Articles Posted in Construction Law

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At issue in this case was the applicability of a broad, absolute insurance pollution exclusion clause to a claim based on negligent installation of a hot water heater that led to the release of toxic levels of carbon monoxide in a residential home. Zhaoyun "Julia" Xia purchased a new home constructed by Issaquah Highlands 48 LLC. Issaquah Highlands carried a policy of commercial general liability insurance through ProBuilders. Soon after moving into her home, Xia began to feel ill. A service technician from Puget Sound Energy investigated Xia's home and discovered that an exhaust vent attached to the hot water heater had not been installed correctly and was discharging carbon monoxide directly into the confines of the basement room. The claims administrator for ProBuilders, NationsBuilders Insurance Services Inc. (NBIS), mailed a letter to Xia indicating that coverage was not available under the Issaquah Highlands policy. As a basis for its declination of coverage, NBIS rested on two exclusions under the policy: a pollution exclusion and a townhouse exclusion. NBIS refused to either defend or indemnify Issaquah Highlands for Xia's loss. When a nonpolluting event that was a covered occurrence causes toxic pollution to be released, resulting in damages, the Washington Supreme Court believed the only principled way for determining whether the damages are covered or not was to undertake an efficient proximate cause analysis. Under the facts presented here, the Court found ProBuilders Specialty Insurance Co. correctly identified the existence of an excluded polluting occurrence under the unambiguous language of its policy. However, it ignored the existence of a covered occurrence negligent installation-that was the efficient proximate cause of the claimed loss. Accordingly, coverage for this loss existed under the policy, and ProBuilders's refusal to defend its insured was in bad faith. View "Xia v. Probuilders Specialty Ins. Co." on Justia Law

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The Ninth Circuit Court of Appeals certified a question of Washington law to the Washington Supreme Court. The issue centered on how the term "collapse" was interpreted under Washington law in an insurance policy that insured "accidental direct physical loss involving collapse," subject to the policy's terms, conditions, exclusions and other provisions, but did not define "collapse" except to state that "collapse [did] not include settling, cracking, shrinking, bulging or expansion." The Washington Court concluded that in the insurance contract, "collapse" means "substantial impairment of structural integrity." "Substantial impairment of structural integrity" means substantial impairment of the structural integrity of a building or part of a building that renders such building or part of a building unfit for its function or unsafe and, under the clear language of the insurance policy here, must be more than mere settling, cracking, shrinkage, bulging, or expansion. View "Queen Anne Park Homeowners Ass'n v. State Farm Fire & Cas. Co." on Justia Law

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The issue this case presented for the Supreme Court's review centered on a challenge to the State Liquor Control Board's spirits distribution licensing fee structure brought by Association of Washington Spirits and Wine Distributors (Association). Specifically, the Association challenged the Board's decision to exempt distillers who distribute their own manufactured spirits and others acting as distributors pursuant to certificates of approval from contributing to a shortfall of $104.7 million in licensing fees imposed on persons holding spirits distributor licenses. The Association asked the Supreme Court to hold that the distillers must contribute proportionately to eliminating the shortfall. The Court rejected the Association's arguments, holding that the Board acted within its authority and did not act arbitrarily or capriciously. Additionally, the Board did not violate the privileges and immunities clause of article I, section 12 of the Washington State Constitution. View "Ass'n of Wash. Spirits & Wine Distribs. v. Liquor Control Bd." on Justia Law

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At issue in this case was whether Washington State courts have jurisdiction over a civil case arising out of a contract in which the tribal corporation waived its sovereign immunity and consented to jurisdiction in Washington State courts. The Washington Supreme Court held that it did not infringe on the sovereignty of the tribe to honor its own corporation's decision to enter into a contract providing for jurisdiction in Washington State courts. View "Outsource Servs. Mgmt. v. Nooksack Bus. Corp." on Justia Law

