Opinion ID: 2515303
Heading Depth: 1
Heading Rank: 3

Heading: PFD and the Mariners v. HK

Text: ¶ 14 HK contends that the claims of the PFD and Mariners accrued no later than July 1, 1999, the date of substantial completion. CP at 174-76. The applicable limitations period for contract claims is six years. RCW 4.16.040. Thus, HK contends that summary judgment was proper because the PFD and Mariners filed their complaint on August 14, 2006, more than seven years after substantial completion. CP at 1-8. ¶ 15 The PFD and Mariners respond that summary judgment was improper because their breach of contract action was brought `for the benefit of the state' and is thus exempt from the six year statute of limitations on contract actions. Br. of Appellants at 19. They rely on RCW 4.16.160, which states: The limitations prescribed in this chapter shall apply to actions brought in the name or for the benefit of any county or other municipality or quasimunicipality of the state, in the same manner as to actions brought by private parties: PROVIDED, That, except as provided in RCW 4.16.310,[ [1] ] there shall be no limitation to actions brought in the name or for the benefit of the state, and no claim of right predicated upon the lapse of time shall ever be asserted against the state: AND FURTHER PROVIDED, That no previously existing statute of limitations shall be interposed as a defense to any action brought in the name or for the benefit of the state, although such statute may have run and become fully operative as a defense prior to February 27, 1903, nor shall any cause of action against the state be predicated upon such a statute. This provision reflects a facet of sovereign immunity under the old English common law doctrine, nullum tempus occurrit regi, meaning no time runs against the king. Sigmund D. Schutz, Time to Reconsider Nullum Tempus Occurrit Regi The Applicability of Statutes of Limitations Against the State of Maine in Civil Actions, 55 Me. L.Rev. 373, 374 (2003). ¶ 16 This court in Washington Public Power Supply System v. General Electric Co., 113 Wash.2d 288, 295, 778 P.2d 1047 (1989) (WPPSS) determined that when a municipality brings an action that arises out of the exercise of powers traceable to the State's sovereign powers delegated to the municipality, the municipality as an agent of the State is bringing the action for the benefit of the state within the meaning of RCW 4.16.160. RCW 4.16.160 exempts a municipality from a statute of limitation in this circumstance. WPPSS, 113 Wash.2d at 295, 778 P.2d 1047. ¶ 17 The for the benefit of the state language in RCW 4.16.160 is properly understood to refer to the character or nature of municipal conduct rather than its effect. WPPSS, 113 Wash.2d at 293, 778 P.2d 1047. The only inquiry is whether the municipal action arises from an exercise of powers traceable to delegated sovereign state powers or whether such action is proprietary and thus subject to the statute of limitation. Id. at 296, 778 P.2d 1047. Each case is determined in light of the particular facts involved. Id. ¶ 18 In determining whether an action is sovereign or proprietary, we may look to constitutional or statutory provisions indicating the sovereign nature of the power and may also consider traditional notions of powers that are inherent in the sovereign. Id. Relevant to this analysis are the general powers and duties under which the municipality acted, the purpose of those powers, and whether the activity or its purpose is normally associated with private or sovereign acts. Id. The distribution of benefits is irrelevant. Id. ¶ 19 The principal test for determining whether a municipal act involves a sovereign or proprietary function is whether the act is for the common good or whether it is for the specific benefit or profit of the corporate entity. Okeson v. City of Seattle, 150 Wash.2d 540, 550, 78 P.3d 1279 (2003); Hagerman v. City of Seattle, 189 Wash. 694, 701, 66 P.2d 1152 (1937). McQuillin's treatise explains the difference between sovereign and proprietary functions: The purposes of municipal corporations, using the term in its strict meaning, are twofold: the one to assist in the government of the state as an agent of the state, often referred to as an arm of the state, and to promote the public welfare generally; the other to regulate and to administer the local and internal affairs of the territory which is incorporated, for the special benefit and advantage of the urban community embracing within the corporation boundaries. These two functions are usually referred to as the dual powers of municipal corporations. 