Costich Petition for Review

8/4/2019 Costich Petition for Review

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RECEIVE

AUG 2 9 ~ 0 0 3

COURT OF APPEALS, DIVISION III

CAUSE NUMBER 21114-2-111

STATE OF WASHINGTON,

Petitioner,

v.

ELROY COSnCH; ELROY COSTICH as trustee under the COSTICH

LIVING TRUST,

Respondents,

SPOKANE COUNTY,

Defendant.

PETITION FOR REVIEW

RECEIVED

SEP 0 2 2001

; \7 T ORNEY GENERAL'S OFFH,::E.' ,.!'JSPORTATIOI'J ,8, PU i3UC

COf\JSTRUCTION D!ViSION

CHRISTINE O. GREGOIRE

Attorney General

JOHN F. SALMON III

Assistant Attorney General

WSBA No. 20812

Transportation & Public ConstructionPost Office Box 40113

Olympia, Washington 98504-0113

(360) 753-1622



TABLE OF CONTENTS

1.

II.

III.

N.

V.

VI.

IDENTITY OF PETITIONER ....................... 1

COURT OF APPEALS' DECISION . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION ............................... 1

ISSUES PRESENTED FOR REVIEW .................. 2

A. Does the Court ofAppeals' decision requiring the publicto pay a property owner's attorney and expert witnessfees where the jury verdict is $30,000 tess than theDOT's highest written offer in settlement conflict withthis Court's decision in State v. Swarva? . . . . . . . . . . . . . . 2

B. Does the Court ofAppeals decision invalidating theDOT's offer improperly make adjustment for fees andcosts in conflict with the Court ofAppeals, Division 1'sholding in SeaTac v. Cassan? ..................... 2

C. Does the Court ofAppeals' decision, which prohibitscondemnors from considering factors other than theiropinion of the fair market value of the owner's propertyin making settlement offers, thereby hindering efforts tosettle condemnation lawsuits, raise issues of substantialpublic interest? ......................... . . . . . 2

ST ATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . 3

ARGUMENT FOR ACCEPTANCE OF REVIEW . . . . . . . . . . 5

A. The Court OfAppeals' Decision Ignores The PlainLanguage OfRCW 8.25.070 And Conflicts With ThisCourt's Decision In State v. Swarva. ...... . . . . . . . . . . 5

B. The Court OfAppeals' Decision Conflicts With TheDivision One Holding In SeaTac v. Cassano .......... 10

C. Because It Hinders Efforts To Settle CondemnationLawsuits, The Court OfAppeals' Decision Raises Issues

Of Substantial Public Importance..................

12

D. The Court ofAppeals' Advisory Decision RequiringCondemnors To Leave Settlement Offers Open ForThirty Days Before Trial Raises Issues Of SubstantialPublic Importance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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VII. CONCLUSION ........................ . · ...... 19

i i



TABLE OF AUTHORITIES

. Cases

Moore v . Moore,

2 0 Wn. App. 909 (1978) . . . . . . . . . . . . . . . . . . . . . . . . 9

SeaTac v . Cassan,

93 Wnw App. 357 (1998) . . . . . . . . . . . . 2, 10 , 1 1 , 12

Sea t t l e v . Rio,16 Wn. App. 718 (1977) . . . . . . . . . . . . . . . . . . . . . . . 11

Snow's Mobile Homes, Inc. v . Morgan,

80 Wn.2d 283 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

S ta te ex re l . Washington Sta te Convention andTrade Center ,101 Wnw App. 25 (2002) . . . . . . . . . . . . . . . . . . . . . . . 11

S ta te V . Olson,

31 Wnw App. 403 (1982) . . . . . . . 11, 15 , 16 , 17 , 18

S ta te v . Swarva,

86 Wn. 2 d 29 (1975) . . . . . . . . . . . . . . . . 2, 5 , 7 , 8, 9

Walker v . Munro,

124 Wn.2d 402 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . 15

S t a t u t e s

Laws o f 1971, 1 s t Ex. S ess . , ch . 39 , § 3 . . . . . . . 15

RCW 8 . 2 5 . 0 7 0 1 , 4 , 5, 10, 11, 13 , 1 4 , 15, 16, 17, 18

RCW 8 . 25 . 070 ( 1) (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

RCW 8 .2 5 .0 7 0 (5 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

RCW 8 .2 5 .1 2 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 , 3 I 8 , 9

RCW 8 . 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

RCW 8 . 26 . 180 . . . . . . . . . . . . . . . . . . . . . . . . 1 , 5 , 6 , 7 , 8

RCW 8 . 2 6 . 18 0 (2 ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

i i i



RCW 8.26.205 I , 5, 7

Other Authori t ies

WPI 150. 05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

iv



I. IDENTITY OF PETITIONER

The Washington State Departmentof

Transportation(DOT), an agency of the State of Washington, and the

Appellant in this action, asks the Court to accept review of the

decision designated in Part II of this Petition.

II. COURT OF APPEALS' DECISION

The DOT seeks review of the Court of Appeals' decision

filed on June 19, 2003. That decision affinned an award of

attorney and expert witness fees of$100,740 in a condemnation

case although the jury returned a verdict of $30,000 less than

the DOT's pre-trial settlement offer. A copy of the decision is

attached as Appendix A. The presiding judge denied the

DOT's Motion for Reconsideration by order dated August 1,

2003, which is attached as Appendix B.

III. INTRODUCTION

Under certain circumstances, RCW 8.25.070 1 entitles a

condemnee to attorney fees if the judgment exceeds the

agency's highest written "offer in settlement" by ten percent or

more. This was intended to encourage early settlement before

the significant costs of preparing for trial are incurred. Here,

the DOT offered more in settlement than what the eventual

1 The statutes referred to in this Petition for Review, RCW

8.25.070, RCW 8.25.120, RCW 8.26.180, and RCW 8.26.205, areattached as appendices to this Petition.

1



verdict was, yet had to pay fees essentially because it offered

more to settle the case than its eventual trial evidence of fair

market value. This result is contrary to both the plain meaning

of the statute and the underlying policy. It also negatively

impacts the ability of all public agencies to settle condemnation

cases.

The Court of Appeals' decision should be reversed

becauseit:

(1) improperly relies on RCW 8.26 to create newrights in condemnation actions contrary to this Court's holding

in State v. Swarva, 86 Wn.2d 29 (1975); (2) contradicts

Division I's holding in SeaTac v. Cassan, 93 Wn. App. 357

(1998); and (3) frustrates the Legislature's goal of encouraging

settlement in condemnation cases. The DOT respectfully

contends that the dissenting opinion is correctly reasoned and

should be followed by this Court.

IV. ISSUES PRESENTED FOR REVIEW

A. Does the Court of Appeals' decision requiring thepublic to pav a propertv owner's attorney and expertwitness fees \vhere the jury verdict is $30,000 less thanthe DOT's highest written offer in settlement conflictwith this Court's decision in State v. Swarva?

B. Does the Court of A p ~ e a l s decision invalidating theDOT's offer improperly make alijustment for feesand costs in conflict with the Court of Appeals,Division I's holding in SeaTac v. Cassall?

C. Does the Court of A p ~ e a l s ' decision, which prohibitscondemnors from considering factors other than their

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opinion of the fair market value of the owner'sproperty in making settlement offers, therebvhindering efforts to settle condemnation lawsuits,

raise issues of substantial public interest?

D. Does the Court of Appeals' advisory decisionreguiring condemnors to leave settlement offers ineffect for thirty days before trial raise issues ofsubstant ial publIc importance?

