CAMANO v. ISLAND, 134 Wn. App. 1020 (2006)

TR CAMANO, INC., ET AL., Respondents, v. ISLAND COUNTY, Appellant.

No. 56692-0-I.The Court of Appeals of Washington, Division One.
July 31, 2006.

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]

Appeal from a judgment of the Superior Court for Skagit County, No. 05-2-00179-1, Michael E. Rickert, J., entered July 12, 2005.

Reversed by unpublished opinion per Baker, J., concurred in by Becker and Dwyer, JJ.

Counsel for Appellant(s), Joshua Choate, Island County Prosecutors Ofc, PO Box 5000, Coupeville, WA 98239-5000.

Counsel for Respondent(s), C. Thomas Moser, Attorney at Law, 411 Main St, Mount Vernon, WA 98273-3837.

Amicus Curiae on behalf of Camano Action For A Rural Environment, David Scott Mann, Gendler Mann LLP, 1424 4th Ave Ste 1015, Seattle, WA 98101-2217.

BAKER, J.

TR Camano (TR) is a land developer seeking to build two small hotels on Camano Island. The subject property is zoned rural village, in which stand-alone hotels are not permitted by the Island County zoning code. TR submitted a site plan application which included the hotels, and requested a zoning code interpretation to permit the plan to go forward. The Island County Planning Department rejected both, and the hearing examiner affirmed. The superior court reversed and remanded the zoning code interpretation request to the department, ordering the agency to consider certain constitutional and statutory issues. The court also remanded the site plan decision to the hearing examiner, ordering him to consider TR’s new site plan in making its decision. We reverse the superior court’s order on the zoning code interpretation based on the principle of res judicata. We also reverse the superior court’s order on the site plan decision, because the hearing examiner has no authority to approve an entirely new site plan submitted on appeal. Finally, we address and reject TR’s constitutional argument, and reinstate the decision of the Island County Hearing Examiner.

I.

TR wants to develop Camano Island property that is zoned rural village. The development proposal includes two small hotels. In rural village zones, stand-alone overnight lodgings (hotels) are not a permitted use. TR asked for a zoning code interpretation as to whether its hotels would be allowed. The planning department initially concluded that hotels were not explicitly excluded from all rural village zones, noting that a special legislative exception had permitted hotels in Coronet Bay, another area zoned rural village. The hearing examiner reversed that decision, finding that when the Board of Commissioners considered hotels in Coronet Bay, it also considered, but rejected, hotels in other rural village zones. The hearing examiner also noted that Island County Code 17.03.035E does not list overnight lodging as a permitted or conditional use in the rural village zone unless it is in conjunction with a cultural center. TR filed a land use petition, but it was dismissed with prejudice at the superior court for failure to serve a party.[1]

TR applied for a second code interpretation, requesting approval for stand-alone hotels and for commercial uses of open space. In the application, TR observed that the Board of Island County Commissioners had allowed overnight lodging as a permitted use in Coronet Bay, which is zoned rural village.[2]
TR argued that the Coronet Bay exception violated article I, section 12 of the Washington Constitution.[3] The planning department refused to consider the hotel issue, applying res judicata because there was no substantial change in the request since the first zoning code decision by the hearing examiner. And after a detailed analysis of the open space issue, the department concluded that the proposed athletic fields, u-fish lake, and miniature golf courses were not permitted uses of required open space.

TR appealed this second code decision to the hearing examiner, arguing that constitutional and statutory issues had not been addressed, and that the planning director had no authority to apply res judicata. The hearing examiner, in an independent analysis, decided that res judicata applied, because there was no substantial change between the first and second appeals.

TR also sought approval for its site plan. The plan included the same hotel and commercial uses rejected in the code interpretation request, so it was rejected. On appeal, the hearing examiner disallowed the hotel and recreational uses, but reopened the record for additional evidence regarding the use of open space in TR’s short plat application. In response, TR submitted an entirely new site plan, not previously considered by the department. The new plan added two new buildings that were labeled “cultural centers,” and removed the u-fish lake, mini-golf, and other commercial uses of open space. The hearing examiner upheld the department’s decision based on the original site plan submitted to the department. TR filed two separate land use petitions, appealing both the code interpretation and the site plan decisions. The cases were consolidated, and the superior court reversed the hearing examiner’s decision.

