Washington Construction Law Blog

Washington courts continue to narrowly apply the "retained control" exception to the ordinary rule that an owner is not liable for injuries sustained by the employees of their independent contractors.  Here, a driver employed by such a contractor failed in his suit against ARCO (the owner) for lack of evidence that ARCO retained control over the contractor's means and methods of doing its work.

Washington State continues to weigh the various options for replacing the Seattle waterfront Viaduct, including a massive tunnel option.  Meanwhile, this news from the Big Dig tunnel fiasco in Massachusetts is a sober reminder of how things go wrong - very wrong. 

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.

In its main contract with the GC, the owner of a fast food facility required the GC to obtain its approval before any extra or changed work could be authorized.  The GC broke that promise by signing a series of change orders with a dirt sub to export wet soils. 

When the GC didn't pay the amounts in the approved change orders, the sub filed a lien and sued to foreclose against the owner's property.  Division 1 held the sub's lien was good against the owner -- even though the owner itself had not approved the changes -- because the GC was the "construction agent" of the owner within the meaning of RCW 60.04.011(1).

The Court said the GC's "potential liability to [owner] for breach of contract" -- that is, not obtaining approval from owner prior to signing the changes with the sub -- "is not before the court and we do not decide the issue here."

In a case of first impression, Division 2 has held that the venue rule in the retainage statute -- which states that a suit to foreclose a lien against the project retainage shall be brought in the county where the lien is filed (RCW 60.28.030) -- gives way to the forum selection clause in a subcontract.

The case arose out of a Pierce County project and the subcontractor filed suit there to foreclose its retainage lien against the surety and general contractor (Garco).  But in the subcontract, Garco had provided for all dispute resolution to occur in Spokane.  The trial court denied Garco's motion to transfer venue to Spokane.  Reversing, the Court of Appeals held the venue rule in the statute could be waived -- and that it was waived here by inclusoin of the Spokane venue clause.

The Court of Appeals also turned away the subcontractor's claims that enforcement of the Spokane venue would be contrary to "public policy" or that Pierce County venue should be retained under the doctrine of forum non conveniens.