V. STATEMENT OF THE CASE

This IS a condemnation action brought to acqUlre

property needed for the construction of the North Spokane

Corridor Highway Project on State Route 395. The DOT

brought this condemnation action to acquire approximately two

and one-half acres of property located in Spokane County. In

preparation for the valuation trial, both the DOT and the

Costiches retained expert witnesses to appraise the value of the

property. The DOT's expert witness valued the property at

$191,200. The Costiches' expert witness valued the property at

$382,000. The parties exchanged these appraisal conclusions in

November 2001 pursuant to RCW 8.25.120.2

Thirty-three days before the date set for trial, the DOT

sent a written offer to settle the case for $282,500 pursuant to

2 The Court of Appeals' decision incorrectly states that the DOTdid not disclose its opinion of fair market value. The record shows that

this opinion was disclosed in November 2001. CP 193 (11-29-01 entry).The Court of Appeals also incorrectly identifies the date of the appraisal

done by the DOT's expert witness, Bruce Jolicoeur, as August 21, 2001.Costich Opinion at 3 and 9. In fact, Mr. Jolicoeur only visited theproperty in August. His appraisal was not completed until November2001 and then revised in December. CP at 34-35, 194 (12-17-01 entry).

3



RCW 8.25.070. CP 99. RCW 8.25.070(1)(b) provides that a

condemnee sha11 be awarded attorney and expert witness feeswhen "the judgment awarded as a result of trial exceeds by ten

percent or more the highest written offer in settlement

submitted to those condemnees appearing in the action by

condemnor in effect thirty days before the trial." By its terms,

this written settlement offer was scheduled to expire nine days

after it was served. However, on the ninth day, the DOT

offered to extend the expiration date for another week. CP 103.

The Costiches then served the DOT with a motion to invalidate

the offer for a11eged failure to comply with RCW 8.25.070. CP

59-60. The Costiches argued and the trial judge agreed that the

settlement offer was invalid because it expired prior to trial and

because it was greater than the DOT's expected just

compensation testimony.3 RP at 8 11. 5-9; CP at 48-49.

At trial the jury awarded $252,000 as just compensation

for the taking, which was $30,000 less than the DOT's

settlement offer. However, because it had previously ruled the

DOT's settlement offer invalid, the trial court then awarded

$88,157.55 in attorney's fees and $12,582.35 in expert witness

3 Where, as in this case, the condemnor acquires the entireproperty, just compensation is the fair market value of the property. WPI

150.05.

4

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fees. The DOT appealed the order invalidating its settlement

offer and thefee

award.VI. ARGUMENT FORACCEPTANCE OF REVIEW

A. The Court Of Appeals' Decision Ignores The PlainLanguage Of RCW 8.25.070 And Conflicts With ThisCourt's Decision In State v. Swarva.

The plain language of RCW 8.25.070 directs trial courts

to award reasonable attorney and expert witness fees to

condemnees only where the judgment awarded as a result of

trial exceeds by ten percent or more "the highest written offer in

settlement. . .in effect thirty days before trial." Instead of giving

effect to this plain language, the Court ofAppeals engaged in a

misguided exercise in statutory interpretation by grafting

guidelines for pre-condemnation acquisitions found in RCW

8.26.180 to the provisions ofRCW 8.25.070.

Specifically, the Court of Appeals found that the

provisions of RCW 8.26.180 limited the DOT to offering

precisely $191,200, which was its evidence of fair market

va1ue.4 Co stich Opinion at 9. In doing so, the Court ofAppeals

ignored RCW 8.26.205, which explicitly limits the effect of

RCW 8.26.180, and this Court's holding in State v. Swarva,

supra, that RCW 8.26.180 creates no legal rights in acondemnation action. In reaching this decision, the Court of

4 As noted earlier, the DOT's expert witness concluded that

$191,200 represented just compensation for the property.

5



Appeals mistakenly found that guidelines for agency

acquisitionof

real property found in RCW 8.26.180 Imposeduties on condemning agencies even after the cases have

entered into adversarial condemnation proceedings. The Court

of Appeals stated:

The State must make every effort to aCRuire thep'roperty through negotiation. RCW 8.20.180(1)Every effort' mcludes informing the condemneeof the State's fair market value determination.RCW 8.26.180(3). Before negotiations begin, the

State must have the property appraised and fix anamount which it believes represents 'justcompensation' for the 'Rroperty. The State mustthen 'make a prompt offer to acquire the propertyfor the full amount so established. In no eventshall such amount be less than the agency's~ p p r o v e d appraisal of the fair market value.'RCW 8.26. I 80(2), (3). We read these provisionsas requiring the State in this case to offer Mr.Costicn $191,200 in just compensation when itreceived this appraisal m August 2001.

Costich Opinion at 9.

By its own terms, RCW 8.26.180 relates only to pre

acquisition activity by the acquiring agency. See RCW

8.26.180(2) ("Real property shall be appraised before the

initiation of negotiations;") RCW 8.26.180(3) ("Before the

initiation of negotiations for real property, the acquiring agency

shall establish an amount which it believes to be just

compensation therefore ....") The DOT met these requirements

prior to the initiation of this condemnation action. CP 26-30.

RCW 8.26.180 does not create a duty for the DOT to

6



immediately transmit new settlement offers when it receives

new condemnation appraisals during pre-trial preparation in thecondenmation litigation. In relying on RCW 8.26.180 as the

basis of its holding, the Court of Appeals ignored RCW

8.26.205, which provides:

The provisions of RCW 8.26.180, 8.26.190 and8.26.200 create no rights or liabilities and do notaffect the validity of any property acquisitions bypurchase or condemnation.

(Emphasis added.)

The Court ofAppeals also ignored this Court's holding in

State v. Swarva. In that case, this Court confirmed that the

plain language of RCW 8.26.180 means what it says.

We note initially that RCW 8.26.180 is a guidelinestatute only, and its terms do not declare rights.

Swarva, 86 Wn.2d at 33.

In Swarva, this Court held that the guidelines found in

RCW 8.26.180 do not affect subsequent condemnation

litigation. Swarva at 33. The Swarva court held that the State

was not prohibited from making a settlement offer for more

than its trial testimony concerning just compensation. "Such

practice is one purpose of settlement-to avoid litigation and its

resulting cost and delay." Swarva at 33. The Court of Appeals'

holding that the State in this case was limited to offering no

7



more than its opinion of just compensation is therefore in direct

conflict with the Swarva decision and should be reversed.

In addition, the Court of Appeals' holding on this issue

makes RCW 8.25.120 superfluous. RCW 8.25.120 provides the

mechanism for the reciprocal exchange of appraisal

information. It provides:

After the commencement of a condemnation

action, upon motion of either the condemnor orcondemnee, the court may order, upon such termsand conditions as are fair and equitable theproduction and exchange of the writtenconclusions of all the appraIsers of the Rarties as tojust compensation owed to the conaemnee, asprepared for the purpose of the condemnationactIOn, and the comparable sales, if any, used bysuch aRpraisers. The court shall enter such orderonly after assurance that there will be m u t u a l ~ recIprocal and contemporaneous disclosures ofsimIlar information between the parties.

By holding that condemnors have a duty to immediately

disclose their appraisal information under RCW 8.26.180, the

Court of Appeals makes RCW 8.25.120 superfluous. A

unilateral duty on the part of the DOT to disclose its appraisal is

contrary to the requirement that there be an exchange of

information and that the exchange be "mutual, reciprocal, and

con temporaneous."

8



Two statutes relating to same subject matter, if they are

not in conflict, should be interpreted to give meaning and effect

to both. Moore v. Moore, 20 Wn. App. 909, 913 (1978).

"(T)he courts are obliged to interpret a statute, if possible, so

that no portion of it is superfluous, void, or insignificant."

Snow's Mobile Homes, Inc. v. Morgan, 80 Wn.2d 283, 288

(1972).

Furthermore, the Court of Appeals' concerns regarding

disclosure of appraisal information are easily allayed by

reference to RCW 8.25.120 and the discovery rules which

provide for discovery of appraisal information. In this case the

Costiches knew months before trial that the DOT's opinion of

fair market value was $191,200. Therefore, the Court of

Appeals' statement that "Swarva cannot be read to say that the

State need not disclose what its determination of the fair market

value is," (Costich Opinion at 10) is misplaced and

demonstrates that the Court of Appeals did not understand the

record or the law regarding the discovery of appraisal

information.

9



..

