author: Sutton, J.

text:
    NORTHWEST ALLOYS, INC., and Millennium Bulk Terminals-Longview, LLC, Respondents/Cross-Appellants, v. State of Washington DEPARTMENT OF NATURAL RESOURCES, and the Honorable Hilary S. Franz, and Columbia Riverkeeper, Washington Environmental Council, and Sierra Club, Appellants/Cross-Respondents.
    No. 51677-2-II
    Court of Appeals of Washington, Division 2.
    Filed August 20, 2019
    Kristen L. Boyles, Jan Erik Hasselman, Marisa Christine Ordonia, Earthjustice, 705 2nd Ave. Ste. 203, Seattle, WA, 98104-1711, Edward David Callow, Washington Office of Attorney General, 1125 Washington Street Se., Ms. 40100, Olympia, WA, 98504-0100, Terence Pruit, Attorney General's Office, P.O. Box 40100, Olympia, WA, 98504-0100, for Appellant/Cross-Respondent.
    Linda Rae Larson, Nossaman PLLC, 719 2nd Ave. Ste. 1200, Seattle, WA, 98104-1749, J. Timothy Hobbs Jr., Attorney at Law, Craig Steven Trueblood, Ankur K. Tohan, Gabrielle Elizabeth Thompson, K & L Gates LLP, 925 4th Ave. Ste. 2900, Seattle, WA, 98104-1158, Jonathan Kolb Sitkin, Chmelik Sitkin & Davis P.S., 1500 Railroad Ave., Bellingham, WA, 98225-4542, for Respondent/Cross-Appellant.
    PUBLISHED OPINION
   Sutton, J.

¶ 1 The Department of Natural Resources and the Commissioner of Public Lands Hilary S. Franz (collectively DNR), and Columbia Riverkeeper, Washington Environmental Council, and Sierra Club (collectively Intervenors) appeal the superior court's order concluding that DNR acted arbitrarily and capriciously by denying Northwest Alloys, Inc.'s (NWA) consent to sublease state-owned aquatic lands to Millennium Bulk Terminals-Longview, LLC (Millennium). DNR and Intervenors argue that DNR's decision to deny consent to sublease was not arbitrary and capricious due to NWA's refusal to provide requested financial information about Millennium and DNR's legitimate concerns about Millennium's financial condition and business reputation.

¶ 2 NWA and Millennium cross-appeal and argue that the superior court applied the incorrect standard of review. NWA and Millennium contend that under RCW 79.02.030, the superior court should review de novo DNR's denial of consent to sublease by applying the "reasonably prudent person" test.

¶ 3 We agree with DNR and Intervenors, and reverse and vacate the superior court's orders, and order the superior court to issue a new order affirming DNR's denial.

FACTS

I. HISTORY OF THE SITE

¶ 4 Reynolds Metals Company, which was owned by Alcoa Corporation, owned property adjacent to the Columbia River navigation channel in Longview. In 2004, Chinook Ventures, Inc. purchased a smelter located on the property and entered into a long-term ground lease with Reynolds. In 2005, Alcoa transferred the property from Reynolds to another of its subsidiaries, NWA.

¶ 5 Alcoa-most recently through NWA-leased the state-owned aquatic lands adjacent to the property from DNR. NWA used the dock and associated infrastructure on the aquatic lands for shipping alumina to Alcoa's Wenatchee Works smelter in eastern Washington.

¶ 6 In 2008, DNR renewed its aquatic lands lease with NWA for an additional 30-year term. Under the terms of the lease, NWA could not sublease the property without the written consent of DNR, which DNR could not unreasonably withhold. The lease provided that in considering whether to consent to a sublease, DNR could consider, among other items, "the proposed transferee's financial condition, business reputation and experience, the nature of the proposed transferee's business, the then-current value of the [p]roperty, and such other factors as may reasonably bear upon the suitability of the transferee as a tenant of the [p]roperty." Clerk's Papers (CP) 16890.

¶ 7 After renewing its lease with DNR, NWA subleased the aquatic lands to Chinook with DNR's consent. Chinook imported alumina as an operator for NWA, and also used the property to store petroleum coke and transfer it onto ships at the dock. During its subtenancy, Chinook failed to obtain the required state and local regulatory permits for its petroleum coke business and failed to provide adequate environmental controls. Chinook built improvements such as a remodeled ship loader and overwater conveyor system without obtaining the required permits or authorization under the lease. Chinook amassed a significant number of environmental violations issued by the Department of Ecology, received a stop work order from Cowlitz County, received a notice of violation from the U.S. Army Corps of Engineers, exacerbated environmental concerns at the site, and put NWA in default of its lease with DNR.

II. MILLENNIUM

¶ 8 In the fall of 2010, while still in default of the lease, NWA sought DNR's consent to sublease the property to Millennium. Millennium was a limited liability company organized in 2010 for the purpose of acquiring Chinook's assets, leasing the smelter property, and subleasing the aquatic lands. Millennium's purported plan was to continue the alumina handling operations at the site using the existing equipment and planned upgrades. Millennium's undisclosed long-term objective, however, was to construct a large coal export terminal on the site.

¶ 9 According to the original permit application from Millennium's corporate parent, a subsidiary of Ambre Energy Inc. (Ambre), the terminal project would allow coal handling and exportation of 5.2 million metric tons of coal per year. A State Environmental Policy Act (SEPA) determination for the original permit application resulted in a mitigated determination of nonsignificance finding, meaning that a full environmental impact study was not required. However, internal Ambre documents later revealed that Millennium intentionally concealed the extent of its plans for the coal export facility in order to avoid full environmental review. After Millennium's deception made national and local news, Millennium withdrew its terminal proposal.

In early 2012, Millennium filed a revised permit application, this time disclosing the full scope of its plans for facilities on the property. Millennium sought to build, operate, and maintain the largest coal export terminal on the west coast, exporting 44 million metric tons of coal per year. Millennium planned to add two large docks to the property. Operating the docks would have required significant new dredging of the aquatic lands within and outside of the geographical areas covered by the lease.

III. FINANCIAL CONCERNS

¶ 10 During a severe coal market downturn in late 2014, Ambre sold its North American assets-including a 62 percent ownership stake in Millennium-to a creditor, Lighthouse Resources.

¶ 11 In late 2015, Alcoa announced it would curtail production at Wenatchee Works. Wenatchee Works had used the Longview dock leased by NWA to import alumina. Following the suspension of production at Wenatchee Works, the dock was not in use.

¶ 12 Due to continued poor coal market conditions, several United States coal producers filed for bankruptcy in 2016. Arch Coal, Inc., which owned 38 percent of Millennium, declared bankruptcy in early 2016. As part of its bankruptcy, Arch Coal sold its interest in Millennium to Lighthouse Resources, Millennium's only remaining corporate parent. In return for its interest in Millennium, Arch Coal received only a release of its obligation to provide capital support of Millennium's projects. Arch Coal stated that the capital contributions Millennium needed from Arch Coal to stay afloat were so significant that Arch Coal's entire ownership share in Millennium, which it valued at nearly $38 million, would have been completely drawn down in a matter of weeks.

IV. NEGOTIATIONS & DNR'S REQUESTS FOR INFORMATION

¶ 13 On November 18, 2010, shortly after NWA sought DNR's consent to sublease to Millennium, DNR requested information about Millennium from NWA, including at a minimum:

1. The financial condition of Millennium Bulk Logistics, Inc., including the extent of its assets, to help DNR determine whether it has the financial wherewithal to comply with the terms of the lease-especially in terms of abiding by requirements related to authorized improvements.
2. The business reputation and experience of Millennium Bulk Logistics, Inc., and if this Incorporation has been formed just to operate this site, the business reputation of any of its affiliates, owners, or partners. DNR would like to understand the history of this company and any of its individual owners in terms of the conduct of their business(es) and whether they have any history of causing environmental damage or failing to comply with applicable law and regulatory requirements. As a steward of state-owned aquatic lands and responsible for this site, DNR would like to understand that the new proposed sublessee will be able to perform its obligations under the lease that relate to site stewardship and otherwise. Please inform us of each of the owners of the Incorporation and their experience with site uses such as the one proposed for the sublease.
3. Any information that you can provide that will inform us of site operating protocols that will protect state-owned aquatic lands from the release of hazardous substances and that will provide environmental protection. If Millennium or any of its partners has experience with the types of systems that would be put in use at the Longview site, please describe what controls are in place to prevent harm to the aquatic environment in which the facility would exist, and how upland operations may affect state-owned aquatic lands.

CP at 17023.

¶ 14 Four days later, Millennium responded to DNR and explained that Millennium was a LLC organized for the sole purpose of the Longview site project and was a wholly owned subsidiary of Ambre. Millennium directed DNR to Ambre's website to review Ambre's annual reports and noted that, at closing, Millennium planned to post a $10 million irrevocable standby letter of credit to NWA to provide security for Millennium's lease commitments. Millennium also provided a follow-up letter summarizing the assets devoted to the project.

¶ 15 On November 29, 2010, DNR clarified that the information Millennium had provided did not fully satisfy DNR's requests. Millennium resisted DNR's requests, stating that "the thought that Millennium has to demonstrate financial capability to DNR is misplaced. Certainly, DNR can make reasonable inquiry into the sublease and its plans. However, the obligations of Millennium flow to Northwest Alloys, Inc., the tenant." CP at 337.

¶ 16 After Millennium's full plan for the coal terminal came to light in early 2011, DNR informed Millennium and NWA that it would not make a decision on the request for consent to sublease until the related shoreline permit and SEPA processes were resolved and until the companies obtained the permits required for any and all planned improvements. DNR explained that NWA's and Millennium's inconsistencies regarding the scope of the proposed coal project made evaluating the proposed sublease difficult.

¶ 17 By late 2015, DNR's, NWA's, and Millennium's negotiations appeared to be in their final stages. On December 14, 2015, DNR suggested two revisions to the consent to sublease, which NWA and Millennium accepted. NWA and Millennium replied, "From our standpoint, we believe these document[s] now to be final, and that all we need to do is 'accept' the changes in both and route for signature." CP at 1512.

¶ 18 However, after Arch Coal's bankruptcy in January, DNR sent a letter dated February 3, 2016, to NWA explaining that DNR needed additional information to complete its review of the request for consent to sublease. DNR emphasized its concern about Arch Coal's bankruptcy and the potential impact on Millennium's financial capability.

The financial capability of Millennium to perform is critical. As the conditions on the leased property and adjoining uplands resulting from the operations of [NWA's] previous subtenant Chinook Ventures demonstrate, when a subtenant in possession of the property lacks the wherewithal to maintain the property and comply with other lease requirements, it may cause significant damage to the property and improvements that takes substantial amounts of time and resources to address.

