Davis v. Baugh Industrial Contractors, Inc.

150 P.3d 545, 159 Wash. 2d 413

• Court: Washington Supreme Court
• Decided: January 18, 2007
• Docket: No. 76696-7
• Status: Published

Opinions

¶1 — We are asked whether the common law doctrine of completion and acceptance, which shields contractors from liability for negligent work after that work has been completed and accepted by the property owner, bars this suit against Baugh Industrial Contractors, Inc., for negligent construction of a pipeline. Finding that this doctrine is outmoded, incorrect, and harmful, we now join the 37 states that have abandoned it. We reverse the superior court order granting summary judgment and remand for further proceedings.

Chambers, J.

FACTS AND PROCEDURAL HISTORY

¶2 On October 12,1992, Baugh entered into a contract to build a network of subterranean pipes for a processing facility belonging to Glacier Northwest. In turn, Baugh hired E.J. Rody & Sons, Inc. (Rody), to install the on-site utilities and underground piping for the facility. In the course of its work, Rody assembled and installed high density polyethylene pipes and buried the piping underground. Rody had exclusive control over the installation. The project was substantially completed in April 1997, and Glacier accepted the work. Shortly thereafter, Glacier began operating the facility.

¶3 In December 2000, after observing that a pond had formed, Glacier suspected a leak in one of the underground pipes. Alan Davis was the foreman of the crew assigned by Glacier to excavate the area and find the leak. While the pipeline was still covered with several feet of dirt, Davis entered the excavated hole to try to pinpoint the leak. Tragically, several cement blocks, weighing between 1,500 and 1,800 pounds each, fell into the hole when a nearby wall collapsed. One of the blocks crushed Davis’ chest and pinned him to the ground. Davis later died of his injuries. Evidence suggested that one of the high density polyethylene pipes, which had a useful life of up to 100 years, had failed. This might have been because of a gouge or dent in the pipe.

¶4 Tami Davis, Alan’s daughter and personal representative of his estate, filed this negligence suit against Baugh among others. The trial court granted summary judgment for Baugh on the ground that the completion and acceptance doctrine relieved Baugh of liability for negligence after the work was completed and accepted by the property owner. The trial court also struck portions of a declaration of Davis’ expert. On direct appeal from the superior court, Davis argues that the trial court erred. We agree and reverse.

STANDARD OF REVIEW

¶5 Trial court rulings in conjunction with a motion for summary judgment are reviewed de novo. Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998).

ANALYSIS

|6 Under the completion and acceptance doctrine, once an independent contractor finishes work on a project and the work has been accepted by the owner, the contractor is no longer liable for injuries to third parties, even if the work was negligently performed. Historically, after completion and acceptance, the risk of liability for the project belonged solely to the property owner. This court has not addressed this doctrine in over 40 years and, in the meantime, 37 states have rejected it. See Emmanuel S. Tipon, Annotation, Modern Status of Rules Regarding Tort Liability of Building or Construction Contractor for Injury or Damage to Third Person Occurring After Completion and Acceptance of Work; “Completed and Accepted” Rule, 74 A.L.R.5th 523, 557-61 (1999); Peters v. Forster, 804 N.E.2d 736, 741 (Ind. 2004). Under the modern, Restatement approach, a builder or construction contractor is liable for injury or damage to a third person as a result of negligent work, even after completion and acceptance of that work, when it was reasonably foreseeable that a third person would be injured due to that negligence. Restatement (Second) of Torts §§ 385, 394, 396 (1965).¹

¶7 We join the vast majority of our sister states and abandon the ancient completion and acceptance doctrine. See In re Rights to Use of Waters of Stranger Creek, 77 Wn.2d 649, 653, 466 P.2d 508 (1970). We find it does not accord with currently accepted principles of liability because it was grounded in the long abandoned privity rule that a negligent builder or seller of an article was liable to no one but the purchaser. See, e.g., Thornton v. Dow, 60 Wash. 622, 635-36, 111 P. 899 (1910) (explaining that a contractor is liable only under the contract); MacPherson v. Buick Motor Co., 217 N.Y. 382, 397, 111 N.E. 1050 (1916). This approach to analyzing liability was first rejected in MacPherson. There, Judge (and later Justice) Benjamin N. Cardozo’s watershed opinion explained that

[w]e have put aside the notion that the duty to safeguard life and limb, when the consequences of negligence may be foreseen, grows out of contract and nothing else. We have put the source of the obligation where it ought to be. We have put its source in the law.

MacPherson, 217 N.Y. at 390. Cardozo has prevailed, and the privity requirement in tort law has been abandoned not just in Washington but in all United States jurisdictions in the decades since MacPherson. See Stuart v. Coldwell Banker Commercial Group, Inc., 109 Wn.2d 406, 418, 745 P.2d 1284 (1987).

¶8 A second, oft-cited rationale for this doctrine is the theory that the owner’s negligence in failing to remedy a dangerous condition upon the land is an intervening cause, which breaks the chain of causation and cuts off the contractor’s liability. Thornton, 60 Wash, at 636. This rationale fails as well because Washington has long since abandoned this theory of proximate cause, sometimes called the “last wrongdoer” rule. See, e.g.,Maltman v. Sauer, 84 Wn.2d 975, 982, 530 P.2d 254 (1975); Olson v. Gill Home Inv. Co., 58 Wash. 151, 157-58, 108 P. 140 (1910); see also Prosser and Keeton on the Law of Torts 304 (W. Page Keeton ed., 5th ed. 1984) (“The risk created by the defendant may include the intervention of the foreseeable negligence of others.”). An intervening cause breaks the chain of causation only if the intervening event is so unexpected that it falls outside the realm of the reasonably foreseeable. Maltman, 84 Wn.2d at 982. Whether an intervening act breaks the chain of causation is a question for the trier of fact. Id.

