K&L Gates Construction Law Blog : Construction and Engineering Lawyers & Attorneys : K&L Gates Law Firm : Financing, Development, Dispute Resolution, Government Contracting

Wash. State Baseball Stadium Pub. Facilities Dist. v. Huber Hunt & Nichols-Kiewit Constr. Co., 202 P.3d 924 (Wash. 2009)

The Washington Supreme Court recently issued a decision in Wash. State Baseball Stadium Pub. Facilities Dist. v. Huber Hunt & Nichols-Kiewit Constr. Co. that may have far-reaching impact on other public construction projects.  In that case, the Court unanimously held the statute of limitations does not apply to claims regarding the construction of Safeco Field brought by the owner, the Washington State Baseball Stadium Public Facilities District (“PFD”), because the construction was for the common good of the state.

At issue were construction defect claims filed by the PFD against its general contractor. The PFD alleged the general contractor failed to follow the intumescent fire protection specification for structural steel members, causing a catastrophic failure of the fire protection. The PFD discovered the defect in 2005, and filed the lawsuit in 2006. This was more than seven years after substantial completion of Safeco Field; the applicable statute of limitations for contract claims is six years. RCW 4.16.040.

The Supreme Court overturned a summary judgment dismissal of the PFD’s claims granted by the trial court, and held that the statute of limitations does not apply. The Court relied on statutory language providing that limitation periods do not apply “to actions brought in the name or for the benefit of the state.” RCW 4.16.160. The majority of the Court’s opinion grapples with the question of whether the PFD brought the construction defect action “for the benefit of the state.”

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

Floor Express, Inc. v. Daly, 138 Wash. App. 750, 158 P.3d 619 (2007)

In this case, a subcontractor sued a general contractor for failing to make payments on the parties’ contract.  The general contractor asserted a counterclaim against the subcontractor for the cost of removing and replacing the subcontractor’s work.  On the first day of trial, the subcontractor moved to dismiss the counterclaim, arguing that the project owner was a necessary party and that the general contractor had no standing to sue the subcontractor because the alleged defective work injured only the owner.  The trial court granted the motion, but Division Two reversed.

The Court of Appeals noted that, where a subcontractor breaches its agreement with a general contractor by failing to perform the work pursuant to the parties’ agreement, the general contractor has legal exposure to the owner.  The court held that the owner was not a necessary party to the litigation under Civil Rule 19 because the general contractor’s claims were based on the subcontract, to which the owner was not a party.  The court also held it could afford complete relief to the general contractor, and that the owner’s absence did not impede any of the owner’s interests.  Accordingly, the general contractor’s claim against the subcontractor should have been allowed to proceed.

• Email This
• Print
• Trackbacks

Bd. of Trustees of Cement Masons & Plasterers Health & Welfare Trust v. GBC Northwest, LLC, 2007 WL 1306545 (W.D. Wash. May 3, 2007), reconsid’n denied, 2007 WL 1521220 (W.D. Wash. May 22, 2007)

A split of authority exists between Washington state courts and federal courts regarding whether an employee benefit trust fund can use state lien laws to recover unpaid employee benefit contribution payments.  In 2000, the Washington Supreme Court held that ERISA preempted the state public works lien law.  Int'l Bd. of Elec. Workers v. Trig Elec. Contr. Co., 142 Wash.2d 431, 13 P.3d 622 (2000).  Two years later, however, Judge Coughenour of the U.S. District Court for the Western District of Washington noted that federal law, as determined by federal courts, governs questions of ERISA preemption, and that ERISA does not preempt Washington’s public works lien laws.  Ironworkers Dist. Council of the Pacific Northwest v. George Sollit Corp., M.A., 2002 WL 31545972 (W.D. Wash. Sept. 4, 2002).

• Email This
• Print
• Trackbacks

MacLean Townhomes, LLC v. Am. States Ins. Co., 138 Wash. App. 186, 156 P.3d 278 (2007)

In this case, a homeowners association informed its developer about certain construction defects attributable to the building’s siding subcontractor.  The developer was named as an additional insured on the siding subcontractor’s commercial general liability insurance policy.  However, the developer failed to give the insurer notice of the defects and potential claim.  The developer further agreed (again without notice to the insurer) to enter into binding arbitration with the homeowners association.

Division One affirmed summary judgment in favor of the insurer, holding that the developer’s failure to give notice was a violation of the insurance policy, prejudiced the insurer, and was therefore fatal to the developer's claim.  Acknowledging that prejudice is normally a question of fact, the court held that the developer’s agreement to binding arbitration deprived the insurer of full judicial review of the matter.  This inability to seek review of a decision, for example, in the case of an error of law, necessarily prejudiced the insurer and excused the insurer of its duty to defend the developer. 

• Email This
• Print
• Trackbacks

Haselwood v. Bremerton Ice Arena, Inc., 137 Wn. App. 872, 155 P.3d 952 (2007)

In this case, Division Two of the Washington Court of Appeals considered whether and to what extent a contractor has lien rights on a private building constructed on public property.  The City of Bremerton entered into a concession agreement with Bremerton Ice Arena, Inc. (“BIA”), under which BIA would construct an ice arena on city property and would own and operate the arena for a specified period of time.  After the expiration of that period of time, ownership of the arena improvements would transfer to the city. 

The excavation and drainage subcontractor on the project claimed it was unpaid for a portion of its work, and filed a lien the project.

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks

• Email This
• Print
• Trackbacks