Advisories & Insights

On September 3, 2003, a King County court dismissed on summary judgment a $3 million claim against our condominium developer client. The case arose out of construction that was performed nine to ten years ago. The claim is being closely monitored by the plaintiffs' bar, as well as by the development community. They are well aware of the implications if the plaintiff prevails in what should be time-barred construction defect claims.

 

Our developer client was sued by a condominium association that claimed extensive damage caused by the usual assortment of alleged construction defects. The disconcerting fact was the age of the building, which the plaintiff asserted was still subject to claim by virtue of some creative legal arguments, principally involving fraud and concealment-type claims based on a "known or should have known" standard. If the plaintiff's claims were to survive, it would open the proverbial "Pandora's Box" on stale defect claims.

 

The problem for the plaintiff was their supposed "evidence" of our client's knowledge of the alleged defects was based primarily on unproven speculation and conjecture. Our challenge was to get the judge to agree that the plaintiff had presented only speculative and conjectural evidence and then to seek dismissal of the plaintiff's claims before they went to a jury.

 

Following the exchange of written discovery, we believed that the plaintiff would be unable to prove its claims. We filed a motion for summary judgment arguing that, based on its responses to discovery, the plaintiff would be unable to meet its burden of proof.

 

At oral argument, the court denied our summary judgment motion, indicating some degree of sympathy with the plaintiff. Fortunately, the court's denial was without prejudice; the stated goal of the court was to give the plaintiff more time to conduct discovery so that it could meet its burden of proof.

 

After three months of additional discovery, we re-filed our motion for summary judgment, arguing that the plaintiff could still not meet its burden of showing that our client had any knowledge of the alleged construction defects.

 

We also argued that the Builder's Statute of Repose was intended by the Legislature to prevent the exact type of stale claims at issue in this case, placing a reasonable time limit on the liability of developers and other construction industry defendants, and thereby avoiding the evils of lost records, faded memories, intervening events, and absent witnesses. Finally, we argued that the Legislature had sent the judiciary a message not to fashion remedies where those remedies were not due.

 

Fortunately, the court dismissed the plaintiff's claims with prejudice and subsequently denied the plaintiff's motion for reconsideration. Although the trial court judge made no written ruling on Bullivant Houser Bailey's policy arguments, she did note that, after the Division I Court of Appeals broke from tradition in the Architectonics case and applied the tort discovery rule in a construction defect case, the Legislature quickly enacted a statute to deny the use of the discovery rule in construction claims.

 

As expected, in an attempt to create more law that is favorable to condominium associations (and the plaintiffs' bar), the plaintiff appealed. Although we intend to preserve on appeal what is a great decision for Washington developers and contractors, we also plan to work with amicus curiae counsel to obtain supporting briefing on issues of importance to special interest groups. If you know of any such groups willing to assist, please have them contact us soon so we can develop a coordinated plan.

About the Bullivant Construction Practice Group
Bullivant Houser Bailey PC represents owners (both public and private), developers, contractors, sureties, subcontractors, vendors, suppliers, and insurers, on all types of construction projects throughout the United States, including Oregon, Washington, California, Alaska, Idaho, Montana, Utah, Nevada, and Arizona. Our attorneys have trial experience in both state and federal courts.