¶9 The completion and acceptance doctrine is also grounded in the assumption that if owners of land inspect and accept the work, the owner should be responsible for any defects in that accepted work. See Pierce v. ALSO Architects, PS, 270 Mont. 97, 890 P.2d 1254, 1262 (1995). While this assumption may have been well founded in the mists of history, it can no longer be justified. Id. Today, wood and metal have been replaced with laminates, composites, and aggregates. Glue has been replaced with molecularly altered adhesives. Wiring, plumbing, and other mechanical components are increasingly concealed in conduits or buried under the earth. In short, construction has become highly scientific and complex. Landowners increasingly hire contractors for their expertise, and a nonexpert landowner is often incapable of recognizing substandard performance.

¶10 Our legislature has adopted a statute of repose to provide predictability and limit contractor liability. RCW 4.16.310. The statute of repose terminates a negligence claim six years after “substantial completion of construction,” even if the injury caused by contractor negligence has not yet occurred. Id. This statute of repose is a much clearer and simpler way to protect contractors from a long period of uncertainty.

111 The completion and acceptance doctrine is harmful because it is unnecessarily complex and difficult for courts to apply. The doctrine is nearly subsumed by the many exceptions which are necessary to avoid inequitable results. See Emmanuel S. Tipon, Annotation, Modern Status of Rules Regarding Tort Liability of Building or Construction Contractor for Injury or Damage to Third Person Occurring After Completion and Acceptance of Work: Exceptions to “Completed and Accepted” Rule, 70 A.L.R.5th 261, 282 (1999).

112 The doctrine is also harmful because it weakens the deterrent effect of tort law on negligent builders. By insulating contractors from liability, the completion and acceptance doctrine increases the public’s exposure to injuries caused by negligent design and construction of improvements to real property and undermines the deterrent effect of tort law. Illinois long ago abandoned the doctrine specifically for this reason, stating that “[a]n underlying purpose of tort law is to provide for public safety through deterrence of negligent designers and builders. This purpose cannot be accomplished if these persons are insulated from liability simply by the act of delivery.” Johnson v. Equip. Specialists, Inc., 58 Ill. App. 3d 133, 373 N.E.2d 837, 843, 15 Ill. Dec. 491 (1978).

¶13 Accordingly, the common law completion and acceptance doctrine is hereby abandoned, and we join those courts who have adopted the Restatement approach.

¶14 We also hold that the trial court erred in striking portions of the declaration of Davis’s expert, Michael Black. Black’s declaration stated that the damaged pipe created a “hazardous condition” and a “zone of danger.” Clerk’s Papers at 692. The trial court struck these words, deeming them inadmissible legal conclusions because they are similar to one of the exceptions to the completion and acceptance doctrine for conditions which are inherently or imminently dangerous. Cf. Andrews v. Del Guzzi, 56 Wn.2d 381, 388, 353 P.2d 422 (1960).

¶15 “Testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.” ER 704. While Black’s declaration may have embraced an ultimate fact under ER 704, his statement was not a legal conclusion. Expert testimony must assist the trier of fact. Mere legal conclusions, such that an act was or was not “negligent” or a “proximate cause” of an injury is not likely to be helpful to the meaningful evaluation of the facts, as it runs the risk of substituting the expert’s judgment for the fact finder’s. However, Washington law favors resolution of issues on the merits. It should not be fatal to a party’s claim or defense that an expert used legal jargon, so long as an appropriate foundation for the conclusion can be gleaned from the testimony. Expert opinions that help establish the elements of negligence are admissible. ER 704; Coggle v. Snow, 56 Wn. App. 499, 784 P.2d 554 (1990); Everett v. Diamond, 30 Wn. App. 787, 638 P.2d 605 (1981). Given our holding today that the completion and acceptance doctrine is no longer the law of Washington, any similarity between the expert’s use of language and the legal test is particularly insignificant. The trial court’s decision striking portions of the expert’s declaration is reversed.²

CONCLUSION

¶16 We conclude that the doctrine of completion and acceptance is outmoded, incorrect, and harmful and join the modern majority of states that have abandoned it in favor of the Restatement approach. We reverse the superior court order granting summary judgment and remand for further proceedings in keeping with this holding.

C. Johnson, Madsen, Sanders, Owens, and Fairhurst, JJ., concur.

1 Section 385 of the Restatement, “Persons Creating Artificial Conditions on Land on Behalf of Possessor: Physical Harm Caused After Work has been Accepted,” provides:

One who on behalf of the possessor of land erects a structure or creates any other condition thereon is subject to liability to others upon or outside of the land for physical harm caused to them by the dangerous character of the structure or condition after his work has been accepted by the possessor, under the same rules as those determining the liability of one who as manufacturer or independent contractor makes a chattel for the use of others.

The other cited sections describe the liability of a manufacturer of a chattel, with reference to additional sections of the Restatement (Second) of Torts (1965).

2 Our opinion considers the tort claim for physical harm allegedly caused by negligent construction. Thus, we respectfully disagree with the dissent that this case implicates any questions regarding the proper line between torts and contracts, or to contract interpretation in any way. See, e.g., Stuart, 109 Wn.2d at 420.