B. The Court Of Appeals' Decision Conflicts With The

Division One Holding In SeaTac v. Cassano

The Court of Appeals' decision also misconstrues the

holding in SeaTac v. Cassan, 93 Wn. App. 357 (1998). In

Cassan, Division I of the Court of Appeals held that attorney

fees, interest and costs should not be added to the jury verdict to

determine whether the award at trial exceeded by ten percent or

more the highest written settlement offer made before trial.

Cassan at 361-62. By the same reasoning, it was improper for

the court to invalidate the DOT's highest written offer in

settlement on the theory that it included amounts for fees,

interest, and trial risks. If, under Cassan, no adjustments to the

offer of settlement are permitted after trial, no adjustments

should be permitted before trial either. RCW 8.25.070 uses the

phrase "written offer in settlement." There is no legal

requirement that the offer in settlement be dissected into

component parts. There is also no reason to treat a settlement

offer in a condemnation case differently from a settlement offer

in any other case. The settlement offers of other litigants are

not limited to their trial evidence and there is no legitimate

reason to apply such a rule in condemnation cases.

The Court of Appeals' decision in this case asserts

"applying the [Cassan] reasoning here, the state cannot add fees

and costs to its offer in order to beat the jury award." Costich

10



Opinion at 8. Of course, there is absolutely nothing in Cassan

that prohibits a condemnor from considering, when making itsoffer, the possibility that it might be responsible for fees if its

offer is too low. The Cassan court simply held that the relevant

figures for determining eligibility for an attorney fee award

were the "offer in settlement" and the jury verdict. The Cassan

court applied the statutory text-the Court of Appeals in this

case did not do so.

Many decisions have stated that one purpose of RCW

8.25.070 is to ensure that both parties in a condemnation

proceeding make a good faith attempt at settlement before trial.

Seattle v. Rio, 16 Wn. App. 718, 721-22 (1977); State ex rei.

Washington State Convention and Trade Center, 101 Wn. App.

25,31-32 (2002); State v. Olson, 31 Wn. App. 403,407 (1982).

I f one of the purposes of RCW 8.25.070 is to encourage

settlement, then condemnors must be allowed to make offers

based on the costs and risks associated with going to trial. The

attorney fee statute recognizes this and uses the phrase "offer in

settlement" rather than "offer of just compensation." RCW

8.25.070. RCW 8.25.070(5) also demonstrates that the

Legislature intended settlement offers to be something other

than just compensation. That paragraph prohibits the use of an

"offer in settlement" at trial for any purpose in d e ~ e r m i n i n g the

amount of "compensation" to be paid for the property. Clearly,

11



the Legislature intended that "offers in settlement" should have

a different meaning than 'Just compensation". The Court of

Appeals ignored the plain language of the statute,

misunderstood the holding in Cassan, and should be reversed.

C. Because It Hinders Efforts To Settle CondemnationLawsuits, The Court Of Appeals' Decision RaisesIssues Of Su bstantial Public Importance.

As the dissenting opinion in this case points out, there is

no statutory or other good reason to prohibit the DOT fromconsidering the same factors that other litigants consider when

making settlement offers, and the Legislature has not done so.

By restricting "offers in settlement" to fair market value, the

Court of Appeals' decision makes settlement in condemnation

cases less likely than where condemnors are free to make an

"offer In settlement" that considers the intangibles,

uncertainties, and risks that are present in nearly every lawsuit.

It is common in condemnation cases, as it is in most

types of lawsuits, to consider any number of risk factors when

formulating settlement offers. In a "total take" condemnation,

'Just compensation" for a particular piece of property is the fair

market value of that property. In addition to its determination

of fair market value for the property, a condemning authority

may consider factors such as: (a) the risk of a high jury award

and the risk of paying attorney and expert witness fees; (b) the

12



significant costs that may be saved by avoiding preparation for

trial and the actual trial of the case as well as potential post trial

litigation costs; and (c) other intangibles such as the complexity

of the legal and factual issues involved in the case, and whether

they involve unsettled issues oflaw.

Offers of settlement in condemnation cases are almost

always higher than the condemnor's evidence of fair market

value as a result of these considerations. It simply makes nosense to invalidate a settlement offer because it is too high.

RCW 8.25.070 applies to condemnations initiated by any state

or local agency exercising the power of eminent domain.

Because the Court of Appeals' decision in this case affects the

ability of all condemning agencies to settle these cases prior to

trial, it raises an issue of substantial public interest.

D. The Court of Appeals' Advisory Decision Requiring

Condemnors To Leave Settlement Offers Open For

Thirty Days Before Trial Raises Issues Of Substantial

Public Importance.

Because it ruled that the DOT's offer in settlement was

invalid on the grounds previously discussed, the Court of

Appeals did not analyze the meaning of the words "in effect

thirty days before trial." In the interest of judicial economy,

this Court should rule on this issue and find as the dissenting

opinion did that "in effect thirty days before trial" means what

13



it says and not "in effect for thirty days" or "in effect for the

thirty days" before trial as the Costiches have argued.

The Court of Appeals in this case offered an advisory

opinion without conducting any analysis of the Issue. The

Court of Appeals' opinion in this case states:

We need not, therefore, address the State'scontention that an offer is "in effect thirty daysbefore the trial" if it is operative, howeverfleetingly, on the 30th day before trial. We

nevertheless mention in passing-purely asdictum-that, as we read this statute, the State isrequired to keep its offer in effect for a full 30days.s

Costich Opinion at 6. If the Court of Appeals wished to decide

that issue, it should have done so directly. If it wished to pass

on the issue, it should not have included gratuitou's remarks.

These unsupported conc1usory remarks are poor jurisprudence

and unfairly prejudice all condemning authorities in future

5 The Court of Appeals' assertion that the DOT contended that a

settlement offer satisfies RCW 8.25.070 "if it is operative, however

fleetingly, on the 30th day before trial" repeats and erroneously attributes

to the DOT the Costiches' mischaracterization of the DOT's argument. Itwas never the DOT's argument that its offer could be "fleeting." In fact,

the DOT argued that any offer must be open for a reasonable amount of

time, and that fifteen days in this case (eight days plus a seven day

extension) was a reasonable amount of time for the offer to be open.

DOT's Reply Brief at 4.

14



proceedings. See, e.g., Walker v. Munro, 124 Wn.2d 402, 411

12 (1994 ) (courts are not authorized to issue advisory opinions).

This dicta, as well as the statement in the first line of the

opinion that the State must have a written offer of settlement

"in effect for thirty days before trial," which simply misstates

the language of RCW 8.25.070, should be corrected.

Prior to its amendment in 1984, RCW 8.25.070

conditioned an award of attorney fees on the judgment awarded

as a result of trial exceeding "by ten percent or more the highest

written offer in settlement submitted to . . . condemnees . . . at

least thirty days prior to commencement ofsaid trial." Laws of

1971, 1st Ex. Sess., ch. 39, § 3. (Emphasis added.)

In the case of State v. Olson, 31 Wn. App. 403 (1982),

the Court of Appeals observed that the phrase "at least thirty

days," could lead to inequities when a property's value

depreciated significantly over the course of a lengthy

condemnation proceeding. Id. at 407. The Olson court,

therefore, suggested thatthe

Legislature should amend thestatute to address a perceived injustice that arose in that case.

15



A thorough understanding of the facts in Olson is key to

appreciating why the Olson court suggested that the Legislature

amend RCW 8.25.070. The purpose of the amendment was to

bring the offer closer in proximity to trial, not to require that the

offer remain openfor thirty days.

In Olson, the State began condemnation proceedings to

acquire a sandspit located in Clallam County in January 1979.

In July 1979, the State offered $90,000 for the property which

was rejected. Then in January 1980, the property's value was

drastically reduced by a flood. After this flood event, the State

reappraised the property and offered just $35,000 for the

property prior to trial. Id. at 405.

At trial the jury awarded $57,000 and the condemnees

requested attorney fees. This request was denied because under

the plain meaning of the statute, the highest written offer made

at least thirty days before trial was $90,000. Therefore, the

judgment at trial had not exceeded by ten percent or more the

highest written offer in settlement made at least thirty daysprior to the trial. Id. at 405-406.

