SPOKANE -- Kennewick won't have to pay a $3 million jury verdict, plus hundreds of thousands of dollars in interest, if the state Court of Appeals agrees that Gary Long Jr. had no legal right to develop an RV park in Columbia Park.
An attorney for the city claims Long, as owner of the Columbia Park Golf Course, is not entitled to the money because Long's agreement with the city was contingent on federal approval.
A three-judge panel heard arguments in the case Thursday in Spokane and will issue a ruling at a later time.
Kennewick's lawyer, Michael Tierney of Mercer Island, argued that Long, who successfully sued in Benton County Superior Court last summer, had "no right for damages" because the jury failed to properly understand that Columbia Park is federal property leased to the city, which in turn subleased a portion to Long for a golf course.
Long's attorney, Nicholas Kovarik of Spokane, told the judges the Corps' lease isn't what matters. What matters is the agreement between Long and the city, in which Long agreed to make several improvements to the golf course and build an RV park.
Long's big plans for the golf course included replacing the driving range with a 67-space RV park, a new 6,000-square-foot golf course clubhouse, two gazebos, a parking lot and boat launch.
"To assert other leases have any bearing on the issues in this case is a giant leap," Kovarik argued. He noted that the city council approved Long's site plan that included the new clubhouse and the RV park at a meeting on May 2, 2006, and then reversed itself and stopped the plan one month later.
"The approved site plan obliged the city and the contractor," Kovarik said. "Had the city not stopped the project, there would've been a project there."
Thursday's one-hour hearing was before judges Dennis Sweeney, Laurel Siddoway and presiding judge Kevin Korsmo.
In June 2009, a jury awarded Long $3 million in damages, and interest has been accruing at almost $1,000 a day since the verdict was announced -- 459 days ago.
Tierney's argument rested on the assumption that the agreement between Long and the city was discretionary and that nothing could be certain until after the Army Corps of Engineers accepted the proposal in the master lease between the federal government and Kennewick.
"This was just one step along the way. There is no contractual right to having an RV park," Tierney said.
"The city can tell anyone to build whatever, even a skyscraper, but without a master lease (from the Corps) that allows it, there is no contractual right," Tierney added.
But Kovarik said the Corps-city lease misses the key fact that the city made an agreement with Long, who proceeded on good faith, and the city even accepted Long's site plan for improvements, before reversing itself and opening negotiations with a different developer.
Long also applied for a shoreline permit with the Corps and the city did not object, Kovarik said.
"It was an exclusivity contract," said Kovarik, who called the city's argument about a master lease with the Corps "extrinsic evidence that only shows the relationship of the parties."