FILED
DECEMBER 6, 2018
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
VICTOR JOHNSON and MARILYN )
JOHNSON, ) No. 35596-9-III
)
Appellants, )
)
v. )
) UNPUBLISHED OPINION
BILL SPENCER, BENTON COUNTY )
ASSESSOR, )
)
Respondent. )
SIDDOWAY, J.—Victor and Marilyn Johnson appeal the superior court’s dismissal
of their petition for judicial review of a decision of the Washington State Board of Tax
Appeals (BTA). Because the Johnsons failed to timely serve their petition on the BTA,
the superior court concluded it lacked subject matter jurisdiction. The Johnsons’
arguments as to why their failure to serve the BTA should be excused fail under well-
settled law. We affirm.
No. 35596-9-III
Johnson v. Spencer
FACTS AND PROCEDURAL BACKGROUND
Victor and Marilyn Johnson purchased 55 acres of property in Benton County in
1967, which they later enrolled as “farm and agricultural” ground under the current use
program codified in chapter 84.34 RCW. Clerk’s Papers (CP) at 9. The program allows
properties to be valued at their current use, rather than highest and best use, for ad
valorem tax purposes. A property can be removed from the program for various reasons.
If it is, a tax adjustment, interest and penalties may be owed. RCW 84.34.108.
In December 2012, the Johnsons sold approximately seven acres of their property
to a developer. A real estate excise tax affidavit filed at closing contained no undertaking
by the developer to keep the seven acres classified as farm and agricultural land. After
the developer confirmed it did not plan to continue farming, the Benton County Assessor
(Assessor) issued a notice of removal of current use classification and additional tax
calculations for the seven acres. The amount of tax, interest and penalties imposed on the
Johnsons was approximately $36,000.
The Johnsons challenged the Assessor’s action before the Benton County Board of
Equalization (County Board). They did not question removal of the seven acres from its
current use classification, but argued that removal should not trigger the additional taxes
because the removal was solely attributable to government action. In 1995, the City of
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Johnson v. Spencer
Kennewick had annexed the Johnsons’ and surrounding properties, adopting new zoning
that did not permit agricultural use.
The Assessor disputed the Johnsons’ challenge, pointing out that the city had
allowed landowners of the annexed properties to continue farming despite the zoning
change. It asserted that it removed the seven acres from its current use classification
solely because they were sold to a developer who had no intention of continuing an
agricultural use. The County Board sustained the Assessor’s action.
The Johnsons appealed to the BTA. In an initial decision, a senior tax referee
sustained the determination of the County Board. When petitioned for review, the BTA
denied the petition and adopted the initial decision as its final decision.
The Johnsons timely petitioned the superior court for review of the BTA’s
decision on February 8, 2017, 30 days after issuance of the BTA’s January 9 final
decision. On the same day, they sent a copy of the petition to the Assessor, the office of
the attorney general, and Reid Hay, a Benton County deputy prosecutor. Mr. Hay filed a
notice of appearance on behalf of the Assessor a couple of weeks later.
In or about early May 2017, the Johnsons’ lawyer retired from his law firm and
responsibility for the Johnsons’ appeal was taken over by one of his partners. In late May
2017, she communicated with Mr. Hay about the appeal. Reportedly so that “[she] would
be the point of contact,” the Johnsons’ new lawyer served the BTA with a substitution of
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Johnson v. Spencer
counsel and the petition for review on or about May 24—three and a half months after the
petition was filed with the superior court. CP at 200. Shortly thereafter, Mr. Hay notified
the Johnsons’ lawyer that the Johnsons’ failure to timely serve the BTA with their
petition for review was grounds for dismissal.
When the Assessor then moved the trial court to dismiss the Johnsons’ petition,
the Johnsons filed a declaration of their attorney in which she testified concerning her and
her former partner’s communications with Mr. Hay. Attached to her declaration was
electronic mail from Mr. Hay to her former partner. The electronic mail, sent on April
20, 2017, included the following statements about notifying the BTA of the appeal:
[B]efore we submit any briefs we’ll need to be sure we have a copy of the
record from the BTA proceeding below filed with the superior court. It
doesn’t look like the clerk’s office has a copy of the BTA record. Have you
contacted the BTA to have them send a copy to the court? (See RCW
34.05.566, 562). I don’t think the clerk’s office communicates with the
BTA on the litigants’ behalf to let them know about the appeal, but I
haven’t handled this species of appeal to the superior court before so feel
free to correct me if I’m off. If you like, I could send the BTA a copy of
the notice of appeal to get the ball rolling. Just let me know.
