IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON NEAL COY, ) ) DIVISION ONE Appellant, ) ) No. 67737-3-1 v. ) ) PUBLISHED OPINION CITY OF DUVALL, ) ) Respondent. ) FILED: April1, 2013 ) DWYER, 

### J.- Neal Coy appeals from thetrial court's summaryjudgment dismissal of his claim againstthe City of Duvall (the City). Coy contends that, although the City ultimately approved his preliminary plat application, it acted in
an arbitrary and capricious mannerduring the application process. Pursuant solelyto the "final decision" prong of RCW 64.40.020(1), Coy seeks an award of money damages for claimed injuries resulting from the City's purportedly arbitrary and capricious conduct. Because the statute provides no cause ofaction in such circumstances, we affirm the trial court's dismissal ofCoy's claim.

In May 2006, Coy submitted an application to the Cityfor preliminary plat approval ofa 32-unit residential subdivision on a 4.58-acre property. In his application, Coy proposed filling the entire on-site wetland. The City's outside consultant peer reviewer, an ecologist atTheWatershed Company, thereafterNo. 67737-3-1/2 performed two site visits ofthe propertyto determinewhether Coy's proposal
was consistent with the City's code. He determined that Coy's proposed mitigation plan was deficient and concluded that, because the wetland "serve[d] several functions," it "appear[ed] that the code would not allow alteration ofthis wetland." On June 29, 2006, city planner Lara Thomas wrote to Coy's consultant, David Evans 

### &Associates, Inc. (Evans}, stating thatthe City's wetland peer review process had been completed and that Coy's wetland fill request did not meetthe criteria set forth in the City's code. On October 13, 2006, after receiving
an extension ofthe period oftime allowed for responding to the City's letter, Evans suggested to Doreen Booth, the City's planning director, thatthe City's response to the proposal was arbitrary and capricious and "constitute[d] a denial of rights afforded to others in the recent past." Evans maintained that the City's code allowed forthe wetland fill proposed by Coy. On December 11, 2006, Booth informed Evans by letterthatthe City's planning staffcould not "approve,
or recommend approving, the filling ofthe wetland underthe Sensitive Areas Regulations [Coy's] project [was] vested in." In January2007, Evans and the City explored the possibility of processing Coy's application underthe new City code, ratherthan the code in which the application had vested, and Coy submitted awetland analysis based upon the
new code. Ultimately, however, in May 2007, Coy decided notto pursue permit approval pursuantto the City's new code; instead, he decided to remain vested in the prior code. 

### - 2 -No. 67737-3-1/3 Then, in October, Coy's attorneywrote to the City, requesting "the City's prompt and immediate action to confirm thatwetland alteration with off-site mitigation is authorized forthis preliminary plat application." The City's outside counsel, Amy Pearsall, responded, maintaining thatthe City was not "prepared at this time to saythat" Coy's proposal was consistent with the City's code. However, Pearsall proposed a compromise whereby the City would review a proposal consistentwith Coy's interpretation ofthe code ifCoy could submit appropriate documentation demonstrating code compliance. Following Coy's submission ofthis documentation, the City's outside consultant determined on July 14, 2008, that Coy had metthe requirements for filling the wetland. However, an appropriate site for off-site mitigation could not be located; thus, the City allowed Coy to perform off-site mitigation by contributing to the Snohomish Basin Mitigation Bank. The hearing examiner approved Coy's preliminary plat application on December23, 2008. On January 22, 2009, Coy sued the City pursuantto RCW 64.40.020(1), which provides permit applicants with a cause ofaction for damages "to obtain relieffrom acts ofan agency which are arbitrary, capricious, unlawful, or exceed lawful authority, or relieffrom a failure to actwithin time limits established by law." Coy alleged thatthe City had both (1) failed to comply with the statutorilymandated time limitfor processing the permit application and (2) acted in an arbitrary and capricious mannerduring the application process. The City moved for partial summaryjudgment, seeking dismissal ofCoy's claim for damages resulting from the alleged arbitrary and capricious conduct. On September 9, 

