Sintra, Inc. v. City of Seattle

Talmadge, J.

(concurring in part, dissenting in part) — While cases arising from governmental restrictions on land use have proliferated in both state and federal courts, Washington jurisprudence, now hopelessly out of dáte, gives little guidance to policymakers, developers, counsel, or the lower courts as to the basic tenets of recovery for excessive government regulation of land. The majority opinion answers the questions at bar, but does not modernize our land use law. I propose what I believe to be a sound analytical approach to recovery for excessive government regulation in keeping with recent developments in the United States Supreme Court.

I dissent on the cost and attorney fee issues, which both parties have appealed. Also, I do not find Sintra was damaged at all by any actions of the City of Seattle. Because the City has not appealed the jury’s conclusion Sintra suf *678 fered a $47,809 loss by a regulatory taking, I am constrained to acquiesce in that conclusion.

FACTS

Our decision in Sintra, Inc. v. City of Seattle, 119 Wn.2d 1 , 829 P.2d 765 , cert. denied, 506 U.S. 1028 , 113 S. Ct. 676 , 121 L. Ed. 2d 598 (1992), discussed the facts as they appeared in limited form on appeal from summary judgment. The majority discusses some of the facts as developed at trial. A more complete review of the record, particularly as to damages, is necessary to a full understanding of this case.

Sintra, Inc., is an Oregon corporation owned by two married couples, the Hamacks and the Stanleys; it owned and operated an auto paint franchise in the Renton area. Keith Hamack is an attorney who was in the private practice of law in 1984. In 1984, the Hamacks also ran a travel agency called Globe Travel. Globe Travel experienced negative cash flow in 1983 and 1984, and Globe Travel was involved in litigation for nonpayment of the sale note; Sintra was also involved in litigation with the auto paint franchiser over advertising fees.

Globe Travel needed a better, more visible location for its office. Keith Hamack looked at the Larned Hotel as a possibility. The Larned was located at 7th and Westlake in Seattle; it also fronted on Lenora Street. It was dilapidated and occupied by a few elderly tenants who paid monthly rent. Hamack believed the Larned could be renovated, with the first floor of the building used for Globe Travel and the other floors for a bed and breakfast.

After extensive negotiations with the seller, the Schon-ing group, Sintra purchased the Larned in September 1984 for $670,000. Sintra’s own real estate agent, Wade Cole, later testified he thought the property was worth only $300,000 to $400,000 at that time. Sintra paid $120,000 down, with monthly interest-only payments of $6,000, and balloon payments every six months over a three year span. The principals of Sintra were personally liable on the note.

*679 Sintra negotiated with the seller over the seller’s intent to place in the purchase and sale agreement a disclosure that the building was subject to Seattle’s Housing Preservation Ordinance (HPO). 27 Hamack did not want such a disclosure in the conveyance documents, as he thought it would hamper Sintra’s ability to obtain financing. The seller agreed to make the disclosure of the HPO to Sintra the subject of a private letter. Sintra was specifically advised in the letter: "Purchasers hereby acknowledge that they have been advised by sellers that the City of Seattle may take the position that the present use of the property may not be altered.” Report of Proceedings at 1039. Thus, Sintra knew about the HPO when it purchased the Larned in September 1984.

Sintra was not worried about the HPO then, because it had arranged for the relocation of the Larned tenants and was intending continued residential occupancy for the building. The HPO required owners who wished to move tenants out of residential buildings to arrange for the relocation of those tenants, which Sintra did. Hamack knew the HPO would not apply to the bed and breakfast.

In early 1985, Sintra learned a company interested in establishing an adult entertainment enterprise intended to purchase the building immediately adjacent to the Larned. Sintra attempted to find joint venturers who would raise the capital necessary to purchase the adjacent building, thereby preventing the opening of the adult entertainment establishment. Sintra was unsuccessful, and the adult entertainment venture ultimately purchased the land in June 1985, immediately obtaining a license for adult entertainment.

At this point, Sintra abandoned plans to operate a bed *680 and breakfast directly adjacent to the planned adult entertainment store, and began looking for alternative ways to develop the Larned property. The City rejected Sintra’s suggestion of a joint enterprise to build low-cost housing.

Sintra does not claim the HPO caused the bed and breakfast project to fail, however. Hamack testified he was unable to obtain financing for the bed and breakfast project even before he learned of the adult entertainment project. From August 1984 to February or March of 1985, Sintra was unable to arrange financing. Sintra’s original plan was to obtain financing by the end of 1984.

Unable to proceed with its original project, Sintra listed the building for sale for $1,100,000 in May of 1985. Sintra also stopped paying on its note to the Larned sellers about this time. It missed the $30,000 balloon payment due in March 1985 because it was financially unable to make the payment.

Sintra had received no acceptable bids for the Larned by mid-1985. Eager to salvage what was turning out to be a bad investment, Sintra had then decided to convert the Larned into a mini-storage warehouse, requiring demolition of the building. Demolition of housing units triggered another aspect of the HPO, requiring a payment of $219,000 by Sintra to obtain a demolition permit. Based on a consultant’s rough cost projections in the summer of 1985, Sintra claimed it could not profitably convert the property into a mini-storage warehouse and pay the $219,000 demolition fee. Sintra asserted in its trial brief that the consultant "agreed to finance the project.” Sin-tra’s Trial Br. at 21; Clerk’s Papers at 2125. At the trial, however, the consultant testified his dealings with Ham-ack never got past the "preliminary negotiations, rough proposal stage,” and because of the applicability of the HPO, he never pursued the project with Sintra. Report of Proceedings at 494-95. The consultant and his partner offered only to be guarantors of the loan Sintra was seeking.

*681 But the HPO demolition fee was not the reason Sintra could not proceed with the mini-storage warehouse. Ham-ack testified the mini-storage warehouse proposal, even without the HPO fee, did not "pencil out” because of the "equity gap.” Report of Proceedings at 1466. The equity gap without the HPO fee was $323,832; with the HPO fee, the gap was $573,832. Hamack testified if Sintra left the $300,000 already invested in the Larned in the project, the equity gap would have been less by that amount. In other words, if Sintra had simply abandoned the money already put into the project, renounced its equity in the Larned, the equity gap would have been no greater than $23,000 without the HPO fee. Although Hamack testified he was not demanding to get his $300,000 "back off the top” prior to the construction of the mini-storage warehouse, he notably did not testify he was willing to abandon forever his equity interest. Report of Proceedings at 1475. Hamack also testified it would have taken six months after obtaining a permit for the mini-storage to begin operations.

The equity gap was the result of Sintra’s having paid too much for the building. Sintra alleged in its counterclaim against the Schoning group that one of the facts the sellers failed to reveal to Sintra prior to the sale was the Larned was really worth less than $450,000. Hamack himself, by the fall of 1985, concluded the building was worth only $300,000 to $400,000.

