Contractual Limitation Period Not Voided by Alleged Fraud
The MTCA opinion summarized in yesterday's post contains another interesting tidbit of relevance to a common type of clause found in many construction industry contracts -- the "contractual limitation period" by which the parties agree to shorten up the normal statute of limitations for commencement of suit.
The contract at issue in this case stated that any suit against the geotechnical engineer (Golder) had to be brought within 1 year of Golder's substantial completion of services -- considerly shorter than the 3 year or 6 year statutes that would normally govern claims against design professionals or contractors.
In this additional holding, Division 1ruled the 1 year clause was valid and enforceable regardless of whether the engineer "misrepresented" the soils conditions -- that is, the Court declined to adopt a fraud exception to the ordinary rule that such clauses are to be enforced as written.
Division 1: Drilling Subcontractor Not Liable for Cleanup Costs as "Operator" under MTCA
A drilling sub (DBM) was hired to build a temporary shoring wall per the geotechnical design of Golder Associates, which called for long soil nails to be installed at an angle into the face of the shoring wall. In installing the soil nails, DBM hit and punctured a petroleum tank, causing a leak and migration of petroleum into the soil.
The property owner sued various parties, including DBM, for clean up costs under the Model Toxics Control Act (MTCA). The legal theory asserted against DBM was that it acted as as "operator" under MTCA, which defines "operator" as any person "who exercises any control over the facility" under RCW 70.105D.020(12)(a).
Rejecting this theory as applied to the activities of DBM in this case, Division 1 observed that DBM
"did not have the authority to decide where to drill and merely followed Golder's orders. Although [DBM] had mechanical control over the drilling facility, it cannot be said that [DBM] had 'any control' in the decision-making sense intended by the Act."
Instead, citing related federal cases, Divison 1 defined the "control" element of the "operator" definition as requiring proof that the supposed operator such as DBM had "authority to control decisions about how to dispose of waste, not mere physical control over the instrumentality that causes disposal or release."