# Manna Funding, LLC v. Kittitas County

> Court of Appeals of Washington · February 28, 2013

URL: https://www.frixlaw.com/law-library/cases/987411

## Case

- **Court:** Court of Appeals of Washington
- **Decided:** February 28, 2013
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

APR - q lDIJ

COURT

COURT OF APPEALS, DIVISION III, STATE OF

WASHINGTON

Manna Funding, LLC a Washington ) No. 30539-2-111
Limited Liability Company, Wild Horse )
Ranch, LLC, a Washington Limited )
Liability Company, Peregrine Skies, LLC, )
a Washington Limited Liability Company, )
Premier Property and Development )
Group, LLC, a Washington Limited )
Liability Company, Wild Rivers Crossing, )
LLC, a Washington Limited Liability ) ORDER DENYING MOTION
Company, ) FOR RECONSIDERATION
) AND AMENDING OPINION
Appellants, )
)
v. )
)
Kittitas County, a Washington municipal )
corporation I )
)
Respondent. )

The court has considered appellants' motion for reconsideration and is of the

opinion the motion should be denied. Therefore.

IT IS ORDERED the motion for reconsideration of this court's decision of

February 28,2013, is denied.

IT IS FURTHER ORDERED that the opinion shall be amended as follows:
No. 30539-2-111
Manna Funding v. Kittitas County

Footnote 8 at the end of the second full paragraph on page 21 shall be
deleted.

The second sentence in the second full paragraph on page 21 that begins

"Manna's failure" shall be amended to delete the words "invidious and."

DATED: April 9, 2013

PANEL: Judges Kulik, Korsmo. Siddoway

FOR THE COURT:

KEVIN M:"KORSMO
CHIEF JUDGE

2

FILED
Feb. 28,2013
In the Office of the Clerk of Coun
W A State Court of Appeals, Division II!

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE

Manna Funding, LLC a Washington ) No. 30539-2-111

Limited Liability Company, Wild Horse )

Ranch, LLC, a Washington Limited )

Liability Company, Peregrine Skies, LLC, )

a Washington Limited Liability Company, )

Premier Property and Development Group, )

LLC, a Washington Limited Liability )

Company, Wild Rivers Crossing, LLC, a )

Washington Limited Liability Company, )

)
Appellants, ) PUBLISHED OPINION
)
v. )
)
Kittitas County, a Washington municipal )
corporation, )
)
Respondent. )

KULI~ J. - The Kittitas County Board of County Commissioners (Board) twice

denied an application by Manna Funding, LLC 1 for site-specific rezoning of its rural

I There are five appellants with equal interests in the subject property: Manna
Funding, LLC; Wild Horse Ranch, LLC; Peregrine Skies, LLC; Premier Property and
Development Group, LLC; and Wild Rivers Crossing, LLC. All are collectively referred
to by the parties as Manna.
No. 30539-2-II1
Manna Funding v. Kittitas County

acreage near Roslyn. Manna sought relief under the Land Use Petition Act (LUPA),

chapter 36.70C RCW, and the superior court ordered Kittitas County (the County) to

grant the rezone. Manna additionally sued the County for a claimed violation of

RCW 64.40.020 and 42 U.S.C. § 1983, and for tortious interference with a business

expectancy/tortious delay. The court dismissed Manna's lawsuit on summary judgment

and awarded the County attorney fees. Manna appeals.

We affirm the summary judgment order based upon our conclusions that

(1) Manna's application for rezoning was not an "application for a permit" for purposes

of a cause of action under RCW 64.40.020; (2) Manna had no federally protected

property interest in its application for rezoning for purposes of a claim under 42 U.S.c.

§ 1983; and (3) Manna produced no evidence of a contractual relationship or business

expectancy necessary to sustain its claims for tortious interference with a business

expectancy or tortious delay. We vacate the attorney fee award, however, and remand to

the superior court with instructions to award the County its attorney fees attributable

solely to the RCW 64.40.020 claim.

FACTS

In October 2006, Manna submitted to Kittitas County its application for a site-

specific rezone from "Forest and Range 20" (FR-20) to "Rural 3" (R-3) of its 100.31

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acres of land lying north of the City of Roslyn and east of State Route 903. The land had

been zoned FR-20 in 1992. The requested rezone would allow a reduction in lot sizes

from 20 acres to 3 acres per residential unit. Manna made clear in its application that it

was currently seeking only a zoning reclassification. that no specific development

activities were currently proposed, and that any future development would comply with

the County's development regulations existing at the time ofthe application. A State

Environmental Policy Act (SEPA), chapter 43.21C RCW, mitigated determination of

nonsignificance was issued by County staff in December 2006.

After open record proceedings that included public testimony for and against

Manna's proposal, the County's Planning Commission adopted findings of fact and a

recommendation that the Board deny the rezone. The Board did so by Resolution 2007­

53 that was entered on May 15,2007. The Board found that Manna failed to prove the

rezone would contribute to the health, safety, and welfare of the surrounding zone, but did

not elaborate on that finding. The Board also determined that Manna's proposal failed to

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meet several necessary criteria for a rezone under Kittitas County Code (KCC)

17.98.020(7).2 The Board's findings reflected concerns that questionable property access

and steep slope hindering fire safety impacted the public health, safety, and welfare; that

the rezone would not have merit or value for the County or sub-area; that the steep slope

made the property unsuitable for reasonable development in general conformance with R­

3 zoning standards; and, that the proposed rezone would be materially detrimental to the

nearby urban forest zone and possibly to the historic city of Roslyn. The Board gave no

other supporting details or reasons for its findings.