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Steve and Karen Donatelli hired D.R. Strong Consulting Engineers Inc. to help the Donatellis develop their real property. Before development could be completed, the Donatellis suffered substantial financial losses and lost the property in foreclosure. The Donatellis sued D.R. Strong for breach of contract, violation of the Consumer Protection Act (CPA), negligence, and negligent misrepresentation. D.R. Strong moved for partial summary judgment on the CPA and negligence claims. D.R. Strong argued that the negligence claims should have been dismissed under the economic loss rule because the relationship between the parties was governed by contract and the damages claimed by the Donatellis were purely economic. The trial court and Court of Appeals held that as a matter of law, the Donatellis' negligence claims were not barred. Finding no error in that analysis, the Supreme Court affirmed. View "Donatelli v. D.R. Strong Consulting Eng'rs, Inc." on Justia Law

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This action stemmed from a contract for construction of a baseball stadium and home field for the Seattle Mariners baseball team. In its first trip to the Supreme Court, "Washington State Major League Baseball Stadium Public Facilities District v. Huber, Hunt & Nichols-Kiewit Construction Company," (202 P.3d 924 (2009) (PFD I)), the Court held that the statute of limitations did not bar the owner’s suit against the general contractor because the action was brought for the benefit of the State, and therefore the exemption from the statute of limitations set out in RCW 4.16.160 applied. This case raised questions about whether the construction statute of repose barred suit against the general contractor and, if not, whether the general contractor may pursue third party claims against two of its subcontractors. The trial court granted summary judgment of dismissal in favor of the general contractor and the subcontractors on statute of repose grounds. Upon review of the matter, the Supreme Court reversed the trial court: "the statute of repose does not bar suit against the general contractor. In accord with several provisions in the subcontracts, the subcontractors are subject to liability to the same extent that the general contractor may be liable for any defective materials or work under the subcontracts. Thus, the trial court erred in holding that the statute of repose bars Hunt Kiewit’s third party claims against the subcontractors." View "Wash. State Major League Baseball Stadium v. Huber, Hunt & Nichols-Kiewit Constr. Co." on Justia Law

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Petitioner and Washington resident Delbert Williams was employed by an Idaho employment agency. The agency regularly sent him to work for Pro-Set Erectors, an Idaho construction subcontractor. In 2007, Pro-Set was hired by Respondent Leone & Keeble (L&K), a general contractor. L&K is a Washington company. Later that year, Petitioner was injured on the job. He filed a claim with the Idaho State Insurance Fund, who accepted his claim and issued workers' compensation payments. In late 2008, the payments stopped. Petitioner filed suit against L&K in Washington, but the trial court dismissed his petition citing lack of jurisdiction over Petitioner's Idaho workers' compensation claim. Upon review of the applicable legal authority, the Supreme Court found that the trial court did have jurisdiction over Petitioner's claim: "our courts below...seem to have given deference to opinions of the Idaho courts" instead of applying Washington law. L&K argued that because Petitioner received benefits from Idaho, he was barred from bringing the same claim in Washington. Petitioner's claim was allowed under the Washington Industrial Insurance Act, which fell under the jurisdiction of Washington courts. The Court reversed the decision of the lower courts and remanded Petitioner's case for further proceedings. View "Williams v. Leone & Keeble, Inc." on Justia Law

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There was a catastrophic failure at the Spokane waste water treatment plant. One man was killed, and two others were severely injured. The survivors, including Respondent Larry Michaels, successfully sued Appellant CH2M Hill, the engineering firm that worked for the city at the time of the accident. The City of Spokane, as employer of Respondents, was immune from liability under the Industrial Insurance Act. All parties agreed that the City was negligent. The issue at trial was whether CH2M Hill was also negligent. On appeal to the Supreme Court, CH2M Hill challenged the trial judge's rulings on its liability as well as twenty-six other findings of fact. Of importance here was whether the City's immunity could be imputed to CH2M Hill under the same insurance act. The Supreme Court dissected all twenty-six points in its review, and concluded that CH2M Hill was not entitled to the same immunity as the City. The Court agreed with all rulings of the trial court. The Court affirmed the trial court's decision in the case.