Court Opinion

ID: 2781650
Source: CourtListenerOpinion
Date Created: 2015-02-24 20:13:47.944396+00
Date Added: 2024-06-11T11:28:20.714230
License: Public Domain

FILED
                                                                                    COURT OF APPEALS
                                                                                       DIVISION 11
                                                                                   2015 FEB 24
                                                                                               11P4 9: 26
                                                                                   STATE OF WASHINGTON
                                                                                   BY
                                                                                            E9ITy

    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                           DIVISION II

FRANK M. HENSLEY              and   MARLYCE A.                             No. 44473 -9 -II
HANSEN, husband and wife,

                                  Appellants,                     UNPUBLISHED OPINION

         v.

HERITOR,         INC.;    NOELE     TIFFANY        and

  JOHN         DOE"        TIFFANY;        MILLER
UTILITIES, LTD.; G. MILLER, " JANE DOE"
MILLER;         the     marital community of G.
MILLER        and `   JANE DOE" MILLER; and R.
UTILITIES CO.,

                                  Respondents.

       BJORGEN, A.C. J. —      Frank Hensley and Marlyce Hansen appeal a trial court' s dismissal

of their suit against two entities, Heritor Inc. and Miller Utilities Ltd., that own an interest in the

community     water system   serving lots they   own, as well as against   two   corporate officers   in those
No. 44473 -9 -II

entities.'    Hensley and Hansen' s suit alleged that Heritor had breached a duty to provide water

service adequate for reasonable domestic needs and that this breach also constituted a violation

of   Washington'    s   Consumer Protection Act ( CPA), chapter 19. 86 RCW. The trial court granted

Heritor' s motion for dismissal at the end of Hensley and Hansen' s presentation of their case- in -

chief. Because substantial evidence supports the trial court' s findings of fact related to the

dismissal, which in turn support its legal conclusion that dismissal is warranted under CR

41( b)( 3),   we affirm.

                                                            FACTS

          In 1996 Pioneer Western Investments Associates, a corporation of which Hensley was

president and in which he and Hansen owned a half interest, loaned money secured by title to a

number of lots in a development called Ripplewood. The borrower defaulted on the loan and, to

avoid foreclosure, conveyed the lots by quitclaim deed to Pioneer Western in 1999.

          Hensley and Hansen later purchased the remaining half of Pioneer Western. After doing

so, Hensley assigned Pioneer Western' s only asset, title to six lots in Ripplewood, to himself and

Hansen by quitclaim deed.

          Ripplewood' s recorded plat contains a servitude stating that:

          Seller   agrees   to install a water system upon             sale of   50% of the lots, or within 2
          years' time for the use of buyer and buyer agrees to use said water system when it
          is installed and approved by the Public Health Department of the State of
          Washington.        Buyer agrees to pay to Seller promptly upon completion of his
          hookup    a charge      therefore   not   to   exceed $   85. 00. From the time water is delivered

1 We refer to the defendants collectively as Heritor unless necessary to identify a specific
defendant. Hensley          and   Hansen' s   complaint alleged        that Miller   Utilities Ltd. (Miller Utilities)
was the record owner of the lot containing the community water system' s well and pump house
and   that Heritor Inc. " claim[ ed] ownership of the               water system."    Clerk' s Papers ( CP) at 30, 32.
While admitting that Heritor Inc. claimed an ownership interest in the water system and that
Miller Utilities was the record owner of the relevant lot, the defendants denied that Miller
Utilities was the owner -in -fact of the lot.

                                                               2
No. 44473 -9 -II

        to Buyer' s lot by said hookup, Buyer agrees to pay a monthly use charge based on
        the rates established by the Washington State Public Services Commission.

Clerk' s Papers ( CP) at 39.

        Ripplewood' s seller installed the water system required by the servitude in or before

1971, when the Washington State Department of Health (Department) approved it. The water

system includes trunk lines that cover the entire development and the necessary meters and

valves to enable each lot to connect. Nineteen of Ripplewood' s lots connected to the system

before the year 2000. The lots Hensley and Hansen now own were not among these; neither

Hensley and Hansen nor their predecessors -in-interest ever requested connection.

        In 2000 the Department changed the regulations governing Ripplewood' s water system.

