determined that the jury's determination of just compensation went beyond its

budget capabilities and moved to dismiss the condemnation action all together); United

States v. 4.18 Acres, 542 F.2d 786 (9th Cir. 1976) (condemnation proceeding not deemed

abandoned when condemnee successfully moved to dismiss the action and rather than

appeal the dismissal the condemnor proceeded to file a new condemnation action within

one year of dismissal); United States v. 431.60 Acres, 355 F.Supp. 1093 (S.D. Ga. 1973)

(government admitted to abandonment).

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

Even if we were inclined to adopt a new rule akin to constructive

abandonment, the out-of-state authorities AIC relies on are distinguishable. See

Appellant AIC's Opening Br. at 41 n.3. In those cases, the physical taking changed

in size and scope. See People ex rel. Dep 't ofTransp. v. N. Tr. Co., 376 N.E.2d 286,

287, 59 Ill. App. 3d 1053, 17 Ill. Dec. 287 (1978) (condemnor modified original

physical taking of 312.5 square feet to 500 square feet, a 84 percent decrease);

County ofKern v. Galatas, 200 Cal. App. 2d 353,354-55, 19 Cal. Rptr. 348 (1962)

(condemnor modified original physical taking of 75.49 acres to 48.87 acres, a 35

percent decrease); Montgomery County v. McQuary, 26 Ohio Misc. 239, 265 N.E.2d

812, 813 (1971) (condemnor "abandoned[ed] the course ofthe easements through

the property of the defendant ... and designate[ d] a different course"); FKM P 'ship,

Ltd. v. Bd. of Regents of Univ. of Houston Sys., 255 S.W.3d 619 (Tex. 2008)

(condemnor modified original physical taking of 47,008 square feet to 1,260 square

feet, a 97 percent decrease). Here, in contrast, Sound Transit made no reduction to

its permanent taking (the PGE); the only change was to reduce the area impacted by

the TCE by 25 percent and to limit its duration to fewer nonconsecutive days of

exclusive possession. Moreover, Sound Transit's settlement offer never changed

despite the reduced TCE. The Court of Appeals properly rejected AIC's claim that

it is entitled to attorney fees under RCW 8.25.075(l)(b).

Admission ofOh 's Testimony regarding the July 2012 Valuation

AIC sought a new trial on the ground that the trial court erred by admitting

Oh's testimony that she believed AIC was entitled to $485,000 for the easements.

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Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

Suppl. Br. by AIC at 13-14. AIC contends this testimony "was not admissible

because it contained not Ms. Oh's own belief of value, but the belief of value of an

expert who was not in court." Id. at 15. The trial court admitted the testimony under

ER 80l(d)(2).

We review a trial court's interpretation of an evidentiary rule de novo. State

v. DeVincentis, 150 Wn.2d 11, 17,74 P.3d 119 (2003). Once the rule is correctly

interpreted, the trial court's decision to admit or exclude the evidence is reviewed

for an abuse of discretion. I d. A trial court abuses its discretion only if its decision

is manifestly unreasonable or based on untenable grounds. Wash. State Physicians

Ins. Exch. &Ass'n v. Fisons Corp., 122 Wn.2d 299,339,858 P.2d 1054 (1993).

A statement qualifies as an admission by a party opponent ifthe "statement is

offered against a party and is (i) the party's own statement, in either an individual or

a representative capacity or (ii) a statement of which the party has manifested an

adoption or belief in its truth." ER 80l(d)(2). Such an admission is not hearsay. Id.

The trial court properly admitted Oh's testimony. Before allowing Oh to be

questioned about the July 2012 valuation letter, the trial judge asked Oh whether the

letter reflected her belief that AIC was entitled to $485,000 for damages. She

confirmed that it did and later repeated this belief in her testimony before the jury.

There is no dispute that Oh, as AIC's president, was entitled to speak on AIC's

behalf. Oh's statement regarding her belief as to the value in July of 2012 was

clearly offered against AIC. And the fact that that the letter containing the $485,000

valuation was never admitted at trial is of no consequence. Admission of a statement

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Cent. Puget Sound Reg'! Transit Auth. v. Airport lnv. Co., 91653-5

by a party opponent does not hinge on admitting documents corroborating the party

opponent's statement. Because Oh manifested a belief in the truth of the $485,000

valuation, the trial court properly considered it to be her statement under ER

80l(d)(2).

AIC nevertheless contends the trial court improperly admitted Oh's testimony

because, as a lay witness, "[s]he never expressed any expertise or method by which

she came to personally believe that the property was worth any particular amount.

She expressly testified she solely relied on her appraiser." Suppl. Br. of AIC at 15.