CP at 204.
The trial court dismissed the petition with prejudice. The Johnsons appeal.
ANALYSIS
Judicial review of decisions of the BTA that are rendered following a formal
hearing (a formal hearing was conducted here) are subject to the Administrative
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Johnson v. Spencer
Procedure Act (APA), chapter 34.05 RCW. RCW 82.03.180. Under 34.05.542(2), “[a]
petition for judicial review of an order shall be filed with the court and served on the
agency, the office of the attorney general, and all parties of record within thirty days after
service of the final order.” “The only reasonable reading of these words is that ‘the
agency’ is the body whose final order is the subject of the petition for judicial review”—
in this case, the BTA. Sprint Spectrum, LP v. Dep’t of Revenue, 156 Wn. App. 949, 954,
235 P.3d 849 (2010).
The Johnsons did not timely serve the BTA. They argue on appeal that (1) the
trial court should have applied the doctrine of substantial compliance and recognized that
they satisfied the “spirit of the law,” Br. of Appellants at 10; (2) service on the attorney
general sufficed as service on the BTA; (3) the Assessor was not prejudiced by the
untimely service; and (4) equitable estoppel should apply and prevent dismissal. We
address their arguments in the order stated.
Substantial compliance and spirit of the law
The APA grants superior courts a limited appellate jurisdiction. RCW
34.05.514(1). Before a superior court may exercise its appellate jurisdiction, statutory
procedural requirements must be satisfied; otherwise, the court must enter an order of
dismissal. Conom v. Snohomish County, 155 Wn.2d 154, 157, 118 P.3d 344 (2005).
Filing and service requirements are necessary conditions to appellate jurisdiction. Union
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Johnson v. Spencer
Bay Pres. Coal. v. Cosmos Dev. & Admin. Corp., 127 Wn.2d 614, 617, 902 P.2d 1247
(1995). This includes the requirement to timely serve the agency whose final order is the
subject of the petition for review. Sprint, 156 Wn. App. at 951. Whether the superior
court may exercise appellate jurisdiction is a question of law that we review de novo.
Conom, 155 Wn.2d at 157.
“[S]ubstantial compliance with service requirements is generally sufficient to
invoke a superior court’s appellate jurisdiction.” Skinner v. Civil Serv. Comm’n of City of
Medina, 168 Wn.2d 845, 854, 232 P.3d 558 (2010); James v. Kitsap County, 154 Wn.2d
574, 588, 115 P.3d 286 (2005) (“[S]tate courts have required substantial compliance or
satisfaction of the spirit of the procedural requirements before they will exercise
jurisdiction over the matter.”).1 “‘Substantial compliance has been defined as actual
compliance in respect to the substance essential to every reasonable objective of the
statute. It means a court should determine whether the statute has been followed
sufficiently so as to carry out the intent for which the statute was adopted.’” Id. (quoting
In re Habeas Corpus of Santore, 28 Wn. App. 319, 327, 623 P.2d 702 (1981)).
1
Skinner distinguished Skagit Surveyors & Eng’rs, LLC v. Friends of Skagit
County, 135 Wn.2d 542, 556, 958 P.2d 962 (1998) and Union Bay, on which Skagit
Surveyors relied. In Union Bay, the Court had held that substantial compliance with APA
service requirements did not suffice. Skinner, 168 Wn.2d at 854-55 (citing Union Bay,
127 Wn.2d at 618-20). It characterized Union Bay as involving a form of service that the
legislature had deleted, and thereby implicitly disapproved. Id.
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Johnson v. Spencer
Two published decisions of this court have held that a failure to serve the BTA
when seeking judicial review of its decision frustrates the purpose of the APA’s service
statute and warrants dismissal. In the first, Banner Realty, Inc. v. Department of
Revenue, 48 Wn. App. 274, 275-76, 738 P.2d 279 (1987), Banner did not serve the BTA
until nearly three months after the BTA’s final decision. Id. On appeal to Division Two,
the petitioner argued that it had substantially complied or satisfied the spirit of the
procedural requirement. The court was unpersuaded, observing that “one of the principal
objectives of RCW 34.04.130(2) and its 30-day service requirement is to assure that
judicial review is promptly sought and accomplished.” Id. at 278. It elaborated:
Service on the agency rendering the final decision in question is a
prerequisite to and triggers transmittal of the administrative record to the
court. RCW 34.04.130(4). In turn, RCW 34.04.130(5) largely confines
judicial review to the record before the administrative agency. Service on
the agency, therefore, is vital to the timely functioning of the review
process. Without such service, there is no record before the superior court
and thus, no basis for review.
