Anderson Hay & Grain Co., Inc. v. UDI

76 P.3d 1205
CourtCourt of Appeals of Washington
DecidedSeptember 23, 2003
Docket20488-0-III
StatusPublished

This text of 76 P.3d 1205 (Anderson Hay & Grain Co., Inc. v. UDI) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anderson Hay & Grain Co., Inc. v. UDI, 76 P.3d 1205 (Wash. Ct. App. 2003).

Opinion

76 P.3d 1205 (2003)

ANDERSON HAY & GRAIN COMPANY, INC., a Washington corporation, Appellant,
v.
UNITED DOMINION INDUSTRIES, INC., a foreign corporation; Tri-Ply Construction, Inc., a Washington corporation, Respondent.

No. 20488-0-III.

Court of Appeals of Washington, Division 3, Panel Ten.

August 5, 2003.
Publication Ordered September 23, 2003.

*1206 William E. Pierson, Attorney at Law, Seattle, WA, for Appellant.

Andrew C. Bohrnsen, Bohrnsen & Stowe, Andrew W. Maron, Christina G. Nelson, Short, Cressman & Burgess, Seattle, WA, for Respondent.

BROWN, Chief Judge.

Anderson Hay and Grain appeals the summary judgment dismissal of its damage claims for a building collapse against building designer United Dominion Industries, Inc. (UDI) and builder Tri-Ply Construction. Mainly, we hold the trial court did not err in concluding both Tri-Ply and UDI were entitled to enforce a waiver of subrogation clause. We also hold the trial court did not err in dismissing Anderson's defective construction and breach of contract claims. Accordingly, we affirm.

FACTS

Anderson Hay and Grain is located in Ellensburg, Washington. In the summer of 1996, Tri-Ply Construction, Inc. contracted with Anderson to build three steel hay storage buildings on Anderson's property. Building 21, like buildings 22 and 23, was designed and pre-fabricated by Varco Pruden Buildings, a wholly-owned subsidiary of UDI.

*1207 The Anderson and Tri-Ply contract required the buildings to be designed, fabricated, and constructed to meet the specifications of the Uniform Building Code (UBC), including snow load. The UBC requires roofs on agriculture buildings to withstand a snow load of at least 22 pounds per square foot. In late December 1996, building 21 collapsed following a heavy snowstorm, damaging the hay stored within. Anderson has been fully reimbursed for damage to building 21 and the contents, except for a small deductible not material here.

In 1999, Anderson sued Tri-Ply and UDI for damages caused by the building collapse. Anderson claimed Tri-Ply was liable for negligence, breach of contract, and defective construction. Anderson's complaint against UDI alleged claimed of defective design and breach of implied warranty of merchantability.

Summary judgment motions were filed. First, Tri-Ply filed for summary judgment against Anderson on each of its claims. Anderson responded with its own motion for partial summary judgment against Tri-Ply, contending it was entitled to summary judgment on its breach of contract claim and proximate cause. UDI then filed its motion against Anderson, later joined by Tri-Ply, seeking dismissal based upon an anti-subrogation clause in the contract between Anderson and Tri-Ply.

The trial court issued a memorandum decision denying Anderson's motion, and granting Tri-Ply's and UDI's motions. The trial court granted Tri-Ply's motion after concluding Anderson had failed to submit any credible evidence establishing the snow load on the building when it collapsed. The court reasoned without evidence of the actual pounds per square feet on the roof at the collapse, Anderson could not prove its claims. The trial court also held the anti-subrogation clause applied to both Tri-Ply and UDI, barring Anderson's claims. Anderson appealed all orders, but has now conceded Tri-Ply was not negligent.

ANALYSIS

A. Waiver of Subrogation

The issue is whether the trial court erred in granting summary judgment dismissal against Anderson in favor of both Tri-Ply and UDI by operation of the waiver of subrogation clause in the Agreement between Anderson and Tri-Ply.

Summary judgment review is de novo; we engage in the same inquiry as the trial court after considering all facts and reasonable inferences in favor of the nonmoving party. Michak v. Transnation Title Ins. Co., 148 Wash.2d 788, 794-795, 64 P.3d 22 (2003). Summary judgment is proper when "there are no issues of material fact and the moving party is entitled to judgment as a matter of law." Id. (quoting CR 56(c)). This standard of review applies throughout our discussion.

Anderson acknowledges it has been reimbursed for all of its damages from insurance proceeds. The Anderson and Tri-Ply Agreement partly states:

9.3.3 The Owner and Contractor waive all rights against (1) each other and the Subcontractors, Sub-subcontractors, agents and employees each of the other, and (2) separate contractors, if any, and their subcontractors, sub-subcontractors, agents and employees, for damages caused by fire or other perils to the extent covered by insurance obtained pursuant to this Paragraph, or any other property insurance applicable to the Work....

Clerk's Papers (CP) at 95.

Our primary goal in interpreting contracts is to determine the parties' intent. Kenney v. Read, 100 Wash.App. 467, 474, 997 P.2d 455, 4 P.3d 862 (2000). The parties' intent will be determined from considering "the contract as a whole, the subject matter and objective of the contract, all the circumstances surrounding the making of the contract, the subsequent acts and conduct of the parties to the contract, and the reasonableness of the respective interpretations advocated by the parties." Berg v. Hudesman, 115 Wash.2d 657, 667, 801 P.2d 222 (1990).

Generally, what the parties intend is a question of fact. Kenney, 100 Wash. App. at 475, 997 P.2d 455. If there are two or more reasonable meanings to contract language, a question of fact is presented and summary judgment is improper. Id. Solely, *1208 when interpretation does not depend on extrinsic evidence, or when extrinsic evidence leads to one reasonable interpretation, can intent be decided as a matter of law on summary judgment. Id. All facts and reasonable inferences must be considered in a light most favorable to Anderson. Id. at 477, 997 P.2d 455.

Absent fraud, anti-subrogation waivers are valid and enforceable in Washington. Touchet Valley Grain Growers, Inc. v. Opp & Seibold General Constr., Inc., 119 Wash.2d 334, 341, 831 P.2d 724 (1992). In Touchet, a new grain storage building collapsed. The owner sued the contractor, the contractor's surety, and the fabricating subcontractor. The contract in Touchet contained a standardized American Institute of Architects form contract. The parties waived subrogation rights to the extent of insurance coverage on losses arising from or in connection with the project, but the waiver did not extend to subcontractors. After completion, the owner canceled its casualty insurance and added the building to its property insurance. Soon, the building collapsed from faulty construction or design.

The Touchet court upheld the waiver of subrogation clause as to the owner's claim against the contractor. Id. at 341-42, 831 P.2d 724.

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