16



While the Olson court held that RCW 8.25.070 was

unambiguous and, therefore, the owners, were not entitled to

attorney fees, the court also noted that in circumstances where

properties depreciated significantly during the course of

litigation, there might be apparent inequities inherent in strict

interpretation of the statute. Consequently, the court in Olson

offered a suggestion for the statute's improvement.

Recognizing that an offer made in effect thirty days before trial

more accurately reflected the actual value of the depreciated

property at the time of trial than an offer which had been in

effect more than a year earlier, before the depreciation had

occurred, the Olson court suggested that "the statute should be

amended 'so as to base attorney and witness fee entitlement on

the highest written offer in settlement in effect 30 days before

trial.'" Olson, 31 Wn. App. at 407. (Emphasis added.)

Significantly, in Olson, there is no discussion whatsoever about

the length of time that the offer must remain in effect.

In 1984, the Legislature acted on the Olson court's

suggestion and amended the statute, using the very words the

court suggested. The Legislature replaced the phrase "highest

written offer in settlement . . . at least thirty days prior to

17



commencement of said trial" with "highest written offer in

settlement ... in effect thirty days before triaL" 1984 Wash.

Laws, ch. 129, § 1. The Legislature did not at that time, or at

any time since, see fit to include in the statute a requirement

that the condemnor's offer be in effect for the entire thirty days

prior to trial. The Olson case and the legislative history of

RCW 8.25.070 demonstrate that the addition of restrictions or

requirements on settlement offers in condemnation cases should

be made as a matter of policy by the Legislature, not by a

judicial amendment of the statute.

This Court should find, as the dissenting opinion below

did, that settlement offers under RCW 8.25.070 must be in

effect thirty days before trial. To hold otherwise will only

encourage expensive and wasteful preparation during the days

immediately preceding trial, when such cases can and should be

settled without such a misuse of litigant and court resources. If

the Court of Appeals is correct, the DOT and all other

condemning agencies would always be required to incur the

cost of full-blown trial preparations, with owners still entitled to

accept the settlement offer on the courthouse steps. RCW

8.25.070 does not require such an absurd result and surely the

Legislature did not intend to force such meaningless litigation

. 18



expenses on the public, where its stated intent was to encourage

early settlement. Because the Court of Appeals' "dicta" stating

that offers in settlement must remain in effect for thirty days

before trial affect all public condemning authorities, it raises

issues of substantial public importance, and should be reviewed

by this Court.

VII. CONCLUSION

This case raises an issue of substantial public interest:

the process by which public agencies deal with private property

owners in condemnation cases. The Court of Appeals' decision

ignores the relevant statutory language and conflicts with

published decisions of both this Court and Division I. Unless

reversed, the Court of Appeals' decision will make settlement

of condemnation cases more unlikely because condemnors will

be prohibited from making realistic offers of settlement.

Therefore, the DOT requests that the Court grant its Petition for

Review.

19



RESPECTFULL Y SUBMITTED this 29th day of

August, 2003.

CHRISTINE O. GREGOIRE

Attorney General

Assistant Attorney General Transportation & Public Construction

Post Office Box 40113

Olympia, Washington 98504-0113

(360) 753-1622

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APPENDIX "A"

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FILED 'JUN 1g 2003

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

STATE OF W A S ~ G T O N , )

) Appellant, )

) v. )

)ELROY COSTICH; ELROY )COSTICH as trustee under the )COSTICH LIVING TRUST, )

)

Respondents, ) )

SPOKANE COUNTY, )

) Defendant. )

---- ----.. ) STATE OF WASHINGTON, )

) Respondent, )

)

v. ) )

ELROY COSTICH; ELROY )

COSTleH as trustee uDder the )

COSTICH LIVING TRUST, ))

Appellants, )

)

SPOKANE COUNTY, ) )

Defendant. )

No. 21114-1-IDNo. 1 1 2 4 3 - 1 ~ m

Division Three

Pane) Nine

PUBLISHED OPINION

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No. 21 114-2-nI, 21243-2-IIIState v. Costich

.SWEENEY, J.-In a condemnation action, the State must have a written offer of

settlement in effect for 30 days before a mal to f1Xjust compensation. RCW 8.25.070(1).

I f the jury's compensation award exceeds that offer by more than 10 percent, the

landowner gets attorney fees and costs. Here, the State made what it-called an "all

inclusive offer. t But, when pressed by the landowner to specifY the amount ofjust

compensation being offered, the State refused to break do'WD. the total to show the amoWlt

being offered for just compensation. So it was impossible for the landowner to compare

any subsequent jury award to the State's pretrial offer.

The question before us is whether this "all inclusive offer" satisfied the

requirements ofRCW 8.25.070(1). We conclude that it did not. And we therefore affinn

the judgment of the trial court awarding fees and costs.

FACTS

The Washington State Department ofTransportation sued to condemn a piece of

north Spokane property owned by Phillip ~ o s t i c h . The State established a just

compensation value of$134,000 based on preliminary appraisals. Following the

statutory condemnation protocol, the State made a written offer and paid $134,000 into

the registry of the court in exchange for Mr. Costich's stipulation to immediate

possession and use. Phillip Cost ich declined the $134,000 offer and demanded ajuI)'

trial.

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. o. 211 14-2-III, 21243-2-IllState v. Costich

Trial was set for March 4, 2002 on the only unresolved question-the amount of

just compensation to be paid for the property. Meanwhile, on August 21. 2001) the State

received a second appraisal of$191 ,200. Although this was the just compensation value

the State planned to offer at trial. the offer was not passed along to !vir. Costich.

On January 30, 2002-34 days before trial-the State made 'a written settlement

offer of$282,500. The State described this offer as~ ' a l l · i n c l u s i v e , · ~

and told Mr. Costich

1

that the offer would expire on February 8.

!vir. Costich responded by asking what portion of the offer represented the State's

fair market value offer for the land and what part of the remainder represented interest,

attorney fees, and so forth. The State responded that "our offer is the written settlement

offer referred to iD. RCW 8.25.070.,,2 C l e r k ~ s Papers (CP) at 78. The State persisted in

its refusal to identifY how much, if any, of the offer was for amounts extraneous to the

fair market value offer for the land. In response to every inquiry, the State simply

reiterated that the offer was a "global settlement": U[i]n formulating this offer in

settlement we did not itemize the categories . . . this offer is all-inclusive." CP at 79-80.

"'All-inclusive means that the offer settles all claims in this condemnation action." CP at

t Phillip Costichdied shortly before the State made this offer. His brother, ElroyCostich, was substituted as the condemnee.

2 RCW 8.25.070(1)(a) and (b) provide that the condemnee is entitled to expertwitness fees and attorney fees if either the condemnor fails to make an offer at least 30days prior to trial or the jury award exceeds the offered amount by 10 percent or more.

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.. No. 211 14-2-III, 21243-2-IIIState v. Costich

103. Mr. Costich proceeded on the assumption that the "all-inclusive" offer included

interest, attorney fees, and ·so forth, as well as the fair market value, and asked the State

to advise immediately if that assumption was wrong.

rvtr. Costich then moved for a pretrial ruling that the State's "all-inclusivet offer

did not constitute an offer for the purposes of determining his entitlement to fees under

RCW 8.25.070. He argued that the lack ofa clear statement of the State 's fair market

value determination rendered the offer useless for the purpose of comparison with the

jury award. The judge agreed. The court ruled that the offer did not comply with the

statute and was invalid. This left the original $134,000 offer as the highest written offer

in effect for the pW'poses of comparison with any jury award. In addition, the court

concluded that the offer was doubly invalid because it did not remain open for 30 days

before the trial as required by the statute.

Following the court's ruling. on February 19 (less than 30 days before trial)1the

State made another written offer of $283,000. Mr. Costich again asked for a breakdown.