The court erred in its findings of fact: it found that the planning director denied the second code interpretation request, “believing that an earlier decision by the Planning Director” precluded a decision on the second code interpretation application.[4] On that basis, the court determined that the doctrine of res judicata was improperly applied. The superior court also decided that the hearing examiner improperly failed to consider constitutional and statutory issues raised in the second request. Finally, the court concluded that the hearing examiner should have considered the revised site plan submitted by TR after the record was re-opened.

The court remanded the case back to Island County, ordered the department to review the second code interpretation request “fairly, fully and analytically considering the constitutional and statutory issues raised,” and ordered the hearing examiner to consider the revised site plan. Island County appealed.

II.

The court may grant relief in a land use petition proceeding if the petitioner has established one of the following standards:

(a) The body or officer that made the land use decision engaged in unlawful procedure or failed to follow a prescribed process, unless the error was harmless;
(b) The land use decision is an erroneous interpretation of the law, after allowing for such deference as is due the construction of a law by a local jurisdiction with expertise;
(c) The land use decision is not supported by evidence that is substantial when viewed in light of the whole record before the court;
(d) The land use decision is a clearly erroneous application of the law to the facts;
(e) The land use decision is outside the authority or jurisdiction of the body or officer making the decision; or
(f) The land use decision violates the constitutional rights of the party seeking relief.[5]

The court reversed the hearing examiner, apparently based on RCW 36.70C.130(1)(a).[6] The County seeks to overturn the decision of the superior court and reinstate the hearing examiner’s decision. This court reviews the administrative record de novo, standing in the same position as the superior court.[7] Factual findings are reviewed under the substantial evidence standard; findings of law are reviewed de novo. Under the substantial evidence standard, “there must be a sufficient quantum of evidence in the record to persuade a reasonable person that the declared premise is true.”[8]

Zoning is a legislative act; it is an exercise of state, county, and city police power to “advance the public health, safety and welfare.”[9] Counties zone land for specific uses under the authority of the Planning Enabling Act.[10] The property at issue lies in Island County and is zoned “Rural Village.”[11] Hotels are not allowed in rural village zones unless they are lodging “associate” to a cultural center.[12]
A party who is uncertain, but believes a use may be permitted, may request a code interpretation.[13] A code interpretation, like all quasi-judicial land use decisions, is subject to the principle of res judicata. The test examines “`identity of (1) subject matter; (2) cause of action; (3) persons and parties; and (4) the quality of the persons for or against whom the claim is made.'”[14] Here, only the first element of the test is at issue. Res judicata applies if there is not “a substantial change in circumstances or conditions relevant to the application or a substantial change in the application itself.”[15] Also, “the changes must be relevant to and resolve the disputed conditions in the previous application.”[16]

Application of Res Judicata

The superior court erred in examining the planning director’s application of res judicata. Only the decision of the hearing examiner was subject to review by the court, so the planning director’s decision is irrelevant. Under RCW 36.70C.020(1), only decisions by the “body or officer with the highest level of authority” on land use issues may be reviewed.[17] Here, that authority is the Island County Hearing Examiner, whose decisions are final unless appealed to superior court.[18]

The hearing examiner properly applied res judicata because the second code interpretation request was the same as the first. TR claims there were two “changes” in the second code interpretation application: (1) a different parcel of real property was involved, and (2) new statutory and constitutional challenges to the zoning code were cited. TR cites no legal argument or authority to support the assertion that the parcel change substantially affects the code interpretation request, so this issue need not be addressed.[19] And the newly cited legal issues do not amount to a “change in circumstance,” because those provisions were in effect when the first code interpretation was issued and appealed. Under res judicata, a litigant may not recast his claim under a different legal theory in order to relitigate it.[20]

Regardless of whether the planning director had the authority to apply res judicata, the hearing examiner independently applied it in the second appeal:

On May 18th, 2004, the Island County Hearing Examiner issued a [ZCI] decision which . . . concluded that overnight lodging could not be established as either a permitted or conditional use in the Rural Village zone. . . . Mr. Platter’s attempt to relitigate the issue of allowing overnight lodging as either a permitted or conditional use within the Rural Village zone . . . raises the same issues and involves the same parties as the prior Zoning Code Interpretation sought by Mr. Platter/TR Camano under ZCI 006/04 and the Island County Planning Director correctly declined to address this issue again.