On September 25, 1985, the Schoning group declared Sintra to be in default of its payment obligation for the Larned, and later sued Sintra for failure to pay on the note. Sintra filed a counterclaim in that action, asserting an agent of the sellers, Douglas Buck, had known all along the adult entertainment venture was going to buy the adjacent building, but had failed to disclose that information to Sintra prior to Sintra’s purchase of the Larned. Sintra was successful in its suit for rescission. As a result, Sintra returned the Larned to the Schoning Group and received $317,000 in damages representing the return of the purchase price.

*682 In the fall of 1985, after numerous unsuccessful attempts to obtain financing, Sintra applied to the City for administrative relief from the fee requirement of the HPO. The City never responded to Sintra’s application. In March 1986, Hamack and Wade Cole, who is also an attorney, met with the director of the City’s Department of Community Development, David Moseley, in an attempt to persuade him to recommend administrative relief. During that meeting, Cole advised Moseley of a King County Superior Court decision that had invalidated HPO-I, implying the City was wrong to enforce HPO-II against Sintra. According to Cole, Moseley’s response was, "So what are you going to do, sue me?” Report of Proceedings at 409.

Cole testified he responded by saying "since the case had already been in court and already been decided, it would be a fairly simple matter to obtain a copy of the summons and complaint, change the names and the dates, and refile it on behalf of Sintra and Mr. Hamack.” Report of Proceedings at 409-10. Hamack was present for this remark, so the record establishes suing the City on the same premise as the successful, earlier HPO suit was something Sintra had considered. Cole, in fact, later testified it may have been Hamack who made the observation that it would have been an easy matter to obtain a ruling invalidating HPO-II.

On July 15, 1986, the King County Superior Court held HPO-II illegal, enjoining its enforcement against the plaintiff in that case. Nevertheless, the City still required Sintra to pay the $219,000 fee before it would issue a demolition permit. In April 1987, we affirmed the King County Superior Court, and the City ceased enforcing the ordinance against Sintra. San Telmo Assocs. v. City of Seattle, 108 Wn.2d 20 , 735 P.2d 673 (1987).

ANALYSIS

A. Substantive Due Process and 42 U.S.C. § 1983

The majority upholds the trial court’s decision on 42 *683 U.S.C. § 1983 and declines to revisit our opinion in Sintra I. 28 Sintra I held an arbitrary and capricious land use decision in violation of substantive due process, standing alone, does not form the basis for a cause of action for damages under 42 U.S.C. § 1983 , but permits only invalidation of the decision. Irrational or invidious conduct is necessary to prove damages. Majority op. at 654.

The trial court ruled as a matter of law the City acted arbitrarily and capriciously, violating Sintra’s right to substantive due process by enforcing the HPO before July 15, 1986. The trial court denied any monetary recovery, however, because the City’s conduct prior to July 15, 1986 was not invidious or irrational. The trial court submitted Sintra’s claim for damages under 42 U.S.C. § 1983 to the jury for the City’s post-July 15, 1986 enforcement of the HPO. The jury obviously did not think much of Sintra’s § 1983 claim, awarding it a total of $3, or $1 in damages each against the City and against the two remaining individual defendants. The City does not appeal from the trial court decisions on 42 U.S.C. § 1983 , although Sintra does so.

Rather cryptically, the majority suggests our prior decisions and federal analysis of substantive due process under 42 U.S.C. § 1983 have limited the availability of claims for damages under this statute. Majority op. at 652-53. This is an understatement. A more accurate statement is federal jurisprudence has virtually rejected the application of substantive due process to land use claims under 42 U.S.C. § 1983 , requiring instead that such claims be based on a specific constitutional provision such as the takings clause of the Fifth Amendment. Armendariz v. Penman, 75 F.3d 1311, 1318 (9th Cir. 1996). 29 This is particularly true if a *684 viable state remedy exists. Hayes v. City of Seattle, 131 Wn.2d 706 (1997) (Talmadge, J., dissenting). 30

The federal cases also indicate something more than a mere violation of state land use law must be present before a cause of action is stated under 42 U.S.C. § 1983 for a violation of substantive due process. "A violation of state law is not a denial of due process of law.” Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 467 (7th Cir. 1988); 31 "It is bedrock law in this circuit, however, that violations of state law — even where arbitrary, capricious, or undertaken in bad faith — do not, without more, give rise to a denial of substantive due process under the U.S. Constitution.” Coyne v. City of Somerville, 972 F.2d 440, 444 (1st Cir. 1992); Midnight Sessions, Ltd. v. City of Phila., 945 F.2d 667, 684 (3d Cir. 1991), cert. denied, 503 *685 U.S. 984 (1992); Steuart v. Suskie, 867 F.2d 1148, 1150 (8th Cir. 1989); Chesterfield Dev. Corp. v. City of Chesterfield, 963 F.2d 1102 , 1104 (8th Cir. 1992):

[I]n zoning and land-use disputes with local governments, the plaintiff must allege something more than that the government decision was arbitrary, capricious, or in violation of state law. Such claims, if asserted, are better addressed to state courts and administrative bodies. Otherwise, every violation of state law could be turned into a federal constitutional tort.

In Orion Corp. v. State, 109 Wn.2d 621, 652 , 747 P.2d 1062 (1987), cert./ denied, 486 U.S. 1022 (1988), we said the same thing: "If our state constitution provides the protection sought, a federal question under the Fourteenth Amendment’s due process clause does not arise.” 32

Based on the present federal court treatment of substantive due process and 42 U.S.C. § 1983 , Sintra’s claim should never have reached the jury. Because a claim for damages under 42 U.S.C. § 1983 must be grounded in a specific provision of the Constitution, this case was properly tried only as a taking case under the Fifth Amendment.

B. Temporary Regulatory Taking

Challenges to federal, state, and local government restrictions on development have proliferated in recent years in both state and federal courts. The formerly well- *686 established jurisprudence of eminent domain has been pushed into the background by claims of inverse condemnation, regulatory taking, and substantive due process, creating an utterly confusing mishmash. Recounting the history and development of temporary regulatory taking law helps inform an understanding of the present case.

