# FILE IN CLERKS OFFICE IUPREME COURT, STATE OF WASHINGTON**~-** 

### !0 2013



### IN THE SUPREME COURT OF THE STATE OF WASHINGTON
COSTMANAGEMENT SERVICES, INC. Respondent,


### v. CITY OF LAKEWOOD, a municipal corporation, and CHOIHALLADAY, Assistant CityManager for Finance, Petitioners.
COSTMANAGEMENT SERVICES, INC. Respondent,
v. CITY OF LAKEWOOD, a municipal corporation, Defendant. NO. 87964-8
ENBANC
Filed 

# ·ocT 1 o zo13

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GORDON McCLOUD, J.-For many years, Cost Management Services Inc. (CMS) made a certain tax payment to the city ofLakewood. In late 2008,CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

upon examining the relevant regulations, CMS decided that it did not in fact owe the taxthatithadbeenpaying. InNovember 2008, it stoppedpaying the tax and it submitted a claim to Lakewood for a refund oftaxes it had previously paid from 2004 to September 2008. Lakewood did not respond to the request for a refund ofthe 2004-2008 tax payments. But six months later, in May 2009, it issued a notice and order to CMS demanding payment ofpast due taxes for a differenttime period-October2008 to May 2009. CMS didnotrespondto the notice and order from Lakewood. Instead, CMS suedLakewood in superior court on its refund claim, asserting
a state common law claim ofmoneyhad and received. The trial courtheld abench trial on that state law claim. The trial court found in favor of CMS, ruling that CMS did not owe the taxes it had paid to Lakewood. In addition, in a separate action, the trial court granted CMS's petition for a writ of mandamus ordering Lakewoodto respondto the refund claim. The Court ofAppeals affirmed in apartially published opinion. CostMgmt. Servs., Inc. v. City of Lakewood, 170 Wn. App. 260, 284 P.3d 785 (2012). Itfirst addressed Lakewood's argument that the trial court should have dismissed CMS's claim because CMS failed to exhaust its administrative remedies. The Court of Appeals reasoned that since Lakewood had never actually responded to the refund 2CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8
claim, CMS had no further administrative steps available to it on the refund claim, and thus exhaustion was not required. The appellate court also ruled that the trial court had properly issued the writ ofmandamus. Lakewood sought review ofthe Court ofAppeals' decisions on the exhaustion and the mandamus issues, and we accepted review. Cost Mgmt. Servs., Inc. v. City of Lakewood, 176 Wn.2d 1011, 297 P.3d 706 (2013). We affirm the Court ofAppeals as to the exhaustion issue, butwe reverse the Court ofAppeals as to the mandamus issue. FACTS CMS is an energy consulting firm that arranges the purchase and delivery of natural gas for its customers from its offices on Mercer Island. Some of its customers are in Lakewood. Between 2004 and 2008, CMS paid a tax to Lakewood that CMS labeled, in its tax returns, an "occupation" tax. Report of Proceedings (RP) 12/13/10 (a.m.) at 98-99. CMS paid the tax through September 2008. During that month, though, CMS discovered that Lakewood did not charge any occupation tax. CMS had instead been paying an amount that apparently corresponded to Lakewood's "utility" tax. RP 12/14/10 (a.m.) at 281-82. Liability for that utility tax depended on CMS having a business license in, and doing business in, Lakewood. CMS believedthat it was not abusiness in, and did not do business in, Lakewood. Ittherefore stoppedpayingthe tax and wrote to Lakewood 3CostMgmt. Servs., Inc. v. ·cityof Lakewood, etal. No. 87964-8

