Harmony at Madrona Park Owners Ass'n v. Madison Harmony Development, Inc.

177 P.3d 755
CourtCourt of Appeals of Washington
DecidedFebruary 25, 2008
Docket58416-2-I
StatusPublished
Cited by29 cases

This text of 177 P.3d 755 (Harmony at Madrona Park Owners Ass'n v. Madison Harmony Development, Inc.) 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
Harmony at Madrona Park Owners Ass'n v. Madison Harmony Development, Inc., 177 P.3d 755 (Wash. Ct. App. 2008).

Opinion

177 P.3d 755 (2008)

HARMONY AT MADRONA PARK OWNERS ASSOCIATION, a Washington condominium unit owners association, Plaintiff,
v.
MADISON HARMONY DEVELOPMENT, INC., a Washington corporation, Defendant,
Ledcor Industries (USA), Inc., a Washington corporation, Respondent/Cross-Appellant,
Margaux's Marine Graphics, Inc., a Washington corporation, d/b/a Serock Construction, Appellant/Cross-Respondent.

No. 58416-2-I.

Court of Appeals of Washington, Division 1.

February 25, 2008.

*758 Kenneth James Cusack, Seattle, WA, for Appellant/Cross-Respondent.

Richard Lawrence Martens, Scott Allen Samuelson, Steven A. Stolle, Martens & Associates PS, Seattle, WA, for Respondent/Cross-Appellant.

BAKER, J.

¶ 1 Ledcor Industries, Inc. (Ledcor), the general contractor on a 25-building condominium project, was sued by the owner/developer for construction defects. Ledcor settled with the developer and then sued Margaux's Marine Graphics, Inc., d/b/a Serock Construction (Serock) for breach of contract and indemnification. The trial court awarded Ledcor damages for breach of contract and indemnification against Serock for defects on several buildings. We reverse in part and affirm in part.

I

¶ 2 This case was originally brought by Harmony at Madrona Park Owners Association against defendant Madison Harmony Development, Inc. (Madison) for construction defects in a 25-building, 116-unit condominium complex in Bellevue. Madison, the owner/developer of the project, in turn filed suit against third party defendant Ledcor Industries, Inc., the general contractor for the project. Ledcor filed a fourth party complaint against several of the subcontractors that had worked on the project. Ledcor then settled with Madison. On November 30, 2004, Ledcor filed a second amended complaint, adding more subcontractor-defendants, including Serock. Ledcor claimed that Serock breached its subcontract with Ledcor and failed to meet its indemnification obligations.

¶ 3 Serock subcontracted with Ledcor to complete the exterior trim on thirteen buildings in Phase 1 of the project. The trim included belly bands and vertical trim between the windows. The subcontract required Serock's work to be done "in a workmanlike and substantial manner," and contained an indemnification agreement requiring Serock to defend, indemnify, and hold Ledcor and Madison harmless from any and all claims, demands, losses, and liabilities arising from, resulting from, or connected with work performed under the subcontract. Serock testified that it last performed services in May 1998, without having worked on two of the buildings. The trial court concluded that Serock did not breach its contract on those two buildings.

¶ 4 All other subcontractors settled with Ledcor prior to trial. After a three-day bench trial, the trial court concluded that Serock had breached its contract on eleven of the thirteen buildings, but that the statute of limitations barred Ledcor's claims as to four of them. The court awarded Ledcor damages pursuant to the indemnification agreement for those four buildings, and damages for breach of contract for the other seven. The trial court awarded attorney fees to Ledcor under the indemnification agreement.

II

Statute of Limitations

¶ 5 Serock contends that all of Ledcor's claims for breach of contract were barred by the statute of limitations. Serock assigns error to the trial court's ruling that the six-year statute of limitations for written contracts began to run on the date of substantial completion of each building, rather than the date Serock performed the allegedly defective work, or, alternatively, when Serock ceased performing its subcontract. Ledcor argues that, although the statute of limitations for contracts is six years, the statute governing claim& arising from construction defects provides a different rule for construction cases. We agree with Serock and hold that Ledcor's claims for breach of contract are time-barred.

¶ 6 Whether the statute of limitations in a construction defect case begins to run on the date of substantial completion or upon *759 breach is a question of statutory construction, which we review de novo.[1]

¶ 7 Ledcor contends that RCW 4.16.310 allows a cause of action to accrue only after the latter of two events—substantial completion or termination of services—regardless of when the alleged breach of contract occurred. RCW 4.16.310 provides that "[a]ny cause of action which has not accrued within six years after such substantial completion of construction, or within six years after such termination of services, whichever is later, shall be barred."

¶ 8 However, RCW 4.16.320 provides that "[n]othing in RCW 4.16.300 through 4.16.320 shall be construed as extending the period now permitted by law for bringing any kind of action." Because of the limitation set forth in RCW 4.16.320, RCW 4.16.310's command that "[a]ll claims or causes of action as set forth in RCW 4.16.300 shall accrue . . . within six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16.300, whichever is later" serves only to impose an outside limit on when events giving rise to a cause of action may provide a basis for legal relief, not to define when a claim accrues for purposes of the statute of limitations. In other words, RCW 4.16.310 is a statute of repose. Claims covered by RCW 4.16.300 may still accrue prior to the beginning of the period of repose created by RCW 4.16.310.

¶ 9 The statute of limitations and the statute of repose applicable to breach of construction contract claims are distinct and have distinguishable effects on the viability of such claims. "In addressing whether a statute of limitations has run on an action arising out of construction or repair of an improvement on real property, both the relevant statute of limitations and the statute of repose set out in RCW 4.16.310 must be considered."[2] The applicable statute of limitations is the period following the accrual of a claim, during which the claim may provide a basis for recovery. In contrast, the statute of repose, RCW 4.16.310

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Bluebook (online)
177 P.3d 755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harmony-at-madrona-park-owners-assn-v-madison-harmony-development-inc-washctapp-2008.