2 The criteria in KCC 17.98.020(7) are:
a. The proposed amendment is compatible with the comprehensive plan.
b. The proposed amendment bears a substantial relation to the public health,
safety or welfare.
c. The proposed amendment has merit and value for Kittitas County or a sub­
area of the county.
d. The proposed amendment is appropriate because of changed circumstances
or because of a need for additional property in the proposed zone or because
the proposed zone is appropriate for reasonable development of the subject
property.
e. The subject property is suitable for development in general conformance
with zoning standards for the proposed zone.
f. The proposed amendment will not be materially detrimental to the use of
properties in the immediate vicinity of the subject property.
g. The proposed changes in use ofthe subject property shall not adversely
impact irrigation water deliveries to other properties.
h. The proposed amendment is in full compliance with chapter 17.13 KCC,
Transfer of Development Rights.
Subsection h was added by Ordinance 2010-006 in 2010 and is not applicable in this case.

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On June 5,2007, Manna filed a LUPA petition requesting the superior court to

overturn Resolution 2007-53. The petition also incorporated a complaint for damages

under RCW 64.40.020 and 42 U.S.C. § 1983. After determining that the Board failed to

adequately review the record and make meaningful findings of fact from which its

conclusions could be drawn, the superior court reversed the Board's decision, vacated

Resolution 2007-53, and remanded the matter for new hearings before the Planning

Commission and Board. The court specifically instructed the Board to conduct on-the­

record discussions to illuminate its decision-making, and to make detailed findings of fact

to support its conclusions. The court elaborated:

Any finding of fact and conclusion of law set forth in the resolution should
reflect just what the Board has reviewed in determihing its findings.
Moreover, the findings should be based upon the evidence presented, not on
conclusions that the applicant did not meet rezone criteria. For instance, if
the Board were to make an ultimate finding that access was questionable, it
should make particular findings based upon the record to demonstrate why
the access was questionable .... Similarly, making a bald finding that the
petitioners did not meet their burden of proof to demonstrate the rezone
positively affected the health, safety, morals and general welfare of the
county, without making findings of fact as to why the Board concludes it
did not meet the burden does not help the court in its judicial review of the
proceedings.

Clerk's Papers (CP) at 534 n.18.

After a new public hearing and findings by the Planning Commission, the Board

entered Resolution 2008-104 on June 17,2008, again denying Manna's application. The

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No. 30539-2-III
Manna Funding v. Kittitas County

Board found Manna failed to show that the proposed R-3 zoning would contribute to the

health. safety, and welfare of the surrounding zone. The Board further found with respect

to the KCC rezone criteria that (1) Manna's proposed amendment "would not change

access to the property" and therefore bears no relation to the health, safety, and welfare,

(2) Manna failed to prove the rezone had merit and value for Kittitas County or a sub-area

of the County, (3) "there is no warranted change in circumstances ... [and] further ... the

analysis in the record is not sufficient to determine there is a need for additional property

in the proposed zone," and (4) "information in the record regarding the commercial forest

zone to the north and the Urban Forest Zone to the south would make a Rural-3 zone

detrimental to the existing zones." CP at 790.

On July 8,2008, Manna filed a second LUPA petition, seeking to overturn

Resolution 2008-104. The petition likewise included a complaint for damages under

RCW 64.40.020 and 42 U.S.C. § 1983. In a memorandum decision issued on February 5,

2009, the court observed that the Board failed to heed its instructions to include detailed

findings to explain the reasons for its decision, and that its findings were again too

conclusory for review. The court ruled that substantial evidence conclusively established

Manna had met its burden on all of the KCC rezoning criteria, and that the R-3 zone

comports with the comprehensive plan and implements its goals and policies relating to

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rural lands. Consequently, the rezone bears a substantial relationship to the public
3
welfare. The court thus reversed the Board's decision, vacated Resolution 2008-104,

and remanded the matter to the Board with instructions to approve Manna's requested

rezone,4 The County did not appeal. On February 18,2009, the Board entered an

ordinance approving Manna's requested R-3 zone change.

Manna subsequently filed an amended complaint on August 11, 2011, adding .

claims for tortious interference with a business expectancy and tortious delay, Manna

filed a motion for partial summary judgment as to RCW 64.40.020 liability of the County

for claimed arbitrary and unlawful delay by the Board, while reserving damages issues for

discovery and a trial. The County filed a cross motion for summary judgment to dismiss

Manna's entire lawsuit on grounds of absence of standing, limitations, ripeness, and

3 The court cited to Henderson v, Kittitas County, 124 Wn, App. 747,100 P.3d 842
(2004) (rezone that furthers the goals of the county's comprehensive plan bears a
substantial relationship to the public health, safety, morals, or general welfare) .
. 4 While not expressed in its written findings, the Board's limited discussions on the
record revealed continued concern about access to the property due to steepness/safety
issues, and perceived lack of merit or value to the County because Manna had no project
pending and it was only speculative whether the assessed value of the property may
increase. The court rejected these considerations in its memorandum decision. The court
ruled there was no basis for a finding of no relationship to the health, safety, and welfare
of the County because road access/engineering issues are not proper considerations for
zoning approval. but pertain only to specific development/permitting requirements. The
court also found Manna provided evidence that the rezone would eventually add to the
County's tax base. thus demonstrating merit and value for the County.