### - 3 -No. 67737-3-1/4 2011, the trial court granted the City's motion, dismissing that claim for relief. Coythereafter stipulated to the dismissal of his claim asserting that the City had failed to comply with the application processing time limit. Thus, the trial court entered an order dismissing that remaining claim. The trial courtthereafter granted the City's motion for an award ofattorneyfees pursuantto RCW 64.40.020(2). 1 Coy appeals from the trial court's dismissal of his claim for relieffrom the City's alleged arbitrary and capricious conduct. II Coy contends that he is entitled to delay damages dueto the City's purportedly arbitrary and capricious conduct during the application process, notwithstanding the fact that his permit application was ultimately approved. However, as we have recently held, the "final decision" prong of RCW 64.40.020(1), pursuantto which Coy seeks relief, provides onlyfor damages resulting from an agency's "final decision"-notfrom its conduct occurring priorto that decision. Thus, Coy did notstate a viable cause ofaction pursuantto that statutory provision, and the trial court did not err by dismissing the claim. RCW64.40.020(1) grants to property ownerswho applyfor land use permits a cause ofaction (1) "for damagesto obtain relieffrom acts ofan agency which are arbitrary, capricious, unlawful, or exceed lawful authority" or (2) for damagesto obtain "relieffrom a failure to actwithin time limits established by

1 "The prevailing party in an action brought pursuantto this chapter may be entitled to reasonable costs and attorney's fees." 

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law." Such a cause ofaction arises only where there is an "act" by the agency, defined by statute as either (1) "a final decision by an agencywhich places requirements, limitations, or conditions upon the use of real property in excess of those allowed by applicable regulations" or (2) "the failure ofan agencyto act within time limits established by law in response to a property owner's application for a permit." RCW 64.40.010(6). The statute further provides thatthe recoverable "damages" are the "reasonable expenses and losses

... incurred between the time a cause ofaction arises and the time a holder ofan interest in real property is granted relief as provided in RCW 64.40.020." RCW 64.40.010(4). Thus, the statute allows a permit applicantto recover damages in two circumstances-when those damages result from an agency's "final decision" and when the damages are caused by an agency's failure to actwithin statutorily-prescribed time limits. Here, Coy asserts thatthe City acted in an arbitrary and capricious
manner by determining that Coy's proposal to fill the wetland was inconsistent with the City's code and, thus, that its approval could not be recommended by City planning staff. Coy contends that the City's conduct was arbitrary and capricious because, he asserts, the City had previously approved other such wetland fills underthe same code language. Thus, Coy sought damages to obtain relieffrom an allegedly arbitrary and capricious "act" ofthe 

### City-notfrom
an alleged failure ofthe City to act.2 See RCW 64.40.010(6). Moreover, Coy

2 Although Coy's complaint alleged thatthe City had both acted in an arbitrary and capricious mannerand failed to act on his application within the statutorily-prescribed time limit, 

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does not contend thatthe hearing examiner's ultimate approval ofhis preliminary plat application was itselfarbitrary and capricious. Rather, he asserts thatthe hearing examiner's decision-the "final decision" contemplated by RCW 64.40.020(1)-wasthe result ofan "arbitrary process." However, as we recently decided in Birnbaum v. Pierce County, 167Wn. App. 728, 274 P.3d 1070 (2012), the "final decision" prong of RCW 64.40.020(1) does not provide a cause ofaction in such circumstances. There, Pierce County approved Birnbaum's conditional use permit application five years after its submission. Birnbaum, 167 Wn. App. at 730-31. Thirty days afterthe approval ofher permit application, Birnbaum sued Pierce County pursuantto RCW 64.40.020(1), alleging thatthe County had both exceeded the statutorilyprescribed time limitfor action on her application and made arbitrary and capricious requests for additional information priorto approving that application. Birnbaum, 167Wn. App. at 731-32. The trial court dismissed Birnbaum's action pursuantto CR 12(b)(6), and we affirmed. Birnbaum, 167Wn. App. at 731-37. As relevant here, we determined that Birnbaum had not "stated a claim for damages based on arbitrary and capricious actions or delays underthe final decision prong ofthe statute." Birnbaum, 167Wn. App. at 735-37. We noted that "Birnbaum's complaint [did] not allege that thefinal 2010 permit approval place[d] requirements, limitations, or conditions upon her real propertythat gave
Coy stipulated to the dismissal of his claim based upon the City's alleged noncompliance with the application processing time limit. He appeals only from the trial court's dismissal of his claim for relieffrom the City's alleged arbitrary and capricious conduct. Thus, only the "final decision" prong of RCW 64.40.020(1) is at issue here. 