This time the State said the $283,000 was the sum of its offers for just compensation,

interest, and an unspecifi.ed amount for the time the State would save by not preparing for

trial and appeal. The State suggested that Mr. Costich could submit a separate attorney

fee request for its discretionary consideration. Mr. Costich ignored this invitation.

Trial was held to fix the amount of just compensation. The jury fixed the fair

market value of the Costich property at $252,000. The court entered judgment for Mr.

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No. 21114-2-III. 21243-2-InState v. Costich

Costich for $365,669.20. This included $88,157.75 for attorney fees; $12.582.35 for

expert witness fees; $1,214.52 for costs; and $11.714.58 in prejudgment interest:

The State filed a timely notice of appeal. A month later, the State returned to the

superior court and filed a belated motion for an order of appropriation, vesting title to the

property in the State upon its payment into court of $252,OOO-the amount ofjust

compensation sans costs and fees. Mr. Costich challenged the superior court's

jurisdiction after the State had filed an appeal, and argued that title could vest only upon

payment of the total judgment. The superior court ruled against Mr. Costich and entered

an order ,of appropriation vesting title in the State upon payment of $252,000 (the jury's

just compensation award).

Before this court are two appeals. The State appeals the order invalidating its

January 30 uall-inclusive offer" and the award of attorney fees. Mr. Costich appeals the

entry of the order of appropriation vesting title in the State on payment of less than the

full judgment amount.

DISCUSSION

THE STATE'S APPEAL

RCW 8.25.070(1) provides in part:

[l]f a trial is held for the fixing of the amount of compensation . . . , thecourt shall award . . . reasonable attorney's fees and reasonable expertwitness fees in the event ofany o f the following:

(a) lfthe condemnor fails to make any written offer in settlement tocondemnee at least thirty days prior to commencement of said trial; or

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(b) If the judgment awarded as a result of the trial exceeds by tenpercent or more the highest written offer in settlement submitted to thosecondemnees appearing in the action by condemnor in effect thirty daysbefore the trial.

(Emphasis added.)

We are asked to review the trial court's interpretation of the statutory term

"highest written offer in settlement:· Our review is, therefore, de novo. State ex reI.

Wash. State Convention & Trade err. v. Allerdice, 101 Wn. App. 25, 28, 1 P.3d 595

(2000). Our determination is dispositive on the issue of attorney fees. We need not,

therefore, address the State's contention that an offer is "in effect thirty days before the

trial" ifit is operative, however fleetingly, on the 30th day before trial. We nevertheless. ~ .

mention in passing-purely as dictum-that, as we read this statute. the State is required

to keep its offer in effect for a full 30 days.

Highest Written Offer in Settlement

The State contends that its " a l 1 - i n c 1 u s i v e ~ 7 offer of $282,500 was a valid offer in

settlement fot' the purposes ofRCW 8.25.070(1)(b). 1vfr. Costich responds that, under the

State's interpretation of the statute, thejury award and the pretrial offer are like apples

and oranges, impossible to compare in deciding whether the award beat the offer by 10

percent. This is because the jury award includes only the just compensation amount, with

no fees or other judgment costs. City o/SeaTac v. Cassan,93 Wn. App. 357,362.967

P.2d 1274 (1998). Costs and fees are added later by the court if certain statutory

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conditions are met. Calcula tion of the jury award as a percentage of the State's pretrial

offer is possible, therefore. 'Only if the two numbers represent the same value.. That is, the

pretrial 'Offer must state unequivocally what the State's fair market value 'Offer is.

Canons 0fConst1'uction. The power of eminent domain is strictly construed

against the government. State ex reI. Wash. State Convention & Trade etr. v. Evans, 136

Wn.2d 811, 836, 966 P .2d 1252 (1998) (Sanders, 1., dissenting) (citing 3 JULIUS L.

SACKMAN, NICHOLS ON EMINENT DOMAIN§ 9.03, at 9-17,9-18 (3d rev. ed. 1998)). The

provisions of Title 8 RCW are strictly construed, both as t'O the extent of the State's

power and Uto the manner 'Of its exercise." Slate v. Teuscher) 111 Wn.2d 486,497) 761

P.2d 49 (1988). Statut'Ory language is interpreted in light 'Of the statute as a whele. In re

Sehome Park Care etr., Inc., 127 Wn.2d 774, 778,903 P.2d 443 (1995).

Just Compensation Means Fa;r Market Value. Just c'Ompensation is the fair

market value of the property. Petersen v. Port o!Seattle, 94 Wn.2d 479.487,618 P.2d

67 (1980). A jury must "fix as a lump sum the t'Otal amount of damages which shall

result te all pers'Ons or parties . . . by reason of the appropriation and use of the lands."

RCW 8.04.110. The cendemnatien award is the full and equitable menetary equivalent

of tile preperty. Lange v. State. 86 Wn.2d 585) 547 P.2d 282 (1976); State v. McDonald,

98 Wn.2d 521, 656 P.2d 1043 (1983).

Ina mirror image 'Of the facts here, the corollary issue has been decided: Can the

landewner add atterney fees, interest, costs, and so f'Orth te thejury's fair market value

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award in order to beat by 10 percent the S ~ t e ' s offer that included only fair market

value? The court held that it could not, because the ext:ran"eous costs and fees bear no

relationship to just compensation and should DQt be included. in the calculations. C a $ s a n ~

93 Wn. App. at 361-62. Applying the same reasoning here, the State cannot add fees and

costs to. its offer in order to beat the jury award.

Statutory Framework. The eminent domain statutory scheme contains provisions

designed to put the State in possession of the property early in the condemnation

'proceedings. while a-voiding the time. trouble, and expense of a jury trial. This requires

the cooperation of the landowner, who has the constitutional right to receive just

compensation before turning over possession. WASH. CONST. art. I. § 16. The owner

also has the statutory right to a trial by jury to detennine the amount ofjust

compensation. RCW 8.04.092; RCW 8.04.094; RCW 8.04.110.

RCW 8.25.070 uses attorney fees and costs as part ofa design to encourage

settlement before trial. I t ensures that each side makes a good faith effort to settle . State

v. Olson. 31 Wn. App. 403,407,642 P.2d 410 (1982). It encourages the landowner by

making the award of attorney fees contingent on bettering the State's offer at trial. Id. It

encourages the State by awarding fees if its best pretrial offer is bettered by 10 percent.

RCW 8.25.070(1Xb).

RCW 8.25.070 works in concert with RCW 8.04.090, which provides for the State

to obtain immediate possession and use of the property during negotiations. Besides

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encouraging the State to make, and the property owner to accept, a reasc:>nable offer,

RCW 8.25.070 creates an additional inducement to the owner to transfer possession to

the State early in the proceedings. I t does this by making the owner's right to receive

attorney fees contingent upon the stipulation to immediate possession and use. RCW

8.25.070(3).

Acquisition Procedures. The sole purpose of negotiations and trial in

condemnation proceedings is to establish the amount ofjust compensation. RCW

8.25.070(1) (Hif a trial is held for the fixing of the a m o u n ~ of compensation"). RCW

8.04.010 provides for a jury trial to detennine "compensation to be made . . . for taking

such land." RCW 8.04.110 also says a trial shall be held to determine "compensation and

damage to be awarded."

The State must make every effort to acquire the property through negotiation.

RCW 8.26.180(1). "Every effor t" includes infonning the condcmnee of the State's fair

market value detennination. RCW 8.26.180(3). Before negotiations begin, the State

must have the property appraised and fix an amount which it believes represents 'Just

compensation" for the property. The State must then "make a prompt offer to acquire the

property for the full amount so established. In no event shall such amount be less than

the agency's approved appraisalof the fair market value." RCW 8.26.180(2), (3). We

read these provisions as requiring the State in this case to offer Mr. Costich $191,200 in

just compensation when it received this appraisal in August 2001.

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Forthright Offer Required. The State insists that an unambiguous offer ofjust

compensation is optional. The State is mistaken. The statute provides:

The acquiring agency shall provide the owner ofreal property to be

acquired with a written statement of, and sununary of the basis for, theamount it established as just compensation. Where appropriate the just

compensation for the real property acquired, for damages to remaining realproperty. and for benefits to remaining real property shaH be separatelystated.