1 EUGENE MCQUILLIN, THE LAW OF MUNICIPAL CORPORATIONS § 2.09, at 158 (3d ed.1999) (footnote omitted). ¶ 20 In WPPSS, this court held that the state electrical supply system was not acting for the benefit of the state within the meaning of RCW 4.16.160 because there was no indication in the Washington Constitution or in the statutes that the development, production, or sale of electric power to the citizens of Washington is a sovereign duty of the State. WPPSS, 113 Wash.2d at 300-01, 778 P.2d 1047. To the contrary, the production of electricity had not traditionally been considered a sovereign duty, but rather was considered a proprietary municipal function. Id. at 301, 778 P.2d 1047. This court stated: There is one statutory provision which authorizes cities of the first class, PUD's, and joint operating agencies to participate together in the development of nuclear and other thermal facilities to achieve economies of scale and thereby promot[e] the economic development of the state and its natural resources to meet the future power needs of the state and all its inhabitants. RCW 54.44.010. The Legislature declared this to be in the public interest and for a public purpose. RCW 54.44.010. However, enabling this type of participation to achieve economies of scale, while in the public interest, does not transform the production of electric energy into a sovereign duty. Id. at 300, 778 P.2d 1047 (alteration in original). ¶ 21 We have never before considered whether a municipality's actions in constructing a professional sports stadium involve a sovereign or proprietary function. The PFD and the Mariners contend that CLEAN v. State, 130 Wash.2d 782, 928 P.2d 1054 (1996), supports their argument insofar as CLEAN recognized that the construction of Safeco Field was a proper exercise of the State's police power, which is necessarily a sovereign power. We do not read CLEAN so expansively. While we there addressed the public purpose involved in the stadium construction, no determination in CLEAN was made as to whether the PFD's construction of Safeco Field was an act in the sovereign capacity for the benefit of the state under RCW 4.16.160. CLEAN, 130 Wash.2d at 786, 928 P.2d 1054. ¶ 22 The mere fact that a government project serves a public purpose or grants an economic benefit does not elevate it to the level of a sovereign act. See WPPSS, 113 Wash.2d at 300, 778 P.2d 1047. Public health and safety are not the basis for distinguishing between governmental and proprietary functions of a municipality. See City of Moses Lake v. United States, 430 F.Supp.2d 1164, 1177-78 (E.D.Wash.2006) (holding that the operation of a municipal water system is a proprietary activity and that Moses Lake was not entitled to invoke RCW 4.16.160 to salvage otherwise untimely tort claims); cf. Okeson, 150 Wash.2d at 550-51, 78 P.3d 1279 (holding that a municipality's operation of street lights and traffic signals involves a sovereign function). ¶ 23 We have found an action to be for the benefit of the state under RCW 4.16.160 where it involves a duty and power inherent in the notion of sovereignty or embodied in the state constitution. WPPSS, 113 Wash.2d at 296, 778 P.2d 1047. For example, in Bellevue School District No. 405 v. Brazier Construction Co., 103 Wash.2d 111, 115-16, 691 P.2d 178 (1984), we held that a school district could bring tort claims for design and construction defects 20 years after completion because in building schools the district was acting in its sovereign capacity. ¶ 24 Similarly, we have held that actions arising out of the sovereign power of taxation are not subject to the bar of a statute of limitations. Gustaveson v. Dwyer, 83 Wash. 303, 309-10, 145 P. 458 (1915); Commercial Waterway Dist. No. 1 v. King County, 10 Wash.2d 474, 479-80, 117 P.2d 189 (1941); City of Tacoma v. Hyster Co., 93 Wash.2d 815, 821, 613 P.2d 784 (1980); Allis-Chalmers Corp. v. City of North Bonneville, 113 Wash.2d 108, 112, 775 P.2d 953 (1989). This court in Gustaveson stated: It is apparent from the doctrine of these authorities that a general statute of limitations has no application, whether the tax sought to be collected is to become the property of the state and payable directly into the state treasury, or whether it is to become the property of the particular county or municipality and payable into the municipal treasury to be expended for municipal purposes. In either case the tax has been imposed and collected for the express purpose of carrying on the functions of government.... All of the rights of the county here involved are traceable to and rest in the sovereign power of taxation. Gustaveson, 83 Wash. at 309-10, 145 P. 458. ¶ 25 In Louisiana-Pacific Corp. v. ASARCO Inc., the Ninth Circuit Court of Appeals applying Washington State law held that the port of Tacoma acted in a sovereign capacity when it leased port log yards because the state constitution provides that areas designated by the port commission up to 2,000 feet from the harbor line `shall be reserved for landings, wharves, streets, and other conveniences of navigation and commerce.'  