Opinion
No. 56262-2-I.
June 26, 2006.
Appeal from a judgment of the Superior Court for Whatcom County, No. 02-2-00750-0, Charles R. Snyder, J., entered April 25, 2005.
Counsel for Appellant/Cross-Respondent, Larry Daugert, Attorney at Law, PO Box 5008, Bellingham, WA 98227-5008.
Counsel for Respondent/Cross-Appellant, Richard Allen III Davis, Chmelick, Sitkin Davis, 1500 Railroad Ave, Bellingham, WA 98225-4542.
Jon Ryan Neumann, Paul Hanley Harley, 1608 4th St Ste 300, Berkeley, CA 94710-1749.
Jonathan Kolb Sitkin, Chmelik Sitkin Davis PS, 1500 Railroad Ave, Bellingham, WA 98225-4542.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Ellington, J., concurred in by Baker and Agid, JJ.
Robert Carruthers owned land near the Blaine Municipal Airport. Exercising its right of eminent domain, the City of Blaine sought first an easement over Carruthers' land, then title to the property. Both parties appeal rulings governing interest on the jury's just compensation award. The trial court properly awarded interest from the date of the taking of the fee, but erred in awarding less than the statutory amount. The court properly refused to award interest on the taking of the easement, because no evidence of its value was presented. We affirm in part, reverse in part, and remand for recalculation of the interest amount.
FACTS
In 2001, the City of Blaine (Blaine) determined that improvements to the Blaine Municipal Airport required an avigation easement over properties lying under the airport approach zone, including property owned by Robert Carruthers. In August 2002, the court granted Blaine's petition for eminent domain, and entered an order of public use and necessity. In September 2002, Blaine and Carruthers stipulated to Blaine's use and possession of an avigation easement over Carruthers' land under a statutory quick-take procedure. Blaine tendered $51,000 to an interest bearing account with the court.
An avigation easement permits `unimpeded aircraft flights over the servient estate.' Black's Law Dictionary 549 (8th ed. 2004).
Under this procedure, the governmental entity takes immediate possession of the owner's property with estimated just compensation placed in the court registry until actual compensation is ascertained by a jury.
In October 2003, Blaine filed an amended petition seeking instead to acquire fee title to the property, and deposited an additional tender of $220,000 with the court. In January 2004, the court entered an order of public use and necessity, and in February, Carruthers stipulated to immediate use and possession by Blaine.
The parties tried the compensation issue to a jury, which found that the value of Carruthers' fee title was $374,550. The court awarded 2.75 percent interest on the jury's valuation amount, calculated from the time of the February 2004 stipulation to Blaine's use and possession. The court ruled Carruthers was not entitled to interest on the avigation easement. Carruthers and Blaine appeal certain aspects of each of the court's rulings.
ANALYSIS
Period of Interest Accrual. Blaine argues the court erred in applying the valuation date of the fee at the time of the taking, and by ruling that interest accrued on the compensation award between the taking and the jury verdict. These rulings were correct. Interest runs from the date of the taking, regardless of the date of the valuation. City of Anacortes v. Demopoulos (In re City of Anacortes), 81 Wn.2d 166, 169, 500 P.2d 546 (1972). Unless the condemnor ensures the jury determines valuation as of the date of the taking (as opposed to the date of the trial), the jury's valuation will serve as the basis for the interest calculation.
In City of Anacortes, the city appealed the application of interest to just compensation awards between the time of possession and the time of the jury verdict. The Supreme Court noted that `it is the right to possession which creates the right to interest,' and held that interest should accrue from the date of the city's possession. Id. (quoting Indep.Sch. Dist. v. C.B. Lauch Constr. Co., 78 Idaho 485, 493, 305 P.2d 1077 (1957) ('The correct rule and the one which is supported by the overwhelming weight of authority, is that the condemnee should be allowed interest upon the compensation . . . awarded from the time the condemnor either takes possession, or becomes entitled to possession, of the property.')); see also Sintra, Inc. v. City of Seattle, 131 Wn.2d 640, 656, 935 P.2d 555 (1997) (interest is necessary to compensate the property owner for the loss of the use of the monetary value of the taking from the time of the taking until just compensation is paid); Consol. Diking Improv. Dist. 3 v. Davis, 36 Wn. App. 125, 672 P.2d 414 (1983); State v. Hallauer, 28 Wn. App. 453, 624 P.2d 736 (1981).
Sintra is analogous to this case even though it involved an inverse condemnation rather than quick take because in each case the taking was effected without full payment. See State v. Trask, 98 Wn. App. 690, 698, 990 P.2d 976 (2000).