CP at 1539.

¶ 19 DNR also questioned Alcoa's recent decision to shutter the Wenatchee Works operation and how that would impact NWA's and Millennium's plans for using the Longview property. DNR requested that NWA provide audited financial statements from Millennium, all documents related to Millennium filed in Arch Coal's bankruptcy case, a statement indicating whether Arch Coal would make any disclosures in its bankruptcy proceeding related to the sublease between NWA and Millennium, and a statement from Millennium regarding its plans for using the existing dock on the property. Millennium responded that the financial statements DNR sought were confidential.

¶ 20 After the bankruptcy court approved the sale of Arch Coal's ownership interest in Millennium in June 2016, DNR sent another letter to Alcoa, expressing concerns about Millennium's obligations to NWA. DNR noted that as a result of Arch Coal's sale, Lighthouse Resources had become the sole owner of Millennium. DNR explained, "Given the difficult market conditions in the coal industry and the fact that [Lighthouse Resources] now has the sole financial responsibility for Millennium, DNR seeks assurance that Millennium has the financial capability to meet its significant ongoing financial obligations and comply with the requirements of [NWA's] lease with DNR." CP at 1741.

¶ 21 To assist its evaluation of Millennium's financial condition, DNR requested:

A balance sheet, income statement, and cash flow statement, prepared in accordance with GAAP Accounting Standards[ ] that accurately states the current assets, liabilities, and capital of [Millennium] and its income and cash flow for the year ending June 30, 2016.
A copy of the January 1, 2011 Lease between [NWA] and [Millennium] for the uplands adjacent to [NWA] leasehold under its lease with DNR and the June 5, 2104 amendment to the lease.
A copy of Millennium's business plan for the existing dock on [NWA's] leasehold that identifies the income that Millennium expects to receive from operations on the existing dock and the sources of income.
Any additional information which [NWA] can provide to shed light on the financial condition of Millennium.

CP at 1742. NWA did not respond to this request.

V. INVOLVEMENT OF ENVIRONMENTAL GROUPS

¶ 22 A group of environmental non-profit organizations contacted state and county regulatory agencies including DNR in October 2010, expressing their concerns about the development of a large coal terminal on the aquatic lands. The groups reiterated their concerns to DNR in November 2010, and requested a meeting with the Commissioner of Public Lands.

¶ 23 On March 16, 2011, the environmental groups sent a letter to the Commissioner regarding Millennium's business reputation based on Millennium's strategy to conceal their long-term plans for the property in an attempt to evade SEPA review. The groups attached several documents that they had obtained regarding Millennium. The letter urged DNR to consider Millennium's deceitful practices when evaluating Millennium's business reputation under the terms of the lease.

¶ 24 On January 25, 2016, as DNR, NWA, and Millennium were finalizing the documents for DNR's consent to sublease the aquatic lands, the environmental groups sent DNR a memo "to lay out some of the facts and legal considerations attendant to DNR's pending decision." CP at 1532. The memo urged DNR to deny consent to sublease based on Millennium's weak financial condition, the international coal market's dismal economics, and Millennium and its parent company's poor business reputation and lack of experience managing a coal terminal.

VI. DNR DENIES CONSENT TO SUBLEASE

¶ 25 On January 5, 2017, the Commissioner of Public Lands issued a letter denying DNR's consent to sublease the aquatic lands to Millennium. The letter explained, "DNR's decision is based on Northwest Alloys' failure to provide requested information regarding the financial condition and business of Millennium as well as other factors that bear on the suitability of Millennium as a subtenant." CP at 16855. The denial letter highlighted DNR's concern about Millennium's financial condition given the bankruptcy of Arch Coal, Wenatchee Works' indefinite closure, coal's historically poor market conditions, and Millennium's commitments to NWA under the ground lease.

¶ 26 The denial letter noted, "As the steward of Washington's state-owned aquatic lands, the financial capacity of a subtenant to perform is important to DNR." CP at 16856. Referencing Chinook's damage to the property during its subtenancy, the letter explained, "The recent history under the lease supports the need for careful examination of the capacity of subtenants at the site to comply with lease obligations." CP at 16856.

¶ 27 The denial letter also referenced Millennium's "significant error" in failing to disclose in its original permit application its plans to significantly increase the amount of coal shipped from the facility. CP at 16857. "That Millennium does not have a lengthy track record on which to judge performance and in its short history has made a significant error with respect to its planned activities on the leased property supports the need for a thorough review of Millennium's potential suitability as a subtenant, including its financial condition." CP at 16857.

¶ 28 The denial letter concluded:

[NWA] has failed to provide information reasonably requested by DNR as permitted under the lease for review of [NWA's] request for consent to sublease. As detailed above, DNR's requests for information are supported by the bankruptcy of Arch Coal; Millennium's commitments to [NWA]; market conditions facing Millennium's sole remaining owner, [Lighthouse Resources]; the history of subleasing under the lease; and the absence of a significant track record supporting Millennium. Accordingly, [NWA's] request for consent to sublease has been denied.

CP at 16857.

VII. SUPERIOR COURT PROCEEDINGS

¶ 29 NWA and Millennium appealed the Commissioner's letter denying DNR's consent to sublease to the superior court under RCW 79.02.030. The superior court granted Columbia Riverkeeper, Washington Environmental Council, and Sierra Club's motion to intervene.

¶ 30 After extensive briefing and argument, the superior court entered an order on the merits of whether DNR's decision to deny consent to sublease was unreasonable. The superior court concluded that in considering the request to sublease, DNR was performing an administrative proprietary function, not a quasi-judicial function. Accordingly, the superior court concluded that the proper standard of review in the matter was whether DNR's actions were arbitrary, capricious, or contrary to law.

¶ 31 Addressing the reasonableness of DNR's decision, the superior court concluded that it must consider the unique statutory mandates that apply to DNR and evaluate DNR's denial from the standpoint of a reasonable landlord in DNR's position. The superior court concluded that DNR's reasons for denying consent to sublease were not supported by facts and that DNR's denial was arbitrary and capricious. As a remedy, the superior court ordered DNR to "undertake further consideration" of NWA's request for consent to sublease to Millennium. CP at 17815.

¶ 32 DNR and Intervenors appeal and NWA and Millennium cross-appeal the superior court's orders.

ANALYSIS

I. STANDARD OF REVIEW

¶ 33 The parties disagree as to our standard of review. DNR and Intervenors contend that we sit in the same position as the trial court and conduct a de novo review of the agency record to determine whether DNR's consent to sublease was unreasonable. NWA and Millennium argue that we should review the superior court's findings for substantial evidence and determine de novo whether the superior court's conclusions flow from those findings. We agree with DNR and Intervenors.

¶ 34 RCW 79.02.030 states:

Any applicant to purchase, or lease, any public lands of the state ... and any person whose property rights or interests will be affected by such sale or lease, feeling aggrieved by any order or decision of the ... commissioner, concerning the same, may appeal therefrom to the superior court of the county in which such lands or materials are situated .... The hearing and trial of said appeal in the superior court shall be de novo before the court, without a jury, upon the pleadings and papers so certified .... Any party feeling aggrieved by the judgment of the superior court may seek appellate review as in other civil cases.

¶ 35 "Where the record at trial consists entirely of written documents and the trial court therefore was not required to 'assess the credibility or competency of witnesses, and to weigh the evidence, nor reconcile conflicting evidence,' the appellate court reviews de novo." Dolan v. King County , 172 Wash.2d 299, 310, 258 P.3d 20 (2011) (internal quotation marks omitted) (quoting Progressive Animal Welfare Soc'y v. Univ. of Wash. , 125 Wash.2d 243, 252, 884 P.2d 592 (1994) ). "Appellate courts give deference to trial courts on a sliding scale based on how much assessment of credibility is required; the less the outcome depends on credibility, the less deference is given to the trial court." Dolan , 172 Wash.2d at 311, 258 P.3d 20. But substantial evidence may be the more appropriate standard in cases where the superior court reviewed "an enormous amount of documentary evidence, weighed that evidence, resolved inevitable evidentiary conflicts and discrepancies, and issued statutorily mandated written findings." Dolan , 172 Wash.2d at 311, 258 P.3d 20.

¶ 36 Here, although the superior court reviewed a large agency record, it did not weigh evidence or resolve evidentiary conflicts. Nor was the superior court statutorily required to enter written findings of fact. Under RCW 79.02.030, the superior court defers to the factual findings of the commissioner and limits its review to the application of law to the admitted facts. Polson Logging Co. v. Martin , 195 Wash. 179, 184-85, 80 P.2d 767 (1938) ; see also State v. Forrest , 13 Wash. 268, 270-71, 43 P. 51 (1895). Given that the superior court made no factual findings, leaving only its conclusions of law for our review, we hold that we review DNR's decision to deny consent to sublease de novo.

II. DNR's DENIAL OF CONSENT

A. ADMINISTRATIVE DECISION

¶ 37 The parties also disagree as to the degree of deference owed to DNR's decision denying consent to sublease. DNR argues that its decision was administrative and should be reviewed under an arbitrary and capricious standard. NWA and Millennium argue that DNR was not acting in an administrative capacity but instead made a quasi-judicial determination, and therefore, its decision should be reviewed de novo applying a "reasonably prudent person" test. We agree with DNR.

¶ 38 Although RCW 79.02.030 uses the language "de novo" review, such a review of an administrative agency's decision "is only permissible when the agency acts in a quasi-judicial manner." Yaw v. Walla Walla School Dist. No. 140 , 106 Wash.2d 408, 413, 722 P.2d 803 (1986). In cases in which the agency acted in its administrative function, review is limited to whether the agency acted arbitrarily, capriciously, or contrary to law. Yaw , 106 Wash.2d at 413, 722 P.2d 803. "Allowing only limited appellate review over administrative decisions, rather than original or appellate jurisdiction as a matter of right, 'serves an important policy purpose in protecting the integrity of administrative decision-making.' " Residents Opposed to Kittitas Turbines v. State Energy Facility Site Evaluation Council , 165 Wash.2d 275, 295, 197 P.3d 1153 (2008) (quoting King County v. Wash. State Boundary Review Bd. for King County , 122 Wash.2d 648, 668, 860 P.2d 1024 (1993) ).

¶ 39 In Francisco v. Bd. of Directors , our Supreme Court identified four steps to determine if an agency's action was administrative or quasi-judicial. 85 Wash.2d 575, 579, 537 P.2d 789 (1975). They are whether (1) the court could have been charged in the first instance with the responsibility of making the decision; (2) the function of the agency is one that courts have historically performed; (3) the agency performs functions of inquiry, investigation, declaration and enforcement of liabilities as they stand on present or past facts under existing laws; and (4) the agency's action is comparable to the ordinary business of courts. Francisco , 85 Wash.2d at 579, 537 P.2d 789.