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No. 30539-2-II1
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failure to satisfY the elements of its various claims. The court denied Manna's motion

and granted the County's motion. The court awarded the County $21,496.50 in attorney

fees as prevailing party under RCW 64.40.020. Manna appeals.

ANALYSIS

This court reviews an order of summary judgment de novo. Hisle v. Todd Pac.

Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004). Summary judgment is

appropriate when there is "no genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter oflaw." CR 56(c). "A material fact is of such

a nature that it affects the outcome of the litigation." Ruffv. County ofKing, 125 Wn.2d

697,703,887 P.2d 886 (1995). We consider the facts and inferences from the facts in the

light most favorable to the nonmoving party. Jones v. Allstate Ins. Co., 146 Wn.2d 291,

300, 45 P.3d 1068 (2002).

A defendant moving for summary judgment may meet the initial burden by

pointing out the absence of evidence to support the nonmoving party's case. Young v.

Key Pharms., Inc., 112 Wn.2d 216, 225 n.l, 770 P.2d 182 (1989) (quoting Celotex Corp.

v. Catrett, 477 U.S. 317,325,106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). "If the moving

party is a defendant and meets the initial showing, then the inquiry shifts to the party with

the burden of proof at trial, the plaintiff." Id. at 225 (footnote omitted). The facts set

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forth must be specific, detailed, and not speculative or conclusory. Sanders v. Woods.

121 Wn. App. 593, 600, 89 P.3d 312 (2004). If, at this point, the plaintiff'"fails to make

a showing sufficient to establish the existence of an element essential to that party's case,

and on which that party will bear the burden of proof at trial', then the trial court should

grant the motion." Young, 112 Wn.2d at 225 (quoting Celotex, 477 U.S. at 322).

Damages Claim under RCW 64.40.020. The issue is whether a site-specific rezone

application is an "application for a permit" for purposes of a cause of action under chapter

64.40 RCW.

RCW 64.40.020(1) provides in pertinent part:

Owners of a property interest who have filed an application for a permit
have an action for damages to obtain relief from acts ofan agency which
are arbitrary, capricious, unlawful, or exceed lawful authority.

(Emphasis added.)

The definitions section in RCW 64.40.010 includes the following:

(2) "Permit" means any governmental approval required by law
before an owner of a property interest may improve, sell, transfer, or
otherwise put real property to use.

(5) "Regulation" means any ordinance, resolution, or other rule or
regulation adopted pursuant to the authority provided by state law. which
imposes or alters restrictions, limitations, or conditions on the use of real
. property.
(6) "Act" means a final decision by an agency which places
requirements, limitations, or conditions upon the use of real property in

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No.30539-2-III
Manna Funding v. Kittitas County

excess of those allowed by applicable regulations in effect on the date an
application for a permit is filed.

Manna broadly contends that Resolutions 2007-53 and 2008-104 were "acts" on an

"application for a penni!" for purposes of RCW 64.40.020( 1) because they were final

decisions by the County that placed limitations upon the use of Manna's real property.

Manna then argues that a site-specific rezone application plainly falls within the

definition of "permit" because it is a "governmental approval required by law" before an

owner of a property interest may "put real property to use." Manna reasons that a site-

specific rezone application involves quasi-judicial decisionmaking, thus subjecting an

agency to liability under RCW 64.40.020. Lutheran Day Care v. Snohomish County, 119

Wn.2d 91,103-05,111,829 P.2d 746 (1992). This is in contrast to area-wide rezones,

which are legislative in nature and subject to a different review procedure under the

Growth Management Act, chapter 36.70A RCW. Woods v. Kittitas County, 162 Wn.2d

597,608, 174 P.3d 25 (2007). The definition of "project permit" under LUPA 5 is

5 RCW 36.70C.020(2) provides in pertinent part:

"Land use decision" means a final determination by a local jurisdiction's body or

officer with the highest level of authority to make the determination, including

those with authority to hear appeals. on:

(a) An application for a project permit or other governmental approval
required by law before real property may be improved, developed, modified, sold,
transferred, or used, but ... excluding applications for legislative approvals such
as area-wide rezones and annexations.

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No.30539-2-II1
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virtually identical to the definition of "permit" under RCW 64.40.010(2), as shown by

case law establishing that a site-specific rezone is a '"project permit application" subject to

LUPA review. Wenatchee Sportsmen Ass 'n v. Chelan County, 141 Wn.2d 169, 181 n.2, 4

P.3d 123 (2000); Woods, 162 Wn.2d at 608. Manna thus reasons that to hold that a site-

specific rezone meets the definition of "permit" under L UPA but not the virtually

identical definition in RCW 64.40.010(2) would defy plain meaning. And consistent with

this reasoning, the term "permit" for purposes of a cause of action under RCW 64.40.020

is not strictly limited to building permits, grading permits and the like, but pertains to a

broad range of approval and decisions affecting use of property-including rezone

decisions.