1. Federal Approach

The United States Supreme Court has struggled mightily with the basis for compensation for temporary regulatory takings. Justice Brennan’s dissent in San Diego Gas & Elec. Co. v. City of San Diego, 450 U.S. 621, 658 , 101 S. Ct. 1287 , 67 L. Ed. 2d 551 (1981), argued monetary loss from a temporary regulatory taking ought to be compensable under the Just Compensation clause of the Fifth Amendment. The Court so held in First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 , 107 S. Ct. 2378 , 96 L. Ed. 2d 250 (1987) (mere invalidation of a regulation is not enough). See also Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470 , 107 S. Ct. 1232 , 94 L. Ed. 2d 472 (1987) (employing multifactor test to determine a compensable regulatory taking had not occurred), and Nollan v. California Coastal Comm’n, 483 U.S. 825 , 107 S. Ct. 3141 , 97 L. Ed. 2d 677 (1987) (holding compensable regulatory taking had occurred because of lack of "essential nexus” between regulation and asserted public interest). In Lucas v. South Carolina Coastal Council, 505 U.S. 1003 , 112 S. Ct. 2886 , 120 L. Ed. 2d 798 (1992), the Court further refined regulatory takings law by holding where a regulation takes all economically beneficial use of property there is a taking per se, and no balancing of interests is permitted. Most recently, in Dolan v. City of Tigard, 512 U.S. 374 , 114 S. Ct. 2309 , 129 L. Ed. 2d 304 (1994), the Court held there must be "rough proportionality” between the cost of the taking and the public benefit. The Court placed the burden of proving "rough proportionality” on the regulatory agency; in the absence of such "rough proportionality,” the statute, regulation, or ordinance effects a taking.

*687 2. Washington’s Approach 33

Washington’s temporary regulatory taking jurisprudence starts with the analysis of the state’s police power. In Conger v. Pierce County, 116 Wash. 27 , 198 P. 377 , 18 A.L.R. 393 (1921), we held the police power is an inherent attribute of government and, to the extent the police power is properly exercised in furtherance of safety, morals, health, or the general welfare of the public, an action cannot be a compensable taking, even if there is damage to property. 34 See also State v. Dexter, 32 Wn.2d 551 , 202 P.2d 906 , 13 A.L.R.2d 1081 (1949).

Subsequent cases refined this approach by requiring a case-by-case analysis "balancing of the public interest in regulating the use of private property against the interests of private landowners not to be encumbered by restrictions on the use of their property.” Maple Leaf Inv., Inc. v. Department of Ecology, 88 Wn.2d 726, 731 , 565 P.2d 1162 (1977). We cited in Maple Leaf to the well-known opinion in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 , 43 S. Ct. 158 , 67 L. Ed. 322 , 28 A.L.R. 1321 (1922), where Justice Holmes wrote:

The protection of private property in the Fifth Amendment presupposes that it is wanted for public use, but provides that it shall not be taken for such use without compensation. A similar assumption is made in the decisions upon the Fourteenth Amendment. Hairston v. Danville & Western Ry. Co., 208 U. S. 598, 605 , 28 Sup. Ct. 331, 52 L. Ed. 637 , 13 Ann. Cas. 1008. When this seemingly absolute protection is found *688 to be qualified by the police power, the natural tendency of human nature is to extend the qualification more and more until at last private property disappears. But that cannot be accomplished in this way under the Constitution of the United States.

The general rule at least is that while property may be regulated to a certain extent [without compensating the owner], if regulation goes too far it will be recognized as a taking.

See also Kennedy v. City of Seattle, 94 Wn.2d 376 , 617 P.2d 713 (1980); State ex rel. Randall v. Snohomish County, 79 Wn.2d 619, 623 , 488 P.2d 511 (1971) ("Unless the controls would deprive plaintiffs of a previously existing usage right, the burden is on plaintiffs to establish the unreasonableness of an othérwise permissible legislative zoning enactment.”); Granat v. Keasler, 99 Wn.2d 564 , 663 P.2d 830 (1983) (ordinance limiting right of landlord to evict houseboat tenants from moorage was deprivation of property without just compensation).

The application of substantive due process principles to government regulation of land created even more doctrinal murkiness. The concept of substantive due process as a constitutional theory upon which to base challenges to governmental actions first appeared in our cases with little fanfare and even less authority in Norco Constr., Inc. v. King County, 97 Wn.2d 680 , 649 P.2d 103 (1982), where we suggested due process was a limiting principle for zoning ordinances. In West Main Assocs. v. City of Bellevue, 106 Wn.2d 47, 52 , 720 P.2d 782 (1986), we stated "this court has often ruled that due process considerations limit how local governments use their police power,” and then stated categorically: "Thus a land use ordinance satisfies due process standards only if it (1) is aimed at achieving a legitimate public purpose, and (2) uses means to achieve that purpose that are reasonably necessary and not unduly oppressive upon individuals.” Id.; Goldblatt, 369 U.S. *689 at 594-95; Lawton v. Steele, 152 U.S. 133, 137 , 14 S. Ct. 499 , 38 L. Ed. 385 (1894). 35

In Orion Corp. v. State, 109 Wn.2d 621 , 747 P.2d 1062 (1987), cert. denied, 486 U.S. 1022 , 108 S. Ct. 1996 , 100 L. Ed. 2d 227 (1988), this Court tried to harmonize the complex and conflicting Washington case law on takings rooted in the police power analysis and the balancing of interests. The Orion court adopted the three-part test for police power excess stated in Goldblatt for substantive due process violations in land use cases. Orion, 109 Wn.2d at 647-48 .

The Orion court correctly pointed out that examining an allegedly excessive regulation either as a due process violation or as an excessive use of the police power asks the same question: Is the landowner being forced to shoulder an economic burden that, "in justice and fairness,” the public at large should bear? Id. at 648-49 . Nevertheless, Orion recognized two alternate remedies for excessive regulation: a violation of substantive due process, allowing invalidation of the regulation; or a taking, requiring just compensation. Id. at 649 . The Court’s approach in not allowing damages for substantive due process claims was practical:

If all excessive regulations require just compensation, rather *690 than invalidation, land-use decision makers, who adopt regulations in a good faith attempt to prevent a public harm, will nevertheless be held strictly liable for regulations that result in a taking. Undoubtedly, the specter of financial liability will intimidate legislative bodies from making the difficult, but necessary choices presented by the most sensitive environmental land-use problems. . . . Strict liability would not result for all excessive regulations, however, under the approach developed in our own regulatory takings jurisprudence.

Orion, 109 Wn.2d at 649 . See also Presbytery of Seattle v. King County, 114 Wn.2d 320 , 787 P.2d 907 , cert. denied, 498 U.S. 911 (1990).

But all excessive land-use regulations do require just compensation. Merely labeling the cause of action as a violation of substantive due process rather than a regulatory taking does not change the nature of the wrong, or eliminate the constitutional imperative to provide a remedy. No matter how we describe the cause of action challenging a regulation, if a regulation "goes too far,” it is a taking requiring just compensation. 36

I have difficulty conceiving of a situation in the context of land-use regulation where a regulation is not a taking, but is constitutionally infirm as a denial of due process. Always, the challenged regulation places some restriction on the use of property, resulting in economic deprivation. If a regulation exceeds the permissible boundaries of the police power, and thereby causes a tangible economic diminution in the value of property, then the aggrieved landowner is entitled to just compensation. If a court holds a challenged regulation to be within the permissible boundaries of the police power, on the other hand, then even though some diminution in value might have occurred, *691 compensation is not required. Always, the central inquiry must be: does the regulation "go too far?”