Although the system operates legally under the new rules for its current number of connections,

it must make capital improvements to increase capacity before it may add new connections.

However, the required capital improvements are not all -or- nothing. Ripplewood' s water utility

may make improvements to add a limited number of connections, rather than having to make the

necessary improvements to serve all of its lots before adding any new connections.

        After the Department changed the regulations in 2000, Hensley and Hansen attempted to

sell their lots, but failed to do so. Attributing this failure to the lack of water service to the lots,

they filed   suit against   Heritor. The    suit asserted   two   causes of action relevant   to this   appeal: (   1)

breach of the " duty to provide water service to meet reasonable domestic needs for the lots

owned   by   the   plaintiffs,"   and ( 2) violations of the CPA arising from the breach of the duty to

provide water service. 2 CP at 33.

2
 Hensley and Hansen also alleged that Heritor had recorded a frivolous lien against their lots.
They produced no evidence to support the allegation, the trial court dismissed it, and they do not
claim on appeal that the trial court erred by doing so.
                                                            3
No. 44473 -9 -II

       At trial, Hensley testified that the Department' s changed regulations had resulted in a

moratorium on new connections to Ripplewood' s water system and that the lack of water service

to his and Hansen' s lots meant that any buyer could not get a building permit. Hensley opined

that this lack of water service halved the value of each lot to approximately $ 5, 000. Hensley also

admitted that he had never requested water service from Ripplewood' s utility.

       Heritor moved for dismissal under CR 41( b)( 3) at the end of Hensley and Hansen' s case-

in- chief In doing so, it argued that Hensley and Hansen failed to show breach of any duty

because they had never requested service or paid the necessary connection fees. They also

contended that without any breach of the duty to provide water service, there was no unfair or

deceptive act that would create a CPA violation. The trial court granted this motion after finding

that

                    1.   The Plaintiffs['] Second Amended Complaint relied upon a Declaration
        contained        in the Plat   of   Ripplewood Tracts ...    regarding providing a water system
        for the Tracts.
                    2.     A water system was installed and approved by the State Department of
        Public Health in[ ] 1971. However Plaintiff testified that he does not want water to
        his   six   lots   and   has   not requested   to be hooked up to    water.   Since Plaintiffs have
        not   hooked up           asby the Declaration,[]
                                       required                              Plaintiffs[']
                                                                         claim that the

        Defendants have breached their duty to provide water service to meet reasonable
        domestic needs to Plaintiffs' lots cannot be sustained.

                    4. Plaintiffs[,]     having failed to present evidence that the Defendants did not
        provide water service           to Plaintiffs[']   lots, have failed to support their claim that the
        Defendants are in violation of Chapter RCW 1986.

CPat5.

        Hensley and Hansen now appeal the dismissal of their claims.

                                                               4
No. 44473 -9 -II

                                                        ANALYSIS

                                                I. STANDARD OF REVIEW

        Under CR 41( b)( 3), 3 in a bench trial the court " may grant a motion to dismiss at the

close of    the   plaintiff' s case either as   a   matter of   law   or a matter of   fact."   Commonwealth Real

Estate Servs.      v.   Padilla, 149 Wn.   App.      757, 762, 205 P.3d 937 ( 2009). The parties here agree

that the trial court dismissed Hensley and Hansen' s claims as a matter of fact. The trial court' s

entry of findings of fact " strongly suggests" that they are correct. In re Dependency ofSchermer,

161 Wash. 2d 927; 940, 169 P.3d 452 ( 2007).               We therefore agree with the parties and, accordingly,

review " whether substantial evidence supports the trial court' s findings and whether the findings

support    its   conclusions of   law."   Padilla, 149 Wash. App. at 762 ( citing Schermer, 161 Wash. 2d at

939 -40).

                                     II. DUTY TO PROVIDE WATER SERVICE

          Hensley and Hansen contend that the trial court erred by finding that Heritor did not

breach a duty to provide water service under either the plat agreement or state law, arguing that

the evidence of the moratorium suffices to show the breach.4 Heritor, contends that the trial court

properly found no breach, because Hensley and Hansen never requested water service. We agree

with Heritor and affirm the trial court.