RCW 8.26.180(3) (emphasis added).

The State's reliance on State v. Swarva is misplaced. State v. Swarva, 86 Wn.2d

29, 541 P .2d 982 (1975). At issue in Swarva was whether an order of immediate

possession binds the State to pay the amount offered at that time, even if the jury award is

less. Id. at 30. Swarva merely holds that the State can offer more than its lowest

appraisal of the fair market valuein

the interests of avoiding trial. Swarva cannot be read

to say that the State need not disclose what its determination of the fair market value is.

ld. at 34.

We therefore agree with the trial judge. He correctly concluded that the State's

highest written offer for the purposes ofRCW 8.25.070 was the $134,000 offered to

secure the order of immediate possession and usc. The January 30 so-called "all

inclusive" offer did not establish the State's determination ofjust compensation. RCW

8.26.180(3). The only offer on the table was, then, th7 $134,000 preliminary offer made

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inorder to secure immediate possession and use. And, of course, the jury's award easily

exceeded this offer by more than the 10 percent required by the statute.

MR. COSTICB'S APPEAL

Waiver of Appeal

On May 10, the State filed its appeal. On June 20. the superior court released

$118,000 of the deposited judgment funds to Mr. Costich.

The State contends that Mr. Costich, as condemnee, waived any right to appeal the

entry of an order of appropriation by accepting the judgment funds. :Mr. Costich

responds that the statute precludes only an appeal of the amount of the damages award.

The statute provides that the landowner may immediately withdraw the funds that

were deposited by the State at the outset of the proceedings to secure an order of

immediate possession and use. RCW 8 . 0 ~ t 0 9 0 . But, if the landowner withdraws funds

deposited to pay the sum awarded by the jury, he is 4'deemed thereby to have waived

conclusively appellate review." RCW 8.04.150.

But Mr. Costich did not appeal the sum awarded by the jury. He appealed the

post-judgment entry of the decree of appropriation. He did not, therefore, waive his right

to this unrelated appeal by accepting the immediate possession funds.

Another section of the statute requires that, once an appeal is file¢! by either party,

all moneys paid into the registry of the court must remain in the custody of the court until

after the appeal is decided. RCW 8.04.130. But. if the court erroneously releases the

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funds, nothing in the statute penalizes the landowner by foreclosing his right to appeal

issues umelated to the amount of the award.

The authorities Cited by the State here do not require a different result. In State v.

Sternoff, the landowners' appeal o fthe judgment amount was dismissed because they had

taken the funds. State v. SternoJf. 64 Wn.2d 465,469,392 P.2d 222 (1964). State v.

Smithrock Quarry, Inc. holds that neither party can appeal the judgment after the court

has disbursed the funds. State v. Smithrock Quarry, Inc., 49 Wn.2d 623, 625, 304 P.2d

1043 (1956). Neither case involves an appeal of an order other than the judgment

amount.

........... Superior Court's Jurisdiction Following State's Appeal

Mr. Costich argues that once the State appealed the attorney fees award, the

superior court lost jurisdiction to enter any further orders in the case. RAP 7.2(e) permits

the superior court to enter an order modifYing a prior ruling. The decree of appropriation,

however, did not modifY a prior ruling. It was an entirely separate order.

Jurisdiction is the power to hear and detennine a cause or proceeding. State v.

Hampson. 9 Wn.2d 278,281, 114 P.2d 992 (1941). Jurisdiction is a question oflaw

which we review de novo. Crosby v. Spokane County, 137 Wn.2d 296,301,971 P.2d 32

(1999).

Once an appeal is before us, RAP 7 .2( e) penni ts the superior court to hear: a

posgudgment motion authorized by statute and to change or modify its decision. If the

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postjudgment action will affect the appeal, the pennission of the appellate court must be

obtained prior to the fonnalentry of the trial court decision. RAP 7.2(e). The trial

court's postjudgment action may itself be appealed, in which case the appellate court may

consolidate the two cases. RAP 7.2(e).

Here, the statutory scheme unconditionally instructs the court to enter a decree of

appropriation at the time the judgment is entered. RCW 8.04.120. The postjudgment

entry of the decree will not affect the State's appeal of an attorney fee award. Under

RAP 7.2(e), therefore, the superior court could hear the motion and enter a decree. Mr.

Costich may appeal it. And we can consolidate the two appeals, which is what we did.

The court then had jurisdiction.

Decree of Appropriation for Less than Full Amount of Judgment

Mr. Costich next contends that the attorneys fee award merges with the

compensation judgment. State v. Wachsmith, 4 Wn. App. 91, 93,479 P.2d 943 (1971).

Therefore the State must pay into court the total amount of this judgment, including the

fee award, before it can obtain title to the property. Instead, the State received title by

depositing the amount of the jury award for just compensation only_ The State now takes

the position that extraneous items such as interest. attorney fees, and so forth that are

unrelated to just compensation are not part of the judgment. City ofSeaTac v. Cassan,93

Wn. App. 351,967 P.2d 1274 (1998). The State therefore contends it was required to

deposit only the amount awarded for just compensation.

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RCW 8.04.120 says: "At the time of rendering judgment for damages, whether

upon default or trial, the court or judge thereof shall also enter a judgment or decree of

appropriation of the land." The decree has the same effect as a deed.

Mr. Costich reads the phrase "enter a judgment or decree" as authorizing the court

either to enter judgment on the verdict or to enter a decree ofappropriation, but not both.

We reject this interpretation. As we read RCW 8.04.120, it commands that, at the same

time that the court enters judgment on the verdict, the court must also enter an order

vesting title in the State. The statute refers to that order a supplementary "judgment or

decree." "Judgment" here does not refer to the judgment for damages.

In the usual case, the court enters judgment on the verdict and a conditional decree

of appropriation in a single order. The tenns of the judgment provide that, upon payment

into court of the amount of the judgment, a decree of appropriation wiU be entered. See,

e.g., State ex reI. Struntz v. Spokane County, 85 Wash. 187, 188, 147 P. 879 (1915); State

v. Calkins, 54 Wn.2d 521,525-26,342 P.2d 620 (1959). Even though combined, the

judgment fixing the award and the tmal decree of appropriation are two distinct

judgments. Calkins, 54 Wn.2d at 526. Satisfaction ofjudgment on the verdict is, then, a

prerequisite for the right to receive title: "Under statutes such as ours, the rights of the

parties are correlative. There can be no vested right in the one party until there is a

vested right in the other." Struntz, 85 Wash. at 189-90, quoted in C a I ~ n . s , 54 Wn.2d at

526-27. Ifthc court here had entered the decree of appropriation simultaneously with the

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entry ofjudgment, as RCW 8.04.120 mandates, the decree would likely have been made

contingent on payment of the entire judgment amount, including fees.

But Calkins and Struntz predate the enactment of the attorney fees provisions of

RCW 8.25.070. The judgment being discussed in those cases includes, therefore, only

the award of just c o m p e n s a t i o n ~ But payment ofjust compensation is a constitutional

quid pro quo for taking title. WASH. CONST. art. I, § 16. Entitlement to attorney fees, by

contrast, is entirely statutory. RCW 8.25.070; State v. Buckley, 18 Wn. App. 798, 801,

572 P.2d 730 (1977). Nothing in Title 8 RCW requires the order awarding attorney fees

to be entered contemporaneously with the judgment on the verdict. And nothing in the,

constitution requires that attorney fees be paid as a condition for transfer of title.

Therefore, in entering the decree of appropriation separately, the judge was not

constitutionally required to condit ion the vesting of title upon satisfaction of the attorney

fees award, but only upon the constitutionally required just compensation.

The statutory scheme of Title 8 RCWread as a w h o ] e ~ however, does require the

condemnor to deposit with the court the full amoWlt of the judgment, including inherent

fees and costs.