We have adopted various tests for this central inquiry. For instance, in analyzing whether a taking has occurred, we first ask if the regulation "substantially advances legitimate state interests.” Presbytery, 114 Wn.2d at 333 . If it does, then we consider whether a facial or an as-applied challenge is involved. For a facial challenge, "the landowner must show that the regulation denies all economically viable use of any parcel of regulated property in order to constitute a taking.” Id. at 333-34 . For a challenge to the specific application of the regulation, the Court employs a three-part test: "(1) the economic impact of the regulation on the property; (2) the extent of the regulation’s interference with investment-backed expectations; and (3) the character of the government action.” Id. at 335-36 . The standard of review for an alleged substantive due process violation also employs a three-part test: "(1) whether the regulation is aimed at achieving a legitimate public purpose; (2) whether it uses means that are reasonably necessary to achieve that purpose; and (3) whether it is unduly oppressive on the landowner.” Id. at 330 . As inspection shows, all of these tests can be reduced to the central inquiry — does the regulation "go too far.”

3. A Clearer Approach: Dolan

We began our analysis in Presbytery by equating inverse condemnation with excessive regulation. Equating these two different concepts was unfortunate, however, because doing so causes unnecessary confusion. The term "inverse condemnation” is better left to its original association as the inverse of eminent domain: "an 'action brought against a governmental entity having the power of eminent domain to recover the value of property which has been appropriated in fact, but with no formal exercise of the power.’ Martin v. Port of Seattle, 64 Wn.2d 309 , 310 n.1, 391 P.2d 540 (1964), cert. denied, 379 U.S. 989 , 85 S. Ct. 701 , 13 L. Ed. 2d 610 (1964).” Presbytery, 114 Wn.2d at *692 323 n.2. What makes inverse condemnation inverse is that the compensation for the taking occurs after the taking, and at the instance of the property owner, who sues for the value of the taking.

Condemnation by eminent domain means an actual physical occupation or taking of property, or damage to it. Condemnation does not occur until the landowner receives compensation through the eminent domain process.

A regulatory taking is not a physical occupation of land, or damage to land, but simply a regulatory limitation of the owner’s use of land. 37 Damages from a regulatory taking will almost always be in the nature of economic loss, rather than in the form of monetary loss resulting from physical occupation of or damage to land. The allegation in a regulatory taking case will be that owner’s land diminished in economic value as a result of restrictions the regulation placed on its use. The law should maintain a robust distinction between eminent domain and inverse condemnation on the one hand, and regulatory taking on the other.

In defining a regulatory taking, we would be wise to cut the Gordian knot by scrapping the conflicting lines of authority and start afresh to describe when a regulatory limitation of the owner’s use of land, which is not a physical occupation of the land or damage to the land, constitutes a taking. We should abandon substantive due process as an analytical tool and avoid the alternate remedies for excessive government regulation set forth in Orion and subsequent cases. We should rely instead on Dolan , which provides a workable framework for assessing an allegation of excessive regulation of land.

We have adopted the Dolan approach in two recent *693 cases. In Trimen Dev. v. King County, 124 Wn.2d 261 , 877 P.2d 187 (1994), we upheld the county’s imposition of a park impact fee on a developer as being "reasonably necessary” to offset the direct detrimental results of the development, citing to Dolan’s "rough proportionality” test. Id. at 274 . Similarly, in Sparks v. Douglas County, 127 Wn.2d 901 , 904 P.2d 738 (1995), where Douglas County conditioned approval of the Sparkses’ short plat applications upon dedication of rights of way for road improvements, we applied a Dolan analysis, asking whether the "exactions demanded by Douglas County are roughly proportional to the impact of the Sparkses’ proposed developments.” Sparks, 127 Wn.2d at 915 . We concluded they were, and reversed the Court of Appeals. Id. at 917 . 38 The Dolan "rough proportionality” test now provides the appropriate analytical framework for deciding when a regulation "goes too far.”

To prove a regulatory taking in Washington, the plaintiff must allege a lack of "rough proportionality” between the cost of the taking to the property owner and the benefit to the public. The agency has the burden of proving the existence of "rough proportionality.” That is, the agency must show (1) the challenged regulation advances a legitimate state interest; (2) there is an "essential nexus” between the interest advanced and the requirement exacted, Nollan, 483 U.S. at 834 ; The Luxembourg Group, Inc. v. Snohomish County, 76 Wn. App. 502, 505 , 887 P.2d 446 , review denied, 127 Wn.2d 1005 (1995); (3) there is a roughly proportional relationship between the benefit to the public and the cost to the landowner; and (4) damages were proximately caused by the governmental action.

The Court in Sintra I appeared inclined to hold the demolition fee "goes too far”: "The economic impact on Sin-tra is enormous. It was asked to pay a $219,000 fee to *694 develop a $670,000 piece of property.” Sintra, 119 Wn.2d at 22 . Plainly, the Court could only express its shock at the size of the demolition fee. By contrast, had Dolan been available at the time of the Sintra I decision, the Court would have been able to assess whether the City had carried its burden of showing the demolition fee was "roughly proportional” to the public benefit.

In summary, Dolan provides a sturdy analytical framework for cases such as this. By placing the burden of proving "rough proportionality” on the administrative agency, Dolan protects property owners by providing quantitatively-based administrative and judicial review of land use regulations.

C. Damages for Taking

The jury returned a verdict for Sintra on its taking claim in the amount of $47,809. The City does not appeal from this judgment, although Sintra believes the award too low. In my view, Sintra was not entitled to any award for a taking as it was not the owner of the property when the Housing Preservation Ordinance was enacted. Moreover, substantial evidence did not support the damage award.

1. Ownership of Property at Time of Taking

If the Housing Preservation Ordinance effected a constitutional taking by the imposition of the demolition fee, only the owner of the property when the ordinance was enacted, and not any subsequent owner, could recover for the taking. Sintra bought the Larned Hotel knowing the HPO was in place. The enactment of the HPO predated Sintra’s acquisition of the Larned Hotel. Sintra’s challenge to the ordinance is not that the City’s particular application of it to Sintra’s particular circumstances was a taking, but that the mere existence of the ordinance effected a taking. The taking Sintra alleges occurred once: "In the takings context, the basis of a facial challenge is that the very enactment of the statute has reduced the *695 value of the property or has effected a transfer of a property interest. This is a single harm, measurable and compensable when the statute is passed.” Levald; Inc. v. City of Palm Desert, 998 F.2d 680, 688 (9th Cir. 1993), cert. denied, 510 U.S. 1093 , 114 S. Ct. 924 , 127 L. Ed. 2d 217 (1994). See also 2 Julius L. Sackman, Nichols on Eminent Domain § 5.01[4], at 5-29 to 5-30 (Rev. 3d ed. 1995); 29A C.J.S. Eminent Domain § 383, at 757 (1992).

