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Cell phone towerT-Mobile West LLC v City of Medina, U.S.D.C. No. C14-1455-RSL (W.D. Wash., August 25, 2015) involved Plaintiff’s federal court challenge under the Federal Telecommunications Act (FTA) to the denial of its cell tower application.  After the case was filed but before trial, the original parties (i.e., the applicant and the City) proposed a stipulated judgment that would allow the tower on the proposed site with some modifications.  Intervening neighbors objected to the same.

2010 GrassSpring Training has begun!  The boys of summer have reported to camp and pre-season games are underway.  While major league teams are preparing for the coming baseball season in sunny Arizona and Florida, the Chicago Cubs baseball club has started its season in federal court in Illinois.  The Cubs are renovating historic Wrigley Field, which includes adding a large video board and signs in the outfield.  The new video board and signs happen to block the view of the field for neighbors beyond right field who have rooftop businesses that provide patrons with food, drinks and views of Wrigley Field events.  The rooftop businesses have sued the Cubs to stop construction.  They have also sued the City of Chicago and the City’s Landmark Commission for approving the renovation to the ballpark in the first place.

In their suit against the Cubs, the rooftop businesses have alleged that the Cubs are violating the Sherman Antitrust Act by strategically constructing the video board and signs in locations that block the views of the rooftop businesses, while not blocking views from other rooftops that the Cubs own or control.  The rooftop businesses have also alleged that the Cubs’ renovations violate a 2004 settlement agreement between the Cubs and the rooftop owners, which provided that the rooftop owners would pay the Cubs a royalty based on gross revenues in return for unobstructed views of the field.

Last month, the rooftop businesses sought a temporary restraining order against the Cubs to halt construction of the video board and signs.  After considering arguments from both sides, the federal judge threw the rooftop businesses a curve and denied their request for a TRO.  The judge ruled that the rooftop businesses failed to satisfy their burden of proving immediate and irreparable harm from the construction, because the businesses did not provide evidence of potential loss of income.

The ruling is not a home run for the Cubs, however.  A further hearing is scheduled for March 23 to determine whether the rooftop businesses are entitled to a preliminary injunction to halt construction.  With opening day in Wrigley Field scheduled for April 5, and with renovations reportedly behind schedule, the Cubs will be hoping to turn a double play and prevail again so the renovation can be completed.

House on euros in forestK.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.) involved petitions for declaratory judgment by a construction company and a developer for a refund of what in Oregon are termed “systems development charges” authorized by a New Hampshire statute. Under the statutory scheme, local governments may assess fees for capital improvements; however, if the fees are not spent within six years, they must be refunded. Defendant’s ordinance authorized a refund, but only to the “current owner” of the land assessed. Plaintiff Construction Company paid the fee, which refund was also sought by the original developer. The land in question was sold to homeowners after development and the Town contended that only these successors could claim the refund.

The assessments were levied to build a new Town fire station; however, after some of the funds had been spent for feasibility studies and architectural plans, the voters of the Town declined to authorize construction. The trial court upheld the Town’s restriction of refunds to current owners and granted its motion to dismiss Plaintiffs’ claims, determining that the statutory direction for a refund of unused fees did not require that such refund be paid to the original payee.

On appeal, the court found no factual disputer and reviewed the trial court’s order of dismissal on a de novo basis, as Plaintiffs’ standing was jurisdictional and a question of law over statutory interpretation of “refund,” a term not otherwise defined by the enabling legislation. Plaintiffs contended that local governments must follow the statutory mandate and that “refund” must be given its ordinary meaning of “pay back” or “reimburse.” Plaintiffs also contended that another statute relating to exactions was more specific, providing refunds in those cases to the payer or the payer’s successor in interest. However, the SDC statute did not contain such language and the court declined to insert the same, finding the two statutes enacted at different times and dealing with different situations.

Moreover, the court cited decisions from other courts that allowed refunds to go to other than the original payers and rejected the possibility that local governments could enter into an agreement a payer to have payments specifically refunded to that payer as requiring this arrangement to be made. Moreover, the court declined to use legislative history to interpret the refund statute, finding no necessary ambiguity that would allow for such an examination. Finally, the court rejected Plaintiffs’ takings challenges, finding no adequate preservation of constitutional issues.  The court thus affirmed the trial court’s conclusion that the local ordinance authorizing SDC refunds to current landowners to be within the statutory authorization.