in November 2008 requesting a refund for taxes mistakenly paid between January 2004 and September 2008. Lakewood did not respond to CMS's request. Instead, in May 2009, over six months after CMS's refund request, Lakewood sent CMS a "NOTICE AND ORDER/DEMAND FORTAX PAYMENT." Def.'s Ex. 3. Thatnotice and order asserted that CMS did business in Lakewood and therefore owed taxes from the time it had stopped paying in October 2008. It demanded payment oftaxes "from October of2008 to the present" and also ordered CMS to apply for and obtain a business license from Lakewood. !d. In June 2009, CMS filed suit in Pierce County Superior Court alleging that Lakewood owed it a refund and had failed to respond to its refund claim. Lakewood sought summaryjudgment, claiming that CMS had failed to exhaust its administrative remedies. The trial court disagreed, eventually held a bench trial, and found thatLakewood owed CMS approximately $600,000. CMS had initiated its suit on June 24, 2009. ItassertedthatLakewood owed it a refund for taxes paid from January 2004 to September 2008. During the litigation, the trial court ruled that CMS's claim for a refund oftaxes before June 24, 2006, was barred by the three year statute oflimitations. Thus, even ifCMS
won at trial, its recovery would be limited to the period of June 24, 2006 to 4CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

October 1, 2008. In an attemptto recovertaxes ithadpaidbefore June 2006, CMS filed another, separate action inthe Pierce County Superior Court seeking a writ of mandamus to compel Lakewood to respond to CMS's November 2008 refund request. The trial court consolidated that case with the first case CMS had filed and grantedthe writ. The benchtrial concluded with ajudgmentin favor ofCMS. 1 Lakewood appealedthatjudgment andthe order granting CMS'spetition for a writ ofmandamus. The Court ofAppeals affirmed. CostMgmt. Servs., 170 Wn. App. 260. Lakewood sought review in this court oftwo specific issues: first, whether the Court of Appeals erred in concluding that exhaustion of administrative remedies was not required; and second, whether the Court of Appeals erred in affirmingthe ordergrantingthe petitionfor a writofmandamus. ANALYSIS 1. WHETHERCMSWAS REQUIRED

### TOEXHAUSTADMINISTRATNEREMEDIES

1 CMS received ajudgment of $424,803.36 for taxes paid from June 24, 2006 through October 1, 2008, as allowed by the statute of limitations, plus $176,149.39 in prejudgment interest, for a totaljudgment of$600,952.75. Clerk's Papers (CP) at 715. Thatjudgment did not include any recovery related to CMS'spursuit ofan administrative remedy based uponthe trial court's issuance ofmandamus orderingLakewoodto respond to CMS's refund request. In fact, the record before us does**n~t** indicate what occurred with respect to further administrative proceedings in Lakewood after the court issued a writ ofmandamus. At oral argument, however, counsel for Lakewood suggestedthatthat part ofthis case is presently before Lakewood's hearing examiner. Wash. State Supreme Court oral argument, CostMgmt. Servs., Inc. v. City of Lakewood, No. 87964-8 (May 16, 2013), at 9 min., 33 sec., audio recording by TVW, Washington State's Public Affairs Network, available athttp://www.tvw.org. 5CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

a. Standardof Review We have never directly stated the standard ofreview in this court ofa lower court's determination regarding exhaustion ofadministrative remedies. We have, however, stated that "[t]he exhaustion issue is a question oflaw for the trial court to decide." Sintra, Inc. v. City ofSeattle, 119 Wn.2d 1, 19 n.10, 829 P.2d 765 (1992) (citing Estate of Friedman v. Pierce County, 112 Wn.2d 68, 76, 768 P.2d 462 (1989)). We review questions oflaw de novo. Robb v. City of Seattle, 176 Wn.2d 427, 433, 295 P.3d 212 (2013). Therefore, we review de novo whether exhaustion ofadministrative remedies was requiredinthis case. b. ExhaustionDoctrine This court has long applied "the general rule that when an adequate administrative remedy is provided, it must be exhausted before the courts will intervene." Wright v. Woodard, 83 Wn.2d 378, 381, 518 P.2d 718 (1974) (citing State ex rel. Ass 'n ofWash. Indus. v. Johnson, 56 Wn.2d 407, 353 P.2d 881 (1960)). To determine ifthe rule applies, we examine whether the party seeking relief"has an administrative remedy" and whether any "attempt has been made to pursue that remedy." Id. at 382. Ifthe party seeking reliefhas an administrative remedy, and did notpursue it before turning to the courts, then it is error for atrial courtto entertainthe action. Id. 6CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