Sintra incurred no injury entitling it to assert a facial challenge to the ordinance. "A landowner who purchased land after an alleged taking cannot avail himself of the Just Compensation Clause because he has suffered no injury. The price paid for the property presumably reflected the market value of the property minus the interests taken.” Carson Harbor Village Ltd. v. City of Carson, 37 F.3d 468, 476 (9th Cir. 1994). Accord, Garneau v. City of Seattle, 897 F. Supp. 1318, 1324-25 (W.D. Wash. 1995). See also Danforth v. United States, 308 U.S. 271, 283 , 60 S. Ct. 231 , 84 L. Ed. 240 (1939). Washington law is the same. Kakeldy v. Columbia & P.S.R. Co., 37 Wash. 675, 680 , 80 P. 205 (1905); Hoover v. Pierce County, 79 Wn. App. 427, 433-34 , 903 P.2d 464 (1995), review denied, 129 Wn.2d 1007 (1996); State v. Sherrill, 13 Wn. App. 250 , 258 n.1, 534 P.2d 598 , review denied, 86 Wn.2d 1002 (1975).

If any compensable taking of the Larned property occurred, it occurred on the day the HPO was enacted. At that point, the demolition fee requirement went into effect, diminishing the value of the property. Anyone wishing to buy and develop the Larned property by demolishing the building — thereby lessening the number of housing units in the city — would have had to pay a demolition fee. The requirement for payment of the demolition fee would presumably reduce the value of the land by the amount of the fee the purchasing developer would have to pay. If the Schoning group could have shown the HPO "went too far,” the enactment of the HPO would be a taking, and the Schoning group would have had a cause of action for just compensation. Petersen v. Port of Seattle, 94 Wn.2d 479, 485 , 618 P.2d 67 (1980).

*696 In the present case, Sintra not only knew about the HPO before it purchased the Larned, it negotiated with the seller to make the sellers’ notice to Sintra of the HPO a private agreement not set forth in the purchase and sale agreement. Sintra also knew the City had turned down the sellers’ request for a variance from the HPO requirements. Moreover, Sintra called the HPO enforcement office before the purchase to ascertain the HPO would place no requirements on Sintra’s plan for a bed and breakfast.

In summary, Sintra purchased the Larned with full knowledge of the HPO. If the HPO effected a taking of the Larned property, the taking occurred before Sintra purchased the property. The right to damages does not run with the property. Sintra, therefore, did not have a regulatory taking claim.

2. Substantial Evidence Does Not Support the Verdict

Despite Sintra’s efforts to show how wrong the City was to enforce the HPO after July 15, 1986, the jury found Sintra had suffered no damages from the City’s enforcement. The trial court instructed the jury in no uncertain terms as to the illegality of the City’s enforcement of the HPO after the King County Superior Court had found the ordinance illegal:

A city and its employees cannot lawfully enforce provisions of a facially invalid ordinance against any person or corporation. Each aggrieved person need not bring his own action challenging the ordinance. A declaratory judgment rendered by the Superior Court in one case finding an ordinance invalid is binding on the city and its employees in every case or situation.

Clerk’s Papers at 273. The court further instructed the jury "You are instructed that it has previously been adjudged that the defendants did, acting under color of state law, arbitrarily and irrationally deprive plaintiffs of their constitutional rights by the continued enforcement of the Housing Preservation Ordinance after the date of July 15, 1986.” Clerk’s Papers at 274. What was left for *697 the jury to decide was whether these unlawful acts of the City were a proximate cause of the damage to Sintra. Id.

The jury rejected Sintra’s damage claim. It found the City’s conduct in enforcing the HPO against Sintra after July 15, 1986, was not a proximate cause of injury to Sin-tra. In other words, the jury believed even if the City had ceased enforcing the HPO after July 15, 1986, Sintra would still have derived no economic benefit from the Larned property. The jury plainly believed the City’s argument the Larned development was economically untenable regardless of the HPO. Pursuant to the court’s direction, however, it awarded Sintra nominal damages of $3.

Yet, the jury did find a regulatory taking and awarded $47,809 as compensation to Sintra. This decision by the jury is most puzzling and is not supported by substantial evidence. Sintra argues the taking began on the date it applied for a permit, October 29,1985. The jury mistakenly assumed the property could have produced income between October 29, 1985, and July 15, 1986. The record does not support this view.

Even if the City had granted Sintra the permit without requiring the demolition fee as early as the date of application, Sintra still would have had to arrange for financing, hire a contractor, and build the mini-storage warehouse before any revenues comprising the leasehold value of the property could be realized. Hamack and Sin-tra’s consultant testified it would have taken six months after receiving a permit for the mini-storage to begin operations. Thus, the absence of revenues from the leasehold value of the property between the time Sintra applied for the permit and July 15, 1986 could not have come from any taking, but instead from the normal delay that would have occurred in financing and constructing the mini-storage warehouse. 39 Nevertheless, the City did not assign error to the jury’s finding of a taking and the award of compensation.

*698 The trial court instructed the jury to calculate the leasehold value as Sintra’s damages in instruction 14:

If a temporary taking has been proven, the measure of compensation to which plaintiff Sintra is entitled is the leasehold value of the property for the period during which the Housing Preservation Ordinance was enforced against the plaintiffs. Such amount should be calculated assuming the highest and best use for the property, which means that use which will bring the greatest economic return over a given time.

Clerk’s Papers at 280. No definition of "leasehold value” was provided. The jury sought guidance from the court, inquiring first whether the word "should” in the last sentence of Instruction No. 14 means "must.” The court responded enigmatically: "The last paragraph of Instruction No. 14 concerns the proper method for calculating 'just compensation’ in the event that you have found a taking to have occurred.” Clerk’s Papers at 284. The court’s answer was not responsive to the jury’s question.

A few minutes later, the jury inquired, "Does leasehold value represent gross income or net income after expenses?” This was a sensible question. The court answered, incorrectly, "Leasehold value means the market rental rate for the building during such period as you find a taking to have occurred.” Clerk’s Papers at 283. The court did not define "market rental rate” to the jury. The court explained its view of the meaning of leasehold value after the trial: "[Just compensation] would be limited to the leasehold value of the building in question to a willing lessor [the court probably meant lessee here] of the entire building. That would be in distinction from the gross rental receipts from someone who might be renting storage units in a building which had already been converted *699 to that particular use.” Report of Proceedings, July 1, 1994, at 7-8.