This is a case of statutory interpretation. Although Oregon law does not speak to the refund issue, common practice is that unspent systems development charges must be refunded. Refunding those charges to current landowners provides for better predictability in the use of those funds and for allocation of the risk of that possibility as part of the sales price for land.

K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.)

Concept of penalty. Wooden cravel and dollars with coins.As a longtime fan of Motown music and former Washington Supreme Court law clerk and now practicing lawyer, it’s hard to resist a mischievous overlap in nomenclature between our highest legal panel and Diana Ross and the Supremes.  Once in a while our Court also inspires litigants and court watchers to burst out in song.  Perhaps this is such a moment.

The Washington Supreme Court is made up of nine justices with a wide range of legal experience, most of whom have been trial lawyers and judges before being elevated to the state's highest court.  They are individually and collectively respected as smart and hardworking.  However, it appears that notwithstanding their varied backgrounds, none of the justices has much experience with the Washington Deed of Trust Act.

I reach this conclusion after reading the recent 9-0 decision of the Court in Washington Federal v. Harvey, No. 90078-7(January 8, 2015).  In that case, the Court sided with the unified legions of banks against commercial loan guarantors seeking to avoid liability for loan deficiency judgments after non-judicial foreclosures.  In the wake of the "Great Recession," during which more real estate loans went into default than at any time since the Depression, it became tragically commonplace that foreclosure sales did not yield proceeds sufficient to pay what were once well-secured loans.  That resulted in large loan deficiencies, and banks looked to whatever source was available to help them repay loan losses, including to loan guarantors.

In Washington, the Deed of Trust Act bars deficiency judgments except in certain narrow circumstances involving commercial loans.  While deficiency actions after trustee’s sales are generally prohibited, RCW 61.24.100(10) provides that a,

"trustee's sale under a deed of trust securing a commercial loan does not preclude an action to collect or enforce any obligations of a borrower or guarantor if that obligation, or the substantial equivalent of that obligation, was not secured by the deed of trust."  (emphasis added)

In the cases before the Court, the banks used loan documents which said that the foreclosed deeds of trust secured not only the borrowers’ original notes, but also the loan guaranties.  It's not clear if the inclusion of the guaranties in the documents secured was intentional, or if the banks did not contemplate that the Washington Deed of Trust Act seemed to prevent actions against guarantors after a non-judicial foreclosure of the deed of trust, as the language quoted above suggests.

But with the ease of a footnote, the Court dismissed the language quoted above, or added its own additional qualification on the exception, in footnote (2) of that opinion:

". . .  Subsection (10) is clear; it provides clarity about when a deficiency judgment may be brought, but does not protect a guarantor of a commercial loan from deficiency judgments solely because the guarantor's guaranty is secured by a deed of trust regardless of who granted such deed of trust.  Accordingly, here, even if the borrowers' deeds of trust secured the guarantors' guaranties, subsection (10) would not preclude deficiency judgments against the guarantors because the guarantors did not grant such deeds of trust."

Notwithstanding that footnote, there is no such limitation in the language of RCW 61.24.100(10).  It refers to a guarantor whose guaranty "was not secured by the deed of trust (foreclosed)".   The Court, in effect, re-writes RCW 61.24.100(10) to read that a,

 "trustee's sale under a deed of trust securing a commercial loan does not preclude an action to collect or enforce any obligations of a borrower or guarantor if that obligation, or the substantial equivalent of that obligation, was not secured by the deed of trust granted by such borrower or guarantor against whom a deficiency action is sought."  (the author’s additional language is in bold)

Without the additional language, the statute would apply to both deeds of trust granted by the borrowers, as in the cases decided by the Court, and deeds of trust granted by the guarantors.  Without that language, there is no basis for making the critical distinction made by the unanimous Court!

The Court pointed to no evidence in other portions of RCW 61.24 or the legislative history to suggest that it is only when the guarantor is the “grantor” under the deed of trust foreclosed that the guarantor is then protected against a deficiency judgment.  In effect, the Court decided the entire case on a limitation to the prohibition on deficiency actions which is not mentioned in the statute.

After reading the opinion, I'm sure bankers across Washington started singing that old Supremes hit, "I Hear a Symphony," while those unfortunate guarantors were shaking their heads and humming, "You Keep Me Hanging On".

By Edward J. Sullivan and Carrie A. Richter

The 2013 Oregon Legislature had before it a proposal to apply “raise it or waive it” to legislative matters, plan amendments, or land use ordinance revisions.  The legislature rejected this proposal but included a “note” in the budget for the Land Conservation and Development Commission (LCDC) to consider policy or legislation to deal with the issue.  Before your eyes glaze over dear reader, let us define these terms and explain why this issue is important.