The exhaustion rule "is founded upon the beliefthat the judiciary should g1ve proper deference to that body possessing expertise in areas outside the conventional expertise ofjudges." Citizensfor Mount Vernon v. City ofMount Vernon, 133 Wn.2d 861, 866, 947 P.2d 1208 (1997) (citing S. Hollywood Hills Citizens Ass 'nfor Pres. ofNeighborhood Safety & Env't v. King County, 101 Wn.2d 68, 73, 677 P.2d 114 (1984)). We have identified several policy bases for the rule: (1) insure againstpremature interruption ofthe administrativeprocess; (2) allow the agency to develop the necessary factual background on which to base a decision; (3) allow exercise ofagency expertise in its area; (4) provide for a more efficient process; and (5) protect the administrative agency's autonomy by allowing it to correct its own errors and insuring that individuals were not encouraged to ignore its procedures byresorting to the courts. ld. (citing McKart v. United States, 395 U.S. 185, 193-94, 89 S. Ct. 1657, 23 L. Ed. 2d 194 (1969)). The primary question in exhaustion cases, however, is whether the relief sought can be obtained through an available administrative remedy; if so, the party seeking relief must first seek relief through the administrativeprocess. See id.
c. Should Exhaustion Apply Where CMS Requested a Tax Refund, and Lakewood's Only Action Thereafter Was a Demandfor Payment of Different Taxes, NotaResponse to theRefundRequest?

7CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

Lakewood asks us to reviewthe Court ofAppeals' conclusion "that superior courts and the local hearing examiners have 'concurrent jurisdiction' over municipal tax disputes on the theory that an equitable cause of action vitiates the requirement ofexhaustion." Pet. for Review at 7. Lakewood is concernedthatthe "import ofthe Court ofAppeals' decision is to provide a license for litigants to evade exhaustion requirements." Suppl. Br. of Pet'rs at 16. We disagree with Lakewood's interpretation ofthe Court ofAppeals' holding; the Court ofAppeals did not hold that an equitable cause of action vitiates the requirement of exhaustion. Itheld that Lakewood's inaction in response to CMS's refund request ended CMS's obligation to continue pursuing a remedy in that forum. CostMgmt. Servs., 170 Wn. App. at 272. Thus, Lakewood's concernis misplaced.
1. The Court ofAppeals Correctly Held That Lakewood's Notice and OrderWas Not aResponseto CMS'sRefund Claim The Court ofAppeals first held that there had been no final administrative decision by Lakewood: "CMS persuasively argues that this Notice and Order did not constitute a denial of CMS's refund claim but was, instead, a demand for payment oftaxes....Lakewood cannotnow characterize thatNotice and Order to pay taxes as a final agency determination denying CMS's refund claim." 

### Id. (citation omitted).
8CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

Based on this determination, the appellate court concluded that there was nothing left for CMS to do inthe Lakewood forum: Lakewood contends that its hearing examiner system provides adequate administrative remedies to review its Notice and Order and, thus, CMS may not enjoy judicial review without exhausting these available administrative procedures. The [Lakewood Municipal Code] provides an administrative remedy only for review of a final order. CMS is not appealing from the May 13 Notice and Order demanding payment of current and future taxes but instead was seeking a tax refund for taxes already paid. Thus, CMS had no administrativemechanismto pursue arefund oftaxes wronglypaid. CostMgmt. Servs., 170 Wn. App. at 273. Finally, the appellate court stated, "Ultimately, CMS's claim was an action
m equity for 'money had and received'; and, under both the Washington Constitution and state statute, the supenor court properly maintained original jurisdictionto hearthe equity claim." Id. at 274. Readingthose passages together, we are convincedthatthe Court ofAppeals did not hold that "an equitable cause of action vitiates the requirement of exhaustion." Pet. for Review at 7. Instead, the Court of Appeals decision that CMS need not make any further attempts to exhaust resulted from its determination that "CMS had no administrative mechanism to pursue a refund of taxes wrongly paid" because Lakewood had never responded.to CMS's refund request. CostMgmt. Servs., 170 Wn. App. at273. 9CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