¶ 40 Here, DNR acted in its administrative capacity when it decided whether to grant or deny consent to sublease. DNR holds state-owned aquatic lands in trust for the public by virtue of the Washington Constitution. Pope Res. v. Dep't of Natural Res. , 190 Wash.2d 744, 754, 418 P.3d 90 (2018). The public trust doctrine is rooted in article XVII, section 1 of the Washington Constitution and protects " 'public ownership interests in certain uses of navigable waters and underlying lands, including navigation, commerce, fisheries, recreation, and environmental quality.' " Weden v. San Juan County , 135 Wash.2d 678, 698, 958 P.2d 273 (1998) (quoting Ralph W. Johnson et al., The Public Trust Doctrine and Coastal Zone Management in Washington State, 67 Wash. L. Rev. 521, 524 (1992) ).

¶ 41 Through the aquatic lands statutes, the State granted sovereign powers to DNR for protection of the State's interest in the trust. Pope , 190 Wash.2d at 755, 418 P.3d 90. As such, DNR is vested with the discretionary, administrative responsibility to reject a bid to lease state lands as the interests of the State or affected trust require. See RCW 79.105.020 ; RCW 79.02.280.

¶ 42 NWA and Millennium argue that "[w]hen acting pursuant to a contract, an agency is exercising an essentially judicial function." Response to Appellants' Opening Br. (Response Br.) at 43. NWA and Millennium contend this is so because "[c]ontracts fix the parties' obligations to one another and eliminate the discretion inherent when an agency is exercising its regulatory authority." Response Br. at 44. It is undisputed that DNR is beholden to the terms of its lease with NWA and that, pursuant to the lease, DNR could not unreasonably withhold its consent. However, DNR cannot contract itself out of its statutorily mandated duty to exercise discretion in furtherance of the public trust.

¶ 43 Nothing in the lease purports to extinguish DNR's statutory authority to exercise its discretion to approve a sublease, so long as it does not unreasonably withhold consent. Indeed, RCW 79.105.210(4) states, "The power to lease state-owned aquatic lands is vested in the department, which has the authority to make leases upon terms, conditions, and length of time in conformance with the state Constitution and chapters 79.105 through 79.140 RCW." (Emphasis added).

¶ 44 It follows that the courts could not constitutionally make a sublease determination in the first instance. Nor have courts historically managed aquatic lands held in public trust because that is a function DNR performs. Here, DNR carefully reviewed NWA's request for consent to sublease and Millennium's suitability as a potential sublessee for the sensitive property. Determining whether Millennium had the financial soundness, environmental awareness, and business reputation to meet the obligations of the lease of state-owned aquatic lands held in public trust was a uniquely administrative decision left to DNR by virtue of the Washington State Constitution and the aquatic lands statutes. See Malmo v. Case , 28 Wash.2d 828, 836, 184 P.2d 40 (1947) (holding that the Commissioner of Public Land's decision refusing to grant extensions for contracts involving timber cutting was not arbitrary or capricious); see also State ex rel. Thompson v. Babcock , 147 Mont. 46, 51, 409 P.2d 808 (1966) (noting, under similar Montana law, that "[t]here is no doubt that the State Board of Land Commissioners has considerable discretionary power when dealing with the disposition of an interest in land they hold in trust for the people of this state").

¶ 45 Accordingly, we hold that DNR's decision to deny consent to sublease was an administrative decision. We apply a de novo review of the agency record to determine if DNR's decision to deny consent to sublease was arbitrary and capricious.

B. DENIAL NOT ARBITRARY AND CAPRICIOUS

¶ 46 Applying a de novo review of the agency record, we hold that DNR's decision to deny consent to sublease was not arbitrary and capricious.

¶ 47 Agency action is arbitrary and capricious if it is willful, unreasoned, and taken without regard to the attending facts or circumstances. Where there is room for two opinions, agency action taken after due consideration is not arbitrary and capricious even if a reviewing court may believe it to be erroneous. Hillis v. Dep't of Ecology , 131 Wash.2d 373, 383, 932 P.2d 139 (1997). Deference will be given to the specialized knowledge and expertise of the administrative agency. Schuh v. Dep't of Ecology , 100 Wash.2d 180, 187, 667 P.2d 64 (1983). The party who challenges an agency action under this standard carries a heavy burden. Pierce County Sheriff v. Civil Serv. Comm'n , 98 Wash.2d 690, 695, 658 P.2d 648 (1983).

¶ 48 Section 9 of the lease conditions NWA's subletting of the aquatic lands on DNR's written approval. That approval cannot be unreasonably withheld. The lease expressly authorizes DNR to consider, among other things, "the proposed transferee's financial condition, business reputation and experience, the nature of the proposed transferee's business, the then-current value of the [p]roperty, and such other factors as may reasonably bear upon the suitability of the transferee as a tenant of the [p]roperty." CP at 16890. Because DNR reasonably considered the factors identified in the lease in light of attending facts and circumstances, its decision was not arbitrary and capricious.

¶ 49 DNR's careful consideration of Millennium's financial condition and business reputation was especially reasonable given the circumstances surrounding the potential sublease. At the time DNR made its decision, coal market conditions were not promising, with U.S. coal production dropping. DNR had concerns because of the recent shuttering of Wenatchee Works, the primary importer of the alumina unloaded at the dock leased by NWA. Finally, additional financial concerns existed after Millennium's corporate parent, Ambre Energy, sold its interest in Millennium, and Millennium's other corporate parent, Arch Coal, filed bankruptcy.

¶ 50 DNR was also acutely aware of the damage a negligent subtenant could inflict on the sensitive aquatic lands, given its recent negative experience with NWA's prior subtenant, Chinook. Millennium had intentionally misrepresented the scope of its plans for the property in 2011. Millennium sought to build, operate, and maintain the largest coal export terminal on the west coast. Such a project posed significant financial demands and high environmental risks if Millennium followed in the previous subtenant's footsteps with lax oversight from NWA. Accordingly, DNR had significant, well founded reasons for carefully considering the financial condition and business reputation of Millennium before consenting to sublease.

¶ 51 NWA and Millennium do not dispute that a landlord has an interest in a subtenant's financial condition. However, NWA and Millennium make several arguments in support of their position that DNR's denial of consent was unreasonable. First, they argue that because NWA would remain liable under the lease for any default by Millennium, DNR was necessarily unreasonable in denying consent. We reject this argument.

¶ 52 Section 9.1 of the lease expressly authorizes DNR to consider a potential subtenant's financial consideration in determining whether to grant consent. Accepting NWA's argument would mean rendering section 9.1 meaningless. And we must construe contract language in a manner that gives effect to the words used and does not render the chosen language meaningless. MacLean Townhomes, LLC v. Am. 1st Roofing & Builders, Inc. , 133 Wash. App. 828, 831, 138 P.3d 155 (2006). Under NWA's argument, DNR's right to grant or deny consent to sublease would be reduced to mere ritual because under section 9.1(c) of the lease NWA would always remain liable under the lease in the event of a default by a subtenant.

¶ 53 The fact that the tenant remains liable under the lease is less significant where, as here, a subtenant's actions have the potential to significantly impact sensitive public lands. As seen in the situation with Chinook, the fact that NWA would remain liable for Millennium's default under the lease does not remove the risk of long-term damage to a sensitive public resource, which DNR has been charged with managing in the public trust. NWA's liability under the lease would not prevent such damage.

¶ 54 Second, NWA and Millennium argue that DNR's denial of consent was unreasonable because the financial documents DNR requested were irrelevant. NWA and Millennium explain that Millennium's financial statements would "only have shown what DNR already knew," namely that Millennium had no positive revenues to cover its operating expenses and that it relied on regular infusions of cash from its parent company. Response Br. at 28, 31. NWA and Millennium further argue that the ground lease between NWA and Millennium had no relevancy to DNR because DNR was not a party to that lease and Millennium's obligations to NWA were otherwise secured by a $10 million letter of credit.

¶ 55 But as noted above, the lease expressly stated that in considering whether to grant consent to sublease, DNR could consider "the proposed transferee's financial condition" as well as "such other factors as may reasonably bear upon the suitability of the transferee as a tenant of the [p]roperty." CP at 16890. Therefore, the lease language supported DNR's requests for information.

¶ 56 In addition, the fact that Millennium's financial statements would have confirmed DNR's suspicions that Millennium's financial condition remained precarious does not render the financial statements irrelevant. Millennium's financial statements would have shown Millennium's assets, liabilities, income, and cash flow, all of which were relevant, critical considerations in assessing Millennium's financial condition. Even if Millennium relied entirely on its parent company for operating income, the financial statements would have shown DNR how much the parent company was regularly investing and how Millennium used those investments. This information was especially relevant given the disclosures in Arch Coal's bankruptcy proceedings that its entire ownership share in Millennium, which it valued at nearly $38 million at the time of bankruptcy, would be eliminated within a matter of weeks.

¶ 57 Third, NWA and Millennium argue that, given what DNR already knew about Millennium, DNR should have requested information on Millennium's parent company's financial condition. But because Millennium's parent company would have no legal obligation to DNR, its financial condition was of little value in alleviating DNR's concerns about Millennium's ability to manage its obligations, particularly in light of the recent restructuring of its corporate ownership following Arch Coal's bankruptcy and Ambre Energy's sale of its ownership stake. And DNR's requests for information from Millennium were not so narrow as to preclude Millennium from providing financial information it believed would be helpful to DNR in understanding Millennium's financial condition. Millennium knew what DNR's concerns were; Millennium could have provided its parent company's information if it believed it would be helpful in answering DNR's inquiry. Instead, NWA refused to respond at all.

¶ 58 Fourth, NWA and Millennium suggest that DNR acted arbitrarily and capriciously by considering Millennium's earlier failure to disclose its long-term plans for the coal terminal in determining whether to consent to sublease. They argue that DNR's willingness to negotiate a nearly-finalized sublease agreement with Millennium in 2015 undercuts DNR's contention that Millennium's failure to fully disclose its plans for the property was a contributing factor to its ultimate decision to deny consent. But the lease expressly authorized DNR to consider Millennium's business reputation in considering whether to grant consent to sublease.

¶ 59 Further, DNR's decision to not reject all consideration of a sublease agreement with Millennium after Millennium's deception came to light in 2011 did not prohibit DNR from weighing that deception as it evaluated Millennium's business reputation. Millennium's history remained part of the context in which DNR ultimately determined whether Millennium would be a suitable subtenant for the aquatic lands. Thus, considering Millennium's business reputation, as expressly permitted by the lease, was not arbitrary and capricious.