Apparently, then, in response to the jury’s inquiry, when the court said just compensation is the "market rental value” of the building, it meant the rate at which Sintra would agree to lease the entire building to a willing lessee. If this was the court’s view of the law, the court should have told the jury as much in an appropriate jury instruction. Perhaps the court did not do so because neither side presented any evidence of what the value of the building would have been to a willing lessee.

Partial evidence from Sintra’s own expert witness was that just compensation for the alleged temporary taking was net operating income, i.e., total rental revenue less total costs. Exs. 306,307. But see note 13, infra. According to juror Slater, the jury settled on the net operating income figure Sintra’s expert had provided, so the court’s response apparently did no harm. Clerk’s Papers at 392. 40

Nonetheless, the principal amount of damages adopted by the jury is manifestly incorrect. The figure the jury used represented four months of net operating income as projected by Sintra’s economist. The net operating income calculation was found in Ex. 306, entitled "Temporary Taking Damages,” which purports to show "the loss of net operating income over the period from November, 1985 through June, 1987, based on an [annual] income-producing potential of the completed project of $143,428.” Id. This figure assumes 90 percent occupancy, a level Sin-tra’s economist did not expect the mini-storage warehouse to achieve until the third complete year of operation. Ex. 307. In the first year of operation, Sintra’s economist predicted only 50 percent occupancy and annual net operating income of $55,900. Id. This means four months of net operating income for the first year of operation — a time period between July 15, 1986, and June 1987 — *700 would be $18,633, considerably less than the $47,809 the jury found.

Even more erroneous, however, was the court’s failure to subtract other factors from net operating income to obtain the true leasehold value. For instance, the City’s expert, William Partin, testified it was necessary to deduct debt service from net operating income to reach the true profit or loss determination:

If this project had been built, it would have had to have had, by definition, debt service associated with it. As so, if you are going to measure the profits that were lost, that is you would have to take Mr. Moss’s [Sintra’s economist’s] net operating number, I believe he used $11,952 per month, and then you deduct from that the debt service to find out how much cash you would have in your pocket as an owner each month if this were a viable project.

Report of Proceedings at 2220. Sintra’s economist assumed debt service to be $103,102 annually. Ex. 307. 41 Partin calculated this to equal $8,592 per month. Subtracting that number from the projected net operating income leaves $3,360 per month as actual profit. Thus, using Sin-tra’s economist’s figures, and taking debt service into account, the principal amount could not have exceeded four times $3,360, or $13,440, for the four-month taking period.

But even this number would be wrong. As noted above, Sintra’s economist told the jury the project would have been at only 50 percent occupancy during the first year of *701 operation. Ex. 307. Thus, the projected net operating income of $55,900 for the first year of operation, from which the yearly debt service, $103,102, must be subtracted, produces a negative cash flow for the first year of operations of $47,202. Id. Because the taking could not have begun before July 1986, and because it ended in April 1987, the pertinent period for the taking must have been during the first year of projected operations, a time when the low start-up occupancy rate would have resulted in negative cash flow.

Plainly, the Housing Preservation Ordinance requirements did not cause Sintra’s problems. The appearance of the adult entertainment facility caused Sintra to change its plans to build a bed and breakfast and caused Sintra’s loss, as Sintra itself argued to the trial court. Clerk’s Papers at 11. A bed and breakfast would not have required any demolition fee under the HPO. Thus, Sintra bought the Larned property knowing of the HPO requirements, and was forced to comply with them only when its plans for the Larned changed. Had Sintra known of the prospective adult entertainment facility, perhaps it would not have elected to purchase the Larned with the expectation of converting it to a bed and breakfast. That lack of knowledge is precisely why Sintra sued the Schoning group, which did know about the prospective adult entertainment facility but said nothing to Sintra. Sintra recovered $317,000 from the Schoning group in settlement after winning at trial. Although Sintra obviously did not take into consideration the possibility of an adult entertainment facility immediately adjacent to its planned bed and breakfast, such economic misfortunes are what the United States Supreme Court has referred to as one of the "incidents of ownership.” Danforth v. United States, 308 U.S. 271, 285 , 60 S. Ct. 231 , 84 L. Ed. 240 (1939). While I do not condone the City’s improper enforcement of the HPO after two King County Superior Court decisions declaring the ordinance illegal, this particular plaintiff did not suffer any harm.

*702 D. Interest and Attorney Fees

Even if the majority were correct in its analysis of Sin-tra’s claims under 42 U.S.C. § 1983 and regulatory takings, its treatment of the trial court’s decisions on interest and attorney fees is flawed.

1. Interest

The trial court based its compound interest award of $60,918.73 on the jury’s award of $47,809 in damages for the first four months after July 15, 1986. The trial court held the taking ended in April 1987, on the date the Supreme Court upheld the King County Superior Court’s invalidation of HPO-II. It then calculated compound interest at 12 percent on the principal amount of $47,809 from that date until the date of judgment. 42 Plainly, because the principal amount is incorrect, the interest calculation must also be erroneous. Nevertheless, I agree with the majority’s conclusion that only simple interest is allowable. Sintra did not prove, or even attempt to prove, simple interest did not provide it with just compensation. 43 There must be a presentation of evidence, and, in a case such as *703 this, where the trial judge was the finder of fact as to the proper rate of interest necessary to provide just compensation, the trial judge must enter findings of fact and conclusions of law to support the interest award. See State v. Doyle, 735 P.2d 733 , 742 n.15 (Alaska 1987) (affirming trial court’s denial of compound prejudgment interest because there was no showing compound interest was necessary to provide just compensation). Moreover, the standard of proof should have been beyond a reasonable doubt that the interest statute, RCW 19.52.020, was unconstitutional as applied to Sintra. 44

2. Attorney Fees

a. 42 U.S.C. § 1988

I agree with the majority’s conclusion Sintra is not entitled to attorney’s fees for the alleged civil rights violations.

b. RCW 8.25.075

Under RCW 8.25.075, the statute pertaining to awards of attorney fees in all eminent domain proceedings, a con-demnee is entitled to fees only if the condemnor makes a "written offer in settlement” and the award secured by the condemnee at trial exceeds the offer by 10 percent. RCW 8.25.075(3). It is not clear initially, given the trial court’s erroneous calculation of interest, whether the statutory test of RCW 8.25.075(3) has been met.