In its supplemental briefing, Lakewood asserts "that [Lakewood's] hearing examiner system provides adequate administrative remedies to review its Notice and Order and, thus, CMS may not enjoyjudicial review without exhausting these available administrative procedures." Id. Lakewood similarly asserted at oral argument that the Lakewood Municipal Code (LMC) provides a procedure by which ataxpayer whose refund claim is denied could startthe process ofappealing through the Lakewood system and that CMS was required to use that procedure.2 See LMC 3.52.150-.160. Assuming that Lakewood is correct that its ordinancecreated appeal process was available to CMS in this case, CMS beganthatprocess with its refund request. Lakewood, however, took no action on that request. As the Court ofAppeals correctly determined, Lakewood's notice and order was not a response to CMS's refund request for the period of2004 through September 2008, but rather a demand for payment oftaxes relating to an entirely different time period-"October 2008 to the present." Def.'s Ex. 3. Lakewood simply failed to respond to CMS's initiation of the administrative process laid out in the LMC. Lakewood cannot place CMS in a catch-22 by refusing to respond to CMS's refund request, issuing its own demand for payment, and then claiming CMS

2 Wash. State Supreme Court oral argument, Cost Mgmt. Servs., Inc. v. City of Lakewood, No. 87964-8 (May 16, 2013), at 2 min., 45 sec., audio recording by TVW, Washington State'sPublicAffairs Network, available athttp://www.tvw.org. 10CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

cannot pursue a remedy for its refund request before addressing Lakewood's demand for payment. CMS did everything it was required to do to exhaust its administrative remedies. CfBowen v. Dep 't of Soc. Sec., 14 Wn.2d 148, 154, 127 P.2d 682 (1942) (en bane) (holding that where an agency failed to respond to a request for a hearing, "so far as these proceedings are concerned, respondent exhaustedhis administrative remedies when he made demand uponthe department for a fair hearing"). We therefore affirm the Court of Appeals' decision that the exhaustion doctrine did notbar CMS's suit in superior court. Exhaustion is required only ifan administrative remedy canprovidethe reliefsought. Jones v. Dep 't of Health, 170 Wn.2d 338, 356, 242 P.3d 825 (2010). But an administrative appeal of Lakewood's demand for payment for the period "October 2008 to the present," Def.'s Ex. 3, would have had no bearing on CMS's refund request for taxes paid "between January 1, 2004 and September 30, 2008," Def.'s Ex. 1. Thus, the administrative process available to CMS could not have provided an adequate remedy for that refund request. The Court ofAppeals correctly determined that Lakewood's failure to respond to the taxrefundrequest, and notthe fact that CMS brought a state lawclaimin equity, vitiatedthe exhaustionrequirement.

11CostMgmt. Servs., Inc. v. City of Lakewood, eta!. No. 87964-8

11. The Court of Appeals' Discussion of Original Jurisdiction Is Potentially Confusing The Court ofAppeals correctly held that CMS's suit was not barred by the exhaustion requirement because Lakewood did not properly respond to CMS's refund claim. However, one of the Court of Appeals' statements may be misleading. After deciding thatLakewoodhad never actuallyrespondedto CMS's refund claim, and holding on that basis that CMS's suit was not barred, the Court of Appeals further concluded that Lakewood's hearing officer and the superior court had "concurrent original jurisdiction," and CMS could therefore "refer its claim to either the hearing examiner or superior court." Cost Mgmt. Servs., 170 Wn. App. at 274 (citing Chaney v. Fetterly, 100 Wn. App. 140, 145-46, 995 P.2d 1284 (2000)). Lakewood interprets that language to mean that no exhaustion was required because the trial court had concurrent original jurisdiction with Lakewood's hearing officer in equitable matters. As explained above, the Court ofAppeals' decision was instead properly based on the lack of an adequate administrative remedy. Nevertheless, amicus Washington Association of Municipal Attorneys (WAMA), in its briefin support ofLakewood's petition for review, agrees with Lakewood's interpretation. Br. ofAmicus WAMA at 9.
12CostMgmt. Servs., Inc. v. City of Lakewood, etal. No.**87964~8**
That interpretation ofthe Court ofAppeals' holding would be an incorrect statement ofthe law. Therefore, we take this opportunity to clarify that even if original jurisdiction in a case lies with the superior court, exhaustion of administrative remedies is still required. The parties believe that the confusion over the relationship between original jurisdiction and exhaustion stems from an earlier case from this court, Qwest Corp.
v. City of Bellevue, 161 Wn.2d 353, 166 P.3d 667 (2007). In Qwest, this court did suggest that ifa superior courthas originaljurisdiction, exhaustion is not required. We stated, "Qwest cites Chaney v. Fetterly, 100 Wn. App. 140, 145, 995 P.2d 1284 (2000) for the proposition that where a court has originaljurisdiction over a dispute, the administrative exhaustion requirement does not apply." Qwest, 161 Wn.2d at**370~71. 3**  Although the Qwest opinion mentions the proposition only in passing, Chaneyexplains its reasoning in detail:

3 The Court ofAppeals below did not cite Qwest, but it did cite Chaney for the propositionthatthe superior court and hearing officerhad concurrent originaljurisdiction over the tax refund claim. CostMgmt. Servs., 170 Wn. App. at 274 (citing Chaney, 100 Wn. App. at**145~46).** Since Qwest expressly relied on Chaney, and the Court ofAppeals below cited Chaney, the parties understandably argue that the Court ofAppeals' holding below is based on Qwest. However, as explained above, the Court ofAppeals relied on the absence of a response from Lakewood to CMS's refund claim, rather than original jurisdiction, in determining exhaustion did not bar CMS's suit in this case. To the extent that the Court of Appeals' opinion implies that original jurisdiction vitiates the exhaustionrequirement, as Lakewood and W AMA assertthatit does, it is incorrect. 13CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

Whether the doctrine of exhaustion applies depends on the nature ofthe relationship between the administrative agency and the superior court. In situations where eachhasjurisdictionofsome kind, the agency may have original jurisdiction, while the superior court has appellate jurisdiction; or . . . the agency and the superior court mayhave concurrentoriginaljurisdiction. Chaney, 100 Wn. App. at 145. According to Chaney, "The doctrine ofexhaustion regulates the first relationship. Itprevents a party from omitting to use, or starting to use butthen abandoning before final conclusion, the only forum thathas original jurisdiction." Id. at 146. Chaney concluded that, as a result, the exhaustion rule does not apply "when a superior court and a quasi-judicial administrative agency have concurrent original jurisdiction." Id. at 141. Thus, Chaney aligns the constitutional concepts of appellate and original jurisdiction with the exhaustion doctrine. WAMA andLakewood are correctthatthis cannotbe an accurate (or at least complete) statement ofthe law. We have cautioned, in a different context, that "by intertwining procedural requirements with jurisdictional principles,
. . . separate issues
... have been blurred. As aresult, unfortunately, procedural elements have sometimes beentransformed intojurisdictional requirements." Doughertyv. Dep 't of Labor &Indus., 150 Wn.2d 310,315,76 P.3d 1183 (2003). Qwest and Chaney represent analogs-inthe context ofexhaustion ofadministrative remedies-ofthe
14CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

sort of blurring of procedural elements and jurisdictional requirements that Doughertywarns of. Superior courts in this state "have originaljurisdiction in all cases and ofall proceedings in whichjurisdiction shall not have been by law vested exclusively in
some other court." WASH. CONST. art. IV, § 6. Superior courts also have "such appellatejurisdiction in cases arising injustices' and other inferior courts in their respective counties as may be prescribed by law." !d. No one argues that in this
case there is a law vesting exclusive jurisdiction ofmunicipal tax refund claims somewhere other than the superior court. CfState v. Posey, 174 Wn.2d 131, 136, 272 P.3d 840 (2012) ("[B]y limiting the common law tort claims of injured workers and creating administrative procedures and enhanced remedies under the Industrial Insurance Act, the legislature effectively modified the role of the superior courts over such claims." (citation omitted)). And amicus W AMA properly points outthat Superior Courts in this state have originaljurisdiction over all kinds ofmatters wherejurisdictionhas notbeen exclusively vested elsewhere- "cases in equity, real property, the legality ofany tax, inter alia." Br. ofAmicus WAMAat9. Exhaustion, on the otherhand, is a doctrine of judicial administration; courts applying exhaustion consider whether an adequate administrative remedy exists 15CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