Id.
In the second decision, Sprint, Division One of this court agreed with Banner
Realty that the rationale for requiring service on the BTA is to ensure timely transmittal
of the administrative record to the trial court for review—hence, late compliance cannot
constitute substantial compliance. It acknowledged that “there are other ways to ensure
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Johnson v. Spencer
that the record of an administrative agency is promptly submitted to a court for review.”
Sprint, 156 Wn. App. at 957.
But the legislature has specified that service on the agency whose order is
the subject of a petition is required to accomplish that objective under these
circumstances. We will not substitute our judgment for that of the
legislature on the proper method of ensuring timely transmittal of the
administrative record to a court for judicial review.
Id.
In this case, the failure to serve the BTA accounts for the fact that as of April 20,
2017, when Mr. Hay sent his electronic mail about doing something to “get the ball
rolling,” the BTA had not begun to prepare the administrative record for the superior
court nor was it on notice that it needed to. Serving the BTA four and a half months after
its final decision did not substantially comply with a statutory service requirement that
exists to ensure timely review.
Service on the attorney general
The Johnsons argue alternatively that service on the attorney general was
sufficient to effect service on the BTA.
RCW 34.05.542(2) requires service on “the agency,” and “the office of the
attorney general” (and “all parties of record”). Nonetheless, this court held in In re the
License Application of Botany Unlimited Design & Supply, LLC that service of a petition
for review on the particular assistant attorney general who represented an agency in the
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No. 35596-9-III
Johnson v. Spencer
underlying administrative proceeding, and who soon appeared for and represented the
agency in superior court, was sufficient service on the agency. 198 Wn. App. 90, 97, 391
P.3d 605, review denied, 188 Wn.2d 1021, 398 P.3d 1143 (2017). The reasoning was
that the extent and nature of the assistant attorney general’s involvement supported
characterizing him as the “‘attorney of record,’” for the agency under the APA’s service
provision, which states that “service upon the attorney of record of any agency or party of
record constitutes service upon the agency or party of record.” Id.; RCW 34.05.542(6).
By contrast, in Cheek v. Employment Security Department, 107 Wn. App. 79, 84-
85, 25 P.3d 481 (2001), this court held that a petitioner’s service on the attorney general’s
office did not qualify as service on the Employment Security Department. No one from
the attorney general’s office had appeared for the Department in any of the administrative
proceedings, so service of the petition was directed to the office in general, not any
particular assistant attorney general. Id. at 84. This court rejected the petitioner’s
argument that since the attorney general’s office will defend unemployment appeals in
superior court, service on the office sufficed as service on the agency. Id. at 82.
This case is like Cheek, not Botany Unlimited. No assistant attorney general
appeared for the BTA in the Johnsons’ appeal of the County Board determination. As the
Johnsons’ declaration of delivery attests, their service on the attorney general’s office
was not directed to an individual lawyer but was instead mailed to the “Attorney
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Johnson v. Spencer
General” at his post office address in Olympia.2 CP at 18. While that satisfied the
statutory requirement to serve the office of the attorney general, it did not satisfy the
requirement to serve the BTA.
Because the Johnsons’ late service on the BTA was not substantial compliance
with RCW 34.05.542(2) and service on the attorney general’s office did not qualify as
service on the agency, the superior court lacked subject matter jurisdiction to entertain the
petition for judicial review.
Prejudice and equitable estoppel
Having determined that the trial court lacked subject matter jurisdiction, little need
be said about the Johnsons’ remaining arguments.
They argue, without citing legal authority, that the failure to serve the BTA was
not grounds for dismissal because the Assessor was not prejudiced. Whether the agency
was prejudiced is irrelevant if the superior court lacks jurisdiction.
They argue that the Assessor should be estopped from challenging the superior
court’s jurisdiction and, relatedly, that the Assessor waived a challenge to jurisdiction by
delay. Estoppel and waiver cannot be relied on as conferring subject matter jurisdiction
on a superior court. Williams v. Leone & Keeble, Inc., 171 Wn.2d 726, 730, 254 P.3d
818 (2011). “Either a court has subject matter jurisdiction or it does not.” Id.
2
Service on the attorney general may be accomplished by mail. RCW
34.05.542(4).
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No. 35596-9-111
Johnson v. Spencer
Affirmed.
A majority of the panel has determined this opinion will not be printed in the
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
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oway,J. ~
WE CONCUR:
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Lawrence-Berrey, C.J.
11