HomeMy WebLinkAboutRespondent City of Renton's Reply in Support of Its Motion for Reconsideration1
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DEFENDANT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 1
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE:
TracFone Wireless, Inc.
Administrative Appeal
RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT OF ITS MOTION FOR RECONSIDERATION
I. ARGUMENT & LEGAL AUTHORITY
A. RMC 4-8-100(I)(3) Allows Timely Reconsideration to Correct an Error in the Administrative Record.
The City timely filed a Motion for Reconsideration to correct a summation formula error in
the Excel spreadsheet marked as Exhibit H2 in the Final Order issued on June 9, 2021, regarding late
payment interest. TracFone first argues that the Hearing Examiner’s Final Order issued June 9, 2021
is not subject to reconsideration because the Hearing Examiner’s jurisdiction over this matter has now
terminated and only “non-final decisions” are subject to reconsideration and correction based on RMC
4-8-100(G)(3)(e)(x), which provides as follows:
x. Termination of Jurisdiction: The jurisdiction of the Hearing Examiner ends
when the Hearing Examiner issues a final decision or recommendation in the matter
and the time limit for all appeals has been exhausted. All prehearing orders and non-
final decisions and recommendations of the Hearing Examiner are subject to
reconsideration and correction.
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RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 2
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
(Emphasis added). Importantly, however, the Hearing Examiner’s June 9, 2021 Final Order remains
subject to reconsideration as a “non-final decision” because Respondent City of Renton filed its
Motion for Reconsideration in a timely manner within fourteen (14) calendar days as clearly
contemplated and expressly allowed by RMC 4-8-100(H)(5) and RMC 4-8-100(I)(3), respectively, as
follows:
5. Decision Final: The decisions and/or recommendations of the Hearing
Examiner are final unless appealed or a reconsideration is requested and
granted. Failure of the Hearing Examiner to follow these rules shall not serve as a
basis for invalidation of the decision, but the Hearing Examiner is expected to apply
these rules to the best of his or her ability.
3. A party of record to a decision who asserts the decision was based on
erroneous procedure, error of law or fact, or error in judgment may make a
written request for reconsideration by the decision maker (e.g., Administrator,
Hearing Examiner, City Council). Any such request for reconsideration must be
made within fourteen (14) calendar days after the written decision has been
rendered. The request shall set forth the specific errors and any arguments for
reconsideration, limited to the evidence in the administrative record unless
authorized by chapter 36.70B RCW, relied upon by such appellant, and the decision
maker may, after review of the record, take further action as deemed proper by said
decision maker.
RMC 4-8-100(H)(5) and (I)(3). (Emphasis added.) Attempting to minimize the applicability of RMC
4-8-100(H)(5) and (I)(3) above, TracFone argues RMC 4-8-100(I)(3) is focused on “land use matters
only” based on the reference to chapter 36.70B RCW. However, all RMC provisions cited — as
subsection (G)(3)(e)(x), which TracFone relies on to claim reconsideration is not allowed, and
subsections (H)(5) and (I)(3), which Renton relies on to claim timely reconsideration to correct errors
is allowed — are located in chapter 4-8 RMC, which “provides the overall review framework
regarding [development-related permits] submittal and hearings.” Although these subsections are in
chapter 4-8 RMC, pertaining to land use administrative appeals, these provisions may be used to
supplement, as applicable, the hearing examiner procedures for administrative appeals of tax
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RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 3
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
assessments set forth in RMC 5-26-18. Reconsideration is indeed proper here to correct a summation
formula error in the Excel spreadsheet marked as Exhibit H2 in the Final Order issued on June 9, 2021.
The corrected Final Order should reflect a refund due as of the date of the hearing in the amount of
$48,161.47, plus refund interest of $2,427.34, for a total refund of $50,588.81. The per diem interest
accrual should be $3.96 from 5/27/2021 until the date refunded.
B. The City’s Reconsideration Request Seeks Correction of an Inadvertent, Undetected Error in the Spreadsheet Marked Exhibit H2 in the Administrative Record.
Although the City reviewed and approved the Excel spreadsheet prepared by TracFone post-
hearing and marked Exhibit H2 in the Examiner’s Final Order issued June 9, 2021, Exhibit H2 contains
a significant summation formula error related to the late payment interest computation that should be
corrected now that it has been discovered. Exhibit H2 is clearly within the Administrative Record, and
Exhibit H2 is repeatedly cited in the Hearing Examiner’s Final Order issued June, 9, 2021, as one of
two additional exhibits admitted after the appeal hearing. See Findings of Fact, Conclusions of Law
and Final Decision, issued June 9, 2021, at 3:10-14. As stated in FOF 10 and COL 5C: “The late
payment interest adopted by Ordinance No. 5756 (imposed by RCW 82.32.050(2)) should apply to all
of the tax liability accrued by TracFone during the Audit Period…” (Emphasis added). The Audit
Period is defined by the Hearing Examiner as:
Audit Period: The period of time subject to the City’s audit of
TracFone, which was January 1, 2007, through May 31, 2013.