¶ 60 In conclusion, DNR's consideration of Millennium's financial condition and business reputation was expressly authorized under the lease. And the additional information DNR sought from Millennium, which Millennium failed to provide, was relevant to DNR's inquiry. Accordingly, we conclude that DNR's denial of consent to sublease was not arbitrary and capricious.

CONCLUSION

¶ 61 We reverse the superior court's order concluding that DNR acted arbitrarily and capriciously by denying NWA consent to sublease state-owned aquatic lands to Millennium, and we vacate the superior court's remedy order, and order the superior court to issue a new order affirming DNR's denial.

We concur:

Maxa, C.J.

Melnick, J.

      NWA and Millennium also cross-appeal the superior court's remedy order, which remanded the sublease decision back to DNR for further consideration. Because we reverse the superior court's order on the merits, we do not address the superior court's remedy order other than to vacate it.

      Ch. 43.21C RCW.

      These cases rely on an early statute-Rem. Rev. Stat. §§ 7797-1 to 7797-201-which later became RCW 79.02. This does not change our analysis.

      NWA and Millennium argue that we should interpret RCW 79.02.030's use of the phrase "as in other civil cases" to mean that we review the superior court's findings for substantial evidence. NWA and Millennium argue that RCW 79.02.030's use of the phrase "as in other civil cases" should have the same meaning as in RCW 51.52.140, which has been interpreted as providing for substantial evidence review. See Hendrickson v. Dep't of Labor & Indus. , 2 Wash. App. 2d 343, 351, 409 P.3d 1162, review denied , 190 Wash.2d 1030, 421 P.3d 450 (2018). However, NWA and Millennium overstress the similarity of that particular phrase while ignoring key differences in the statutory schemes.
      In industrial insurance appeals, the superior court or a jury may substitute its own findings and decision for the Board of Industrial Insurance Appeals if, after weighing the evidence, it finds by a preponderance of the evidence that the Board's findings and decision are incorrect. Harrison Mem'l Hosp. v. Gagnon , 110 Wash. App. 475, 482, 40 P.3d 1221 (2002). Accordingly, in industrial insurance appeals, we review the superior court's decision for substantial evidence. Rogers v. Dep't of Labor & Indus. , 151 Wash. App. 174, 180, 210 P.3d 355 (2009). In contrast, in appeals arising pursuant to RCW 79.02.030, as here, the superior court is not entitled to weigh evidence and must defer to the commissioner's factual findings. We disagree that RCW 79.02.030 is analogous to RCW 51.52.140.

      Article XVII, section 1 states "The state of Washington asserts its ownership to the beds and shores of all navigable waters in the state up to and including the line of ordinary high tide, in waters where the tide ebbs and flows, and up to and including the line of ordinary high water within the banks of all navigable rivers and lakes."

      NWA cites Yaw , 106 Wash.2d 408, 722 P.2d 803 in support of its argument. However, NWA overstates the holding in Yaw . The Yaw opinion did not hold that all agency decisions involving a contract are necessarily judicial actions. Yaw specifically dealt with a school board's hiring decision in light of a collective bargaining agreement.

      Even if we applied the "reasonably prudent person" test, we would conclude that DNR's decision to deny consent to sublease was not unreasonable. In Washington, a lease term that prohibits a landlord from "unreasonably" withholding consent requires a reviewing court to determine "whether a reasonably prudent person in the landlord's position would have refused consent." Ernst Home Ctr., Inc. v. Sato , 80 Wash. App. 473, 486, 910 P.2d 486 (1996) ; see also 224 Westlake, LLC v. Engstrom Props., LLC , 169 Wash. App. 700, 721, 281 P.3d 693 (2012). Our analysis above also would apply under this test. It was not unreasonable for DNR to withhold consent when NWA refused to provide requested financial information, especially in light of DNR's legal responsibilities as manager of state-owned aquatic lands held in public trust.


source: Caselaw Access Project

license: Public Domain

text:
    STATE of Washington, Respondent, v. John W. JACKSON, Sr., Appellant.
    No. 51177-1-II
    Court of Appeals of Washington, Division 2.
    August 20, 2019
    PUBLISHED OPINION
   Sutton, J.

¶1 John W. Jackson, Sr. appeals his conviction and sentence for second degree assault by strangulation. Jackson argues that the trial court violated his constitutional right to due process when it used restraints on him during pretrial hearings and jury trial without conducting an individualized inquiry into the need for the restraints. He also argues that the trial court erred by imposing legal financial obligations (LFOs) despite his indigency. We agree that the trial court violated his constitutional right to due process by failing to conduct an individual inquiry into the need for pretrial and trial restraints, but we hold that the errors were harmless. Accordingly, we affirm his conviction and remand to the trial court for reconsideration of the imposition of LFOs.

FACTS

¶2 The State charged Jackson with second degree assault for strangling his fiancée, Darci Black.

¶3 At his first pretrial appearance, Jackson appeared before the court in a belly chain and shackles. Jackson's defense attorney objected to the restraints and moved to have them removed. The trial court reserved ruling until it received a response and it set a hearing at a later date. The trial court set bail at $35,000 based on "the nature of the charges, the criminal history, [and] the fact that there's been at least four or five warrants over the years." Verbatim Report of Proceedings (RP) at 14.

¶4 At an arraignment hearing a few days later, the trial court declined to lower bail because the court was concerned about whether Jackson would return, about the nature of the allegations, and about community safety. The trial court again declined to reduce bail at a later status hearing.

¶5 The trial court subsequently held a hearing on Jackson's objection to restraints and motion for their removal. The hearing consolidated multiple defendants' motions regarding being shackled in their cases. The trial court said it would issue a decision that applied to the entirety of the Clallam County Superior Court.

¶6 Six weeks later, the trial court issued a memorandum opinion "address[ing] all restraint/shackling motions currently before the court and reflect[ing] the unified position of the Clallam County Superior Court on this issue." Clerk's Papers (CP) at 64. The ruling acknowledged that "less restrictive means of furthering the compelling government interest of courtroom security" existed, which would "eliminate potential problems associated with defendants being so humiliated and distracted by their restraints that it interferes with their ability to communicate with their lawyers and would address concerns associated with the routine use of restraints affronting the dignified and decorous judicial process." CP at 65-66. The trial court envisioned implementing video conferencing as a less restrictive option, but it noted that the superior court would be unable to implement a video conferencing policy for several months.

¶7 The trial court concluded that until the video conferencing policy could be implemented, the court would proceed under its previous ruling, which adopted the Clallam County Corrections Facility's shackling policy for all pretrial hearings. The previous policy considered general "security concerns associated with transporting varying numbers of in-custody defendants from secure facilities to less-secure courtrooms" and noted that Clallam County "is routinely limited by budget issues and staff shortages." See Motion to Supp. Record on Appeal at 12 (May 1, 2018). Under the policy, all criminal defendants would appear at pretrial proceedings in shackles, and the trial court would not consider motions for removal of the restraints during pretrial proceedings.

¶8 When the case proceeded to jury trial, Jackson was fitted with a leg brace, which he wore under his clothes. The brace would lock into position when he straightened his leg. Defense counsel objected to the brace, noting that the trial court had not made any rulings about the use of this restraint during trial. The trial court responded:

At this juncture, I don't think there's anything inappropriate in having that limited security measure employed. To the extent that your client wishes to testify, we'll make sure that he gets into the witness box without the jury being present and seeing him perhaps have some difficulty walking. But, at this juncture, I think that it is appropriate to have some limited security and I think that the brace that is employed is certainly appropriate.

RP at 75.

¶9 Black testified at trial. She said that Jackson drove her to a doctor's appointment. On their way home from the appointment, Jackson drove onto an industrial road and he and Black began having sexual intercourse. Jackson became upset, accused Black of cheating on him, and ripped Black's engagement ring off of her finger. Jackson pushed Black and started to strangle her, saying, "[D]ie, why don't you F'ing die." RP at 317. Jackson let go and then strangled Black a second and third time. Finally, Jackson released Black and starting crying and apologizing for almost killing her. Later that afternoon, Black told her sister that Jackson had tried to kill her and her sister called the police.

¶10 The trial court admitted a series of text messages between Black and Jackson from the day of the incident. The messages were obtained from both Black's and Jackson's phones because Black had deleted several messages.

¶11 Dr. John Shima, an emergency room physician who evaluated Black the evening of the incident, also testified at trial. Dr. Shima observed that there were mild abrasions and bruises around Black's neck consistent with a strangulation event.

¶12 Jackson testified in his defense. To avoid the jury seeing Jackson struggle to walk with his leg restraint to the witness stand, the trial court instructed Jackson to enter the stand before the jury entered the courtroom. Jackson asked the trial court if he needed to stand when the jury came in. The trial court asked if it was difficult for Jackson to stand with the restraint. Jackson's defense counsel responded, "I mean, he's been doing it, but the brace will be basically on the leg next to them, when he's sitting up there, it's on his left leg." RP at 448. The court continued, "I'll give you the oath seated, so just have a seat. Actually, if you're standing when they come in, is it problematic sitting down, I mean, is it observable?" RP at 448. Jackson responded, "They can actually see it. ... Yeah, it's gonna be noticeable for them." RP at 448. The trial court instructed him to remain seated. RP at 448.

¶13 Jackson testified as follows. The day before Black's doctor's appointment, Black and Jackson had sexual intercourse in a car. After Black's doctor's appointment the next day, Jackson drove her back to her parents' house. On the way to Black's parents' house, Black became irritable, and Jackson suggested she get her medication that helps with her anger. Once at Black's parents' house, Black went inside. When Black returned to the car, she started yelling at Jackson and accused him of cheating on her. After arguing for an hour, Jackson indicated that he was going to leave, at which point Black started punching him. Jackson ultimately got out of the car and started walking away. Black chased after him, yelling at him, and demanding he tell her who he was sleeping with. Eventually Black's sister yelled at Black to "just let him go Darc, just let him go." RP at 458.

¶14 The jury found Jackson guilty of second degree assault. The trial court sentenced Jackson to 20 months confinement and imposed various LFOs.

¶15 Jackson appeals his conviction and sentence.

ANALYSIS

I. PRETRIAL & TRIAL RESTRAINT

¶16 Jackson argues that the trial court violated his constitutional right to due process when it adopted the jail's blanket policy of shackling criminal defendants during pretrial proceedings, and by requiring him to wear a leg restraint during the jury trial without conducting an individual inquiry into the need to restrain him. We hold that the trial court violated Jackson's constitutional right to due process by failing to perform an individualized inquiry into the need to restrain him at the pretrial proceedings and at trial, but we further hold that these errors were harmless.

