State Supreme Court reverses and remands determination that City of Tacoma was not liable for damages in land use case.

By Tadeu Velloso

On September 19, 2019, our State Supreme Court released a decision in The Church of Divine Earth v. City of Tacoma.   The Court only considered whether the City of Tacoma (City) can be held liable for damages for imposing an unlawful condition on a building permit. 

The Church of Divine Earth (Church) sought to build a parsonage on church-owned land.  Among other requirements, the City required the Church to dedicate land for a right-of-way without any compensation from the City.  Despite dropping the other requirements and conditions, the City still required that the Church dedicate the right-of-way. 

The Church appealed to the hearing examiner.  The hearing examiner ruled in the City’s favor relying on the need for street uniformity in that area.  The Church then appealed to the Superior Court.

In the LUPA appeal, the Superior Court decided that the City acted unlawfully by imposing the dedication of land requirement as a condition of the Church’s building permit.  However, the Superior Court denied the Church’s request for damages.  The Court of Appeals affirmed.  Here, the Supreme Court reversed the Court of Appeals’ decision and remanded this matter for new trial. 

The Court did not consider the constitutionality of the underlying land use decision or just compensation for a taking.  Instead, it considered whether the City should have known that its actions were unlawful.  To prove otherwise, the City would have to establish that the required easement dedication solved a public problem and, as such, the condition was proportional to the impact resulting from the Church’s proposed project.  The City was unable to justify its dedication requirement relying solely on the need for street uniformity as raised by the hearing examiner.

The Court determined that, on appeal, the trial court considered “improper, irrelevant evidence,” including testimony from City officials regarding visibility concerns, and that “the Court of Appeals . . . applied the wrong standard in its review.”  Majority at 5-6.  RCW 64.40.020 establishes an objective standard, asking whether the City’s final decision “should reasonably have been known to be unlawful.”  Instead, the Court of Appeals held that the City “reasonably believed” its dedication requirement was lawful—a subjective standard.  The Court notes: “The City's subjective belief that the dedication was lawful does not determine what it objectively should reasonably have known.”  Majority at 9.

Justice Yu, with support from Chief Justice Fairhurst, authored the accompanying dissent reasoning that the trial court did not err by considering additional evidence and that the Court of Appeals applied the correct legal standard for assessing liability.

The opinion can be read in its entirety here.

Stacey Tuesta