Examiner’s Final Order, Glossary, p. 3. Thus, permitting the calculation to go uncorrected contradicts
both the Hearing Examiner’s and the parties’ intention to apply interest to the entire audit period,
rather than only the last three years. See FOF 5, 7 & 10 and COL 5B & 5C. TracFone argues that
Renton is improperly relying on facts outside the administrative record; yet, Exhibit H2 contains a
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RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 4
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
formula error that should be corrected to arrive at the correct amount of interest due. The Malone
Declaration filed in support of the City’s motion for reconsideration explains his discovery of the
formula summation error in Exhibit H2, which inadvertently included only the most recent three years
of the audit period instead of the entire audit period. This error resulted in an overstatement of the
amount of refund due to Tracfone in the amount of $15,924.69, as well as a decrease in the per diem
interest rate for overpayment interest. The City calculated the proper amount, accounting for the entire
audit period. See Exhibit B to Malone Decl., which corrects Ex. H2. Thus, as corrected, the total refund
due as of the date of the hearing should have been $48,161.47 in audit corrections, plus refund interest
of $2,427.34, for a total refund of $50,588.81. The per diem interest accrual should be $3.96 (not
$5.20) from 5/27/2021 until the date refunded.
C. Reduced Interest Based on Error Constitutes an Impermissible Gift of Public Funds, and TracFone Must Pay the Correct Interest Due, as the City Never Intended Reduced Interest as a Gift Nor as Negotiated Consideration.
TracFone’s opposition attempts to capitalize on a mistake that runs contrary to the Hearing
Examiner’s Final Order to get the benefit of reduced interest and a higher refund payment. However,
an award of an unwarranted, surplus refund would qualify as an impermissible gift of public funds
where the City never intended to award TracFone reduced interest as a gift nor as negotiated
consideration. Moreover, contrary to TracFone’s position, courts routinely correct these types of errors
in tax cases.
For example, in Worden v. Smith, the court of appeals found a motion for reconsideration was
warranted when the final order included an incorrect payment schedule. 178 Wn. App. 309, 327, 314
P.3d 1125, 1134 (2013) (working copy filed herewith). While the tax issues in Worden vary from the
present case, the parties in Worden similarly stipulated to the payment schedule and only discovered
the error after the order had been entered. The opposing party argued that because the order directing
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RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 5
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
distribution was an agreed order, the court should not entertain any motion to amend. Id. The court of
appeals disagreed and held that the erroneous distribution had significant monetary consequences for
the parties and reversed the superior court’s refusal to correct the error upon a timely motion for
reconsideration. Id. Similarly here, a correction is warranted because a clear error exists in the
administrative record based on an inadvertent mistake in Exhibit H2 that was not discovered until after
issuance of the Final Order in this case. Even though the parties agreed to the final spreadsheet, the
City timely filed its Motion for Reconsideration upon discovery of the error.
II. CONCLUSION
Exhibit H2 should be corrected to reflect the amount of late payment interest due for the entire
audit period consistent with COL 5B and 5C and RCW 82.32.050(2). If the tables were turned and a
spreadsheet formula error favored Renton, most certainly TracFone would seek correction of the error.
By claiming reconsideration is not allowed under these circumstances, when reconsideration is within
the Hearing Examiner’s discretion, TracFone is hoping to capitalize on the error rather than focus on
the accuracy of the assessment. Reconsideration is warranted to correct a clear error in the
administrative record based on a non-obvious mistake that was not discovered until after issuance of
the Final Order in this case. The spreadsheet formula summation error amounts to an overstated
interest refund of $15,924.69. This overstated refund must be corrected to avoid an impermissible gift
of public funds where, as here, the City does not intend to make a gift to TracFone, nor was this
additional interest refund of $15,924.69 part of any bargained for consideration in a quid pro quo
exchange between the parties. Justice compels correction of the error. For the reasons stated in the
City’s motion and here, reconsideration to correct Exhibit H2 is warranted.
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RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 6
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
DATED this 28th day of June 2021.
OGDEN MURPHY WALLACE, PLLC
By /s/Kari L. Sand Kari L. Sand, WSBA #27355 Julia Norwood, WSBA #52876 Attorneys for Respondent City of Renton ksand@omwlaw.com jnorwood@omwlaw.com 901 Fifth Avenue, Suite 3500 Seattle, WA 98164-2008
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{KZS2437798.DOCX;1/07851.000003/ }
RESPONDENT CITY OF RENTON’S REPLY IN SUPPORT
OF ITS MOTION FOR RECONSIDERATION - 7
OGDEN MURPHY WALLACE, PLLC
901 5th Ave, Suite 3500
Seattle, WA 98164
Tel: 206-447-7000/Fax: 206-447-0215
CERTIFICATE OF SERVICE
I, Kenya Owens, an employee of Ogden Murphy Wallace, PLLC, certify that on the date below,
I filed and served the Respondent City of Renton’s Reply in Support of Its Motion for Reconsideration
via email on the following parties:
TracFone Wireless, Inc. Scott Edwards Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 EdwardsS@LanePowell.com Grant S. Degginger Lane Powell, PC 1420 5th Avenue, Suite 4200 Seattle, WA 98101 DeggingerG@LanePowell.com
I declare under penalty of perjury under the laws of the State of Washington that the foregoing
is true and correct.
Executed at Seattle, Washington this 28th day of June, 2021.
/s/Kenya Owens
Kenya Owens
Legal Assistant