January 6, 2015
Division II Issues New Statutes of Repose / Limitations Decision
The Washington Court of Appeals’ (Division II) recently published a new opinion, Dania et al. v. Skanska USA Building Inc., et al., concerning the construction claim affirmative defense found at RCW 4.16.326(1)(g). The Court’s decision dives deeper into the ongoing debate over whether — and to what extent — the statute’s “termination of services” prong contains a “nexus requirement” between post-substantial completion services and claims asserted. The Court agreed that RCW 4.16.326(1)(g) contained a nexus requirement, but held that the statute did not bar Dania’s claims because it — at least for purposes of summary judgment — had established a sufficient nexus between its claims and the services provided.
The claims at issue in Dania arose out of the 2005-06 construction of a warehouse in Dupont, WA. The warehouse was substantially complete by January of 2006, but certain work on the warehouse roof continued to June of 2006. The warehouse roof began leaking in fall of 2006. Dania (naturally) waited to file suit against Skanska until April of 2012, i.e. more than six years after substantial completion, but less than six years after termination of at least some of the roofing services provided by Skanska and its subcontractors.
As Washington construction law practitioners are well aware, RCW 4.16.326(1)(g) generally provides (by way of an affirmative defense) that the statute of limitations for certain construction claims (identified in RCW 4.16.300) expires “six years of 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.” In an earlier decision, Parkridge Associates Ltd., v. Ledcor Industries Inc., 113 Wn. Ap 592 (2002), Division I held that the identical “termination of services” language in the statute of repose required a “nexus” between the services performed and the claims asserted.
The facts in Dania placed this “nexus” requirement squarely before the Court. Dania argued that it need only show that there was “some kind of connection” between the final services and the cause of action (Dania’s argument appears to essentially have been that the final services performed were roof-related, and its claim was for a leaking roof). Skanska, on the other hand, argued that Dania was required (in opposition to Skanska’s motion for summary judgment) to provide clear evidence of a “causal link” between the final services and the cause of action.
The Court sided with Dania, holding that the owner had provided sufficient evidence to create an issue of material fact as to whether there was a “connection” between the services and the claim. The Court notably declined to require a “causal link”, believing that this would require a “mini-trial on causation” at the summary judgment stage.
The opinion is worth reading in whole for its discussion of the statute at issue and the corresponding statutes of limitation and repose. The concurring opinion (Judge Maxa) is perhaps more noteworthy. While the majority adopts the Parkridge “nexus” requirement without much discussion, Judge Maxa would dispose of the requirement altogether. Under his reading, the statute of limitations for all claims would begin running at the end of termination of services, regardless of whether the claims bore any relation to such services or not.