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rise to herdamages"-thus, the permit approval itselfwas notthe "act" forwhich Birnbaum sought damages. Birnbaum, 167Wn. App. at735. Rather, Birnbaum sought "damages for costs and delays that occurred while the County processed the application, before the permitissued." Birnbaum, 167Wn. App. at 735. We held that, pursuantto its plain meaning, the statutory definition ofdamages set forth in RCW 64.40.010(4) "authorizes damages onlyforexpenses and losses that are incurred aftera cause ofaction underthe statute arises." Birnbaum, 167 Wn. App. at 735-36. Thus, the damages alleged by Birnbaum, which were incurred priorto the final decision giving rise to a cause ofaction, were not recoverable. Birnbaum, 167Wn. App. at 736. We rejected Birnbaum's assertion that "a claim for arbitrary delay occurring priorto a final decision

... may be brought once the permit decision is final." Birnbaum, 167Wn. App. at 736. Rather, we held: Underthe final decision prong, the final decision is the act which triggers the cause ofaction. The definition of"damages" limits recoveryto those damagesthat occur afterthe cause of action accrues. Simply put, the statute does not contemplate damages-fordelay orotherwise-underthe final decision prong that occurred priorto the final decision. Birnbaum, 167Wn. App. at 737. Similarly, here, Coy seeks damagesfor delays resulting from the City's allegedly arbitrary conductpriorto the City's final decision-in this case, the hearing examiner's ultimate approval ofCoy's preliminary plat application. Coy does notallege thatthe hearing examiner's approval ofthe permit application "places requirements, limitations, orconditions" upon Coy's use of his property 

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"in excess ofthose allowed by applicable regulations." RCW 64.40.010(6). Thus, the conduct at issue-fromwhich Coy contends his alleged damages flow-is the City's conduct during the application process, notthe hearing examiner's final decision approving the application. But, as Birnbaum makes clear, damages resulting from such conduct are not recoverable pursuantto chapter 64.40 RCW. Rather, damages must resultfrom either a final decision (which Coy does not challenge) ora failure bythe agencyto actwithin the statutorily-prescribed time limit (which Coy no longer alleges). RCW 64.40.010(4). Just as we stated in Birnbaum, "the statute does not contemplate damages-fordelay or otherwise-underthefinal decision prong that occurred priorto the final decision." 167Wn. App. at737. Pursuantto RCW 64.40.020, where a permit applicant challenges an act ofan agency-ratherthan the agency's failure to act-the applicant's damages mustflowfrom the agency's final decision. Because, here, Coy challenges the agency's conduct priorto the final decision, he has not stated a viable claim for relief pursuantto that statute. Accordingly, the trial court properly dismissed his claim. Ill Coy additionally contends thatthe trial court erred by granting an award of attorneyfees to the City. We disagree. Coyfirst asserts thatthe trial court's grant ofan award ofattorneyfees to the City was improper because, he contends, the City prevailed on "jurisdictional" grounds ratherthan "on the merits" ofthe claim. However, RCW64.40.020(2), 

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which provides for an award ofattorneyfees to the prevailing party in an action brought pursuantto that chapter, does not require that a party prevail on any particular ground. Nevertheless, Coy contends that RCW4.84.370 is a "similar, almost parallel, statute" and that, pursuantto that statute, Washington courts have determined that an award offees is precluded where a party does not prevail on the merits ofa claim. Butthat statutory language-which provides that "the county, city, ortown whose decision is on appeal is considered a prevailing party ifits decision is upheldat superior court and on appeal," RCW4.84.370(2) (emphasis added)-bears little resemblance to the language of RCW 64.40.020(2). It does not inform ourdecision. Underthe plain language ofthe applicable statutory provision, the trial court had the discretion to award fees to the prevailing party, regardless ofthe basis for its victory. Coy additionally asserts that, even ifthe grant ofan award offees was proper, the trial court abused its discretion in determining the amount ofthat award. Specifically, he asserts that, "considering the City prevailed on jurisdictional grounds and notthe merits, the numberof hours spent on this case
were extraordinary." However, Coyfails to note thatthe City addressed "the merits" ofthe arbitrary and capricious claim in its motion for partial summary judgment, even though thetrial court dismissed that claim on other bases. Moreover, Coy does not address the factthatthe City prevailed on his claim regarding the timeliness ofthe application process; although Coy eventually stipulated to the dismissal ofthat claim, he did notdo so until after a motion for partial summaryjudgmenton that issue had been submitted to the trial court. 

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"The amount ofafee award is discretionary, and will be overturned only for manifest abuse." Boeing Co. v. Sierracin Corp., 108Wn.2d 38, 65, 738 P.2d 665 (1987). The trial court did not abuse its discretion in either determining to make an award offees or in determining the amount ofthe award it entered. IV Finally, the City requests an award ofattorneyfees on appeal pursuantto RCW 64.40.020(2). The City is the prevailing party on appeal. Accordingly, upon proper application, our commissionerwill enteran appropriate order awarding appellate attorneyfees to the City. Affirmed.