A. LEGAL PRINCIPLES

¶17 We review constitutional claims de novo. State v. Lundstrom , 6 Wash. App. 2d 388, 393, 429 P.3d 1116 (2018), review denied , 193 Wash.2d 1007, 443 P.3d 800 (2019). A criminal defendant has a right to appear before the court "with the appearance, dignity, and self-respect of a free and innocent man." State v. Finch , 137 Wash.2d 792, 844, 975 P.2d 967 (1999) ; U.S. CONST. amends. VI, XIV. The Washington Constitution provides, "In criminal prosecutions the accused shall have the right to appear and defend in person." Wash. Const. art. I, § 22. Washington courts have long held that the right to appear and defend in person extends to "the use of not only his mental but his physical faculties unfettered, and unless some impelling necessity demands the restraint of a prisoner, to secure the safety of others and his own custody, the binding of the prisoner in irons is a plain violation of the constitutional guaranty." State v. Williams , 18 Wash. 47, 51, 50 P. 580 (1897). This includes the right "to be brought into the presence of the court free from restraints." State v. Damon , 144 Wash.2d 686, 690, 25 P.3d 418 (2001).

¶18 "[R]egardless of the nature of the court proceeding or whether a jury is present, it is particularly within the province of the trial court to determine whether and in what manner shackles or other restraints should be used." State v. Walker , 185 Wash. App. 790, 797, 344 P.3d 227 (2015). Restraints are disfavored because they may interfere with important constitutional rights, "including the presumption of innocence, privilege of testifying [on] one's own behalf, and right to consult with counsel during trial." State v. Hartzog , 96 Wash.2d 383, 398, 635 P.2d 694 (1981).

¶19 However, a defendant's right to be in court free from restraints may yield to courtroom safety, security, and decorum. Walker , 185 Wash. App. at 800, 344 P.3d 227. "A defendant may be restrained if necessary to prevent injury, disorderly conduct, or escape." Lundstrom , 6 Wash. App. 2d at 394, 429 P.3d 1116. The superior court has the discretion to provide for courtroom security to ensure the safety of court officers, parties, and the public. Lundstrom , 6 Wash. App. 2d at 394, 429 P.3d 1116.

¶20 In order to balance the interest in courtroom security and defendants' constitutional right to due process, the superior court must determine the extent to which courtroom security measures are necessary based upon facts set forth in the record. Lundstrom , 6 Wash. App. 2d at 394, 429 P.3d 1116. "The trial court should allow restraints only after conducting a hearing and entering findings on the record sufficient to justify their use on a particular defendant." Lundstrom , 6 Wash. App. 2d at 394, 429 P.3d 1116. The trial court must perform an individualized inquiry into the necessity for pretrial and trial restraints. Lundstrom , 6 Wash. App. 2d at 395, 429 P.3d 1116.

¶21 The Supreme Court has identified several factors that the trial court should consider when deciding whether a defendant should be restrained during trial:

"[T]he seriousness of the present charge against the defendant; defendant's temperament and character; his age and physical attributes; his past record; past escapes or attempted escapes, and evidence of a present plan to escape; threats to harm others or cause a disturbance; self-destructive tendencies; the risk of mob violence or of attempted revenge by others; the possibility of rescue by other offenders still at large; the size and mood of the audience; the nature and physical security of the courtroom; and the adequacy and availability of alternative remedies."

State v. Hutchinson , 135 Wash.2d 863, 887-88, 959 P.2d 1061 (1998) (quoting Hartzog , 96 Wash.2d at 400, 635 P.2d 694 ).

¶22 A trial court commits constitutional error when it fails to exercise its discretion. See State v. Clark , 143 Wash.2d 731, 775, 24 P.3d 1006 (2001) ("[W]here no balancing or analysis as to the need to restrain [the defendant] was done, his shackling was constitutional error."). Deferring to general jail policy is an abuse of discretion and constitutional error. Lundstrom , 6 Wash. App. 2d at 395, 429 P.3d 1116 ; see also Hartzog , 96 Wash.2d at 400, 635 P.2d 694 ("A broad general policy of imposing physical restraints upon prison inmates charged with new offenses because they may be 'potentially dangerous' is a failure to exercise discretion.") (quoting People v. Duran , 16 Cal. 3d 282, 293, 545 P.2d 1322, 127 Cal. Rptr. 618 (1976) ); see also State v. Jaquez , 105 Wash. App. 699, 709, 20 P.3d 1035 (2001) ("[T]he sole reason for the trial court's allowing the use of restraints was because it was general jail policy. ... [A] court's decision to defer to the security policy of correctional officers is unjustifiable."). "While prison officials may be well positioned to assist the trial court in deciding matters of courtroom security, they are in no position to weigh and balance the many factors the court must consider when determining whether, and in what manner, a defendant should be restrained during a court proceeding." Walker , 185 Wash. App. at 796-97, 344 P.3d 227.

¶23 Generally, an error that violates a defendant's constitutional right is presumed to be prejudicial. Finch , 137 Wash.2d at 859, 975 P.2d 967. But the State can overcome the presumption by showing that the error was harmless beyond a reasonable doubt. Finch , 137 Wash.2d at 859, 975 P.2d 967. "A claim of unconstitutional shackling is subject to harmless error analysis." Hutchinson , 135 Wash.2d at 888, 959 P.2d 1061.

B. MOOTNESS

¶24 As an initial matter, the State argues that the issue of whether the trial court violated Jackson's right to due process by failing to make an individualized determination on the necessity of restraints during pretrial hearings is moot. We disagree.

¶25 "Generally, we do not consider claims that are moot or that present only abstract questions." Lundstrom , 6 Wash. App. 2d at 392, 429 P.3d 1116. An issue is moot when the "court can no longer provide effective relief." State v. Gentry , 125 Wash.2d 570, 616, 888 P.2d 1105 (1995).

¶26 The State contends that we cannot grant effective relief, and therefore, the issue is moot, because "the underlying criminal case has been resolved through jury trial." Br. of Resp't at 10. However, the fact that the case proceeded to trial and that Jackson was ultimately convicted, does not preclude us from granting relief. We may reverse and remand for a new trial based on pretrial errors. See State v. Coley , 171 Wash. App. 177, 179, 286 P.3d 712 (2012), rev'd on other grounds , 180 Wash.2d 543, 326 P.3d 702 (2014) (reversing and remanding based on the misallocation of the burden of proof in a pretrial competency hearing).

¶27 Because a remedy remains available for the alleged pretrial errors that occurred, the issue of Jackson's pretrial restraints is not moot.

C. CONSTITUTIONAL ERROR

¶28 Here, the trial court clearly committed constitutional error when it failed to address the necessity of shackling Jackson during pretrial hearings and of restraining Jackson with a leg brace during the jury trial.

¶29 At the pretrial stage, the trial court did not make any findings regarding the need to place Jackson in shackles. In fact, the trial court failed to even address whether any physical restraints were necessary. The court did not analyze any of the relevant factors and failed to recognize that under well-settled law, physical restraints should be used only in extraordinary circumstances and as a last resort.

¶30 The trial court considered the issue of shackling criminal defendants generally at a hearing involving many defendants. The trial court's decision was driven not by any identified safety risk posed by Jackson or any particular defendant, but rather by logistical concerns for the Clallam County Superior Court as a whole. Indeed, the trial court not only failed to conduct an individualized inquiry into the need to restrain Jackson, it determined that, as a matter of superior court policy, all criminal defendants would be restrained during pretrial proceedings without any consideration of motions for removal of restraints.

¶31 Similarly, the trial court failed to conduct any analysis as to the need to restrain Jackson with a leg brace during trial. The trial court did not apply any of the Hartzog factors. Rather, the court simply stated that it did not see "anything inappropriate" about the leg brace. RP at 75.

¶32 The failure to conduct any inquiry into the need to restrain Jackson, and the broad adoption of jail policy for all criminal defendants in pretrial proceedings, was clearly in violation of well-established constitutional law.

D. HARMLESS ERROR

¶33 Having established that the superior court violated Jackson's constitutional right to due process, we next determine whether the decision to restrain Jackson was harmless beyond a reasonable doubt. See Finch , 137 Wash.2d at 859, 975 P.2d 967. For erroneous restraints to be reversible rather than harmless error, the record must show that the restraints "had a substantial or injurious effect or influence on the jury's verdict." Hutchinson , 135 Wash.2d at 888, 959 P.2d 1061.

¶34 Because the purposes of the pretrial phase and guilt phase of criminal proceedings are different, we assess the harmlessness of Jackson's restraints during pretrial hearings and during jury trial separately. See Finch , 137 Wash.2d at 862, 975 P.2d 967. During the pretrial proceedings, one of the trial court's duties was to set bail. During jury trial, the inquiry was whether evidence established Jackson's guilt of the charged crime.

¶35 Jackson argues that his shackling during pretrial proceedings was not harmless error because "[s]hackles make a person appear dangerous and unmanageable, which prejudices the court's assessment of whether to release Mr. Jackson and what bail amount he must post." Br. of Appellant at 26. He further argues that his shackling was harmful error because it resulted in a high bail that he could not afford to pay, which prevented him from assisting in his defense by timely providing the text messages from his phone.

¶36 Jackson appeared in a belly chain and shackles for his pretrial hearings. The trial court set bail at $35,000 based on "the nature of the charges, the criminal history, [and] the fact that there's been at least four or five warrants over the years." RP at 14. At an arraignment hearing a few days later, the trial court declined to lower bail, in part, due to the nature of the charges and concerns for the community's safety, and due to concerns that Jackson may not appear at future proceedings.

¶37 The likelihood of prejudice is significantly reduced in a proceeding without a jury. State v. E.J.Y. , 113 Wash. App. 940, 952, 55 P.3d 673 (2002). There is a presumption that the trial court properly discharged its official duties without bias or prejudice. In re Pers. Restraint of Davis , 152 Wash.2d 647, 692, 101 P.3d 1 (2004). Additionally here, the trial court pointed to significant concerns that Jackson posed a flight risk if he was released based on his history of outstanding warrants. Because the record suggests that the trial court's bail determination was not driven by the sentiment that Jackson was dangerous, which Jackson's shackles could have contributed to, we hold that the trial court's error in restraining Jackson during pretrial proceedings was harmless beyond a reasonable doubt.

¶38 We also hold that the trial court's error in restraining Jackson during trial was harmless beyond a reasonable doubt. Improperly restraining a defendant is harmless error if the jury does not see the defendant in restraints. Clark , 143 Wash.2d at 777, 24 P.3d 1006. Although Jackson told the court that, from the witness stand, the jury could see his leg brace restraint if he was standing, nothing in the record suggests that the jury actually saw or was aware of the leg restraint, in part because Jackson remained seated in the jury's presence. Jackson's defense counsel acknowledged that the brace was "not visible from outside his clothes." RP at 75. Furthermore, Jackson moved around the courtroom only while the jury was not present so the jury would not see Jackson struggle to walk with the brace. Because there is no evidence that the unseen restraint had a substantial or injurious effect on the jury's verdict, we hold that the erroneous imposition of the leg brace restraint was harmless beyond a reasonable doubt.

