Washington Construction Law Blog

That's the price tag for the misadventure in the Port Angeles WSDOT project to build pontoons for the Hood Canal Bridge (the world's longest floating bridge over salt water), which was abandoned in 2004 upon discovery of an Native American burial grounds. This chart at p. 7 lays out the details. And this May 16, 2006 WSDOT report to the Legislature provides the complete audit investigation.

Well, this is the opposite of construction. Worth a look, from last weekend's cooling tower implosion in Oregon.

This warranty clause in this new case read as follows:

WARRANTY. The Contractor shall guarantee all work against faulty materials and workmanship for a period of one year from the date of final payment and the performance bond shall remain in full force and effect for the period.

You'll have to be somewhat of an ERISA junkie to enjoy the full scope of this 9th Circuit decision, which turns away a preemption challenge to Oregon's apprentice training system.

Oregon evaluates an application to form a new apprentice training committee based in part on a "needs" requirement -- that is, whether the new proposed committee is necessary to the relevant occupations. The 9th Circuit, while historically somewhat inclined to read ERISA preemption broadly, here declines to override this "needs" rule, thereby giving the State latitude to run its own show.

...at the risk of contributing to the already abundant collection of anti-lawyer jokes, at least this one has something to do with construction.

The Supreme Court will take up four significant issues in cases scheduled for oral argument this month:

1. Surety Law. Whether a surety’s obligation to a contractor on a subcontractor’s performance bond was conditioned on the contractor declaring a default before the subcontractor substantially completed the work and whether a contractor may recover attorney fees from the surety of a subcontractor in an action to recover on the performance bond, under the rationale of Olympic Steamship Co. v. Continental Ins. Co., 117 Wn.2d 37, 811 P.2d 673 (1991). For further information, go below the fold.

2. Discovery Rule. Whether the discovery rule applies to actions for breach of contract, and if so, whether RCW 4.16.326(1)(g), which bars the use of the discovery rule in actions based on construction contracts, applies retroactively. No. 77362-9 (cons. w/77846-9), 1000 Virginia Ltd. P’ship (respondent) v. Vertecs Corp. (petitioner); Lombardi (respondent) v. JTE Constr., Inc. (petitioner). (5/16/06)

3. Registation Statute. Whether, in an action against a contractor and its surety bond, the attorney fees available to the prevailing plaintiff under RCW 18.27.040(6) are recoverable against both the contractor and the bond. No. 77661-0, Cosmopolitan Eng’g Group, Inc. (respondent) v. Ondeo Degremont, Inc. (petitioner). (5/25/06)128 Wn. App. 885 (2005). For WCL's prior coverage of this case, click here.

4. Delay Damages. Whether utilities that removed or relocated their facilities pursuant to a city-contracted street improvement project “acted for” the city, thus rendering void, under RCW 4.24.360, a contract clause barring the contractor from recovering damages for delays caused by the utilities. No. 77459-5, Scoccolo Constr., Inc. (petitioner) v. City of Renton (respondent). (6/6/06)

The two cases seemed similar enough. In the venerable Stute case decided in 1990, the employee of a subcontractor slipped while installing gutters on a condo project and fell off the roof. The Supreme Court held he could bring a direct action against the project's GC based on its nondelegable duty to comply with WISHA safety rules such as scaffolding regulations.

And here a subcontractor employee was also installing gutters on a home project when injured in a fall. The difference, according to Division I in dismissing the suit, was that this plaintiff had zero evidence of causation between the GC's negligence and his injury:

Stute is distinguishable because the cause of the accident in that case was known. Stute slipped. The only issue was whether the general contractor owed the employee of a subcontractor a duty to comply with specific regulations promulgated under WISHA. The court held that the general contractor owed Stute such a duty. Stute did not hold that a general contractor is liable for injuries to the employee of a subcontractor regardless whether the general contractor's failure to comply with safety regulations caused the accident. Without evidence to explain how his accident occurred, Little could not establish proximate cause and could not withstand summary judgment.

In a coverage dispute stemming from construction of a custom home, Division I has delivered a victory to Mutual of Enumclaw (MOE). The trial court had concluded that MOE committed bad faith sufficient to estop its coverage denial by disrupting the private arbitration between its insured and the home's owner. Division I's opinion provides guidance on how an insurer defending under a reservation of rights in Washington is allowed to seek information pertinent to coverage without necessarily committing bad faith.

A Sobering Thought: Six employees of the company supplying concrete to Boston's "Big Dig" have been arrested on criminal charges they falsified records to hide the poor quality of concrete delivered to the project.

The scenario is all too familiar to Washington general contractors -- a subcontractor neglects to make its fringe benefit contributions to union trust funds. The trust funds in turn threaten to file a lien against the GC's payment bond and foreclose under RCW 39.08.

In the Trig Electric case decided in 2000, our Supreme Court interpreted ERISA as preempting any such bond claim by union trust funds. That's the good news, at least for GCs.

The story gets complex because the 9th Circuit subsequently decided under ERISA that trust funds were allowed to bring such bond claims against the GCs surety, setting up a conflict between how the state and federal courts in Washington approach the same issue of federal law.

As a result, the issue can boil down to which forum controls the matter: if the issue is decided by the state court, the GC will ordinarily win. But if the case goes to federal court, the trust fund has the upper hand.

If a GC wants to enforce its rights, it will therefore bring a declaratory judgment action in state court against the trust fund, to obtain a ruling that its purported lien is preempted. The trust fund's response -- knowing the state venue is probably fatal -- is to remove to federal court. But the attached ruling -- which grants the GCs motion to remand such a case back to state court -- is a decisive victory for GCs in long-running battle with the trust funds over the risks associated with unpaid fringe benefit contributions. Download file