Supreme Court Recognizes Discovery Rule for Latent Defect Case
Yesterday the Supreme Court handed down its decision in the important Vertecs case. The primary issue in the case was whether the discovery rule should be adopted for accrual of claims for latent construction defects. While the Court of Appeals in the Architectonics case several years ago did recognize the discovery rule, the Supreme Court had not squarely decided the matter until yesterday.
In a somewhat puzzling twist, the Supreme Court held that Architectonics was wrongly decided but then essentially adopted the rule espoused in Architectonics. As a result, the rule today in Washington is that the 6 year statute of limitation does not begin to run until the claimant knew or had to reason to know the defect.
But wait. In 2003, the Legislature in RCW 4.16.326(1)(g) banished the discovery rule in construction claims, declaring the applicable limitation period shall expire six years after substantial completion, regardless of discovery. The Supreme Court declined to apply the 2003 statute retroactively to the claim in this case, which had already accrued under the discovery rule recognized by the court.
Vertecs thus creates a complex transitional situation as claims that accrued prior to the effective date of the 2003 statute presumably will still be governed by the discovery rule. One would assume that, eventually, the situation will simplify as those accrued claims extinguish. All that can be said with certainty today is that the transition period is complex and fact-dependent.