RCW 8.25.075(3) is silent on the question of whether interest is part of the award for purposes of the statutory offer. The statute says only reasonable attorney fees and reasonable expert witness fees may be allowed, "but only *704 if the judgment awarded to the plaintiff as a result of trial exceeds by ten percent or more the highest written offer of settlement submitted by the acquiring agency to the plaintiff.” (Emphasis added). In my view, the interest awarded in this case came not as a result of trial, but as a result of the statutory mandate for the award of interest in Title 8 cases. RCW 8.28.040. In Northside Auto Serv., Inc. v. Consumers United Ins. Co., 25 Wn. App. 486 , 607 P.2d 890 (1980), the plaintiff made an offer of settlement of "$973.50 together with interest thereon,” under RCW 4.84.250, which at that time allowed attorney fees in cases where the plaintiff sought damages and the amount pleaded was $1,000 or less, "exclusive of costs.” The Court of Appeals held the statute applied, excluding interest from the calculation of the amount pleaded. The North-side Auto approach is correct and applicable here. Interest should not be calculated as part of Sintra’s award for purposes of RCW 8.25.075(3). Thus, because Sintra’s recovery did not exceed the $75,000 offer from the City, Sintra is not entitled to attorney fees,

c. Hourly Rate

The City challenged the trial court’s assigning $225 as the hourly rate for Sintra’s lead counsel to be used to calculate attorney’s fees. Sintra’s lead counsel submitted a declaration asking for an hourly rate of $250, even though he stated in his declaration his usual hourly rate during the pendency of the case was $150. The declaration sought to justify the higher hourly rate by comparison with other attorneys of like experience doing similar work. Under a fee shifting statute, rule, contract, or equitable theory, an attorney is ordinarily entitled to recover only the reasonable fees actually charged to the client, not the fees the attorney wishes he or she might have charged. Scott Fetzer Co. v. Weeks, 122 Wn.2d 141, 149-50 , 859 P.2d 1210 (1993). The trial court abused its discretion by not adopting $150 as the lodestar hourly rate and then justifying departure from it by analyzing the factors set forth in Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581 , 675 P.2d 193 *705 (1983); Travis v. Washington Horse Breeders Ass’n, 111 Wn.2d 396 , 411-12, 759 P.2d 418 (1988) (limited availability of multipliers under Washington law).

CONCLUSION

Washington’s law on recovery for excessive governmental regulation of property deserves a clearer analytical framework than the majority provides. In general, whether described as a violation of the landowner’s right to substantive due process of law, and consequently a violation of 42 U.S.C. § 1983 , or a temporary regulatory taking, we should scrap prior formulations and ground any recovery in the Fifth Amendment takings analysis of the United States Supreme Court in Dolan .

In this case, Sintra was not entitled to recover any damages, even under the theories for recovery articulated by the majority. Sintra’s purchase of the property at issue postdated enactment of the HPO; any taking of Sintra’s property had already occurred. Further, the record indicates Sintra did not suffer a loss as a result of City action. Unfortunately, the City did not seek relief on appeal from the erroneous damage award.

Sintra was not entitled to an award of attorney fees under RCW 8.25.075 or 42 U.S.C. § 1988 . I would remand the case to the trial court for a proper calculation of interest on a recovery of $47,812.

Motions for reconsideration denied July 16, 1997.

Sintra bought the Larned Hotel when HPO-I was in place. HPO-II replaced HPO-I in August 1985, approximately one year after Sintra’s purchase. The ordinances were identical in requiring developers to obtain a housing demolition license before proceeding with any demolition of housing units. Both ordinances gave developers the option of either providing replacement housing or paying a demolition fee. Br. of Resp’ts at 9 (San Telmo Assocs. v. City of Seattle, 108 Wn.2d 20 , 735 P.2d 673 (1987)).

I agree with the majority’s analysis of the qualified immunity of the individual defendants and its discussion of the instruction on punitive damages.

Based on the same reasoning and authority as Armendariz , the Court of Appeals for the Seventh Circuit in Kernats v. O’Sullivan, 35 F.3d 1171 (7th Cir. 1994), and the Court of Appeals for the Eleventh Circuit in Tinney v. Shores, 77 *684 F.3d 378 (11th Cir. 1996), have held the Fourth Amendment preempts substantive due process claims.

The federal circuit courts of appeal employ various exceedingly restrictive tests for finding substantive due process, thereby reflecting their oft-stated aversion to sitting as federal zoning boards of appeal. Zahra v. Town of Southold, 48 F.3d 674, 680 (2d Cir. 1995) (due process clause does not function as a general overseer of arbitrariness in state and local land-use decisions). Some courts look only for a "rational basis” behind the decision, a very relaxed standard of review. Hoffman v. City of Warwick, 909 F.2d 608, 618 (1st Cir. 1990). Others hold only decisions that "shock the conscience” are worthy of constitutional protection. Committee of U.S. Citizens in Nicaragua v. Reagan, 859 F.2d 929, 943 (D.C. Cir. 1988). Others look for decisions animated by bad faith, bias, or improper motive. Midnight Sessions, Ltd. v. City of Phila., 945 F.2d 667 , 683 (3d Cir. 1991), cert. denied, 503 U.S. 984 , 112 S. Ct. 1668 , 118 L. Ed. 2d 389 (1992). The Court of Appeals for the Fifth Circuit treats all land use decisions, even those Washington would characterize as quasi-judicial, as legislative acts, requiring only the least judicial scrutiny. Shelton v. City of College Station, 780 F.2d 475, 479-83 (5th Cir.), cert. denied, 477 U.S. 905 and 479 U.S. 822 (1986). Other courts hold that substantive due process protection applies only to fundamental rights, such as marriage and family privacy, and not to land use decisions. Halverson v. Skagit County, 42 F.3d 1257 (9th Cir. 1994).

The same court forcefully reiterated this statement three years later:

The Constitution does not insist that a local government be right; whether its acts were proper in light of its concerns are staples of litigation under state law and inverse condemnation, and we reiterate the message of River Park [Inc. v. City of Highland Park, 23 F.3d 164 (7th Cir. 1994)], Coniston, and many other cases that developers cannot move land-use disputes to federal court by crying 'substantive due process.’ That doctrine is not 'a blanket protection against unjustifiable interferences with property. That way Lochner [ v. New York, 198 U.S. 45 , 25 S. Ct. 539 , 49 L. Ed. 937 (1905)] lies.’ Schroeder [ v. City of Chicago], 927 F.2d [957, 961 (7th Cir. 1991)].

Gosnell v. City of Troy, 59 F.3d 654, 658 (7th Cir. 1995) (Easterbrook, J.).

Sintra had the remedy of filing for a temporary restraining order enjoining the City from enforcing the HPO against it after July 15,1986. In R/L Assocs. v. City of Seattle, 113 Wn.2d 402, 411 , 780 P.2d 838 (1989), we affirmed the King County Superior Court’s judgment of contempt against the City of Seattle for continued enforcement of HPO-I after the King County Superior Court had invalidated the ordinance. Sintra did not pursue this remedy. I note without analysis the City might have been able to raise the defense of failure to mitigate damages as a result of Sintra’s unwillingness to seek an injunction against the City after July 15, 1986. Certainly Sintra’s failure to seek an injunction brings into question the financial viability of the business opportunity Sintra claims to have lost as a result of the City’s enforcement of HPO-II.

