Opinion ID: 1444406
Heading Depth: 1
Heading Rank: 6

Heading: County's Approval of Private Development as a Basis of Liability

Text: The County and various amici argue that the Court of Appeals decision improperly equates King County's approval of private development with liability for a public project. We agree. If all that the County had done was to approve private development, then one of the elements of an inverse condemnation claim, that the government has damaged the Phillips' property for a public purpose, would be missing. There is no public aspect when the County's only action is to approve a private development under then existing regulations. Furthermore, the effect of such automatic liability would have a completely unfair result. If the county or city were liable for the negligence of a private developer, based on approval under existing regulations, then the municipalities, and ultimately the taxpayers, would become the guarantors or insurers for the actions of private developers whose development damages neighboring properties. One of our older opinions has caused some confusion on this issue. The Court of Appeals in the present case read our decision in Wilber Dev. Corp., 83 Wash.2d 871, 523 P.2d 186, as holding that approval alone can give rise to a taking. The Court of Appeals stated: Although the Wilber court did not directly hold that a municipality by the mere approval of a private developer's drainage plan accomplishes a constitutional taking, such a holding would appear to be implicit in the ruling. Phillips, 87 Wash.App. at 485, 943 P.2d 306. While we understand why Wilber has caused this confusion, we disagree with this reading of the case. The Wilber case was an inverse condemnation action brought by a landowner whose property was allegedly damaged by surface water. While the Court in Wilber did reverse a summary judgment in favor of the town and county, the Court did not discuss the question of what action by the town or county gave rise to liability. The Court did point out that the town controlled the flow of water from a natural watercourse that flowed on the plaintiff's land. While we understand that the Wilber case could be read to hold that a municipality's mere approval of private development could give rise to liability on the part of the governmental entity, we take this opportunity to clarify the opinion. The municipality's liability was predicated on its involvement in the project and not simply on its approval of development. To the extent the Wilber case can be read to hold that approval of development alone is sufficient to give rise to liability on the part of a municipality, we overrule it. In a recent case from the Court of Appeals, the Court addressed the issue whether approval of development can give rise to an inverse condemnation claim. In Pepper v. J.J. Welcome Constr. Co., 73 Wash.App. 523, 871 P.2d 601 (1994), landowners sued the county and the developer of a residential subdivision, seeking recovery for damage to their property allegedly caused by excessive runoff of surface water from the development. In Pepper, the county had approved short plats for development, including the drainage facilities, and had accepted the road and drainage systems for county maintenance after final approval. The plaintiffs argued that in failing to enforce its own ordinances, the county took or caused damage to their property without just compensation. The Court of Appeals held that liability for inverse condemnation may exist where the alleged taking or damage was caused by affirmative action of a government entity, i.e., appropriating the land, restricting its use through regulation, or causing damage by constructing a public project to achieve a public purpose. Pepper, 73 Wash.App. at 530, 871 P.2d 601. The Court dismissed the action against the county, reasoning: Here, the damages to the [plaintiffs'] properties were not the result of the County appropriating or regulating their use of the land. There was no allegation that [the development] was a government project, or that King County affirmatively participated in any way. The fact that a county regulates development and requires compliance with road and drainage restrictions does not transform a private development into a public project. Since [the development] was not a public project, the County did not appropriate [the plaintiffs'] land, and land use regulation of their property did not cause the damages, no inverse condemnation was involved. Pepper, 73 Wash.App. at 531, 871 P.2d 601. We agree with the Pepper Court that county action in regulating development and enforcing drainage restrictions should not give rise to liability against the county for the negligence of a developer. Our conclusion on this issue comports with the practical realities of the vested rights doctrine. At common law, the vested rights doctrine in Washington entitled developers to have a land development proposal processed under the regulations in effect at the time a complete building permit application was filed. Not until 1987 did the Legislature enlarge the vesting doctrine to also apply to subdivisions. Noble Manor Co. v. Pierce County, 133 Wash.2d 269, 275, 943 P.2d 1378 (1997). Under current law, as required by the subdivision statute, RCW 58.17.033, a subdivision application is reviewed under the codes, ordinances and regulations in effect at the time a complete application for preliminary approval is filed. See Noble Manor, 133 Wash.2d 269, 943 P.2d 1378. Since the application for the Autumn Wind project was submitted in 1988, the plans for the development were reviewed pursuant to the 1979 Surface Water Design Manual. As noted above, a new surface water drainage code was adopted by King County in 1990, but it did not apply to the Autumn Wind project because the project was vested to the prior code under RCW 58.17.033. Therefore, developer Lozier had to decide whether to meet only the requirements of the older code or whether to exceed its requirements and meet the modern criteria. While Lozier could have exceeded the code requirements, absent some SEPA consideration, [5] the County was bound by the vested rights rules to apply the requirements of the code in effect at the time of the project's application. In light of this doctrine, we reject the contention that a municipality will be liable for a developer's design which causes damages to neighbors when the county's only actions are in approval and permitting. This Court's modern articulation of the public duty doctrine as it applies to land use regulation also militates against finding municipal liability based only on approval of private development. The public duty doctrine has been interpreted by this Court to specifically preclude claims based on a municipality's approval of private development. Taylor v. Stevens County, 111 Wash.2d 159, 164-65, 759 P.2d 447 (1988). In Taylor, the purchasers of a home sued the county for negligently issuing a building permit for a house which turned out to have violations of the building code. We held that the county was not liable and rejected the contention that building codes impose a duty on local governments to enforce the provisions of such codes for the benefit of individuals. We explained that building codes, the issuance of building permits, and building inspections are devices used to secure to local government the consistent compliance with zoning and other land use regulations and code provisions governing the design and structure of buildings. Taylor, 111 Wash.2d at 164, 759 P.2d 447. In Taylor, we explained that building permits and building code inspections only authorize construction to proceed; they do not guarantee that all provisions of all applicable codes have been complied with. Allowing an eminent domain cause of action based solely on a municipality's approval of private development, where the developer acts negligently and the municipality is not actively involved in the project, would be an end-run around this Court's law on the public duty doctrine. The Phillips' reliance on Conger v. Pierce County, 116 Wash. 27, 198 P. 377, 18 A.L.R. 393 (1921) is misplaced. While that opinion did say that [t]he state itself cannot take or damage private property for a public use, without compensating the owner; nor can it authorize a taking or damaging which is prohibited to it, 116 Wash. at 35, 198 P. 377, the Conger Court was referring to legislation that authorized local governments to do construction work on the Puyallup River. The Court held only that the State could not authorize the counties to do work on the river which took or damaged private property. The authorization referred to was the authorization from the Legislature to the counties to engage in construction. The cases on which the Phillips rely for the proposition that a municipality is liable for diverting surface water onto private property involve situations where the municipality was the actor. The reliance on regulatory takings cases is inapposite. While a governmental entity can take property when regulation goes too far, the County did not regulate the use of the Phillips' property in this case. The question of when legal liability attaches to one's acts is a policy question, and legal liability is always to be determined on the facts of each case upon mixed considerations of logic, common sense, justice, policy, and precedent. Rains, 89 Wash.2d at 743-44, 575 P.2d 1057. A governmental entity does not become a surety for every governmental enterprise involving an element of risk. Bodin v. City of Stanwood, 130 Wash.2d 726, 740, 927 P.2d 240 (1996). Mere approval of a private developer's plans does not give rise to an action for inverse condemnation.