Facts: Respondent South Tacoma Way, L.L.C. filed suit against the petitioner state of Washington in the Superior Court for Thurston County seeking to void as ultra vires the state’s sale of surplus real property to Sustainable Urban Development, L.L.C. on grounds that the state had not complied with Washington Revised Code §47.12.063(2)(g), which requires that the owners of abutting property be given notice of any such sales. The trial court ruled that although the state failed to comply with §47.12.063(2)(g), the sale was not ultra vires and Sustainable Urban Development was a bona fide purchaser. Upon appeal, the Washington Court of Appeals reversed the trial court and voided the sale. The state of Washington appealed this decision to the Supreme Court of Washington.

Question(s): Did the state’s failure to comply with §47.12.063(2)(g) render the sale ultra vires?

If so, was Sustainable Urban Development nonetheless a bona fide purchaser?

Conclusion: Justice Charles W. Johnson’s opinion for the Court concluded that, despite the fact that the state failed to notify the owners of abutting properties of the sale as required by §47.12.063(2)(g), the sale was not ultra vires as the state possessed authority to sell surplus property and no substantive statutory violation had been committed insofar as §47.12.063(2)(g) was enacted in order to prevent fraud and collusion and there was no evidence that such fraud or collusion had occurred. The Court also held that the sale was valid under the bona fide purchaser doctrine given that Sustainable Urban Development was a good faith purchaser for value who lacked knowledge that the sale was procedurally flawed. Thus, the Court reversed the Washington Court of Appeals and reinstated the judgment of the trial court.

Docket No. 82212-3 (from Court of Appeals Division II Case No. 36687-8)

Petitioner: State of Washington

(Counsel: Robert G. Casey, Philip Albert Talmadge, Sidney Charlotte Tribe, Ann Elizabeth Salay, Andrea Vingo, and Jay Douglas Geck)

Respondent: South Tacoma Way, L.L.C.

(Counsel: Patrick J. Mullaney)

Other Parties: Sustainable Urban Development, L.L.C.

Briefs:

Argument: Thursday, January 14, 2010 10:00am

[Source: TVW, http://tvw.org]

Decided: Thursday, June 24th, 2010

Prevailing Party: State of Washington (Petitioner)

Vote: 8-1

Citation: Pending

Court: Madsen1 Court (2010-)

Madsen

Johnson
(Majority)

Alexander

Sanders
(Dissent)

Chambers

Owens

Fairhurst

Johnson

Stephens