II. LEGAL FINANCIAL OBLIGATIONS

¶39 Jackson also argues that the trial court erred by imposing LFOs despite his indigence.

¶40 In 2018, the legislature amended the statutes pertaining to LFOs. Laws of 2018, ch. 269. The amendments apply to this case because it was not final on June 7, 2018, when the amendments took effect. State v. Ramirez , 191 Wash.2d 732, 747-49, 426 P.3d 714 (2018).

¶41 Accordingly, we affirm Jackson's convictions and remand to the trial court to reconsider imposition of LFOs in accordance with Ramirez and the relevant statutory amendments.

I concur:

Glasgow, J.

Melnick, J. (concurrence)

¶42 Although I concur in the majority's analysis and resolution of the shackling issue, I write separately to express my concerns regarding what the appropriate remedy should be when a court improperly shackles a person who appears before it. John W. Jackson, Sr. urges us to dispense with the harmless error test that we currently utilize and instead adopt a structural error analysis. Because the Court of Appeals is bound to follow Supreme Court precedent, I concur with the majority's decision to not accept Jackson's invitation. However, I believe a new look at the appropriate remedy for what appears to be a statewide, systemic violation is warranted.

¶43 The law is clear, well-settled, and not in dispute. A person has a right to appear "before the court with the appearance, dignity, and self-respect of a free and innocent man." State v. Finch , 137 Wash.2d 792, 844, 975 P.2d 967 (1999). Thus, a defendant "is entitled to appear at trial free from all bonds or shackles except in extraordinary circumstances." Finch , 137 Wash.2d at 842, 975 P.2d 967. Restraints should only be used when necessary to prevent courtroom injuries, disorderly conduct, or escapes. Finch , 137 Wash.2d at 846, 975 P.2d 967.

¶44 The rule on shackling is not confined to trials. State v. Lundstrom , 6 Wash. App. 2d 388, 392, 429 P.3d 1116 (2018). "[R]egardless of the nature of the court proceeding or whether a jury is present," the court shall decide when and how shackles or restraints should be utilized. State v. Walker , 185 Wash. App. 790, 797, 344 P.3d 227 (2015).

¶45 The courts are to ensure the safety of court officers, the public, and the parties. Lundstrom , 6 Wash. App. 2d at 394, 429 P.3d 1116. Courts must balance, among other factors, the need for a secure courtroom with the constitutional presumption of innocence, the rights of the defendant, and the dignity of the judicial process. Finch , 137 Wash.2d at 844-46, 975 P.2d 967. Because the interests of jail administrators are different from the interests of the court, courts cannot defer to jail policy. Walker , 185 Wash. App at 796, 344 P.3d 227. They must exercise their own discretion. Lundstrom , 6 Wash. App. 2d at 395, 429 P.3d 1116.

While prison officials may be well positioned to assist the trial court in deciding matters of courtroom security, they are in no position to weigh and balance the many factors the courts must consider when determining whether, and in what manner, a defendant should be restrained during a court proceeding.

Walker , 185 Wash. App. at 796-97, 344 P.3d 227.

¶46 Relying on State v. Hartzog , 96 Wash.2d 383, 635 P.2d 694 (1981), the appellate courts have concluded that trial courts may not adopt general policies regarding the imposition of restraints but must exercise their discretion based on facts developed in and set forth in the record. E.g. , Lundstrom , 6 Wash. App. 2d at 394-95, 429 P.3d 1116. The use of physical restraints should be authorized only as a last resort. Finch , 137 Wash.2d at 850, 975 P.2d 967.

¶47 The Washington Supreme Court has decided that a harmless error test applies when a court violates the above-stated rules. State v. Hutchinson , 135 Wash.2d 863, 888, 959 P.2d 1061 (1998). We are obligated to follow and are bound by the Supreme Court's decisions. State v. Hairston , 133 Wash.2d 534, 539, 946 P.2d 397 (1997).

¶48 It appears to me that the application of the harmless error test in the area of shackling defendants who appear before the court, especially when the court has not made any individual inquiry, has resulted in a constitutional violation without a remedy. Regardless of the well-settled and clearly articulated principles of law in this area, it appears trial courts have difficulty adhering to them.

¶49 My survey of cases shows that there are no fewer than 14 cases since February 2015 where our appellate courts have found a violation of a defendant's right to be free from shackles, yet every case has resulted in harmless error. In Lundstrom , the trial court did not exercise its discretion, effectively deferring to the jail's policy. 6 Wash. App. 2d at 395, 429 P.3d 1116. Similar situations existed in State v. Zain , State v. Smith , and State v. Montenguise . In State v. Calhoon , State v. Boatright , and State v. Bruce , the court held a hearing, but the evidence did not support the court's decision to physically restrain the defendant. In State v. Huynh , State v. Flores , and In re Welfare of A.N.B. , the court held a hearing, and we either assumed without deciding that the court abused its discretion or did not decide the issue because we determined that any error would have been harmless. In State v. Lomax and State v. Bakke , the court abused its discretion by either not conducting a hearing or conducting an inadequate hearing. In State v. Mendez , the State conceded that the trial court did not make an adequate record to support the use of restraints. In In re Personal Restraint of Pender , we concluded harmless error existed after the sheriffs' office decided the defendant had to wear a stun belt at trial but never informed the court.

¶50 In the present case, the State conceded in oral argument that it has been confronting the issue of shackling defendants for the last one to two years. Wash. Court of Appeals oral argument, State v. Jackson , No. 51177-1-II (Apr. 8, 2019), at 7 min., 39 sec. through 7 min., 44 sec. (on file with court). The State also admitted that judges are not making individualized determinations regarding shackling and restraints, but are instead leaving it to the jail staff. Wash. Court of Appeals oral argument, State v. Jackson , No. 51177-1-II (Apr. 8, 2019), at 10 min., 54 sec. through 11 min., 4 sec. (on file with court). Finally, the State conceded that, based on its blanket policy, it presumes defendants appearing in court are dangerous. Wash. Court of Appeals oral argument, State v. Jackson , No. 51177-1-II (Apr. 8, 2019), at 20 min., 15 sec. through 20 min., 30 sec. (on file with court).

¶51 As pointed out by the majority, the trial court considered the shackling issue at a hearing involving multiple defendants. The court did not make or consider individualized determinations. By adopting the jail's policy, the court determined that all defendants would be restrained during pretrial proceedings. Motion to Supp. Record on Appeal, State v. Jackson , No. 51177-1-II (May 1, 2018), at 12. In addition, the court did not see "anything inappropriate" about having Jackson in a leg brace for trial, notwithstanding its failure to conduct a hearing and consider the mandatory factors. Report of Proceedings (Aug. 21, 2017) at 75.

¶52 "[J]udges are human, and the sight of a defendant in restraints may unconsciously influence even a judicial factfinder." People v. Best , 19 N.Y. 3d 739, 744, 955 N.Y.S.2d 860, 979 N.E. 2d 1187 (2012). Studies support the proposition that judges, like laypersons, are similarly prone to implicit associations and implicit biases. See, e.g. , JUDGE ANDREW J. WISTRICH & JEFFREY J. RACHLINSKI, IMPLICIT BIAS IN JUDICIAL DECISION MAKING: HOW IT AFFECTS JUDGMENTS AND WHAT JUDGES CAN DO ABOUT IT , in ENHANCING JUSTICE: REDUCING BIAS 87 (Sarah E. Redfield ed., 2017).

¶53 It is clear that in the present case the trial court failed to follow well-established and clearly stated legal principles. As a result, we are bound to conclude error occurred, but we must also determine that the error was harmless. I think the application of this remedy should be revisited, especially where, as here, the court failed to conduct an individualized hearing on the use of pretrial and trial restraints.

      The messages from Jackson's phone were not obtained until the beginning of trial because the phone had remained with Jackson's brother in a different town while Jackson was incarcerated leading up to the trial. The day trial began, Jackson's uncle transported the phone to the court.

      Jackson argues that the superior court's systemic refusal to conduct the requisite individual inquiry before shackling Jackson, and other criminal defendants appearing in Clallam County Superior Court, constitutes structural error and is not subject to a harmless error analysis. "A structural error resists harmless error review completely because it taints the entire proceeding." State v. Levy , 156 Wash.2d 709, 725, 132 P.3d 1076 (2006). Such structural errors include total denial of counsel, a biased trial judge, racial discrimination in jury selection, denial of self-representation at trial, and denial of a public trial. Arizona v. Fulminante , 499 U.S. 279, 310, 111 S. Ct. 1246, 113 L.Ed. 2d 302 (1991). "Each of these constitutional deprivations is a similar structural defect affecting the framework within which the trial proceeds, rather than simply an error in the trial process itself." Fulminante , 499 U.S. at 310, 111 S.Ct. 1246. Jackson provides no authority to support the extension of the structural error doctrine to shackling, and we decline to do so for the first time here.

      Nothing in this opinion should be construed to address the separate issues involving the use of shackles when transporting or detaining prisoners.

      Although not applicable to this case, I also note that "[j]uveniles shall not be brought before the court wearing any physical restraint devices except when ordered by the court during or prior to the hearing." JuCR 1.6(a).

      I rely on unpublished cases not as persuasive authority, but as part of the data-gathering process.

      State v. Zain , No. 47368-2-II, 2015 WL 7737874 (Wash. Ct. App. Dec. 1, 2015) (unpublished), http://www.courts.wa.gov/opinions/; State v. Smith , No. 45777-6-II, 2015 WL 4755642 (Wash. Ct. App. Aug. 11, 2015) (unpublished), http://www.courts.wa.gov/opinions/; State v. Montenguise , No. 33007-9-III, 2015 WL 4094316 (Wash. Ct. App. July 7, 2015) (unpublished), http://www.courts.wa.gov/opinions/.

      State v. Calhoon , No. 49346-2-II, 2018 WL 1725219 (Wash. Ct. App. Apr. 10, 2018) (unpublished), http://www.courts.wa.gov/opinions/; State v. Boatright , No. 49218-1-II, 2017 WL 5593790 (Wash. Ct. App. Nov. 21, 2017) (unpublished), http://www.courts.wa.gov/opinions/; State v. Bruce , No. 49058-7-II, 2017 WL 5462514 (Wash. Ct. App. Nov. 14, 2017) (unpublished), http://www.courts.wa.gov/opinions/.

