SSHI, LLC v. Department of Labor & Industries

Court of Appeals of Washington·Decided July 30, 2026·No. 41328-4·Unpublished

Opinion

FILED JULY 30, 2026 In the Office of the Clerk of Court WA State Court of Appeals, Division III

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE

SSHI, LLC, ) ) No. 41328-4-III Appellant, ) ) v. ) ) WASHINGTON STATE DEPARTMENT ) UNPUBLISHED OPINION OF LABOR & INDUSTRIES, ) ) Respondent. ) ) ) In re: SSHI, LLC, ) ) Docket No. 23 W0003 ) Citation & Notice No. 317969114 )

COONEY, A.C.J. — The Department of Labor and Industries (Department) cited

SSHI, LLC, for a serious violation of WAC 296-155-477(1)(f)(i), requiring the

completion of a “stairway to a second or higher floor before studs are raised to support

the next higher floor.” SSHI appealed to the Board of Industrial Insurance Appeals

(Board). Following a hearing, an industrial appeals judge (IAJ) issued a proposed

decision and order affirming the citation. SSHI petitioned for review, and the Board No. 41328-4-III SSHI v. Dep’t of Lab. & Indus.

adopted the IAJ’s proposed decision and order. SSHI then appealed to the superior court,

which also affirmed.

SSHI appeals to this court, arguing that a different standard for knowledge of a

violative condition should apply to general contractors than that applied to

subcontractors. SSHI also argues that substantial evidence does not support the Board’s

findings that SSHI had constructive knowledge of the violation. We disagree with

SSHI’s arguments and affirm.

BACKGROUND

SSHI was the general contractor for Windhaven, a large housing development

project in Spokane, Washington. SSHI subcontracted the construction work for

Windhaven to John 316, among others. John 316, in turn, subcontracted the framing of

the homes to SVK Builders. SSHI typically had three superintendents and two assistants

supervising safety and production at the Windhaven project. The superintendents and

assistants each typically drove or walked by homes being constructed 10 or more times

per day.

On June 8, 2022, Douglas Thoet, a Department inspector, inspected the

Windhaven project. During his inspection, Mr. Thoet noticed that the second floor walls

of a home were being erected with an extension ladder providing the only means of

accessing the second floor. SSHI was cited for a serious violation of WAC 296-155-

477(1)(f)(i) that mandates that stairs be installed to a second floor, or higher floor, before

2 No. 41328-4-III SSHI v. Dep’t of Lab. & Indus.

studs are constructed to support the next floor. The violation was considered serious

because a fall from the second floor of a structure could cause someone to “lose their life

if they sustain an injury or a serious injury from a fall from that distance.”

Administrative Record (AR) at 863.

SSHI appealed the citation to the Board, arguing that “it took reasonable steps to

ensure its subcontractors complied with safety rules.” AR at 41. An evidentiary hearing

was held before an IAJ. Numerous witnesses testified at the hearing and exhibits,

including photographs of the alleged violations, were admitted.

Prior to the hearing, SSHI moved for admission of the CR 30(b)(6) deposition

transcript of Terry Walley. SSHI argued Mr. Walley’s deposition “provides the history

and policy basis for the [Division of Occupational Safety and Health (DOSH)] Directive

27.00 which the Department expects its compliance staff to follow.” AR at 212. The IAJ

did not consider Mr. Walley’s deposition testimony in making its decision, but DOSH

Directive 27.00 was admitted. DOSH Directive 27.00 establishes guidelines for “DOSH

compliance and consultation staff when assessing an upper-tier contractor’s compliance

with the Washington Industrial Safety and Health Act (WISHA).” AR at 1885. DOSH

Directive 27.00 provides “interpretation of appropriate application of [WISHA]” to

“general contractor[s]” and “upper-tier subcontractor[s].” AR at 1885.

At the hearing, Mr. Thoet testified that he inspected the Windhaven project on

June 8, 2022, and noticed a person not wearing fall protection while on the second level

3 No. 41328-4-III SSHI v. Dep’t of Lab. & Indus.

of a home being constructed. Mr. Thoet photographed the person from the street. Mr.

Thoet then took a series of photographs from a different area of the construction zone.

Mr. Thoet testified that “during a review, while the inspection was still going on,” his

supervisor noticed no staircase was in place before the second floor walls of a home were

constructed. AR at 856. Mr. Thoet testified workers were “using an extension ladder to

access the second level” of the home. AR at 857. A close examination of the

photographs revealed that the “left side rail of that extension ladder” was visible “through

th[e] main entrance doorway.” AR at 858. The photographs were admitted at the

hearing.

Mr. Thoet also testified that this was a “repeat” citation because SSHI had been

cited for violating WAC 296-155-477(1)(c) 1 within the last three years. AR at 867. An

exhibit was admitted showing SSHI had been cited for a violation of WAC 296-155-

477(1)(c) on August 5, 2021. Mr. Thoet determines whether a prior violation is a

“repeat” violation by looking at whether the prior violation is “similar in nature” to the

current violation. AR at 867. Specifically, Mr. Thoet testified he looks at whether “it’s

within the same section for the same WAC, just different subsections.” AR at 867.

Sean Potter, a superintendent for SSHI, testified that he saw that “the second floor

walls” of the home at issue were up on June 8, 2022. AR at 792. When asked whether

1 “In all buildings or structures two or more stories or 24 feet or more in height or depth, you must install suitable permanent or temporary stairways.”

4 No. 41328-4-III SSHI v. Dep’t of Lab. & Indus.

he remembered what time employees were done installing floors in the home, Mr. Potter

testified, “I don’t look that close. It’s just the generic idea that people are on site and

getting things done.” AR at 791. Mr. Potter stated he “either drove by” or “walked by”

the home but he “didn’t really stop and go into anything unless there was a need to,

whether [he saw] big schedule complication[s] or a safety violation.” AR at 791-92. Mr.

Potter further testified that he was aware stairs needed to be installed before the second

floor walls could be erected. However, he recognized that “it’s not always obvious” if

stairs have been installed, especially in certain floor plans like the one at issue. AR at

797. Mr. Potter testified, “This particular [floor] plan makes it difficult as you’re driving

or walking by to know if [stairs are] in or not” because the stairs are located behind the

powder room. AR at 798.

Zach Cody, the area construction manager for SSHI, testified that he drove by the

home at issue “maybe 10 to 12 times a day,” and the superintendents collectively drove

by the home “30 to 40 times throughout the day” on June 22, 2022. AR at 704. When

asked if he was aware that stairs needed to be installed before the second floor walls were

erected, Mr. Cody responded that he knew “that that was the case” but “that morning [the

construction crew] had started the subfloor and by the end of the day they had their walls

up so without actually walking into the house and checking on the stairs, we just assumed

that they had thrown in the stairs as they were going.” AR at 721.

5 No. 41328-4-III SSHI v. Dep’t of Lab. & Indus.

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