3 CR 41( b)( 3) states, in pertinent part:
          After the plaintiff, in an action tried by the court without a jury, has completed the
          presentation of his evidence, the defendant, without waiving his right to offer
          evidence in the event the motion is not granted, may move for a dismissal on the
          ground that upon the facts and the law the plaintiff has shown no right to relief.
          The court as trier of the facts may then determine them and render judgment against
          the plaintiff or may decline to render any judgment until the close of all the
          evidence.

4 The claim by Hensley and Hansen that the two corporate officers are individually liable is
derivative of the breach of duty claim. Our affirmance of the trial court' s conclusion that no
breach of duty occurred is therefore determinative of these claims.
                                                                5
No. 44473 -9 -II

A.     Duty Under the Plat

       Hensley and Hansen first contend that Heritor breached a duty to provide water service

arising from the servitude in Ripplewood' s recorded plat. Heritor contends that it owed no duty

because Hensley and Hansen never requested water service. This issue turns on when the duty to

provide water service imposed by the plat arose. If, as Hensley and Hansen claim, Ripplewood' s

utility had a duty to provide service as soon as the water system was installed and approved,

Heritor is in breach because Hensley and Hansen cannot currently get service due to the

moratorium. If, as Heritor claims, the duty arises upon a request for service, there was no breach

because a condition precedent to breach, a request for service, never occurred here. Based on

language in the plat, we hold that the duty to provide water service arose upon a request for

service.

           When interpreting a servitude, we attempt to determine the intent of the parties. Riss v.

Angel, 131 Wash. 2d 612, 621, 934 P.2d 669 ( 1997). We give the servitude' s words their ordinary

meanings and construe the document in its entirety. Riss, 131 Wash. 2d at 621.

           Read in its entirety, the servitude did not impose an immediate duty on Ripplewood' s

utility to provide water to Ripplewood' s lots. The first sentence of the servitude obligated

Ripplewood' s seller to build a water system and the buyers of lots in Ripplewood to use the

system after its approval by the Department. The seller complied with this duty by installing the

trunk lines and the meters and valves necessary for individual connections. The remainder of the

servitude, however, distinguishes installation and approval of the system from the actual

provision of service. The second sentence obligates buyers to pay connection fees after

  hookup" rather than after installation and approval of the overall system. CP at 39. The third

                                                     6
No. 44473 -9 -II

sentence requires   buyers to pay monthly    service charges after " water   is delivered,"   which, again,

is distinguished from installation and approval. CP at 39.

       By distinguishing installation and approval of the system from the connection of

customers, the servitude conditions the utility' s duty to provide service to individual lots on

something besides the initial installation and approval of the system. Generally, that something

else is a request for service by the customer. N. States Power Co. v. Nat' l Gas Co., 232 Wis. 2d
541, 549, 606 N.W.2d 613 ( 1999) ( quoting 64 AM. JuR. 2D Public Utilities § 16 ( 1972)).          The

servitude here appears to implicitly follow this rule: water service begins at some time after

installation and approval of the system, and customers connect by requesting to do so. See N

States Power Co., 232 Wis. 2d    at   549 ( quoting 64 AM. JuR. 2D Public Utilities § 16 ( 1972)).

       Reading the servitude to require a request for service before any duty to provide service

exists gives effect to the intent of the parties in agreeing to the servitude. The servitude is a

mutual exchange of promises. Ripplewood' s seller agreed to build a water system for use of the

buyers of lots in Ripplewood. This gave Ripplewood' s buyers access to water when they chose

to develop their lots. Ripplewood' s buyers promised to use the water system to the exclusion of

others, but this duty to use the system is triggered only when the lot owners need water.5 This

interpretation of the servitude serves the seller' s intent by allowing it to recoup money spent on

the water system without saddling lot buyers with fees they do not want or need, which could

decrease the marketability of Ripplewood' s lots in contravention of the seller' s purposes. This

interpretation of the servitude also serves the buyers' intent by ensuring that lot owners have

access to water service when they want to develop their lots.

5 We note that a large majority of Ripplewood' s lot owners have never requested water service.
                                                     7
No. 44473 -9 -II

         A request for service was thus a condition precedent to any breach by Heritor, and the

trial court found that Hensley and Hansen never made any request for service. See Ross v.