24 F.3d 1565, 1582 (1994) (quoting WASH. CONST. art. XV, § 1). Thus, the port of Tacoma could bring tort claims after expiration of the limitation period, pursuant to RCW 4.16.160. Id. ¶ 26 This court has held in sovereign immunity cases that a municipal corporation's improvements, construction, or maintenance of public parks, swimming pools, or merry-go-rounds for public recreation involve sovereign governmental functions. Russell v. City of Tacoma, 8 Wash. 156, 159, 35 P. 605 (1894); State v. Metro. Park Dist. of Tacoma, 100 Wash. 449, 452, 171 P. 254 (1918); Nelson v. City of Spokane, 104 Wash. 219, 220, 176 P. 149 (1918); Stuver v. City of Auburn, 171 Wash. 76, 82, 17 P.2d 614 (1932); Mola v. Metro. Park Dist. of Tacoma, 181 Wash. 177, 182, 42 P.2d 435 (1935); Kilbourn v. City of Seattle, 43 Wash.2d 373, 380, 385, 261 P.2d 407 (1953); Port of Seattle v. Int'l Longshoremen's & Warehousemen's Union, 52 Wash.2d 317, 322, 324 P.2d 1099 (1958). This accords with the view of other states that the construction and maintenance of facilities for public recreation are sovereign functions. Packard v. Rockford Prof'l Baseball Club, 244 Ill.App.3d 643, 613 N.E.2d 321, 325-27, 184 Ill.Dec. 294 (1993); Libertarian Party v. State, 199 Wis.2d 790, 546 N.W.2d 424, 435-36 (1996); Kelly v. Marylanders for Sports Sanity, Inc., 310 Md. 437, 530 A.2d 245, 259-60 (1987). ¶ 27 In Packard, for example, the Illinois Court of Appeals held that sovereign immunity principles applied to a city park district as a security provider at a professional baseball field because this act was a governmental function. 184 Ill.Dec. 294, 613 N.E.2d at 325-27. The Illinois Court of Appeals based its holding on the fact that the park district had the power to lease, establish, and maintain athletic fields under Illinois State statutes and was obligated under a stadium lease to operate and maintain the field during baseball games. Id. at 327. ¶ 28 In Libertarian Party, the Wisconsin Supreme Court held that the construction of the Milwaukee Brewers' professional baseball stadium did not violate the internal improvements clause of the Wisconsin Constitution because the construction of the baseball stadium for public recreational purposes was similar to a municipality's construction of a natural public park and thus served a predominantly governmental function. Libertarian Party, 546 N.W.2d at 435-36. In upholding sports stadium legislation, a California State court has compared the creation of modern sports stadiums to the great public arenas in ancient Greece. Los Angeles County v. Dodge, 51 Cal.App. 492, 197 P. 403, 407 (1921). ¶ 29 Particularly instructive here is the Maryland Court of Appeals decision in Kelly, cited with approval by this court in CLEAN, 130 Wash.2d at 793, 928 P.2d 1054 (citing Kelly, 530 A.2d at 257). In Kelly, the Maryland State Legislature created the Maryland Stadium Authority (Authority), designated as a public corporation and instrumentality of the State. Kelly, 530 A.2d at 245-46. Much like the PFD here, the Authority was vested with broad power to regulate the use and operation of its facilities and to charge fees. Id. The Authority was authorized to borrow money, issue bonds in connection with the acquisition and construction of facilities, and acquire property as needed. Id. ¶ 30 Various bills were passed and signed into law through the Maryland State Legislature that defined the financial parameters in which the Authority could construct the sports stadiums. Id. at 246-49. Opponents of the Authority filed suit, claiming the legislation was not an appropriation `for maintaining the State Government' within the contemplation of the Maryland Constitution to exempt it from referendum. Id. at 249-50 (quoting MD. CONST. art. XVI, § 2). ¶ 31 While recognizing that stadium construction served a public purpose, the Maryland Court of Appeals determined that the real issue was whether Maryland's involvement was an exempt appropriation `for maintaining the State Government.' Id. at 257-58 (quoting MD. CONST. art. XVI, § 2). The Maryland Court of Appeals emphasized that the for maintaining the State Government