The County contends that RCW 64.40.020(1), by its clear terms, allows recovery

of damages only to a property owner who has applied for a permit to develop the

property. Since Manna's application was strictly for a rezone, it lacks standing to bring a

claim under RCW 64.40.020(1). Westway Constr., Inc. v. Benton County, 136 Wn. App.

859, 866, 151 P .3d 1005 (2006).

No Washington case is cited or found that addresses whether a site-specific rezone

application is an "application for a permit" under RCW 64.40.020( 1). Statutory

interpretation is a question of law reviewed de novo. W. Telepage, Inc. v. City o/Tacoma

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No.30539-2-III
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Dep 't ofFin., 140 Wn.2d 599, 607, 998 P.2d 884 (2000). Courts apply general principles

of statutory construction in determining the meaning of statutory language. If the

language of a statute is plain and unambiguous, we derive its meaning from the language

of the statute itself. Harmon v. Dep 't ofSoc. & Health Servs., 134 Wn.2d 523, 530, 951

P.2d 770 (1998). Statutes are interpreted so that all language is given effect and no

portion is rendered meaningless or superfluous. Whatcom County v. City ofBellingham,

128 Wn.2d 537, 546, 909 P.2d 1303 (1996). A court "should interpret the meaning of

terms in the context of the statute as a whole and consistently with the intent of the

legislature." One Pac. Towers Homeowners' Ass 'n v. HAL Real Estate Invs., Inc., 148

Wn.2d 319, 330, 61 PJd 1094 (2002). If the language is susceptible to more than one

reasonable interpretation, an ambiguity exists and courts attempt to give effect to the

intent and purpose of the legislature. Harmon, 134 Wn.2d at 530. If the intent ofa

statute is not clear, the court may resort to statutory construction, including a

consideration of legislative history. Cherr.v \'. Mun. ofMetro. Seattle, 116 Wn.2d 794,

799,808 P.2d 746 (1991); Harmon, 134 Wn.2d at 530 (to discern legislature's intent. a

court may look to any legislative history materials that are probative of that intent);

Lutheran Da:v Care. 119 Wn.2d at 104-05 (same).

RCW 64.40.020(1) is clear that only an owner with an interest in the property who

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has filed an "application for a permit" may sue for damages under the statute. Westway

Constr., 136 Wn. App. at 866 (plaintifflacked standing under RCW 64.40.020 because

contractor who applied for permit had no property interest and person with property

interest did not apply for permit). "Standing challenges are jurisdictional and may be

raised at any time." Stevens County v. E. Wash. Growth Mgmt. Hearings Bd., 163 Wn.

App. 680, 686, 262 P.3d 507 (2011), review denied, 173 Wn.2d 1019 (2012). While

Manna does have the standing of an interested property owner under RCW 64.40.020(1),

the dispositive question is whether it also has the permit applicant status necessary to sue

under the statute.

RCW 64.40.020(1) is also clear that a "permit" applicant's cause of action for

damages is "to obtain relief from acts of an agency." (Emphasis added.) A county is an

agency for purposes of the statute. RCW 64.40.010(1); Lutheran Day Care, 119 Wn.2d

at 101. Under RCW 64.40.010(6), an "act" is defined as that which places "requirements,

limitations, or conditions upon the use of real property in excess ofthose allowed by

applicable regulations in effect on the date an application for a permit is filed. "

(Emphasis added.) Manna does not address the above-italicized language. The

legislative history, however. sheds light on this already-clear language as pertains to the

particular question whether a rezone application is "an application for a permit" for

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purposes ofRCW 64.40.020(1).

Chapter 64.40 RCW was passed by the legislature in 1982. LAWS OF 1982, ch.

232. The bill originated as H.B. 1006 and became Substitute H.B. 1006. Viewing

legislative history, the bill file includes a document entitled "Bill Analysis" for the House

Committee on Local Government. The document explains the bill's intended scope:

Acts of a public entity which are subject to a lawsuit under the bill include
requirements or conditions placed upon land that are in excess of the zoning·
and other restrictions upon the use of the land in effect at the time an
application fora "permit["J is made. A "permit" is defined as governmental
approval required by law before a property owner may improve, sell or
otherwise use property.

HOUSE COMM. ON LOCAL GOVERNMENT, H.B. ANALYSIS on H.B. 1006, at 2, 47th

Leg., Reg. Sess. (Wash. Jan. 25,1982) (on file with Wash. State Archives); see

also HOUSE COMM. ON LOCAL GOVERNMENT, SUMMARY on H.B. 1006 ("Act" is

defined as when public entity imposes conditions or limitations which are more

stringent than those contained in adopted regulations) (on file with Wash. State

Archives); SENATE COMM. ON JUDICIARY, SYNOPSIS on Substitute H.B. 1006, at 1

(Wash. Feb. 23,1982) (on file with Wash. State Archives).6

6 The Senate Journal contains another pertinent point of inquiry about the bill's
intent. Senator Metcalf queried: ", Senator Hemstad, this does, then, make it substantially
easier to develop property? This is a development bill, this is a real estate development
bill or is it, make it more difficult or more easy to develop propertyT " 1 SENATE

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More pointedly, the House Committee file and Senate Committee file also each

include a "Discussion of Issues" document that contains the following question and

answer:

3. Will HB 1006 create a cause of action if an application for a zone
change is denied?
[Answer] No. HB 1006 does not apply to zone changes. It only creates a cause of
action when the allowable use under applicable regulations is denied or restricted
without just cause.