TR’s second request for a code interpretation, requesting hotels in the rural village zone, was identical to the first. TR cites a statute that it could have raised in the first code interpretation application,[21] so this does not qualify as a substantial change in the application itself. The claim that prohibiting hotels in a rural village zone is improper under RCW 36.70.770 is res judicata.

Constitutional Claim

The constitutional challenge, unlike the statutory challenge, is not a matter of res judicata. Although res judicata prevents TR from recasting its claim under a different legal theory in order to relitigate it, this principle is only applicable if there was a final judgment on the merits.[22] Because neither the planning department nor the hearing examiner can rule on a constitutional question, the merits of TR’s constitutional claim have not and could not have been adjudicated in the first request for code interpretation, as res judicata requires.[23]

However, the superior court erred when it remanded this case to the planning department for constitutional evaluation. An administrative agency has no authority to determine the constitutionality of the statute it administers.[24] Only the judiciary may resolve this question.[25] TR properly raised this constitutional challenge in a land use petition,[26] and the superior court should have decided the issue. However, the claim raises a purely legal issue needing no factual findings, so this court can properly rule on it without remand to the superior court.[27]

As to this issue, TR essentially seeks a declaratory judgment that having allowed stand-alone hotels for Coronet Bay, the County cannot refuse to allow them for every other Island County rural village zone. But even if the Coronet Bay exception amounts to unconstitutional spot zoning, what TR seeks is impermissible:

[M]any spot zoning ordinances have been vulnerable to attack, although the courts have been careful not to lay down any hard and fast rule that all spot zoning is illegal.

But when a spot rezoning is a fait accompli, it does not justify additional spot rezoning for the benefit of other property owners who may conceive themselves to be similarly situated. It has quite uniformly been held that permitting some persons to violate a zoning regulation does not preclude its enforcement against others.[28]

TR cites no support for its unprecedented request for a judicial order extending the Coronet Bay exception to other, similarly zoned properties. We reject TR’s constitutional challenge.

New Site Plan on Appeal

When a property owner wishes to develop land, a site plan must be submitted to the Island County Planning Department.[29] The department may approve, disapprove, or grant preliminary approval subject to conditions.[30] If the proposed use within the site plan does not conform to the zoning code, it will not be approved.[31] TR’s site plan was rejected by the hearing examiner because it proposed uses not allowed in the rural village zone.

TR replies that the hearing examiner’s site plan decision was (1) “not supported by evidence that is substantial when viewed in light of the whole record before the court” and (2) “a clearly erroneous application of the law to the facts.”[32]
Substantial evidence in land use decisions is a “`sufficient quantity of evidence to persuade a fair-minded person of the truth or correctness of the order.'”[33] The hearing examiner makes a clearly erroneous application of the law only if the court is left with the firm conviction that a mistake was made.[34]

The record below supports the hearing examiner’s decision. A hearing examiner stands in an appellate role when reviewing a site plan or code interpretation decision.[35] Here, he based his decision on the site plan that was submitted to the planning department; that plan included uses that are impermissible under the Island County Code.

The hearing examiner’s decision is not clearly erroneous. When reviewing a site plan on appeal, the hearing examiner has three options under the Island County Code: “to grant, deny, or grant with such conditions, modifications, and restrictions as the Examiner finds necessary to make the application compatible with [applicable laws].”[36] TR points to no statute, ordinance, or case that requires the hearing examiner to remand an application to the planning department for reconsideration when a revised site plan is submitted on appeal.

We reverse the decision of the Skagit County Superior Court, and affirm the decisions of the Island County Hearing Examiner.

REVERSED.

DWYER and BECKER, JJ., concur.