      State v. Huynh , No. 50218-6-II, 2018 WL 1393836 (Wash. Ct. App. Mar. 20, 2018) (unpublished), http://www.courts.wa.gov/opinions/; State v. Flores , No. 49777-8-II, 2017 WL 5152762 (Wash. Ct. App. Nov. 7, 2017) (unpublished), http://www.courts.wa.gov/opinions/; In re Welfare of A.N.B. , Nos. 71230-6-I, 71231-4-I, 71232-2-I, 71233-1-I, 71234-9-I, 71236-5-I, 71237-3-I, 2015 WL 782975 (Wash. Ct. App. Feb. 23, 2015) (unpublished), http://www.courts.wa.gov/opinions/.

      State v. Lomax , No. 48072-7-II, 2017 WL 2560098 (Wash. Ct. App. June 13, 2017) (unpublished), http://www.courts.wa.gov/opinions/; State v. Bakke , No. 46696-1-II, 2016 WL 562755 (Wash. Ct. App. Feb. 9, 2016) (unpublished), http://www.courts.wa.gov/opinions/.

      State v. Mendez , No. 49847-2-II, 2018 WL 2324388 (Wash. Ct. App. May 22, 2018) (unpublished), http://www.courts.wa.gov/opinions/.

      In re Pers. Restraint of Pender , No. 42430-4-II, 2015 WL 562694 (Wash. Ct. App. Feb. 10, 2015) (unpublished), http://www.courts.wa.gov/opinions/.

      I note that in considering the release of a defendant, CrR 3.2 requires a court to determine, among other factors, whether a defendant is dangerous and a flight risk.


author: Leach, J.