Discussion of Issues, H.B. 1006, 47th Leg., Reg. Sess., at 1 (Wash. 1982) (on file with

Wash. State Archives).

In addition, a bill summary from the Washington Association.ofRealtors

contained in the Senate Committee file sheds further light on the object of legislative

remedy-government attempts to "downzone" property following receipt of permit

applications. The Realtors summary explains that a typical example of the problem was a

developer who filed a legal action claiming an arbitrary and capricious decision by the

county for approving his plat, but with one-third less lots than allowed by zoning. Two

years later, the court overturned the lower density so the plat was finally approved as

JOURNAL, 47th Leg., Reg. Sess., at 1449 (Wash. 1982). Senator Hemstad responded:
'" What it is doing is providing to a party with a grievance for arbitrary, capricious, or
unlawful conduct by local officials in failure on a timely basis to authorize the
development of the property to recover damages for that period of time in which the
property was improperly withheld from development.'" Id.

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originally requested with full density, but current law (pre-chapter 64.40 RCW) did not

give the property owner any damages relief. Wash. Ass'n of Realtors, No.1 Priority for

1982, Substitute H.B. 1006, Section 8 (Wash. Feb. 12, 1982) (located in Senate

Committee on Judiciary file on H.B. 1006) (on file with Wash. State Archives).

Manna's situation is just the opposite because its application was to upzone its

property from FR-20 to R-3. The County did not impose restrictions of less than one

residence for every 20 acres when it denied Manna's requested R-3 rezone. This helps

further illustrate why the County's resolutions denying the rezone were not "acts" as

defined in RCW 64.40.010(6) because its challenged decisions did not place any hew

requirements, limitations, or conditions upon the use of real property in excess of those

allowed Manna under then-current FR-20 zoning. Critically, Manna's application was

strictly for a rezone only and not for any type of development permit.

We conclude that when the plain language of the statute pertaining to "acts" of an

agency for which an "applicant" may sue is viewed in light of the legislative history, an

application, such as Manna's, that solely requests the rezoning o/property is not an

"application for a permit" under RCW 64.40.020(1). See Westmark Dev. Corp. v. City 0/

Burien, 140 Wn. App. 540, 548, 166 P.3d 813 (2007) (purpose of chapter 64.40 RCW is

to '" provide a swift remedy for property damage caused by govern~ental agency

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No. 30539-2-II1
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action''') (quoting Wilson v. City o/Seattle, 122 Wn.2d 814,825,863 P.2d 1336 (1993)).

While Manna correctly argues that a court determining legislative intent may also

look to other statutes dealing with the same subject matter, see e.g., Harmon, 134 Wn.2d

at 530, such inquiry is not relevant here. Manna's analogy to RCW 36.70C.020(2)(a) and

case authority from Wenatchee Sportsmen and Woods that a site-specific rezone is a

"project pennit application" under LUPA is not controlling. Those cases did not involve

a claim under RCW 64.40.020. And Manna was able to receive its available remedy

under LUPA when the court ordered the County to approve the rezone and the County did

so by ordinance. See RCW 36.70C.030(1)(c) (distinguishing land use petition from trial

on claims for monetary damages and compensation).

We affirm the trial court's summary judgment dismissal of Manna's

RCW 64.40.020 claim on the sole basis that Manna did not file an "application for a

permit" giving rise to a cause of action for any "act" of the County under the statute. See

Young, 112 Wn.2d at 225 (failure ofproof on an essential element renders immaterial all

other facts as to claim) (quoting Celotex, 477 U.S. at 322-23)~ Boyce v. West, 71 Wn.

App. 657, 665, 862 P.2d 592 (1993) (same). Whether Manna's suit was barred for failure

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No. 30539-2-II1
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to exhaust administrative remedies under RCW 64.40.030 is irrelevant in this situation. 7

42 u.s.c. § 1983 Due Process Claim. 42 U.S.c. § 1983 provides: "Every person

who, under color of any statute, ordinance, regulation ... of any State ... subjects, or

causes to be subjected, any citizen of the United States ..' . to the deprivation of any

rights, privileges, or immunities secured by the Constitution and laws, shall be liable to

the party injured in an action at law, suit in equity, or other proper proceeding for

redress."

To establish a prima facie due process violation under § 1983, the plaintiff must

show that the defendant deprived the plaintiff of a constitutionally protected property

right. Mission Springs, Inc. v. City o/Spokane, 134 Wn.2d 947, 962, 954 P.2d 250

(1998); Robinson v. City a/Seattle, 119 Wn.2d 34, 58, 830 P.2d 318 (1992); see Nieshe v.

Concrete Sch. Dist., 129 Wn. App. 632, 641-42, 127 P.3d 713 (2005) (fact that decision-

making entity may have deviated from its procedures, or acted arbitrarily, is not a prima

facie deprivation of constitutional due process) (citing Williams v. City 0/ Seattle, 607 F.
Supp. 714,718-19 (W.D. Wash. 1985)). "Property interests are not created by the

7We also do not decide whether the Board acted arbitrarily, capriciously, or
unlawfully in its denials of Manna's rezone application. We note with respect to damages
that Manna presented no evidence of compensable damages under RCW 64.40.010(4) in
response to the County's motion for summary judgment so as to meet its summary
judgment burden of prima facie establishing each element ofRCW 64.40.020.

