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Washington Supreme Court Interprets Notice Provisions in Construction Defect Statute
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September 11, 2006
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(A revised version of this article will appear in The Construction Lawyer, Volume 26, No. 3, Summer 2006, published by the American Bar Association's Forum on the Construction Industry.)
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Thelen Reid Brown Raysman & Steiner LLP
In 2002, Washington enacted a statute requiring certain pre-litigation notices in connection with construction defect actions. Rev. Code Wash. 64.50.005 et seq. The statute imposes obligations on both the "claimant" and the "construction professional" with whom the claimant contracted. For a project completed before the statute was enacted and the defect claim arose after the statute was enacted, Washington Supreme Court recently decided how these provisions should be applied.
First, some definitions. Under the statute:
|  | An "Action" means any civil lawsuit in contract or tort for damages or indemnity brought against a construction professional, whether by complaint, counterclaim, or cross-claim, for damage or the loss of use of real or personal property caused by a defect in the construction of a residence or in the substantial remodel of a residence. "Action" does not include any civil action in tort alleging personal injury or wrongful death to a person or persons resulting from a construction defect.
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| | A "Construction Professional" means an architect, builder, builder vendor, contractor, subcontractor, engineer, or inspector, including, but not limited to, a dealer as defined in RCW 64.34.020 (12) and a declarant as defined in RCW 64.34.020 (13), performing or furnishing the design, supervision, inspection, construction, or observation of the construction of any improvement to real property, whether operating as a sole proprietor, partnership, corporation, or other business entity.
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| | A "Claimant" means a homeowner or association asserting a claim against a construction professional concerning a defect in the construction of a residence or in the substantial remodel of a residence.
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| | A "Residence" means a single-family house, duplex, triplex, quadraplex, or a unit in a multiunit residential structure in which title to each individual unit is transferred to the owner under a condominium or cooperative system, and shall include common elements as defined in RCW 64.34.020 (6) and common areas as defined in RCW 64.38.010 (4).
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RCW 64.50.020 requires a prelitigation construction defect notice and a response from the construction professional.
In every construction defect action brought against a construction professional, the claimant shall, no later than forty-five days before filing an action, serve written notice of claim on the construction professional. The notice of claim shall state that the claimant asserts a construction defect claim against the construction professional and shall describe the claim in reasonable detail sufficient to determine the general nature of the defect.
The construction professional must respond by proposing to inspect the residence, offering to settle the claim without an inspection or disputing the claim. The statute mandates additional responses within proscribed time periods before the claimant can commence an action.
The obligations of construction professionals arise earlier in the construction process. RCW 64.50.050 (1) provides:
The construction professional shall provide notice to each homeowner upon entering into a contract for sale, construction, or substantial remodel of a residence, of the construction professional's right to offer to cure construction defects before a homeowner may commence litigation against the construction professional. Such notice shall be conspicuous and may be included as part of the underlying contract signed by the homeowner.
RCW 64.50.050 (2) requires that the construction professional's notice be in substantially the following form:
CHAPTER 64.50 RCW CONTAINS IMPORTANT REQUIREMENTS YOU MUST FOLLOW BEFORE YOU MAY FILE A LAWSUIT FOR DEFECTIVE CONSTRUCTION AGAINST THE SELLER OR BUILDER OF YOUR HOME. FORTY-FIVE DAYS BEFORE YOU FILE YOUR LAWSUIT, YOU MUST DELIVER TO THE SELLER OR BUILDER A WRITTEN NOTICE OF ANY CONSTRUCTION CONDITIONS YOU ALLEGE ARE DEFECTIVE AND PROVIDE YOUR SELLER OR BUILDER THE OPPORTUNITY TO MAKE AN OFFER TO REPAIR OR PAY FOR THE DEFECTS. YOU ARE NOT OBLIGATED TO ACCEPT ANY OFFER MADE BY THE BUILDER OR SELLER. THERE ARE STRICT DEADLINES AND PROCEDURES UNDER STATE LAW, AND FAILURE TO FOLLOW THEM MAY AFFECT YOUR ABILITY TO FILE A LAWSUIT.
In the case before the Washington Supreme Court, the construction project was completed before 2002, when the statute was enacted, so the construction professional did not provide the contract notice. Thereafter, the claimant (a homeowners' association) commenced an action against the construction professional (the developer) without giving the pre-litigation notice. The construction professional moved for dismissal of the claimant's action, which the Superior Court denied but the Court of Appeals granted.
The Supreme Court reversed the Court of Appeals, holding that the pre-litigation notice requirement becomes operative only after the construction professional has given the contract notice. Lakemont Ridge Homeowner Assn. v. Lakemont Ridge L.P., 156 Wn2d 696, 131 P.3d 905 (2006). Rather than reading the two notice requirements independently, the Washington Supreme Court concluded that the two provisions "operate together to achieve the legislature's dual goals of reducing potentially burdensome and expensive construction defect litigation and preserving rights and remedies for property owners."
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©2006 Thelen Reid Brown Raysman & Steiner LLP
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