[1] The superior court paperwork is not in the record, but it appears that the substantive merits of that appeal were never reached because of the procedural errors.
[2] Island County Code 17.03 Appendix A. Apparently this exception was the result of lobbying by a specific, interested developer. However, the exception applies to the entire Coronet Bay zone, not just one specific parcel of land.
[3] `Special Privileges and Immunities Prohibited. No law shall be passed granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which upon the same terms shall not equally belong to all citizens, or corporations.’ Wash. Const. art. I, sec. 12.
[4] As stated above, the planning director cited the decision of the hearing examiner, not the planning director, as the basis for res judicata.
[5] RCW 36.70C.130(1).
[6] The conclusions of law essentially state that the planning director and hearing examiner `failed to consider’ the issues and evidence TR raised.
[7] Wenatchee Sportsmen Ass’n v. Chelan County, 141 Wn.2d 169, 176, 4 P.3d 123 (2000).
[8] Wenatchee Sportsmen, 141 Wn.2d at 176.
[9] 17 William B. Stoebuck John W. Weaver, Washington Practice Real Estate: Property Law sec. 4.1, at 167 (2d ed. 2004).
[10] Ch. 36.70 RCW.
[11] A `rural village zone’ is defined as `The zoning classification applied to non-residential areas that are less than forty (40) acres in size that contain a predominant pattern of development. . . .’ Island County Code 17.03.040.
[12] Island County Code 17.03.035E.
[13] Island County Code 16.19.040-.160.
[14] Hilltop Terrace Homeowner’s Ass’n v. Island County, 126 Wn.2d 22, 32, 891 P.2d 29 (1995) (quoting Rains v. State, 100 Wn.2d 660, 663, 674 P.2d 165 (1983)).
[15] Hilltop Terrace, 126 Wn.2d at 33.
[16] DeTray v. City of Olympia, 121 Wn. App. 777, 789, 90 P.3d 1116 (2004).
[17] RCW 36.70C.020(1); Tugwell v. Kittitas County, 90 Wn. App. 1, 8, 951 P.2d 272 (1997).
[18] Island County Code 16.13.100(A).
[19] State v. Dennison, 115 Wn.2d 609, 629, 801 P.2d 193
(1990).
[20] Stevedoring Servs. of Am. v. Eggert, 129 Wn.2d 17, 40, 914 P.2d 737 (1996).
[21] An administrative agency interprets the statute it administers. 1-10 Washington Administrative Law Practice Manual sec. 10.05 Standards of Judicial Review. So the argument that RCW 36.70.770 prohibits the department’s action could have been raised in the first code interpretation application.
[22] Stevedoring Servs., 129 Wn.2d at 40.
[23] It is not clear if the claim was raised in the first land use petition, but regardless, the merits of that appeal were never reached because it was dismissed for procedural reasons.
[24] See Exendine v. City of Sammamish, 127 Wn. App. 574, 586-87, 113 P.3d 494 (2005) (city council has no power to enforce, interpret, or rule on constitutional issues and therefore cannot delegate such power to hearing examiner), rev. denied, 156 Wn.2d 1018 (2006).
[25] See Prisk v. Poulsbo, 46 Wn. App. 793, 798, 732 P.2d 1013
(1987) (when the issue raised is the constitutionality of the law sought to be enforced, `only the courts have [the] power’ to decide).
[26] RCW 36.70C.130(1)(f).
[27] In re Marriage of Tower, 55 Wn. App. 697, 701, 780 P.2d 863 (1989).
[28] State ex rel. Miller v. Cain, 40 Wn.2d 216, 225, 242 P.2d 505 (1952) (citations omitted).
[29] Island County Code 16.15.020.
[30] Island County Code 16.19.160.
[31] See Island County Code 16.15.080(A)(2) (no site plan shall be approved unless it `meet[s] the requirements of Chapter 17.03 ICC’).
[32] These two standards are from RCW 36.70C.130(1)(c) and (d).
[33] Benchmark Land Co. v. City of Battle Ground, 146 Wn.2d 685, 694, 49 P.3d 860 (2002) (quoting City of Redmond v. Cent. Puget Sound Growth Mgmt. Hearings Bd., 136 Wn.2d 38, 46, 959 P.2d 1091 (1998)).
[34] Lakeside Indus. v. Thurston County, 119 Wn. App. 886, 894, 83 P.3d 433 (2004).
[35] Island County Code 16.13.100(A)(5) and (9).
[36] Island County Code 16.19.180(B).
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