that the claimant should try first because ofthe courts' "beliefthat the judiciary should give proper deference to thatbody possessing expertise in areas outside the conventional expertise ofjudges." Citizensfor Mount Vernon, 133 Wn.2d at 866 (citingS. HollywoodHills CitizensAss 'n, 101 Wn.2d at 73). The exhaustion doctrine has no bearing on the jurisdiction ofthe court in terms ofthe constitutional power ofthe court to hear a case.4 Thus, to the extent that the Court of Appeals' opinion suggests that a superior court's original jurisdiction over a claim vitiates the exhaustion requirement, we disagree. A superior court's original jurisdiction over a claim does not relieve it of its responsibility to consider whether exhaustion should apply to the particular claim beforethe court. 2. Whetherthe Trial CourtErredWhen ItGranted CMS'sPetitionfor aWrit of Mandamus
a. Standardof Review Writs of mandamus are subject to two separate standards of review, depending onthe question reviewed. First, a writ ofmandamus "maybe issued by

4 In addition to its argument that it had no administrative remedy to pursue, CMS argues that exhaustion is not required for recovery ofwrongfully paid taxes because the superior court has originaljurisdiction overthe "legality ofany tax." WASH. CONST. art. IV, §6. CMS asserts thatunder Qwest, no exhaustion is required ifthe courthas original jurisdiction, and thus it cannot be required to exhaust its remedies. For the reasons discussed, CMS's argument is incorrect. 16CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

any court ...to compel the performance ofan act whichthe law especially enjoins
as· a duty
...." RCW 7.16.160. Moreover, "[t]he determination ofwhether a statute specifies a duty that the person must perform is a question oflaw." River Park Square, LLC v. Miggins, 143 Wn.2d 68, 76, 17 P.3d 1178 (2001). Thus, sincewereview questions oflaw de novo, we review de novothe question whether
a statute specifies a duty suchthatmandamus may issue. But "[w]hetherthere is a plain, speedy, and adequate remedy in the ordinary course ofthe law is a question left to the discretion ofthe court in which the proceeding is instituted." Id. (citing State ex rel. Hodde v. Superior Court, 40 Wn.2d 502, 517, 244 P.2d 668 (1972)). We reverse discretionary decisions ofthe trial court only if "the superior court's discretion was manifestly unreasonable, or exercised on untenable grounds, or for untenable reasons." I d. (citing State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971)). Therefore, to sum up, ifthe question raised is whether a statute prescribes a duty that will support issuance of a writ of mandamus, our review is de novo. But ifthe question raised is whether there existed an adequate remedy at law that precludes issuance ofmandamus, we review the trial court's decision for abuse ofdiscretion.5

5Arguably, the second standard does not always apply. For example, whether an adequate remedy exists will often turn on regulatory or statutory interpretation. In such instances, the question is one oflaw thatwereview de novo. 17CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

b. The Trial Court Erred in Issuing a Writ ofMandamus Compelling LakewoodTo Hear CMS's RefundClaim CMS sought and obtained a writ of mandamus from the trial court compelling Lakewood to respond to its refund claim. Lakewood asserts the court erredby issuingthe writ. First, Lakewood argues the application for the writ was untimely. The general rule is that mandamus "should be sought within the same period as that allowed for an appeal." State ex rel. Von Herberg v. Superior Court, 6Wn.2d 615, 618, 108 P.2d 826 (1940) (citing State ex rel. Hawksworth v. Clifford, 130 Wash. 103, 226 P. 272 (1924)). Lakewood argues that the writ application was untimely because it was filed after the period for appealing its notice and order had expired. But since the notice and order had nothing to do with the refund claim it cannot affect the timeliness ofa writ application related to that refund claim. Therefore, Lakewood's first argument fails. Second, Lakewood argues that awrit ofmandamus was improperbecause its notice and order constituted a final agency action in response to CMS's refund claim, so Lakewood had already complied with its duty to respond to CMS's claim. As described above, however, the Court of Appeals correctly held that

18CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

Lakewood never responded to CMS's claim; therefore, Lakewood's second argument fails. Third, Lakewood argues in its petition for reviewthat CMS cannot get awrit ofmandamus because it was maintaining a suit at the same time, seeking the same thing (a tax refund). Lakewood argues that CMS could get a double return by pursuing its administrative remedies while also getting relief in superior court. CMS responds that the reason it applied for a writ ofmandamus was because the three year statute oflimitations on its claim in state court prevented recovery of taxes paid before June 24, 2006 (because it filed suit on June 24, 2009). CMS asserts it has no avenue to reach the money it paid before June 2006 except Lakewood's administrative process. And under CMS's theory ofthe case, it was denied access to that administrative process because Lakewood never responded to its refund request. Thus, CMS asserts, mandamus was proper to force Lakewood to respond to its refund request as the only means by which CMS could recover taxes paidbefore June 2006. Neitherpartyhas produced authority onthis particular issue, butwe disagree with CMS's argument, although for different reasons than those suggested by Lakewood. Theproblem is notthat CMS might get a double recovery. Rather, the problem is that CMS might get any recovery for the stale, time-barred, portion of 19CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

its claim. CMS chose to answer Lakewood's failure to respond to its refund claim by filing suit in superior court. CMS could also have chosen (although it was not required to do so) to seek mandamus from the superior courtto force Lakewoodto respond. Instead, CMS first filed suit, and then sought mandamus only after the trial court informed it that its recovery in superior court was constrained by the three year statute oflimitations. In essence, CMS seeks to use the administrative process to revive aclaim otherwise barredbythe three year statute oflimitations. The statute oflimitations is "alegislative declaration ofpublic policy which the courts can do no less thanrespect." JM Arthur & Co. v. Burke, 83 Wash. 690, 693, 145 P. 974 (1915) (citing Thomas v. Price, 33 Wash. 459, 74 P. 563 (1903)). Courts "will not, as a general rule, read into statutes of limitation an exception which has not been embodied therein
...." Rushlight v. McLain, 28 Wn.2d 189, 199-200, 182 P.2d 62 (1947) (quoting 34 AM. JUR. Limitation of Actions § 186, at 150 (1941)). We do not believe that the administrative process can be used to provide a way around the statute of limitations in this case. A federal district court case provides an illustrative example. Ladzinski v. MEBA Pension Trust, 951 F. Supp. 570 (D. Md.), aff'd, No. 97-1237, 1997 WL 452237 (4th Cir. Aug. 11, 1997) (unpublished). Ladzinski applied for his federally regulated pension benefits in 20CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

1972. !d. at 573. The responsible administrative board calculated his pension and advised Ladzinski ofhis right to appeal ifhe disagreed with the calculation. 

### Id. Ladzinski filed an appeal ofthat decision in 1993. 

### Id. Despite that appeal coming
over 20 years after the initial decision, the board heard it and denied it. 

### Id. Ladzinski then appealedthat denial to the United States District Court in 1996. 

### Id. Ladzinski argued thatthe board'srecent determination ofhis administrative appeal made his appeal to the district court timely. 

### Id. at 574 n.l. The district court disagreed. Itexplainedthatthe administrative process cannot overcome the statute oflimitations, and "the purpose ofthe statute oflimitations would be defeated if Ladzinski were able to preserve his
... action indefinitely." 

### Id. Here, CMS seeks mandamus for the express purpose of reaching back beyond the legal statute oflimitations. We do not think the statute oflimitations
can be overcome by such a use of the administrative process. Under the circumstances of this case, we hold that CMS cannot choose first to pursue recovery through the courts, and then attempt to bypass the statute oflimitations that necessarily applies as a result of that choice by seeking relief through the administrative process. We therefore reverse the Court ofAppeals on this issue and hold that the trial court erred in granting CMS's petition for a writ of mandamus. 21CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8

CONCLUSION The Court ofAppeals correctly held that CMS was not required to exhaust administrative remedies in this case because none were available: without a response by Lakewood to CMS's refund claim, there was no other administrative step for CMS to take. We clarify, however, that the exhaustion requirement is not vitiated by the fact that the superior court has original jurisdiction over a claim. Instead, in this case, itwas vitiated by Lakewood's inaction. Finally, we hold that the trial court erred in granting CMS's petition for a writ ofmandamus under the circumstances ofthis case. Therefore, the Court ofAppeals is affirmed in part and reversed in part, and the case is remanded to the trial court for further proceedings consistent withthis opinion.



### 22CostMgmt. Servs., Inc. v. City of Lakewood, etal. No. 87964-8



### WE CONCUR:

23

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