Hardin, 64 Wash. 2d 231, 236, 391 P.2d 526 ( 1964) ( quoting 3A Corbin, Contracts, §§ 631, 632

 1960)).    Substantial evidence supports this finding, since Hensley repeatedly testified to that

fact. Without the occurrence of the condition precedent, Hensley and Hansen cannot not show a

breach   of   duty by   Heritor. Partlow    v.   Mathews, 43 Wash. 2d 398, 406, 261 P.2d 394 ( 1953).          The

trial court' s conclusion that Hensley and Hansen' s suit should be dismissed thus flows directly

from its finding that Heritor breached no duty.

         Hensley and Hansen appear to contend they did not need to request service because doing

would    have been futile     and '   the law does   not require performance of   futile   acts. "'   Music v.

United Ins. Co.      ofAm.,   59 Wash. 2d 765, 768 -69, 370 P.2d 603 ( 1962) (   quoting Mass. Bonding &

Ins. Co.   v.   Springsteen, 1955 OK 142, 283 P.2d 819, 823 ( 1955)).       However, the record contains

evidence showing that a request for service would not be, futile, because the connection fees for

Hensley and Hansen' s lots would pay for the capital improvements necessary to lift the

moratorium to the extent needed to serve their lots. Evidence at trial also showed that utilities

commonly use connection fees like the ones Hensley and Hansen would owe to pay for the costs

of complying with changed regulations. We therefore reject Hensley and Hansen' s argument

that they were excused from requesting service because of the futility of doing so.

           Absent a request for service from Hensley and Hansen, the servitude unposed no duty on

Heritor to supply water to their lots. Without a duty to provide service, dismissal under CR

41( b)( 3) was appropriate.

                                                           8
No. 44473 -9 -II

B.         Duty Under State Law

           Hensley and Hansen next argue that Heritor owed a duty to provide water to their lots

under state        law.    Hensley     and   Hansen   claim     that this   duty   arose   from RCW 70. 119A.060( 1)(      a),

which provides            that "[   p] ublic water systems shall comply with all applicable federal, state, and

local    rules."    One     of   Washington'     s rules,     WAC 246- 290 -420( 1),       requires   that "[ a] 11 public water

systems shall provide an adequate quantity and quality of water in a reliable manner at all times

consistent with the requirements of this chapter. "6

           Whether RCW 70. 119A.060( 1) and WAC 246- 290 -420( 1) imposed a legal duty on

Heritor to provide water to the subject lots is a question of law, Crowe v. Gaston, 134 Wash. 2d
509, 515, 951 P.2d 1118 ( 1998),               turning on our interpretation of those provisions. We interpret

agency     regulations        just   as we   interpret   statutes.   Cobra Roofing Servs. v. Dep' t ofLabor &

Indus., 122 Wn.            App.     402, 409, 97 P.3d 17 ( 2004). We attempt to discern and give effect to the

agency'     s   intent. See      Dep' t   of Ecology     v.   Campbell & Gwinn, LLC, 146 Wash. 2d 1, 9 -10, 43 P.3d 4

 2002).     We discern that intent from the plain meaning imparted by the text of the regulation and

any     related regulations.          See Campbell & Gwinn, 146 Wash. 2d at 10 -12. Where the provision

remains susceptible to more than one reasonable interpretation after the plain meaning analysis,

it is   ambiguous and we             turn to   extrinsic evidence of        the agency' s intent. See Campbell & Gwinn,
146 Wash. 2d at 12.

           Chapter 246 -290 WAC makes clear that any duty imposed on public water utilities by

WAC 246- 290 -420( 1) is owed only to consumers of the utility' s services. WAC 246 -290-

001( 1),    which defines the purpose and scope of chapter 246 -290 WAC, states that the chapter' s

6 Ripplewood' s water system is a public water system. See WAC 246- 290 -020( 1).

                                                                     9
No. 44473 -9 -II

purpose is to " define basic regulatory requirements and to protect the health of consumers using

public   drinking    water supplies."     Other subsections of WAC 246 -290 -420 also focus on the term

 consumer."      E.g., WAC 246- 290 -420( 2), ( 5), ( 7), ( 8)(      c).   Similarly, the statutory purpose of the

State' s regulation of public water systems is to protect consumers' health. RCW 70. 119. 010.