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constitution but are reasonable expectations of entitlement derived from independent

sources such as state law." Mission Springs, 134 Wn.2d at 962 n.15 (citing Ed. of

Regents v. Roth, 408 U.S. 564, 577, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972)). '" A

protected property interest exists if there is a "legitimate claim of entitlement" to a

specific benefit.'" Nieshe, 129 Wn. App. at 641-42 (quoting Goodisman v. Lytle, 724

F .2d 818, 820 (9th Cir. 1984)).

Consistent with these principles, the law is well settled that a landowner has a

vested right to develop land under the zoning ordinances in effect at the time the permit

application is submitted. See Weyerhaeusel: v. Pierce County, 95 Wn. App. 883, 890, 976

P.2d 1279 (1999); Hale v. Island County, 88 Wn. App. 764, 771, 946 P.2d 1192 (1997).

This is well illustrated, for example, in Mission Springs, 134 Wn.2d at 962 (developer

who met ordinance requirements had constitutionally cognizable right to grading permit),

and Cox v. City ofLynnwood, 72 Wn. App, 1,863 P.2d 578 (1993) (applicant meeting

code requirements for boundary line adjustment entitled to § 1983 damages for city's

arbitrary and capricious denial). Cf Kelly v. Chelan County, 157 Wn. App. 417, 427-28,

237 P .3d 346 (2010) (development rights to project did not vest under the regulations in

effect at time of application for conditional use permit).

19

No. 30539-2-II1
Manna Funding v. Kittitas County

Manna contends that its interest in obtaining a valid and lawful decision on its

rezone application is a protected "property interest" under 42 U.S.C. § 1983. Manna

again theorizes that because a site-specific rezone is a land use decision (project permit

application under LUPA). it would also defy logic to not provide rezone applicants the

same substantive due process protections of § 1983 that Lutheran Day Care, 119 Wn.2d at

125, confirms are afforded other applicants for conditional use permits and building

permits. We reject Manna's arguments.

The dispositive principle, as urged by the County, is that "vested rights generally

do not apply to rezoning applications because at that point no decision has been

rendered." Hale, 88 Wn. App. at 771 (citing Teed v. King County, 36 Wn. App. 63 644,

677 P.2d 179 (1984); 6 WASHINGTON STATEBARAsS'N, REAL PROPERTY DESKBOOK

§ 97.8(2)(g) at 97-46 (3d ed. 1996)); see also Braun v. Ann Arbor Charter Township, 519

FJd 564, 573-74 (6th Cir. 2008) (plaintifflandowners had no constitutionally protected

property interest in application for future rezoned use of farm property for a trailer park):

Camastro v. City o/Wheeling, 49 F. Supp. 2d 500,505-06 (N.D. W.Va. 1998) (plaintiff

had no protected property interest for 42 U.S.C. § 1983 due process purposes in obtaining

zoning variance for car wash building).

20

No.30539-2-III
Manna Funding v. Kittitas County

We conclude that Manna had no vested/constitutionally protected property right

pertinent to R-3 zoning prior to the superior court's February 5, 2009 order directing the

County to grant its application. Until that time, its constitutionally protected property

interest was under existing FR-20 zoning for which no violation is claimed and nothing

was lost. Manna cites no authority that there is a federally protected property interest

under § 1983 in obtaining a decision on a mere application to rezone ("upzone") property.

Moreover, the County promptly issued the rezone ordinance within two weeks of the trial

court's order.

Accordingly, we uphold the trial court's summary judgment dismissal of Manna's

§ 1983 claim on the basis there is no evidence that the County deprived Manna of a

federally protected property right. Manna's failure of proof on this essential element

renders immaterial the facts relating to ripeness issues and to Manna's claim that the

Board denied it substantive due process by acting in arbitrary or invidious and irrational

fashion in passing on its rezone application. Young, 112 Wn.2d at 225; Boyce, 71 Wn.

App. at 665. 8

8In any event, we have carefully reviewed the record of the proceedings before the
Planning Commission and Board. As a matter of law, we find no conduct approaching
the animus necessary to sustain a § 1983 action. See Sintra, Inc. v. City ofSeattle, 119
Wn.2d 1,23.829 P.2d 765 (1992) (applying "invidious or irrational" standard to land use
decisions in Washington); County ofSacramento v. Lewis, 523 U.S. 833, 846-47, 118 S.

21

No.30539-2-II1
Manna Funding v. Kittitas County

Tortious Intelference with Business Expectancy/Delay. A claim for tortious

interference with a business expectancy requires five elements: (1) the existence of a

valid contractual relationship or business expectancy, (2) that defendants had knowledge

of that relationship, (3) an intentional interference inducing or causing a breach or

termination of the relationship or expectancy, (4) that defendants interfered for an

improper purpose or used improper means. and (5) resultant damage. Leingang v. Pierce

County Med. Bur., Inc., 131 Wn.2d 133, 157,930 P.2d 288 (1997). Arbitrary delay is one

improper means of interfering with a business expectancy. Pleas v. City ofSeattle, 112

Wn.2d 794, 805, 774 P.2d 1158 (1989); Westmark Dev. Corp., 140 Wn. App. at 560.