“Raise it or waive it” is a requirement that applies to “quasi-judicial” land use hearings – those involving the application of policy to one or a few parcels of land, such as a zone change, conditional use permit or variance.  Quasi-judicial decision-making is where the applicant comes with a particular development proposal and the local government makes a decision, “yea” or “nay,” based on the adopted criteria.  Local governments provide mailed and published notice of the proposal: describing the property, identifying the applicable criteria, and detailed hearing rules for a decision that must be issued within 120 or 150 days.  That tradeoff promotes speed and efficiency in the land use process, if a party fails to raise an objection locally, she may not raise it for the first time on appeal.

In contrast, legislative amendments often affect large areas through changes to planning designations or changes to the text of those documents altering how various plan policies or regulations apply.  They often do not focus upon specific properties; but rather are policy matters that apply to the entire local government or to large parts of it.  The process of adoption is much more fluid.  If notice is provided, as in the case of Measure 56 notice containing boilerplate text that a proposal could affect permissible uses of your property, it is done in the most general terms and most often comes with tax bills.  Finally, that notice is often sent months or even years before the amendments are adopted and then, the proposal may look vastly different from what was originally proposed.  Participants in a legislative process must be fastidious and dedicated to track an often-changing scope of proceedings and a large record where consensus amongst the staff or the decision-makers is not always obvious.  Given that this is often a true sausage-making experience, state law does not require that participants raise all of their issues before the local government.  Rather, by merely making an appearance, they are free to raise new issues for the first time at LUBA.

Some local government planners working on the front line, putting their soul into drafting and shepherding a legislative proposal through the approval channels, favor imposing raise or waive it onto legislative decision-making.  From their perspective, cunning land use lawyers “wait in the weeds,” hold back their objections in order to kill a proposal on a legal front when they lack the necessary votes on the political front.  Whether this is a “fair” legal strategy or not, it is true that a challenge to LUBA pursued by a single or small interested group can significantly delay (or derail) a legislative proposal completely frustrating the significant taxpayer funds and efforts expended in the effort and the inertia keeping these significant planning efforts on track.

Applying “raise it or waive it” to these policy endeavors is problematical for a number of reasons.  First, there is no notice setting forth criteria and cautioning participants about the consequences of failure to raise issues and no limit on the time in which the decision must be made.  Although the statutes could be amended to provide for more detailed notice or decision-making time limits, the bigger problem is the nature of the decision itself.  Legislative decision-making is not a question of “to be or not to be.”  It is a question about where and how to be.  Unlike the situation for quasi-judicial hearings, the universe of criteria is so unlimited that providing a list of potentially applicable criteria would become a meaningless exercise.  Only those with the time to participate from the stakeholder advisory meetings through adoption by the council or commission, or the fiscal resources to hire attorneys to do the same would be able to track the local proposals over an unlimited period to identify potential issues.  Speaking as some of those attorneys accused of “laying in the weeds,” it is more often the case that we are retained at the end of the process when the extent of the impacts come into sharp focus but identifying all of the legal issues, sometimes when the final findings are available a week before adoption is difficult, even though it may be in our client’s best interest to do so.

Why is this important?  Oregon has a long tradition of citizen involvement.  The statewide planning goals were the result of intensive citizen involvement.  Oregon allows to anyone who participates in a hearing to appeal a case to LUBA act as his or her own lawyer.  If an industrial landowner fails to find out about hearings to enact new environmental regulations or if neighbors don’t find out about code amendments to allow inappropriate uses in residential zones, these folks may be foreclosed from challenging those regulations if they cannot contest them.  Whether you liked the Portland parking requirements for multifamily housing near certain transit facilities, the fact remains that these and other regulations fly “under the radar” at present and could be immune from review if the “raise it or waive it” rule applies to legislative decision-making.

This next year LCDC is likely to make recommendations to the legislature on the application of raise it or waive it to policy matters.  Whether citizen participation remains more important than the efficiency or cost-effectiveness of the Oregon planning program - that is the question.

More and more the annual Oregon land use legislative update is a story about the legislature dabbling around the edges of land use controversy that results in legislative spot zoning.

For example, House Bill 3098 started out as the Young Life Church bill to allow expansion of summer camp facilities at the Rajneeshpuram property.  It was amended to allow youth camps on low quality farmland throughout eastern Oregon.  While critics of bills that are aimed at special projects, like the Young Life Church (or another failed bill for Project Azalea - Senate Bill 845),  may claim victory, other farmland preservationists may view House Bill 3098 as eroding farmland protections because of its breadth.