Although cited by neither party, the decision in Consolidated Diking is directly on point. In 1980, after the eruption of Mount St. Helens, a diking improvement district of Cowlitz County required access to land in order to build a dike to stem mud and ash flow. The landowner granted the district immediate possession, with compensation to be determined in a later condemnation action. The stipulation was silent as to interest or date of valuation. At trial two years later, the jury determined compensation `measured as of the date of trial.' Consol. Diking, 36 Wn. App. at 127 (quoting jury instruction). The trial court awarded interest on the full amount of the jury's valuation from the date of possession two years earlier. Division Two affirmed, holding that interest on an award of compensation runs from the time of the taking. Id. at 128. The court also noted that the district waived the right to have the valuation made at the date of the taking by not presenting that question to the jury. Id.
Similarly here, the February 2004 stipulation granting Blaine the immediate right to possession was silent as to valuation date and interest. Because Blaine had the right to possession from the date of the stipulation, interest runs from that date. Further, Blaine made no objection to the instruction calling for valuation as of the time of trial, thereby waiving any argument that the valuation should be as of the date of the taking. Blaine seeks to distinguish Anacortes because the parties there stipulated that the date of the valuation was the date of the taking. This stipulation was held of no significance in Consolidated Diking, 36 Wn. App. at 127 ('The District attempts to distinguish Anacortes by pointing out that the parties there had stipulated that the possession date would also be the valuation date. . . . A stipulation was present in Anacortes, as the District contends, but we have searched the opinion for any suggestion that this was of any significance to the holding. We found no such suggestion.').
We also note that there is nothing in the record before us to support an alternate value of the fee because Blaine did not provide the trial record on this issue.
Blaine also argues that there is no basis for an award of interest from the date of possession absent express authority in the statutes governing eminent domain powers of cities (chapter 8.12 RCW). This contention is also contrary to established precedent. Interest accrues from the time of the condemnor's possession in any governmental taking. See Anacortes, 81 Wn.2d at 169; Consol. Diking, 36 Wn. App. at 128.
Finally, Blaine argues that the court erred in granting interest from the time of possession to the time of the verdict on the full judgment amount, contending it should have received credit for the amount deposited with the court. We decline to reach this issue because Blaine did not raise it below. RAP 2.5(a); Rogers Walla Walla, Inc. v. Ballard, 16 Wn. App. 92, 101, 553 P.2d 1379 (1976) (theories raised for the first time on appeal will not be considered). We note, however, that the parties dispute whether those funds could have been available to Carruthers, and a deposit to the court registry does not compensate the landowner.
We affirm the award of interest on the jury's compensation award for the time between the stipulation for immediate use and possession in February 2004 and the jury verdict in February 2005.
Interest Calculation. Carruthers argues that the court erred in setting the pretrial interest rate at 2.75 percent. Interest on the compensation award is not post-judgment interest; it is part of the just compensation award. Anacortes, 81 Wn.2d at 169; see also Sintra, 131 Wn.2d at 660 (pretrial interest is `part of the damages and is required as part of just compensation'). The governing statute is RCW 8.28.040, which sets the rate of interest in eminent domain proceedings at the maximum permitted by RCW 19.52.020 (currently, 12 percent). See State v. Lacey, 84 Wn.2d 33, 38, 524 P.2d 1351 (1974) (approving application of RCW 8.28.040 in Anacortes to require the maximum rate of interest from the time of taking). The court erred in awarding interest at the rate of 2.75 percent.
Avigation Easement. Carruthers argues the trial court should have awarded interest on the value of the short-lived avigation easement. As discussed above, an award of interest was indeed appropriate. See Seattle v. Seattle First Nat'l Bank, 81 Wn.2d 652, 659, 504 P.2d 292 (1972) (requiring interest for period of temporary taking even where the city later abandons its eminent domain proceedings). But this issue was not tried to the jury, and Carruthers points to nothing in the record establishing the value of the easement. Carruthers claims Blaine's tender of $51,000 represents an appropriate value, but the tender amount was intended as compensation for a permanent easement, not for a easement lasting only 13 months. The stipulation for immediate use and possession provided that compensation for the easement was to be determined by the court or jury, but Carruthers did not present the question at trial. In the absence of any evidence of value, there was no basis for a calculation of interest, and the court did not err in declining to award it.
Clerk's Papers at 190 (Blaine's easement rights to `remain in perpetuity').
Attorney Fees. RCW 8.25.075 permits an award of fees in eminent domain proceedings where the judgment awarded exceeds by 10 percent or more the highest written offer of settlement submitted by the acquiring government agency. Here, the verdict for the fee value of $374,550 exceeded Blaine's tender of $271,000 by 38 percent. Carruthers is entitled to attorney fees on appeal under the statute.
We affirm the court's award of interest on the jury's compensation award from the time of the taking, not the verdict, but remand for recalculation of the amount at the maximum rate permitted by RCW 19.52.020.
Affirmed in part, reversed in part, remanded.
AGID and BAKER, JJ., concur.