Citing to Westmark. Manna applies these five elements to both its tortious interference

and tortious delay claims. Br. of Appellant at 46.

A valid "business expectancy" includes any prospective contractual or business

relationship that would be of pecuniary value. Newton Ins. Agency & Brokerage, Inc. v.

Caledonian Ins. Group, Inc., 114 Wn. App. 151, 158,52 P.3d 30 (2002) (citing

Ct. 1708, 140 L. Ed. 2d 1043 (1998) (applying "shocks the conscience" standard to
§ 1983 cases not involving claimed denial of a fundamental right); Shanks v. Dressel, 540
F .3d 1082, 1088-89 (9th Cir. 2008) (same): see also Mongeau v. City ofMarlborough,
492 F.3d 14,17-18 (lstCir. 2007): Eichenlaub v. Township ofIndiana. 385 F.3d 274.
285-86 (3rd Cir. 2004); United Artists Theatre Circuit, Inc. v. Township of Warrington,
316 F.3d 392,399,402 (3rd Cir. 2003); Licari v. Ferruzzi, 22 F.3d 344,347 (1st Cir.
1994).

22
No. 30539-2-II1
Manna Funding v. Kittitas County

RESTATEMENT (SECOND) OF TORTS § 766B, cmt. c (1979). "All that is needed is a

relationship between parties contemplating a contract, with at least a reasonable

expectation of fruition. And this relationship must be known, or reasonably apparent, to

the interferor." Scymanski v. Dufault, 80 Wn.2d 77,84-85,491 P.2d 1050 (1971).

Manna contends that summary judgment dismissal was improper because it

established a prima facie case on all five elements: (1) the business expectancy was the

rezone approval once Manna met all of the KCC 17.98.020(7) criteria; (2) Kittitas County

had full knowledge of the relationship with Manna through its rezone application and first

LUPA petition; (3) if not after Resolution 2007-53. then certainly after Resolution 2008­

104, the County had intentionally interfered with Manna's expectation of a lawful rezone

decision; (4) the County had absolutely no legitimate purpose or interest in twice issuing

unlawful and virtually unreviewable decisions that lacked any support in the record; and

(5) Manna incurred delay damages from the County's action in an amount to be proven

through pretrial discovery. We find no error.

Manna made clear in its rezone application that it was currently seeking only a

zoning reclassification and that no specific development activities were currently

proposed. Manna identified no prospective business relationship with any party and it

repeatedly insisted in both its application and contemporaneous environmental checklist

23

No.30539-2-II1
Manna Funding v. Kittitas County

that the rezone was unrelated to any development project. Manna's manager, Tiffany

Doty, verified these facts in her deposition testimony submitted with the County's

summary judgment motion. She testified Manna was only seeking rezone approval to

allow for future creation of three-acre lots, and that between the time of the first rezone

denial in May 2007 and the rezone approval in February 2009, Manna had no written

contract or agreement of any kind with any developer. Thus, no agreement or business

relationship was terminated or severed because of the Board's denial of the rezone. Ms.

Doty also said that although Manna had stayed in touch with some potential investors and

developers prior to the rezone denial, nothing occurred with respect to the property after

the rezone was approved. Manna had not applied for a subdivision of its property into

three-acre lots, nor did it apply for any building or development permits on the property.

Manna provided no contrary evidence in its response to the County's summary judgment

motion.

Thus, as argued by the County, Manna failed to produce evidence of the first two

elements-existence (and knowledge by the County) of a valid contractual relationship or

business expectancy with which the County could interfere or delay. This renders all

other facts immaterial with respect to the additional elements requiring the County's

intentional interference, improper purpose or improper means. and proximate causation of

24

No.30539-2-II1
Manna Funding v. Kittitas County

damages (of which Manna shows none in any event). Young, 112 Wn.2d at 225; Boyce,

71 Wn. App. at 665.

The case Manna primarily relies on, Pleas v. City ofSeattle, is distinguishable.

There, the City was held liable for intentional interference with developer Parkridge's

business expectancy because it acted with an improper purpose (political motives and

favoritism to a neighborhood group)~ and by improper means (arbitrary delay) in refusing

to grant necessary environmental and building permits for a high-rise apartment project

that was allowed under existing zoning regulations. Pleas, 112 Wn.2d at 796. Part of the

delay was also attributable to the city council granting an opposing neighborhood group's

"downzone" application (filed after Parkridge applied for permits) that the court ruled

was "unreasonable, arbitrary and capricious and therefore void." Id. at 797. Due to the

delays, Parkridge incurred ascertainable damages for lost profits, Joss of favorable

financing, increased construction costs due to inflation, and the costs of an environmental

impact statement discarded by the City. Jd. at 799.