After the trial court enters judgment, the statute provides for the attorney general

to obtain a warrant from the state treasury and to "forthwith" deposit with the court the

full amount of the award together with "the costs of said proceeding." RCW 8.04.130;

RCW 8.04.160. These provisions say the State "may" do this, but this does not mean that

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the attorney general or the court has discretion over whether the full amount of the

judgment must be deposited. Rather, the pennissive language leaves open the option of

abandoning the acquisition if the just compensation award is lUlsatisfactory. State ex reI.

Peel v. Clausen, 94 Wash. 166, 162 P. 1 (1917). Once it receives possession and use

under RCW 8.04.090, however, the State is statutorily precluded from abandoning the

acquisition. Buckley, 18 Wn. App. at 800.

Here, the State took possession under RCW 8.04.090 before the trial. Moreover,

the property was under 40 feet of rubble when the decree of appropriation was sought

The State had no intention of abandoning the acquisition. In light ofRCW 8.04.130 and

.160, therefore, the State was required to deposit the full amount of the judgment. The

court should have ordered the State to do this, decree or no decree.

Our prior decisions are in accord. Where an award of attorney fees and costs is

made and included in the judgment for damages, the fee award is merged in the total

judgment for damages. Wachsmith, 4 Wn. App. at 96.

Mr. Costich complains that vesting title before the judgment was paid into court

deprives him of any protection i f the State refuses to pay. But RCW 8.04.130 and .160,

as discussed above, require the State to forthwith obtain and deposit with the court a

warrant for the full amount of the judgment. And RCW 8.04.090 provides that the order

of immediate possession and use binds the State '1:0 pay the full amount of any fmal

judgment." We have interprt:ted "final judgment" to mean judgment after review.

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Wachsmith, 4 Wn. App. at 95. By seeking and securing immediate use and possession

here, therefore. the State bound itself to pay the full amount of the judgment as affmned

on appeal.

Both parties. then, benefited from the court's inadvertent departures from the

black letter statute in this case. The statutory scheme binds the State to deposit the full

amount of the judgment. It also precludes Mr. Costich from withdrawing any disputed

funds until after the appeal is concluded. The errors were mutually beneficial and,

therefore, hannless.

Frivolous Appeal

Finally, the State contends that Mr. Costich's appeal on the question of title

vesting is frivolous because the highway has been built and there was nothing to gain by

delaying the vesting of title.

An appeal is frivolous if it presents no debatable issue' upon which reasonable

minds might differ and is so devoid of merit that there is no reasonable possibility of

reversal. State ex rei. Quick-Ruben v. Verharen, 136 Wn.2d 888, 905, 969 P.2d 64

(1998). An appeal is not frivolous simply because the arguments are rejected. In re

Marriage ofWagner, 111 Wn. App. 9, 18.44 P.3d 860 (2002). All doubts as to whether

the appeal is frivololls are resolved in favor of the appellant, consider ing the record as a

whole. Id.

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No. 21114-2-III, 21243-2-II1

State v. Costich

Here, what constitutes satisfaction of the judgment for the purposes of vesting title

is no less debatable than what constitutes an offer for the purposes ofattorney fees.

Disposition of each issue presented nove] questions of intetpretation of a complex

statutory scheme and judicial decisions. No Washington case was directly on point.

Mr. Costich's appeal is not, then. frivolous.

ATTORNEY FEES

:Mr. Costich is entitled to attorney fees and costs as prevailing party in appeal No.

21114-2-III. the State's appeal of the judgment. Neither party is entitled to fees in appeal

No. 21243-2-III, Mr. Costich's unsuccessful appeal of the post udgment order.

The judgment of the trial court is affmned.

I CONCUR:

Kato, A.C.J.

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No.11114-2-nI; No. 21243-2-DI

KURTZ, J. (dissenting) - RCW 8.25.070(1)(b) directs trial courts to award

reasonable attomey fees and expert fees to condemnees if:

(T]he judgment awarded as a result of the trial exceeds by ten percent or

more the highest written offer in settlement submitted to those condenmeesappearing in the action by condemnor in effect thirty days before the trial.

(Emphasis added.) Here, the trial court ordered State to pay attorney fees and expert

witness fees and costs even though the jury verdict on just compensation was $30,000

less than the State's highest written offer in settlement in effect 30 days before trial. The

trial court achieved this result by connecting the phrase "highest written o f f ~ r in

settlement" to ''just compensation," and by interpreting the phrase "in effect thirty days

before the triartto mean "in effect for thirty days before the trial" or possibly "in effect

for the thirty days before the trial."

In interpreting a statute, this court's primary goal is to ascertain the intent of the

legislature. Dep't of Ecology v. Campbell & Gwinn, L.L.C'7

146 Wn.2d 1,9,43 P.3d 4

(2002). If the statute's meaning is plain on its face, we must give effect to that plain

meaning as an expression of the legislative intent. Id. at 9-10. The "plain meaning" rule

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No. 21114-2-111; No. 21243-2-ID State v. Costich

includes not only the ordinary meaning of the words, but the underlying legislative

purpose and closely related statutes to detennine the proper meaning of the statute. Id. at

11. If the plain meaning inquiry shows the existence of an ambiguity, we may construe

the meaning of the statute with the aid of other sources of interpretation. Yd. at 12.

The plain 1anguage ofRCW 8.25.070 does not limit the "bighest written offer in

settlement" to just compensation, nor does the statute indicate a relationship between the

two phrases. When the legislature uses different language in the same statute that deals

with related matters, the .legislature is presumed to have intended that. those words have

different meanings. Silver Firs Town Homes. Inc. v. Silver Lake Water Dist., 103 Wn.

App. 411, 419, 12 P.3d 1022 (2000), review denied, 143 Wn.2d 1013 (2001) . While

other parts ofTitle 8 RCW refer to 'Just compensation," RCW 8.25.070 does not.

Instead, for the statute the legislature uses the broader term Hoffer in settlement."

Arguably, the legislature used the broader term, "offer in settlement," instead of

the narrower term, "just compensation:- to encourage settlement. The State should be

allowed to include intangibles other than fair market value or just compensation in the

settlement offer. Here, the Department ofTransportation's opinion of ' just

compensation'- was $191,200. But its offer of settlement exceeded that amount by almost

$100,000. What is the reason for prohibiting the State from considering the same things

that other litigants consider when they make settlement offers?

2

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No. 21114-2-III; No. 21243-2-m

State v. Costich

The trial court's second reason for ruling that the State"s offer was invalid was that

the State's offer was not in effect for 30 days before trial. RCW 8.25.070(1)(b)

authorizes the trial court in condern.nation cases to make certain awards to the condemnee

if the judgment awarded as a result of trial exceeds by 10 percent or more the highest

written offer in settlement uin effect thirty days before the trial/' The State's settlement

offer was made on January 30, 2002, a:rid was scheduled to expire on February 8,2002, or

24 days before the March 4, 2002 trial.

The Costiches argue that the phrase "in effect thirty days before the triar'should

be read as meaning "in effect for thir ty days before the trial" or even Hin effect for the

thirty days before the trial." We are instructed to add words to a statute only where its

omission creates a contradiction that renders the statute absurd and undermines its sole

purposes. Nielsen v. Employment Sec. Dep"l, 93 Wn. App. 21, 36, 966 P.2d 399 (1998).

Here, the addition of the words "forto or "for the" in front of "thirty days before the trial"

is no t necessary to avoid a contradiction or absurdity. Addition of these words simply

changes the meaning of the statute.

I therefore respectfully disagree with the majority and I would reverse the

judgment in favor of the Costiches.

Kurtz, 1.·

3

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APPENDIX "B"

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08/29/03 PRI 12:21 FAX 360 586 6847 AGO - TPC flIChapter 8.25.070 RCW - The Washington State Legislature Page

AboutJJs, Search

RQW T l I l , E : . ~ » I!I!.._E._e » Q H ~ E I E B J t , 4 , ~ » SECTION 6.25.070

f 3 , 2 ~ . Q ~ Q . « 8.25.070 » . e . : . ~ 5 . 0 , Z . ~

~ c 8.25.070Award of attorney's fees and witness fees to condemnee •• Conditions to award.