Our own constitutional counterpart to the Fifth Amendment and the Fourteenth Amendment is Wash. Const., art., I, § 3. We are not confronted here with an analysis based on it, so our decision is ultimately based on federal constitutional principles. City of Spokane v. Douglass, 115 Wn.2d 171, 176 , 795 P.2d 693 (1990).

"The term 'police power’ connotes the time-tested conceptional limit of public encroachment upon private interests. Except for the substitution of the familiar standard of 'reasonableness,’ this Court has generally refrained from announcing any specific criteria.” Goldblatt v. Hempstead, 369 U.S. 590, 594 , 82 S. Ct. 987 , 8 L. Ed. 2d 130 (1962). "It is easy to understand the principles upon which the police power doctrine is based, but difficult to define in language its limitations.” Conger, 116 Wash. at 35 .

This test for excessive land use regulation overruled sub silentio strongly-worded prior opinions to the contrary on the question of substantive due process. In Aetna Life Ins. Co. v. Washington Life & Disability Ins. Guar. Ass’n, 83 Wn.2d 523 , 520 P.2d 162 (1974), after reviewing the history of substantive due process cases in the United States Supreme Court, we said:

This unfortunate history of the due process clause in the United States Supreme Court presents to this court a sobering lesson in the necessity for judicial deference to the legislature in the exercise of its police power to accomplish economic regulation.

Were we to accept appellants’ invitation to void the act here on substantive due process grounds, we would set a precedent for embarking upon a course already traveled and finally rejected by the United States Supreme Court.

Id. at 534 (rejecting challenge to constitutionality of Washington Life and Disability Insurance Guaranty Act, RCW 48.32A). See also Farrell v. City of Seattle, 75 Wn.2d 540, 542-43 , 452 P.2d 965 (1969) (courts will not review zoning decisions except for manifest abuse of discretion involving arbitrary and capricious conduct).

The Orion court overlooked First English Evangelical Lutheran Church v. Los Angeles County, 482 U.S. 304 , 107 S. Ct. 2378 , 96 L. Ed. 2d 250 (1987), which overruled prior federal law limiting the remedy for regulatory takings to invalidation of the challenged ordinance, and permitted for the first time compensation for regulatory takings.

The inadequacy of describing regulatory takings as inverse condemnations is clear given the usual definition of inverse condemnation — "government actions [that] inadvertently or presumptuously usurp property interests that should have been properly acquired,” Richard L. Settle, Regulatory Taking Doctrine in Washington: Now You See It, Now You Don’t, 12 U. Puget Sound L. Rev. 339 , 344 (1989). Here, Sintra complained not about the taking of its land, but about the imposition of a demolition fee of $219,000.

The three dissenters in Sparks agreed with the Court’s use of the Dolan test, but simply reached the opposite result based on their interpretation of the facts. Sparks, 127 Wn.2d at 917 (Alexander, J., dissenting).

Sintra obtained a declaration from one of the jurors, who averred the jury found a taking by the City commencing on July 15, 1986, and continuing for four months. This declaration indicates the unfortunate confusion in the jury *698 room. See Clerk’s Papers at 282 (jury note requesting definition of "governmental taking”). The finding of the need for compensation of $47,809 after July 15, 1986, is completely inconsistent with the jury’s finding that nothing the City did after that date was a proximate cause of injury to Sintra for purposes of 42 U.S.C. § 1983 .

The trial court gave no credence to the juror affidavit because it went to the deliberative processes of the jury, which inhered in the verdict.

Sintra’s economist Moss testified as follows with respect to the debt service:

[F]or the mature project, the fully occupied project from 1989 onward, the net operating income is in the $140,000 a year range. . . .

Now, it would be lovely if we could stop there, but we can’t, because there is going to be — the major draining factor on your operating cash is going to be the debt service you have to pay on your refinancing. . . . We have to deduct from this net operating income the annual debt service . . . the result of that is, in the first year — and this is not at all unusual — in the first year we have a net operating loss.

Report of Proceedings at 1571. This uncontroverted testimony shows it was error to allow the jury to use any calculation of just compensation that did not include a subtraction for debt service.

The trial court entered no findings of fact or conclusions of law to support its oral opinion on the proper interest rate. In its oral decision on interest, the court said only with regard to the rate and its decision to compound the interest: "interest should accrue at the statutory rate from the date of April of 1987 through today. I do believe it is appropriate to have that interest compounded, again in order to achieve full and fair compensation of the claimants.” The court did not allude to what evidence it relied on to find the statutory rate appropriate, or what evidence it relied on to conclude compounding interest was necessary for full and fair compensation. Report of Proceedings, July 22, 1994, at 5. In the absence of findings of fact and conclusions of law, this Court cannot know if substantial evidence supports the trial court’s interest award.

Washington law on interest is unambiguous. Compound interest is never implied, and may be permitted only if there is express language in a statute or agreement providing for compound interest. Goodwin v. Northwestern Mut. Life Ins. Co., 196 Wash. 391 , 83 P.2d 231 (1938); Caruso v. Local 690, Int’l Bhd. of Teamsters, 50 Wn. App. 688, 689 , 749 P.2d 1304 (1988). All judgments under RCW 4.56.110 and RCW 19.52.020 accrue simple interest, Caruso, 50 Wn. App. at 689 ; even prejudgment interest awards are governed by these existing statutory provisions. Thomas v. Ruddell Lease-Sales, Inc., 43 Wn. App. 208, 216-17 , 716 P.2d 911 (1986). Compound interest is simply not favored under Washington law. Goodwin v. Northwestern Mut. Life Ins. Co., 196 Wash. 391, 401-02 , 83 P.2d 231 (1938); Xebek, Inc. v. Nickum & Spaulding Assocs., Inc., 43 Wn. App. 740, 743 , 718 P.2d 851 (1986).

“Statutes are presumed to be constitutional (In re Welfare of Harbert, 85 Wn.2d 719 , 538 P.2d 1212 (1975)); the party challenging the statute has the burden of proving unconstitutionality (Higher Educ. Assistance Auth. v. Graham, 84 Wn.2d 813 , 529 P.2d 1051 (1974)); and the challenging party must prove the statute is unconstitutional beyond a reasonable doubt. Aetna Life Ins. Co. v. Washington Life & Disability Ins. Guar. Ass’n, 83 Wn.2d 523 , 520 P.2d 162 (1974); Hoppe v. State, 78 Wn.2d 164 , 469 P.2d 909 (1970).” Sator v. Department of Revenue, 89 Wn.2d 338, 346 , 572 P.2d 1094 (1977).