Her testimony, AIC argues, was used merely as a conduit to bring in the out-of-court

valuation opinion of a nontestifying appraisal expert. See Sentine!C3, Inc. v. Hunt,

181 Wn.2d 127, 139 n.5, 331 P.3d 40 (2014) (rejecting admission of expert

witnesses' valuation opinion put into evidence through party's testimony because

the valuations "were based entirely on a consulting expert's valuation that

'constituted hearsay'" (quoting SentinelC3, Inc. v. Hunt, 176 Wn.2d 152, 162, 309

P.3d 582 (2013))). It is true that allowing Oh's testimony brought into evidence the

fact of an earlier, lower appraisal obtained by AIC. The jury certainly understood

that Oh's belief was based on this appraisal valuation. 9 CP at 952. But the trial

court's voir dire of Oh revealed that she had adopted the valuation as her own belief,

making it admissible as a statement of a party opponent. No requirement exists that

9 During deliberations, the jury sent an inquiry to the judge, asking how to "consider

the estimate from a third appraiser, who was briefly mentioned? We think that estimate

was $485,000. Can we consider this as evidence or witness testimony?" CP at 952. The

judge responded, "You may consider all the testimony and exhibits that were admitted into

evidence, and assign it what weight you believe it is worth." !d. 953.

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Cent. Puget Sound Reg'l Transit Auth. v. Airport Inv. Co., 91653-5

the party opponent must possess particular "expertise or method" in forming an

opinion. ER 801(d)(2)(ii) requires only that the party "has manifested an adoption

or belief in [the statement's] truth." The trial court properly rejected AIC's hearsay

objection and admitted the evidence. AIC is not entitled to a new trial.

CONCLUSION

We affirm the Court of Appeals. AIC is not entitled to attorney fees under

RCW 8.25.070(1)(a) or (b), and the trial court properly allowed AIC's president to

be questioned about the July 2012 valuation letter.

-18-

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., 91653-5

WE CONCUR:

(2 .Q.

{

-19-

Cent. Puget Sound Reg 'l Transit Auth. v. Airport Inv. Co.

No. 91653-5

JOHNSON, J. (dissenting)-In this classic bait-and-switch case, Central

Puget Sound Regional Transit Authority (Sound Transit) changed its condemnation

claim during trial from what it told the property owner when the "settlement" offer

was conveyed. No offer was ever "on the table" for property interest claimed

during trial. The offer caused, if not compelled, the property owner to seek fair

value for their property at trial, where Sound Transit essentially said, "Never mind,

we do not need that much property, and therefore settlement should be for a lesser

fair value for the condemned property interest." Torturing the statutory purpose,

the majority denies the property owner fees and costs even though no offer was

ever made for the property Sound Transit actually took. Under the statute as

written, this "changing the rules after the game is played" is unsupportable, or

should be. The majority's new rule encourages such gamesmanship. I dissent.

The majority incorrectly denies Airport Investment Company (AIC) its

statutory entitlement to attorney fees. A straightforward reading of the statute

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5

(Johnson, J., dissenting)

discloses that any "offer" must be for the "interest in the property being

condemned." RCW 8.25.070(l)(a). The majority essentially rewrites this provision

and untethers the "offer" from the "interest in the property being condenmed,"

defying common sense and the most elementary of principles of statutory

construction and contracts. Some relationship must exist between a condemnor's

offer and what it is taking. This case arose because Sound Transit changed its

claim during trial.

The majority erroneously concludes that because Sound Transit made "any"

offer, no fee award is due under RCW 8.25.070(1 ). 1 Public policy, legislative

intent and well-settled principles of statutory interpretation should mean that you

cannot divorce the offer from the interest in the property by changing the claim

after the "offer" was made and rejected. A straightforward application of the

language ofthe statute requires that the "offer" be for the "interest in the property

being condemned." No other reading makes sense.

The purpose ofRCW 8.25.070 is to encourage condemnors to make fair

offers, thus avoiding litigation and encouraging settlement before trial. See State v.

1

"(1) Except as otherwise provided in subsection (3) of this section, if a trial is held for

the fixing of the amount of compensation to be awarded to the owner or party having an interest

in the property being condemned, the court shall award the condemnee reasonable attorney's fees

and reasonable expert witness fees in the event of any of the following:

"(a) If condemnor fails to make any written offer in settlement to condemnee at least

thirty days prior to commencement of said trial." (Emphasis added.)

2

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5

(Johnson, J., dissenting)

Costich, 152 Wn.2d 463, 471, 98 P.3d 795 (2004). The majority at least

acknowledges that our precedent requires a condemnor to present an adequate

taking description before trial to allow the landowner time to prepare for trial.

Majority at 12 (citing In re Municipality ofMetropolitan Seattle, 67 Wn.2d 923,

928, 410 P.2d 790 (1966) (Kenmore Props.)). It is true that a property owner

before trial has a "right to be adequately advised of the exact nature of the

proposed taking, so that he [or she] may evaluate the resultant damage." Kenmore

Props., 67 Wn.2d at 927. However, the majority's reading of Kenmore Properties

ignores that the same reason why a property owner must be adequately informed of

the exact nature of the taking before trial underlies why he or she must be informed

of the exact nature of the taking when being given a settlement offer. It makes

sense that a condemnor must provide the property owner a description of the taking

to allow the landowner to make a decision to accept any offer and, if not, prepare

for trial.