One notable bill that did not pass was an industrial supersiting bill, House Bill 3267, aimed at areas outside the urban growth boundary in Malheur County because critics faulted the House’s passage of the bill without a public hearing.  A few industrial supersiting bills did pass – Senate Bills 246 and 253 that set forth standards for supersiting, and more industrial lands bills are expected in next year’s session.

Senate Bill 77 started out as a bill that would have meant mayhem for parties to LUBA appeals because it called for abnormal timelines for argument before LUBA based on where an application was in the local review process.  Fortunately, for land use practitioners, amendments were made to the bill to omit any of these process changes.  Instead, the bill retained a number of statistical gathering requirements for LUBA to track and report statistics on its website:

  • The number of reviews commenced.
  • The number of reviews commenced for which a petition is filed.
  • In relation to each of those numbers, the rate at which the reviews result in a decision of the board to uphold, reverse or remand the land use decision or limited land use decision.
  • A list of petitioners, the number of reviews commenced and the rate at which the petitioner’s reviews have resulted in decisions of the board to uphold, reverse or remand the land use decision or limited land use decision.
  • A list of respondents, the number of reviews involving each respondent and the rate at which reviews involving the respondent have resulted in decisions of the board to uphold, reverse or remand the land use decision or limited land use decision.
  • Additionally, when a respondent is the local government that made the land use decision or limited land use decision, the board shall track whether the local government appears before the board.
  • A list of reviews, and a brief summary of the circumstances in each review, under which the board exercises its discretion to require a losing party to pay the attorney fees of the prevailing party.

Tags: land use

Governor Inslee recently signed legislation passed by the Washington legislature which provides a mechanism for clearing up deeds of trust on title securing paid loans, without having to chase lenders.  This is good news for the real estate industry.

Have you ever paid off a debt secured by a deed of trust on real estate, and had to waste time and money chasing the lender to get the trustee to reconvey the lien?  It's a pain.  Sure, there's been a 60 day time limit, requiring lenders and their trustees to release deeds of trust securing satisfied debts.  If the deed of trust is not reconveyed within that time period, a lender is liable to the property owner for damages and attorney fees.  RCW 61.16.030; I'm happy to report that the Washington legislature has created another tool to clear up title without bringing a lawsuit.

Representatives Roger Goodman (D-Kirkland) and Terry Nealey (R-Walla Walla) sponsored the new legislation which allows a title insurance company or agent, a licensed escrow agent, or a Washington attorney (collectively, “Agent”), who has paid a lender’s pay off demand in full from escrow powers to bring about a reconveyance of the lien securing the satisfied debt.  Upon receipt of notice of the beneficiary's failure to request reconveyance, the Agent may submit proof of satisfaction of the debt and request the deed of trust trustee to reconvey the lien.  If the trustee on the deed of trust is unable or unwilling to reconvey within 120 days following payment to the beneficiary in response to the beneficiary's demand statement, then the agent may record a notarized "declaration of payment" in the land records of the county(ies) where the deed of trust was recorded, and send a copy to the beneficiary and trustee.

The beneficiary or trustee then have 60 days to object to the "declaration of payment" by filing an "objection to declaration of payment".   If no objection has been filed within 60 days, "any lien of the deed of trust against the real property encumbered must cease to exist".   Magic - clean title.

This is a good law.  Too often a lender is intensely interested in having its loan repaid, and then its attention to cleaning up the encumbered property is quickly distracted.  Who wants to have to bring a lawsuit to clear title of a deed of trust which has been repaid?  The costs and time involved are usually prohibitive. This new law, which will be codified at RCW 61.24.110 (2) and (3) provides an easy tool to do so.

Is there a downside?   There is a possibility of a dishonest title insurance company or agent, escrow agent or attorney filing a false "declaration of payment," and then failing to send notice to the beneficiary.   A subsequent examination of title in connection with a refinancing or sale would not consider the subject deed of trust to be valid, which could result in a secured loan not being repaid upon such event. The initial loss would fall on the title insurance company, insuring the new deed of trust and/or purchaser.

Ultimately, and hopefully, the guilty Agent filing the declaration of payment would be drawn and quartered, or at least be required to pay, and if the agent were a lawyer, severely disciplined.

More probably, less time will be wasted chasing down disorganized lenders to reconvey their liens. May it be so!

Please feel free to contact me if you have any questions!

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We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
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