         Given the     scope of   the   duty   owed under   WAC 246 -290 -420( 1),      and the trial court' s

finding that Hensley and Hansen had never requested water service, Heritor owed no duty to

provide water service to Hensley and Hansen' s lots. A consumer is " someone who buys goods

or services for personal, family, or household use, with no intention of resale; a natural person

who uses products       for   personal rather    than   business   purposes."   BLACK' S LAW DICTIONARY at

382 ( 10th   ed.).   Hensley and Hansen never requested water service for their lots, and the record

does not show that they are consuming water supplied to those lots. Therefore, they are not

consumers of Heritor' s water service. For that reason, they cannot claim the benefit of any duty

under WAC 246 -290 -420( 1) and therefore cannot claim a duty under RCW 70. 119A.060( 1).

         In addition, Hensley and Hansen' s position would conflict with the purpose of chapter

70. 119 RCW and would raise contradictions in the regulations themselves. As noted, the

purpose of the State' s regulation of public water systems is to protect consumers' health. RCW

70. 119. 010. In service of that purpose, the State determined in 2000 that capital improvements

must be made to the Ripplewood system to increase capacity before any new connections may be

added.    To   now read another public water system regulation,               WAC 246- 290 -420( 1),   to impose a

duty on the Ripplewood utility to add new customers in violation of the 2000 order sacrifices

both consistency and service of the public health.

                                                            10
No. 44473 -9 -I1

          For these reasons, state law does not impose a duty on Heritor to provide water service to

Hensley    and   Hansen'   s   lots   under   the   present circumstances.      The trial court' s dismissal of

Hensley and Hansen' s suit flows from its findings and is consistent with governing law.7
                                                        III. THE CPA

          Hensley and Hansen contend also that Heritor' s breach of its duty to provide water

service to their lots constituted a violation of the CPA. Their CPA claim thus depends on a

breach of duty by Heritor. Because we hold that Heritor did not breach any duty, the CPA claim

must fail.

                                                     IV. ATTORNEY FEES

          Hensley and Hansen do not request attorney fees. Heritor seeks reasonable attorney fees,

contending that Hensley' s and Hansen' s appeal is frivolous under RAP 18. 9.

          RAP 18. 9 authorizes the award of reasonable attorney fees " as sanctions, terms, or

compensatory damages            when    the opposing party      files   a   frivolous   appellate action."   Advocates

for Responsible Dev. v.. W. Wash. Growth Mgmt. Hr' gs Bd., 170 Wash. 2d 577, 580, 245 P.3d 764

 2010).    An appeal is frivolous within the meaning of RAP 18. 9

          if, considering the entire record, the court is convinced that the appeal presents no
          debatable issues upon which reasonable minds might differ, and that the appeal is
          so devoid of merit that there is no possibility of reversal.

7
    Hensley and Hansen contend that dismissal was inappropriate because the trial court never
addressed their statutory and rule -based duty argument. We may sustain the trial court' s
judgment   on any grounds " established by the pleadings and supported by the proof." Gross v.

City of Lynnwood, 90 Wash. 2d 395, 401, 583 P.2d 1197 ( 1978). As shown above, the trial court' s
findings support the trial court's dismissal, since under them Heritor owed no duty to provide
service to Hensley and Hansen' s lots.
                                                               11
No. 44473 -9 -II

Advocates for Responsible Dev., 170 Wash. 2d     at   580.   We resolve any doubt about the

frivolousness of an appeal in favor of the appellant so as to avoid chilling the exercise of the

right to appeal. Skinner v. Holgate, 141 Wash. App. 840, 858, 173 P.3d 300 ( 2007).

        Here, there is no authority on point that would reduce Hensley and Hansen' s argument to

the frivolous, and a person could read the plat agreement in the way they advocate. We hold that

the appeal is not frivolous and decline to award attorney fees.

                                          CONCLUSION

        We affirm the trial court' s dismissal of Hensley and Hansen' s complaint.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2. 06. 040,

it is so ordered.

                                                                           4,c.X
 We concur:

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