(1) Except as othelWise provided in subsection (3) of this section, if a trial is held forthe fixing of the amount of compensation to be awarded to the owner or partyhaving an interest in the property being condemned. the court shall award the

condemnee reasonable attorney's fees and reasonable expert witness fees in theevent of any of the following: "

(a) If condemnor fails to make any written offer in settlement to condemnee at least thirty days prior to commencement of said trial; or

'b) If the judgment awarded as a result of the trial exceeds by ten percent or

the highest written offer in settlement submitted to those condemnees""-1earing in the action by condemnor in effect thirty days before the trial.

(2) The attorney general or other attorney representing a condemnor in effectinga settlement of an eminent domain proceeding may allow to the condemnee

reasonable attorney fees.

(3) Reasonable attorney fees and reasonable exp'ert witness fees authorized bythis section shall be awarded only if the condemnee stipulates, if requested to do soin writing by the condemnor, to an order of immediate possession and use of the

property being condemned within thirty days after receipt of the written request, orwithin fifteen days after the entry of an order adjudicating public use whichever islater and thereafter delivers possession of the property to the condemnor upon thedeposit in court of a warrant sufficient to pay the amount offered as provided by law.In the event, however, the condemnor does not request the condemnee to stipulateto an order of immediate possession and use prior to trial, the condemnee shall be

entitled to an award of reasonable attorney fees and reasonable expert witness

fees as authorized by subsections (1) and (2) of this section.

(4) Reasonable attorney fees as authorized in this section shall not exceed thegeneral trial rate, per day customarily charged for general trial work by thecondemnee's attorney for actual trial time and his or her hourly rate for preparation.Reasonable expert witness fees as authorized in this section shall not exceed the("' . -+omary rates obtaining in the county by the hour for investigation and research

ly the day or half day for trial a t t endance . ' "

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(5) In no event may any offer in settlement be referred to or used during the trialfor any purpose in determining the amount of compensation to be paid for the-"operty.

c 129 § 1; 1971 ex.S. c 39 § 3; 1967 ex.s. c 137 § 3.]

NOTES:

Court appointed experts: Rules of court: ER 706.

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06 ) 29 ) OJ FRJ. 12; 22 I 'AA 566 586 BU' x a - TPC ~ Chapter 8.25.120 RCW - The Washington State Legislature . Page

L ~ g i s l a t u r ~ H..ome About Us J;-Mail U ~ f $ . Search

.KG.Y\I : r I T ~ J ; § » T I T . ~ ~ . . a » . ~ t . 1 S P . T . e R 8 2.2 >.> SECTION 8.25.120

e , . ~ 9 . , O r § .. « 8.25.120 » 8 . 2 . ~ . . ! ~ O O

RCW 8.25.120Conclusions of appraisers - Order fo r production and exchange betweenparties.After the commencement of a condemnation action, upon motion of either thecondemnor or condemnee, the court may order. upon such terms and conditions asare fair and equitable the production and exchange of the written conclusions of allthe appraisers of the parties as to just compensation owed to the condemnee, asprepared for the purpose of the condemnation action, and the comparable ~ a l e s , ifany, used by such appraisers. The court shall enter such order onty after assurancethat there will be mutual. reciprocal and contemporaneous disclosures of similarinformation between the parties.

£1969 ex.s. c 236 § 8.]

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.W i we 11<1 14 .... l i iX 360 560 6641 AGO - c ~ Chapter 8.26.180 RCW - The Washington State Legislature page

About l)s

RC,W..JITbJ;S » I J . T b . t ; . ~ » C H A e I . f . ; B . . ~ ~ ~ . e . » SECTION 8.26.180

8.26.. tt§. « 8.26.180 » §...~ . ~ . 1 . $ O

RCW 8.26.180Acquisition procedures. Every acquiring agency shall, to the greatest extent practicable, be guided by the following policies:

(1) Every reasonable effort shall be made to acquire expeditiously real property by negotiation.

(2) Real property shall be appraised before the initiation of negotiations, and the

owner or his designated representative shall be given an opportunity to accompany at least one appraiser of the acquiring agency during his inspection of the property, except that the lead agency may prescribe a procedure to waive the appraisal in cases involving the acquisition of property with a low fair market value

.,3) Before the Initiation of negotiations for real property. the acquiring agency~ I establish an amount which it believes to be just compensation therefor, andshall make a prompt offer to acquire the property for the full amount so established.In no event shall such amount be less than the agency's approved appraisal of thefair market value of such property; Any decrease or increase in the fair market

value of the real property to be acquired prior to the date of valuation caused by thepublic improvement for which such property is acquired, or by the likelihood that the

property would be acquired for such improvement, other than that due to physicaldeterioration within the reasonable control of the owner, will be disregarded indetermining the compensation for the property. The acquiring agency shall providethe owner of real property to be acquired with a written statement of. and summaryof the basis for, the amount it established as just compensation. Where appropriatethe just compensation for the real property acquired, for damages to remaining realproperty, and for benefits to remaining real property shall be separately s t a ~ ~ d .

(4) No owner shall be required to surrender possession of real property before the agreed purchase price is paid or deposited with a court having jurisdiction of

condemnation of such property. in accordance with applicable law, for the benefit of the owner an amount not less than the acquiring agency's approved appraisal of the fair market value of such property, or the amount of the award of compensation in the condemnation proceeding of such property. _ .

(5) The construction or development of a public improvement shall be sp . ,. . ~ d u l e d that, to the greatest extent practicable, no person lawfully occupying real

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8.26.180 RCW - The Washington State Legislatux'e

property shall be required to move from a dwelling or to move his business or farmoperation without at least ninety days wrrtten notice of the date by which such move. 'qulred.

If an owner or tenant is permitted to occupy the real property acquired onrental basis for a short term or for a period subject to termination on short notice,the amount of rent required shall not exceed the fair rental value of the property to ashort-term occupier.

(7) In no event shall the time of condemnation be advanced, on negotiations or

condemnation and the deposit of funds in court for the use of the owner be deferred, or any other coercive action be taken to compel an agreement on the price to be paid for the property. .

(8) If an interest in real property is to be acquired by exercise of the power of eminent domain, formal condemnation proceedings shall be instituted. The acquiring agency shall not intentionally make it necessary for an owner to institute legal proceedings to prove the fact of the taking of his real property.

(9) If the acquisition of only a portion of a property would leave the owner with anuneconomic remnant, the head of the agency concerned shall offer to acquire thatremnant. For the purposes of this chapter, an uneconomic remnant is a parcel ofreal property in which the owner is left with an interest after the partial acquisition of

the owner's property and that the head of the agency concerned has determinedhas little or no value or utility.

0) A person whose real property is being acquired in accordance with this"-rpter may. after the person has been fully informed of his right to receive justcompensation for the property, donate the property. any part thereof. any interesttherein, or any compensation paid for it to any agency as the person may

determine.[1988 c 90 § 12; 1971 ex.s. c 240 § 18.]

NOTES:

Section captions -1988 c 90: See note following RCW ~ . ~ 9 - , - Q 1 0 .

~ 0Page

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08/29/03 PRI 12:23 FAl 360 S86 6847 AGO - TPC ~ 0RCW - The W a s h i n ~ o n State Legislature J:l'age

~ - M a i l Usts

. 8 ~ W TII!-ES » Til],,!;. 8 » yH_APTER a.2§ » SECTION 8.26.205 p-.rjnt Y ~ . n . i l p . D

e . . , 6 J ~ : . 2 0 0 « 8.26.205 » ! } . 2 ~ ..21 Q

RCW 8.26.205Effect on certain property acquisitions.The provisions of RCW e . . , - ~ _ § ! .. 80.. 6.2§...J.. ~ 0 , and .8.._ 2 § , ~ O Q create no rights orliabilities and do not affect the validity of any property acquisitions by purchase orcondemnation.

{19B8 e 90 § 15.]

NOTES:

Section captions --1988 c 90: See note following RCW 8.26,010.

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Costich Petition for Review

Documents

Transcript of Costich Petition for Review