clause was a higher standard than a mere public purpose: In determining whether a particular appropriation is for maintaining the State government within the meaning of the Referendum Amendment, our cases have variously described the appropriation as being for a primary, imperative, or important function of State government.... As otherwise stated in Bickel, the proper test is whether the governmental activity being funded comes within the class of those for maintaining the government, without reference to the existing need or lack of it. Id. at 259 (quoting Bickel v. Nice, 173 Md. 1, 11, 192 A. 777 (1937)). ¶ 32 Ultimately, the court determined that the stadium project met the higher standard. Id. at 259-60. Maryland State courts subsequently held that expansions of a convention center and a public ballot program were sovereign acts because both were legislatively authorized, were for the public interest, and gave little profit to the municipalities at issue. Bell Atl.-Md., Inc. v. Md. Stadium Auth., 113 Md.App. 640, 688 A.2d 545, 551 (1997); Burns v. Mayor & City Council, 71 Md.App. 293, 525 A.2d 255, 262 (1987). ¶ 33 The Safeco Field project similarly reflects the sovereign function of providing for public recreation. The state legislature and the King County Council created the PFD, a municipal corporation. LAWS OF 1995, 3d Spec. Sess., ch. 1, §§ 201(4)(b) at 5, 301(1)-(5), at 8; KING COUNTY ORDINANCE 12000, § 6, at 8 (1995). The PFD consistent with chapter 36.100 RCW was delegated broad state powers to acquire, construct, own, remodel, maintain, equip, reequip, repair, and operate a baseball stadium. LAWS OF 1995, 3d Spec. Sess., ch. 1, §§ 201(1), at 4, (4)(b) at 5; KING COUNTY ORDINANCE 12000, § 4C at 5. This court previously upheld the constitutionality of the delegation of legislative powers to the PFD under the stadium act. King County v. Taxpayers of King County, 133 Wash.2d 584, 605-06, 949 P.2d 1260 (1997). [2] ¶ 34 From its inception, the PFD's construction of Safeco Field involved the traditional sovereign function of providing public recreational benefits, like the public parks in Russell, Metropolitan Park District of Tacoma, Nelson, and Kilbourn, the swimming pools in Mola, and the playgrounds in Stuver. See Russell, 8 Wash. at 159, 35 P. 605; Metro. Park Dist. of Tacoma, 100 Wash. at 452, 171 P. 254; Nelson, 104 Wash. at 220, 176 P. 149; Kilbourn, 43 Wash.2d at 380, 385, 261 P.2d 407; Mola, 181 Wash. at 182, 42 P.2d 435; Stuver, 171 Wash. at 82, 17 P.2d 614. It is not necessary that the Washington State Constitution explicitly mandate the construction of professional baseball stadiums in order for this to be a sovereign function. The constitution does not explicitly require the construction of merry-go-rounds at city playgrounds, public libraries, or art museums, yet this court has determined that the construction and maintenance of such facilities for public recreational purposes involve the exercise of a sovereign governmental power. Stuver, 171 Wash. at 82, 17 P.2d 614; Heavens v. King County Rural Library Dist., 66 Wash.2d 558, 566, 404 P.2d 453 (1965); Int'l Longshoremen's & Warehousemen's Union, 52 Wash.2d at 322-23, 324 P.2d 1099. [3] ¶ 35 As in Maryland's Kelly case, Wisconsin's Libertarian Party case, and Illinois' Packard case, the PFD has been delegated broad powers by the state legislature to create and maintain a sports stadium for public recreation. Laws Of 1995, 3d Spec. Sess., ch. 1, §§ 201(1), at 4, (4)(b) at 5; see also Kelly, 530 A.2d at 246; Libertarian Party, 546 N.W.2d at 428-29; Packard, 184 Ill.Dec. 294, 613 N.E.2d at 325. We have held that the PFD operates Safeco Field for the public benefit, and any excess profit from the venture is put into the excess revenues fund for future capital maintenance costs. CLEAN, 130 Wash.2d at 796-97, 928 P.2d 1054; Laws Of 1995, 3d Spec. Sess., ch. 1, § 203(3)(a) at 7-8. The construction of Safeco Field creates recreational benefits that reflect a sovereign, not proprietary purpose. ¶ 36 We reverse the trial court's order granting summary judgment in favor of HK and remand for further proceedings. Consistent with 90 years of jurisprudence by this court and other state courts, we hold that the construction of Safeco Field by the PFD as an agent of the State was a sovereign act creating public recreational benefits and traceable to delegated sovereign powers. Thus, the action by the PFD and the Mariners against HK regarding construction defects at Safeco Field qualifies under the for the benefit of the state exemption to the six year contract statute of limitations in RCW 4.16.160.