For the property owner to determine if a settlement offer is fair-and

consequently whether to litigate the condemnation action-the property owner

must know what exactly Sound Transit is offering and what property interest

Sound Transit is taking in exchange for that offer. Any change to what Sound

Transit provides to the property owner makes the calculation impossible.

3

Cent. Puget Sound Reg'/ Transit Auth. v. Airport Inv. Co., No. 91653-5

(Johnson, J., dissenting)

Engaging in what is essentially a statutory rewrite, the majority claims that

AIC failed to demonstrate that the temporary construction easement (TCE) was

inadequately described, or that the changed TCE "otherwise resulted in prejudice

to its trial preparations," or that Sound Transit "committed bad faith or engaged in

gamesmanship in its settlement negotiations." Majority at 12. Under the majority's

view, evidently, all the statute requires is that any offer "comes close" to

describing the property and, if so, the property owner must now prove some type

of materiality or prejudice. Nowhere in the statute does it say this. What the statute

says is that the offer match the property interest sought. In this case, at trial, both

the physical footprint and the duration changed from that specified in the offer.

Whether this change was or was not "material" to the property owner's decision

can never be known with certainty. Nor should condemnation trials include this

issue. One certainty is established: the property owner never had the decision to

accept an offer never presented.

The majority offers no cases to support its rule that a court must somehow

consider materiality of any changes. Unfortunately, the majority fails to explain

how the property owner can prove "materiality"-by what standard or much else.

Fortunately, the statute answers this question. The statute provides that the burden

is on Sound Transit to make offers for what it wants. Any change voids the offer.

4

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5

(Johnson, J., dissenting)

Even if it were, under the statute, appropriate to engage in such an inquiry, a

taking reduced by both its physical footprint and a reduction in duration is a lesser

taldng. A lesser taking is material in relation to the evaluation of the offer of just

compensation. Here, the original TCE allowed for exclusive use of up to 1,080

days; the new TCE narrowed that exclusive use to 160 days. 2 The changes included

a 25 percent decrease in the area of the easement and a reduction of the duration by

2.5 years. Sound Transit presented an entirely different picture of the taking to the

jury than its pretrial offer had specified. Under the majority's approach, a

condemnor can overstate its taking at the beginning of condemnation proceedings

and then present the jury with a lesser taking to insulate itself from having to pay a

fee award. While this likely was not the deliberate strategy of Sound Transit, the

majority seems to ignore the possibility and risk of gamesmanship and abuse from

its result, which conflicts with the statutory purposes.

The majority claims RCW 8.25.070(1)(b}-which separately awards fees to

the condernnee when the condemnor's offer is less than 90 percent of the jury's

just compensation verdict-provides a safeguard against the risk this potential

abuse. Majority at 13. For this ostensible safeguard to be triggered, the jury award

2

The record does not disclose exactly when Sound Transit made this change. We can

presume that trial preparations and discovery were complete and at the very least the appraisal

was done.

5

Cent. Puget Sound Reg'! Transit Auth. v. Airport Inv. Co., No. 91653-5

(Johnson, J., dissenting)

must necessarily be greater than the pretrial offer, which will almost never be the

case when the property interest is reduced. In other words, RCW 8.25.070(1)(b)

protects the condemnee only when the condemnor has offered less than what the

jury awards. In instances where the pretrial offer is based on a taking that is less

than what the taking presented at trial-either by its duration or its physical

amount or both as is the case here-then the jury award will never be less than the

pretrial offer. Under the statute, this does not make sense. Apparently, no question

in this case exists that had Sound Transit gone to trial on its original claim, the

award would have been larger. Because of the difference, no comparison between

the offer and the award can be done.

The statute was designed to protect property owners who receive unfair

settlement offers from bearing the costs of pursuing just compensation.

Conversely, the statute was also designed to protect Sound Transit from bearing

the costs of litigation when a fair offer of settlement is made. The property owner

has a choice to make. If it decides to litigate, the statute determines fairness by

comparing what was offered before trial to what the jury awarded. That

comparison is simple where the taking on which the initial offer was based is the

same as the taking evaluated by the jury. It becomes impossible and meaningless to

compare the pretrial offer to the jury award where the property interests are

different.

6

Cent. Puget Sound Reg'/ Transit Auth. v. Airportlnv. Co., No. 91653-5

(Johnson, J., dissenting)

Under the statute, an offer is inextricably linked to the property interest on

which the offer is made. In this case, because the offer was for a different property

interest than that sought at trial, it is simply void and AIC is statutorily entitled to

recover its fees and costs. For these reasons, I dissent.

"-··

7