We concur:

- 10-No. 67737-3-1/11 SCHINDLER, J. (concurring)- I concur in the result butwrite separately because I would also affirm on the grounds that Coyfailed to exhaust all administrative remedies beforefiling his lawsuit againstthe City of Duvall alleging a cause ofaction under chapter64.40 RCW, and I disagree with the mischaracterization ofCallfas v. Department ofConstruction and Land Use ofthe City ofSeattle, 129Wn. App. 579, 120 P.3d 110 (2005), in Birnbaum v. Pierce County, 167Wn. App. 728, 274 P.3d 1070 (2012). The exhaustion ofall administrative remedies is a statutory condition precedent to asserting a cause ofaction underchapter 64.40 RCW. RCW64.40.030 states: "Any action to assert claims underthe provisions ofthis chapter shall be commenced only within thirty days afterall administrative remedies have been exhausted." 1 Coy claims he "diligently pursued the legitimate remedies available." But contrary to his assertion, the undisputed record shows that Coywas aware of, but chose notto pursue, all administrative remedies. On May 11, 2006, David Evans & Associates (Evans) submitted a preliminary plat application to subdivide the 4.58 acres ofproperty owned by Coy into 32 lots for single family homes. The property contains awetland. The preliminary plat application proposed filling "the entire on-site wetland area and provid[ing] fee in-lieu mitigation to the City of Duvall." In support ofthe proposal, Evans submitted a "Sensitive Areas Report" prepared byThe Jay Group, Inc. The City retained TheWatershed Companyto analyze whetherthe proposal complied with the City of Duvall's "Sensitive Area Regulations." Ecologist Hugh Mortensen determined thatthe wetland was largerthan represented in the proposal,

1 (Emphasis added.)

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and is "an emergentwetland in a rapidly developing watershed [that] has both the potential and the opportunityto improve water quality." Mortensen concluded the Duvall City code "would not allow alteration ofthis wetland, since it does serve several functions." Mortensen also concluded the proposal did not comply with the requirement to consider practical orfeasible alternatives thatwould result in less environmental impact, and did not provide an analysis ofmitigation sequencing. The proposal is to fill the entire on-site wetland area and provide fee in-lieu mitigation to the City of Duvall. Typically, since mitigation has been shown to have a historically low success rate, both in Duvall and in the broader region, it is common that agencies allow it only as a last resort. One ofthe key steps in preparing orevaluating a wetland modification proposal is to demonstrate that there is no practicable or feasible alternative development proposal that results in less impactto the wetland and its buffer. The proposal should include an analysis of mitigation sequencing and an evaluation of howthe project has been designed to avoid impacts to the wetland or buffer and to minimize any impacts that are determined to be unavoidable. In evaluating the proposed design, itwould appearthat there are many efforts that could be taken to avoid wetland fill, notthe least ofwhich would be a redesign of the projectto include fewer lots or clusterthe allowed density on the nonsensitive area portion ofthe site. On June 29, the City notified Coy thatthe proposal to fill the wetland did not meet the current code requirements and Coy could either revise the proposed plat to reduce density, or resubmitthe application afterthe new Sensitive Area Regulations were adopted. The City of Duvall has completed the wetland peer review process. The City's wetland consultant has determined thatthere is more wetland and buffer on site than the Sensitive Areas Report prepared by the Jay Group dated April 7, 2006 shows. The City has determined based on peer reviewthatthe wetland fill request does not meetthe criteria in [former] DMC [(Duvall Municipal Code)] 14.42.300A [(2005)]. Underexisting regulation the projectwill be subjectto minimal fill in accordance with [former] DMC 14.42.320 [(2005)], Wetland- Permitted Alterations. As the applicantyou have two choices revise your plans and density calculations

- 12-No. 67737-3-1/13 accordingly orwait and resubmit your application underthe new Sensitive Area Regulations that are anticipated to be adopted in September ofthis year. Jack Molver of Evans & Associates sent Coy a draft letter in response to the City for his review, and strongly urged Coyto not pursue administrative remedies, including
a variance or reasonable use exception. Here is a draftforyour consideration. Ithink that it is clearthatthe city is making an arbitrary call. The code clearly makes provisions for the fill. Not complying with use ofthe DRC seems to be a violation ofthe code. [Former] DMC 14.02.030 [(2005)] states that one duty ofthe Planning Director is to manage the DRC.1 2l I do not believe thatwe wantto go into the appeal, variance or reasonable use provisions discussed in [former DMCs] 14.42.060. 14.42.070 and 14.42.080 [(2005)] becausewe must stand firm in our believe [sic] thatwhatwe are proposing to do is permitted outright.t3

### 1 Ifso, there is nothing to seek a variance from. The Reasonable Use route is risky in thatthe [hearing examiner] must rule that all reasonable use is denied.141 That is clearly notthe case. Please give me your comments. In the letter dated October 13from Molverto City Planning Director Doreen Booth, Molver claims thatthe proposal to fill the wetland was allowed bythe code, and asserts the City's position is "arbitrary and capricious, and constitute[s] a denial of rights afforded to others in the recent past." Molver requests the Duvall City Development Review Committee (DRC) review the "wetland issues associated with this project." In response to the October 13 letter, Planning Director Booth cites the City code provisions and reiterates thatthe City "cannot approve, or recommend approving, the filling ofthe wetland underthe Sensitive Areas Regulations your project is vested in."

