## Facts

- The City of Des Moines operated as a noncharter code city under a council–manager form of government; the city manager supervised administrative affairs, and councilmembers were barred from directing city staff.
- Gary W. Petersen became a city councilmember while serving as president, majority shareholder, and salaried employee of Petersen Northwest Corporation, whose divisions included Pete’s Towing.
- For decades before Petersen took office, city police and other authorized staff routinely called Pete’s Towing to remove vehicles from city property or rights-of-way.
- The City had no written towing policies and no express contract with Pete’s Towing; staff could call any towing company but usually called Pete’s Towing due to location, equipment, and service history.
- Towing requests occurred about 500 times per year; Pete’s Towing generally billed vehicle owners rather than the City.
- A corporation and its president sued, alleging each tow request formed a “contract” between the City and Pete’s Towing, giving Petersen a prohibited beneficial interest under RCW 42.23.030.
- On cross-motions for summary judgment, the trial court ruled each tow was a prohibited contract, voided the transactions, enjoined further tows by Pete’s Towing while Petersen remained in office, and set a jury trial on penalties.

## Issues

1. Whether individual towing transactions requested by city staff, without a written agreement and typically paid by vehicle owners, constituted “contracts” with the City under RCW 42.23.030.
2. Whether such transactions were “made by, through, or under the supervision” of the city council so as to trigger a prohibited beneficial interest for a councilmember with an ownership stake in the towing company.
3. Whether the trial court properly voided the transactions and issued broad injunctive relief on summary judgment.

## Decision

- The Court of Appeals reversed the summary judgment against Petersen.
- The court held the record did not establish that the towing arrangements were “contracts” with the City within the meaning of RCW 42.23.030 on the trial court’s per-transaction theory.
- The court concluded the towing decisions reflected routine operational service calls by staff, not contracts made by or under the supervision of the council in a meaningful statutory sense.
- The orders voiding the tows and enjoining further towing work by Pete’s Towing could not stand on the legal theory adopted below, and the matter was remanded for further proceedings consistent with the opinion.

## Legal Principles

- RCW 42.23.030 bars a municipal officer from having a beneficial interest in a contract made by, through, or under the supervision of the officer’s municipal body; contracts made in violation are void and may carry penalties.
- For conflict-of-interest purposes, not every transaction initiated by municipal employees constitutes a “contract” made by or under the supervision of the governing body; statutory application depends on the nature of the arrangement and the body’s role.
- In a council–manager system, day-to-day operational decisions by subordinate staff may fall outside “made by, through, or under the supervision” of the council when councilmembers lack administrative control and are legally prohibited from directing staff.
- A conflict finding under RCW 42.23.030 requires more than automatic attribution of staff purchasing or service decisions to the council based solely on an official’s ownership interest, particularly where the practice preexisted the official’s tenure.

## Conclusion

The appellate court rejected treating each staff-requested tow as a council-supervised municipal contract under RCW 42.23.030, reversed the trial court’s conflict-of-interest summary judgment, and vacated the resulting voiding and injunctive relief.


Citizens for Des Moines, Inc. v. Petersen, 125 Wash. App. 760, 106 P.3d 290 (Wash. Ct. App. 2005)