text:
    In the MATTER OF the MARRIAGE OF Richard Dennis GROVES, Respondent, and Mary Noonan Groves, Appellant.
    No. 78236-3-I
    Court of Appeals of Washington, Division 1.
    FILED: August 26, 2019
    Craig Jonathan Hansen, Hansen Law Group, 12000 Ne 8th St. Ste. 202, Bellevue, WA, 98005-3193, Valerie A. Villacin, Catherine Wright Smith, Smith Goodfriend PS, 1619 8th Ave. N., Seattle, WA, 98109-3007, for Appellant(s).
    Kerry Alan Richards, Law Offices of Michael W. Bugni & Associ, 11300 Roosevelt Way Ne. Ste. 300, Seattle, WA, 98125-6243, Gregory Mann Miller, Carney Badley Spellman PS, 701 5th Ave. Ste. 3600, Seattle, WA, 98104-7010, for Respondent(s).
    PUBLISHED OPINION
    Mann, A.C.J.
    ¶1 Mary Groves appeals the trial court's characterization and division of her former husband, Dennis Grove's, Law Enforcement Officer and Fire Fighter (LEOFF I) disability allowance. The trial court characterized Dennis's disability allowance as separate property and awarded the entire monthly allowance to Dennis.
    ¶2 While a disability allowance that has the character of compensation for future lost wages is generally separate property and not divisible upon dissolution, a disability allowance that takes the place of a standard retirement pension is more akin to deferred compensation and therefore is divisible upon dissolution. Because Dennis was eligible to retire when he became disabled, and certainly would have retired prior to the parties' dissolution, his disability allowance was more akin to deferred compensation and should have been characterized as community property. Further, the trial court's failure to divide Dennis's disability allowance-the parties' most substantial asset-indicates that the final division of property was unfair, unjust, and inequitable. Accordingly, we reverse and remand.
    I.
    ¶3 Dennis joined the Seattle Fire Department on February 11, 1963, and became a lieutenant in 1979. Dennis and Mary married on November 18, 1991; they did not have any children together. In October of 1992, Dennis was injured in the line of duty while fighting a fire. After his injury, the Seattle Firefighters Pension Board doctor determined that Dennis was no longer able to physically handle the duties of a firefighter. Accordingly, on April 15, 1993, the Seattle Firefighters Pension Board approved Dennis's line of duty disability. That decision was subsequently affirmed by the State Department of Retirement Systems on May 5, 1993. Since then, Dennis has received a monthly disability allowance set at approximately 60 percent of the salary of a fire department lieutenant. At the time of trial Dennis was receiving $5,784 a month in disability.
    ¶4 The majority of the couple's assets were brought into the marriage by Dennis. Mary owned a small equity in a condominium and a small IRA deferred compensation account. The mortgage balance on Mary's condominium was fully paid using Dennis's separate liquid investments early in the marriage. The condominium was rented during the marriage and the community shared the revenue. Upon sale, the proceeds from the sale of the condominium were placed in Dennis's investment accounts. During their marriage, the couple lived in a house that Dennis had separately purchased.
    ¶5 On November 12, 1998, the couple signed a community property agreement. The agreement provided that all of their separate property would be transferred to community property. On the agreement, Dennis hand wrote "Our intention is to now own all of our property together as community property." After signing and having the agreement notarized, the couple drove to three different counties to record the agreement and quit claim deeds that they made out to each other.
    ¶6 On October 21, 2016, after nearly 25 years of marriage, Dennis petitioned for dissolution. Both parties cross moved for summary judgment on the validity of the community property agreement and the characterization of Dennis's disability allowance. On the community property agreement, the trial court rejected Dennis's argument that he was coerced into signing the agreement or that he did not know what he was signing. The trial court found that the agreement was valid and that the parties' actions were "consistent with an intent to make all of their property community." The court reserved on the characterization of Dennis's disability allowance until trial.
    ¶7 After trial, the trial court awarded each party half of their collective assets except Dennis's disability allowance. The court awarded both parties 50 percent each of the net proceeds from the sale of the family home, 50 percent each of various savings bonds, and 50 percent each of Mary's IRA account, a money market account, and a joint account. But the trial court determined that Dennis's disability allowance was his separate property and was not "in any part community in character." Further, the court concluded that "any service related pension/allowance is owned for the most part (97.5%) by Dennis as his separate interests as he worked for the [Seattle Fire Department] for 28.5 years before marriage."
    ¶8 The trial court also granted Mary a monthly maintenance of $1,600 for five years. The five-year time frame was intended to last until Mary qualified for Medicare and Social Security payments. At the time of trial, Dennis was 75 years old and Mary was 61.
    II.
    ¶9 Mary argues that the trial court erred in characterizing Dennis's disability allowance as his separate property and then abused its discretion by awarding the full allowance to Dennis. We agree.
    A.
    ¶10 "In performing its obligation to make a just and equitable distribution of properties and liabilities in a marriage dissolution action, the trial court must characterize the property before it as either community or separate." In re Marriage of Kile, 186 Wash. App. 864, 875, 347 P.3d 894 (2015). We review de novo a trial court's characterization of property as separate or community. In re Marriage of Mueller, 140 Wash. App. 498, 503-04, 167 P.3d 568 (2007).
    ¶11 The trial court's characterization, however, is not controlling. In re Marriage of Shannon, 55 Wash. App. 137, 141, 777 P.2d 8 (1989). "Rather, the trial court must ensure that the final division of the property is 'fair, just and equitable under all the circumstances[,]' " In re Marriage of Olivares, 69 Wash. App. 324, 329, 848 P.2d 1281 (1993) (quoting In re Marriage of Hadley, 88 Wash.2d 649, 656, 565 P.2d 790 (1977) ), because "all of the property of the parties, whether it be community or separate, is before the trial court for disposition." Shannon, 55 Wash. App. at 141, 777 P.2d 8.
    ¶12 In dividing property, the trial court must consider: (1) the nature and extent of the community property, (2) the nature and extent of the separate property, (3) the duration of the marriage, and (4) the economic circumstances of each spouse at the time the division of property is to become effective. RCW 26.09.080. No factor is afforded greater weight than any other. In re Marriage of Konzen, 103 Wash.2d 470, 478, 693 P.2d 97 (1985).
    ¶13 The trial court has broad discretion in dissolution proceedings "to make a just and equitable distribution of property based on the factors enumerated in RCW 26.09.080." In re Marriage of Wright, 179 Wash. App. 257, 261, 319 P.3d 45 (2013). We review a trial court's division of property for a manifest abuse of discretion, Wright, 179 Wash. App. at 261, 319 P.3d 45, such as when the trial court exercises its discretion on untenable grounds or "[i]f the decree results in a patent disparity in the parties' economic circumstances." In re Marriage of Rockwell, 141 Wash. App. 235, 243, 170 P.3d 572 (2007). This is a highly deferential standard and "[t]he spouse who challenges such decisions bears the heavy burden of showing a manifest abuse of discretion on the part of the trial court." In re Marriage of Landry, 103 Wash.2d 807, 809, 699 P.2d 214 (1985).
    B.
    ¶14 In reaching its characterization decision, the trial court found that Dennis "was not given the option of taking retirement or disability allowance" and instead that based on the medical evaluation at the time of his injury "the determination was made that he was to take a disability allowance." Based largely on this finding, the trial court determined that "the disability allowance received by Dennis [was not] in any part community in character, but rather it is his separate personal property as described by the Court of Appeals in [ In re Marriage of Anglin, 52 Wash. App. 317, 759 P.2d 1224 (1988) ]."
    ¶15 The trial court's sole focus on whether Dennis elected to receive his disability allowance at the time of his injury was mistaken. It was undisputed that Dennis was eligible to retire and receive a pension before he became disabled at age 50. It is also undisputed at the time of trial Dennis was 75 years old and likely would have been retired and would have been eligible for his LEOFF I pension. Therefore, whether he elected to take disability instead of retirement at the time of his injury should not have been the sole focus of the trial court's analysis. Several cases are instructive.
    ¶16 In In re Marriage of Knies, 96 Wash. App. 243, 244, 979 P.2d 482 (1999), the wife was awarded 50 percent of the husband's pension with the Washington State Patrol as part of a 1990 dissolution decree. In 1996, six days before the husband would have been eligible to retire, he became disabled and was awarded disability payments. Knies, 96 Wash. App. at 244, 979 P.2d 482. The wife moved for an order directing the husband to pay a portion of the disability payments to her and the trial court agreed. On appeal, the husband argued that the trial court erred in determining that the disability benefits may substitute for retirement pensions for the purposes of property division.
    ¶17 This court affirmed the trial court, noting that while generally "retirement benefits are considered deferred compensation ... [and] [d]isability payments ... are considered compensation for lost future wages ... courts look carefully at the disability payment received to determine whether the payment has characteristics of an earned pension in addition to disability." Knies, 96 Wash. App. at 251, 979 P.2d 482. "By choosing to accept the disability benefits in lieu of retirement, only six days before he was eligible to retire ... [the husband] effectively altered the character of his disability to one of deferred compensation." Knies, 96 Wash. App. at 252, 979 P.2d 482.
    ¶18 Importantly, it was the nature of the benefits that was important in Knies and not the election of those benefits. This was evident in the court's rejection of the husband's argument-the same argument that Dennis made below-that he would not have retired but for the disability: "It was not untenable for the [trial] court to conclude, after hearing all the evidence, that [the husband] intended to remain on disability indefinitely. Therefore, we affirm." Knies, 96 Wash. App. at 252, 979 P.2d 482.
    ¶19 Similarly, in In re Marriage of Kollmer, 73 Wash. App. 373, 377-78, 870 P.2d 978 (1994), Division Two of this court affirmed in part the trial court's conclusion that the husband's LEOFF I disability allowance was divisible community property. The court reasoned that:
    [i]nsofar as the trial court determined that [the husband's] LEOFF I benefits were divisible after [he] was "over the age of 50", its determination was correct. At that age, any disability benefit [the husband] would be entitled to receive, up to the amount he would have received as retirement pay at that age, clearly will have the characteristics of compensation for past services. It was, therefore, properly divisible. On the other hand, any disability pay [the husband] has received or will receive prior to becoming eligible to collect retirement pay does not have characteristics of compensation for past services. It was, therefore, error for the trial court to divide it.
    Kollmer, 73 Wash. App. at 378, 870 P.2d 978.
    ¶20 In contrast, in In re the Marriage of Huteson, 27 Wash. App. 539, 543, 619 P.2d 991 (1980), the husband began working as a Vancouver fireman, and thus became a member of the LEOFF retirement system in 1973. After a 10-year marriage, the parties separated in 1977. A year later, in 1978, the husband suffered a heart attack and was placed on full disability. At the time he went on disability the husband had been employed less than five years and thus did not have any vested retirement benefits under LEOFF. Huteson, 27 Wash. App. at 540, 619 P.2d 991. The trial court determined that the husband's disability income was compensation for loss of future income and not a community asset.
    ¶21 Division Two of this court agreed with the trial court, explaining,
    [b]ut perhaps the most compelling argument favoring a separate property characterization is that disability payments acquired before the disabled spouse has earned a vested right to retirement benefits are designed to compensate solely for loss of future earnings. To treat such disability payments as a community asset would unfairly and permanently burden those future earnings to the same extent as would an award of permanent alimony. We believe such disability payments should not be considered a community asset subject to division in a dissolution proceeding.
    Huteson, 27 Wash. App. at 543, 619 P.2d 991. The court, however, distinguished the facts before it, with a situation, such as here, where the disability serves as a form of deferred compensation.
    We acknowledge that if the disability pension serves as a form of deferred compensation for past services or is taken in lieu of a vested retirement benefit, circumstances may call for a different characterization. We agree with Kittleson that
    [a]n inflexible rule that required a disability pension to be classified as separate property would ignore the fact that some "disability" pensions step into the place of a regular retirement pension ... yet other awards are made for disability alone.
    Here there are no retirement elements involved in the disability award except for the possibility that respondent may, in the future, return to his firefighter's duty and vest a retirement benefit.
    Huteson, 27 Wash. App. at 543, 619 P.2d 991 (quoting Marriage of Kittleson, 21 Wash. App. 344, 353, 585 P.2d 167 (1978) ).
    ¶22 In Anglin, the case relied upon by the trial court here, the trial court's decree of dissolution characterized the husband's disability allowance as community property but awarded it entirely to the husband. 52 Wash. App. at 318, 759 P.2d 1224. There, the husband was injured while working as a police officer and received a LEOFF I disability allowance, but the parties had executed a community property agreement prior to their dissolution. Anglin, 52 Wash. App. at 318-19, 759 P.2d 1224. In distributing the parties' property, the trial court "determined that the disability award was community property (based on the community property agreement)." Anglin, 52 Wash. App. at 319, 759 P.2d 1224 (parenthesis in original). The trial court nevertheless awarded all of the disability allowance to the husband "based on the age of each party, their respective incomes, and the distribution of other assets and obligations." Anglin, 52 Wash. App. at 319, 759 P.2d 1224.
    ¶23 This court affirmed "because [the husband] was under 50 ... the award to him was based solely on his disability, rather than being in the nature of a retirement benefit." Anglin, 52 Wash. App. at 324, 759 P.2d 1224. Thus, as repayment for lost future wages, the disability award was "not a marital asset to be characterized and distributed by the trial court." Anglin, 52 Wash. App. at 324, 759 P.2d 1224. Therefore, despite characterizing the disability award as community property, "[t]he trial court below did not abuse its discretion in awarding all of [it] to [the husband]." Anglin, 52 Wash. App. at 324-25, 759 P.2d 1224.
    ¶24 Finally, in Marriage of Nuss, 65 Wash. App. 334, 343, 828 P.2d 627 (1992), this court upheld the trial court's characterization of a disability allowance as community property able to be distributed. The court reasoned that "[w]here a spouse has elected to receive disability in lieu of retirement benefits, for instance, only the amount of disability received over and above what would have been received as retirement benefits is considered that spouse's separate property." Nuss, 65 Wash. App. at 343, 828 P.2d 627. This is so because "disability payments which are in the nature of compensation for lost future wages are not an asset for distribution upon dissolution" but, "retirement benefits are considered deferred compensation for past services, and thus the portion of those benefits accrued during marriage is community property." Nuss, 65 Wash. App. at 343, 828 P.2d 627.
    ¶25 From this line of cases we conclude that disability benefits that are intended to be compensation for lost future earnings are not distributable upon dissolution, but disability benefits that replace compensation earned but deferred during marriage are potentially distributable. Further, if "a party would be receiving retirement benefits but for a disability, so that disability benefits are effectively supplanting retirement benefits, the disability payments are a divisible asset to the extent they are replacing retirement benefits." Geigle, 83 Wash. App. at 31, 920 P.2d 251.
    ¶26 Here, trial court erred by determining that Dennis's disability allowance was his separate property and indivisible at dissolution. Dennis was eligible to retire when he became disabled. Moreover, by the time of trial Dennis was in his 70s and as such, it is reasonable to conclude that before dissolution Dennis would have retired. Thus, but for Dennis's disability, the marital community would have received Dennis's retirement benefits. The disability allowance effectively supplanted the retirement benefits.
    ¶27 The trial court erred by not characterizing Dennis's disability allowance as community property because it had the character of deferred compensation and not compensation for lost future income.
    C.
    ¶28 The trial court's mischaracterization of Dennis's disability allowance does not, alone, require reversal if the final division of property is otherwise fair. The characterization of property as separate or community is not controlling. Shannon, 55 Wash. App. at 140, 777 P.2d 8. "Rather, the trial court must ensure that the final division of the property is 'fair, just and equitable under all the circumstances.' " Olivares, 69 Wash. App. at 329, 848 P.2d 1281 (quoting Hadley, 88 Wash.2d at 656, 565 P.2d 790 ).
    ¶29 Dennis argues that the trial court's division of property was fair and just under the circumstances. Dennis contends that he accumulated 95 percent of his retirement pension before his marriage to Mary and consequently at most only 5 percent of his retirement pension could be considered community property, of which Mary would only be entitled to half or 2.5 percent of his entire retirement account. The trial court agreed with this proposition when it found that "[a]ny service related pension/allowance is owned for the most part (97.5%) by Dennis as his separate interests as he worked for the [Seattle Fire Department] for 28.5 years before marriage."
    ¶30 But this argument ignores the presence of the community property agreement, which the trial court expressly found to be valid. The community property agreement states that it was Dennis and Mary's intention "to now own all of our property together as community property." There was no exception for retirement accounts that the parties earned prior to the marriage, as is evident by the trial court's equal division of Mary's previously earned IRA account.
    ¶31 Dennis's disability allowance was one of the most substantial assets that the parties had. At the time of trial, Dennis was collecting $5,784 a month in disability and will continue to do so until his death. And while the trial court split virtually every other asset equally, it awarded Dennis the entirety of his disability allowance. Therefore, the trial court's mischaracterization of Dennis's disability allowance likely affected its distribution of property. While the trial court divided everything the parties owned evenly, it left Mary with a $1600 a month for five years maintenance while Dennis will receive nearly $6000 a month for life. This is not a fair, just, and equitable division of property under the circumstances.
    ¶32 Accordingly, this is one of the rare cases where the appellant has met their heavy burden to show that the trial court manifestly abused its discretion by exercising it on untenable grounds. Landry, 103 Wash.2d at 809-10, 699 P.2d 214. The final division appears to result in "a patent disparity in the parties' economic circumstances." Rockwell, 141 Wash. App. at 243, 170 P.3d 572. Remand is necessary.
    III.
    ¶33 Mary asks for an award of her attorney fees on appeal. RAP 18.1(a) allows us to do so "[i]f applicable law grants to a party the right to recover reasonable attorney fees or expenses." RCW 26.09.140 allows the court "from time to time after considering the financial resources of both parties [to] order a party to pay a reasonable amount" of attorney fees and costs. Mary requests attorney fees based on the disparity in the parties' financial situations, her demonstrated need, and Dennis's ability to pay. App. at 45. But Mary declines to mention the fact that she recently received half of the net proceeds from the sale of the couple's marital home and other valuable property. The trial court, below, concluded that Mary did not warrant an award of attorney fees and costs. We agree and decline Mary's request for her attorney fees on appeal.
    ¶34 We reverse and remand for the trial court to make a just and equitable distribution of property based on characterizing Dennis's LEOFF payments as community property.
    WE CONCUR:

      For clarity we refer to the parties by their first name. No disrespect is intended. Dennis's brief and the trial court orders refer to the respondent as "Dennis" despite his legal first name being Richard. We will follow suit.

      See In re Marriage of Brewer, 137 Wash.2d 756, 767-69, 976 P.2d 102 (1999) ; In re Marriage of Geigle, 83 Wash. App. 23, 30, 920 P.2d 251 (1996) ; Nuss, 65 Wash. App. at 343, 828 P.2d 627 ; Anglin, 52 Wash. App. at 324, 759 P.2d 1224.

      See Geigle, 83 Wash. App. at 31, 920 P.2d 251 ; Kollmer, 73 Wash. App. at 377, 870 P.2d 978 ; Nuss, 65 Wash. App. at 343, 828 P.2d 627 ; In re Marriage of Leland, 69 Wash. App. 57, 73, 847 P.2d 518 (1993).

      Mary also argues that the trial court erred in awarding her an insufficient maintenance. But because the trial court must reevaluate the division of property on remand, it will necessarily also have to reconsider its award of maintenance. See Marriage of Marzetta, 129 Wash. App. 607, 626, 120 P.3d 75 (2005).

   Leach, J.

Dwyer, J.