2 (Emphasis in original.) 3 (Emphasis added.) 4 (Emphasis in original.)

- 13-No. 67737-3-1114 Booth pointed outthatthe DRC did not hear appeals, and Coy could appeal to the hearing examiner. It is a planning directordecision re: code interpretation. According to our city attorney, projects are not vested in process, and an appeal ofmy interpretation would be to the hearing examiner in accordance with [former] DMC 14.08.010.C [(2005)]. Please call me ... ifyou have any questions. After receipt ofthe response from Booth, Molver again advised Coy againstfiling
an appeal.5 Coy did not appeal the City's interpretation ofthe code or seek a variance
or reasonable use exception. Nonetheless, Coy claims he pursued administrative remedies by requesting review by the DRC, and no other administrative remedies were available. Coy misrepresents the function ofthe DRC, and the record shows there were other administrative remedies that he did not pursue. The DRC is an advisory board managed by the Planning Director. The DRC is not an appellate review bodyto which the director's code interpretation decision may be appealed. Former DMC 14.02.030A(A)(4) (2005); former DMC 14.02.080(8) (2005). Underthe code, the hearing examiner is the final decision-makerfor issues related to preliminary plats. Former DMC 14.08.010(C); former DMC 14.42.070. The code also expressly provides for an appeal to the hearing examiner ofan interim decision concerning Sensitive Area Regulations. Former DMC 14.42.070 states: 

### 14.42.070 Appeals. A. Any decision to require a special sensitive area study pursuant to this chapter may be appealed by the applicantto the hearing examiner. The fee and costs, procedural and appellate provisions established in this code forvariances shall apply. B. Any decision to approve, condition ordeny a development proposal based on the requirements ofthe sensitive area regulation may

5 In 2007, Coy submitted a wetland analysis underthe City's new Sensitive Area Regulations. However, based on the impact ofthe newdrainage regulations, Coy abandoned that approach.

- 14-No. 67737-3-1/15 be required in conjunction with and according to the review proceduresfor the permit or approval involved. C. Any decision authorized by the sensitive area regulations where no review process existforthe permit or approval involved beyond the development review committee (DRC), may be appealed by an aggrieved partyto the hearing examiner pursuantto this title. See also former DMC 14.42.060 (reasonable use exception); former DMC 14.42.080 (variances). Coy does not assertthat he attempted to appeal the City's interpretation ofthe Sensitive Area Regulations, nor does he address why he did not have to exhaust other administrative remedies. For instance, the City code clearly provides for the issuance of
a variance where, due to the special circumstances applicable to the property, "the strict application ofthe sensitive area regulations would deprive the subject property of rights and privileges enjoyed by other properties in the vicinity and in the same zone." Former DMC 14.42.080(B)(1). Because the record shows that Coy did not exhaust all administrative remedies, I would also affirm on this ground. I also write separately because Idisagree with the footnote in Birnbaum rejecting
a statement in Callfas as "not reconcilable with the statutory definition of 'damages' " in RCW 64.40.020(1). Birnbaum, 167Wn. App. at 736, n.2. The footnote in Birnbaum states:Callfas stated, "Indeed, a permit applicant like the Callfases would have a claim under chapter 64.40 RCWfor delay damages, as we noted above, without a writ once the tardy permitwas issued." Callfas, 129Wn. App. at 597. This statement is not reconcilable with the statutory definition of "damages," which that opinion had no occasion to analyze. We respectfully reject it. Birnbaum, 167Wn. App. at 736, n.2.

- 15-No. 67737-3-1/16 The statement in Callfas refers to the discussion ofthe supreme court's decision in Mission Springs, Inc. v. City ofSpokane, 134Wn.2d 947, 954 P.2d 250 (1998), and is not contrary to the definition in RCW 64.40.020(1). In addressing Mission Springs, the opinion clearly states that the developer "filed his action under chapter 64.40 RCWwell within 30 days ofthe City's 'act' ofvoting to delaythe permitto which he was entitled." Callfas, 129Wn. App. at 594.

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