Here, in contrast to Pleas where the developer applied for specific project permits

allowed under existing zoning, Manna only applied for a rezone to possibly facilitate

future, but unspecified, development plans. Unlike the developer in Pleas who incurred

actual damages, Manna did not identify any business expectancy of pecuniary value-no

25

No. 30539-2-III
Manna Funding v. Kittitas County

business relationship, contract, or development project. All the County knew was that

Manna wanted it to approve a rezone. On these facts, only after Manna received its R-3

rezone in February 2009 could it stand in similar shoes to the developer in Pleas. But the

Board acted expeditiously-within two weeks of the court's order-to enact the

ordinance granting Manna's rezone. Since there was no identified contract, permit, or

contemplated development activity (either pre- or post-ordinance), the County did nothing

to interfere with or delay any business expectancy.

Manna's other cited interference with a business expectancy cases are likewise

distinguishable because they involved delay of identified projects. Westmark Dev. Corp.,

140 Wn. App. at 558-63 (city interfered with business expectancy by acting with

improper purpose in singling out developer's apartment project and using improper means

by unreasonably delaying original permit decision); City ofSeattle v. Blume, 134 Wn.2d

243,947 P.2d 223 (1997) (city delayed processing of developer's master use permit for

office building/research facility designed in accord with current zoning regulations). Two

other cases cited by Manna are inapposite because they are not interference with

business expectancy cases. Wilson, 122 Wn.2d at 823 (claim under RCW 64.40.020):

Cal([as v. Dep '1 ofConstr. & Land Use, 129 Wn. App. 579, 120 P.3d 110 (2005) (claims

under 42 U.S.c. § 1983 and RCW 64.40.020).

26
No. 30539-2-III
Manna Funding v. Kittitas County

We conclude that the trial court did not err in granting summary judgment

dismissal of Manna's tortious interference and tortious delay claims.

Attorney Fees. Attorney fees may be awarded when authorized by a contract, a

statute, or a recognized ground in equity. Fisher Props., Inc. v. Arden-Mayfair, Inc., 106

Wn.2d 826. 849-50. 726 P.2d 8 (1986). RCW 64.40.020(2) provides: "The prevailing

party in an action brought pursuant to this chapter may be entitled to reasonable costs and

attorney's fees."

After prevailing on summary judgment, the County filed a motion and

accompanying affidavit of counsel (with billing time sheets) requesting an award of

$21,496.50 in attorney fees and $1,665.99 in costs. The County's lawyer did not attempt

to segregate fees attributable solely to the RCW 64.40.020 claim. Manna argued that the

County was required to do so and that any fee award must be limited to those the County

could actually demonstrate were related to the RCW 64.40.020 claim. The County's

lav.ryer disagreed but suggested if fee segregation were appropriate, perhaps 10 percent to

20 percent of the time billed would fall outside of the RCW 64.40.020 claim.

The trial court's order awarding attorney fees states in its entirety:

Kittitas County, as the prevailing party under RCW 64.40.020, is awarded

judgment for $21,496.50 in attorney fees. The request for costs is denied

because the costs requested do not qualify as court costs.

27
No. 30539-2-III
Manna Funding v. Kittitas County

CP at 1531.

Manna again contends the trial court erred in failing to require the County to

segregate its fees attributable only to the RCW 64.40.020 claim. We agree.

"If attorney fees are recoverable for only some of a party's claims, the award must

properly reflect a segregation of the time spent on issues for which fees are authorized

from time spent on other issues." Mayer v. City o.fSeattle, 102 Wn. App. 66, 79~80, 10

P.3d 408 (2000); accord Dice v. City ofMontesano, 131 Wn. App. 675,690, 128 P.3d

1253 (2006). A court is not, however, required "to artificially segregate time ... where

the claims all relate to the same fact pattern, but allege.different bases for recovery."

Ethridge v. Hwang, 105 Wn. App. 447, 461, 20 P.3d 958 (2001) (citing Blair v. Wash.

State Univ., 108 Wn.2d 558, 572, 740 P.2d 1379 (1987)). The party claiming an award of

attorney fees has the burden of segregating its lawyer's time. Loeffelholz v. Citizens for

Leaders With Ethics & Accountability Now, 119 Wn. App. 665, 690, 82 P.3d 1199

(2004).

Although our review of an attorney fee award is for abuse of discretion, the trial

court must nevertheless calculate the fees using the lodestar method of analysis, and it

must enter findings of fact and conclusions of law supporting its decision to award fees.

Mahler v. Szucs, 135 Wn.2d 398, 434-35, 957 P.2d 632 (1998). Such a record is

28
No. 30539-2-III
Manna Funding v. Kittitas County

necessary for an appellate court to review the award. Bentzen v. Demmons, 68 Wn. App.

339,350,842 P.2d 1015 (1993). When a trial court fails to create the appropriate record,

the remedy is to remand for entry of proper findings and conclusions. Mahler, 135 Wn.2d

at 435.

Such is the case here. The court did not enter any findings. Nor did it require the

County to segregate out its lawyer's time unrelated to the RCW 64.40.020 claim. We

observe that while the County's billing entries are typically general in nature, some

entries do specifY work on non-RCW 64.40.020 claims.

Consistent with the above-cited cases, we vacate the attorney fee award and

remand for the superior court to determine the appropriate amount of attorney fees to be

awarded to the County as prevailing party under RCW 64.40.020.

Holding. The summary judgment order dismissing Manna's lawsuit is affirmed.

The attorney fee award is vacated and remanded consistent with this opinion.

Kulik, J.

WE CONCUR:

I4orsmo, C.J.

29

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/987411. Public record. Not legal advice.