Tag: Washington

1
Washington Court of Appeals Holds that Summary Judgment is Proper if the Non-Moving Party’s Expert Opinion is Inadmissible Under Frye
2
Lien Held Invalid for Failure to Comply with Statutory Attestation Requirement
3
Washington Supreme Court Holds the Statute of Limitations Does Not Apply to Safeco Field Construction
4
Washington’s Limited Liability Company Act is Applicable Retroactively and Permits Liability for Individual LLC Members or Managers
5
Washington Supreme Court Re-Affirms Mike M. Johnson Rules Regarding Waiver of Contractual Claims Provisions
6
Cancelled LLC Can Be Sued, But Cannot Sue
7
Developer and Construction Manager Lose Pending Claims
8
General Contractor May Recover from Subcontractor Without Joining Owner as Party
9
Winning Race to Courthouse Does Not Win ERISA Preemption
10
Agreement to Arbitrate Prejudices Insurers

Washington Court of Appeals Holds that Summary Judgment is Proper if the Non-Moving Party’s Expert Opinion is Inadmissible Under Frye

Lake Chelan Shores Homeowners Ass’n v. St. Paul Fire & Marine Ins. Co., 167 Wn. App. 28, 272 P.3d 249 (Wash. Ct. App. 2011)

Although summary judgment is improper when opposing experts present conflicting testimony on a genuine issue of material fact, this case demonstrates that a trial court can grant summary judgment if the non-moving party’s expert testimony is inadmissible under the Frye standard. 

In this case, a homeowners association sought insurance coverage when it discovered that its condominiums had been damaged by rot.  The association offered the expert testimony in question as the only proof that the building damage should be covered by the insurance policy.  The Washington Court of Appeals, Division I, held that summary judgment was proper because, although the opposing experts’ testimonies did conflict, the association did not offer admissible testimony to create a genuine issue of material fact regarding the source of the building damage.

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Lien Held Invalid for Failure to Comply with Statutory Attestation Requirement

Williams v. Athletic Field, Inc., No. 33607-3-II (Wash. Ct. App. Apr. 7, 2010)

By: Jesse O. Franklin IV and Bradley D. Bowen, K&L Gates, Seattle

This case demonstrates the importance for claimants to substantially comply with Washington’s lien statutes.  The issue in Williams was whether a lien is invalid if a lien filing service employee signs the lien’s attestation clause, rather than a claimant or the claimant’s attorney.  The Court in Williams held that an agent of a claimant can sign a lien’s attestation clause under RCW 60.04.091, addressing the recording of liens, including an employee of a lien filing service.  However, the Court went on to hold that when the claimant’s agent is also a corporation, like a lien filing service, the agent must comply with the corporate acknowledgement requirements under Washington law.  Moreover, the Williams case stands for the more general proposition that a lien claimant in Washington must clearly demonstrate that all statutory lien claim requirements have been met because courts strictly construe the lien statutes.

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Washington Supreme Court Holds the Statute of Limitations Does Not Apply to Safeco Field Construction

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.”

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Washington’s Limited Liability Company Act is Applicable Retroactively and Permits Liability for Individual LLC Members or Managers

Emily Lane Homeowners Ass’n v. Colonial Dev., LLC, 139 Wash. App. 315, 160 P.3d 1073 (2007)

In this case, Emily Lane Homeowners Association sought damages against Colonial Development, LLC and its individual company members and managers.  Emily Lane alleged that members of Colonial failed to act in a timely manner to address warranty claims.  When Emily Lane filed suit on July 19, 2005, Colonial had already dissolved and filed a certificate of cancellation.  The trial court granted summary judgment, finding that Emily Lane’s action against Colonial could proceed even though Colonial had already dissolved.  However, the trial court also dismissed Emily Lane’s claims against the members and managers of Colonial, presumably finding that they were immune from liability as individuals.

On appeal, there were two main issues.  First, whether the 2006 amendment to Washington’s Limited Liability Company Act, RCW 25.15, could be applied retroactively to permit an action against a dissolved limited liability company (LLC).  Second, whether members and managers of a company could personally be liable under the Limited Liability Company Act if they did not properly wind up the dissolution of the LLC. Read More

Washington Supreme Court Re-Affirms Mike M. Johnson Rules Regarding Waiver of Contractual Claims Provisions

Am. Safety Cas. Ins. Co. v. Olympia, 162 Wash.2d 762, 174 P.3d 54 (2007)

The Washington Supreme Court affirmed summary judgment for the City of Olympia against American Safety Casualty Insurance Company where the contractor (whose rights the surety was pursuing) failed to comply with contractual notice procedures.  During construction, the contractor had written letters purporting to reserve its right to bring a claim at a later date.  The contractor defaulted, and the surety completed the job.  After completion, the surety presented Olympia with a Request for Equitable Adjustment.  Though Olympia expressed a willingness to enter into negotiations if the surety provided sufficient supporting documentation, Olympia ultimately rejected the surety’s claim for failing to comply with the contract’s claims provisions.  When the surety filed suit, the Thurston County Superior Court granted Olympia summary judgment, which was then overturned by Division Two. Read More

Cancelled LLC Can Be Sued, But Cannot Sue

Chadwick Farms Owners Assoc. v. FHC, LLC, 139 Wash. App. 300, 160 P.3d 1061 (2007)

This case presents a similar set of facts to Maple Court.  Condominium developer FHC, LLC was administratively dissolved on March 24, 2003.  On August 18, 2004, Chadwick Farms Homeowner’s Association filed suit against FHC, alleging construction defects.  Seven months later, on March 24, 2005, FHC was administratively cancelled because it failed to reinstate during the two-year dissolution period.  Two months after cancellation, FHC filed third party claims against its subcontractors, and in August 2005 moved for summary judgment against Chadwick on the ground that it was no longer a legal entity.
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Developer and Construction Manager Lose Pending Claims

Maple Court Seattle Condo. Assoc. v. Roosevelt, LLC 139 Wash. App. 257, 160 P.3d 1068 (2007)

In June 2007, Division One of the Court of Appeals rendered its decisions in three cases involving the issue of a dissolved limited liability company’s standing to maintain claims.  Maple Court illustrates the adverse impact that administrative dissolution can have on the pending claims of a developer and general contractor.

On September 23, 2002, condominium developer Roosevelt, LLC allowed itself to be administratively dissolved by the Secretary of State.  Fifteen months later, Roosevelt was sued by the condominium homeowners’ association.  In response, Roosevelt filed third party complaints against its construction manager and subcontractors.  During the pending litigation, on September 23, 2004, Roosevelt was administratively "cancelled" pursuant to RCW 25.15.270(6) because it did not reinstate itself following the prior administrative dissolution.
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General Contractor May Recover from Subcontractor Without Joining Owner as Party

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.

Winning Race to Courthouse Does Not Win ERISA Preemption

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).

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Agreement to Arbitrate Prejudices Insurers

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. 

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