LAKEVIEW v. Apartment Sales Corp.

• Citation: 6 P.3d 74,101 Wash.App. 923
• Decision Date: 14 August 2000
• Docket Number: No. 44049-7-I.,44049-7-I.
• Court: Court of Appeals of Washington
• Parties: 1519-1525 LAKEVIEW BOULEVARD CONDOMINIUM ASSOCIATION, a Washington corporation, Robert A. Ferguson, Douglas A. Taylor, Bruce E. Curnutt, Bruce A. McLaughlin, Frank Y. Fukui and Penny Fukui, husband and wife and the marital community composed thereof, Appellants, v. APARTMENT SALES CORPORATION, a Washington corporation, Michael K. Williams and Jane Doe Williams, husband and wife and the marital community composed thereof, Gordon Capretto and Jane Doe Capretto, husband and wife and the marital community composed thereof, Geotech Consultants, Inc., a Washington corporation, Stephen Sullivan, d/b/a Stephen Sullivan Architects, Martha Rose d/b/a Rose Construction Management, Gary Swenson and Jane Doe Swenson, husband and wife and the marital community composed thereof, and RSP/EQE, Inc., a Washington corporation, and the City of Seattle, a municipal corporation, Respondents.

6 P.3d 74

101 Wash.App. 923

1519-1525 LAKEVIEW BOULEVARD CONDOMINIUM ASSOCIATION, a Washington corporation, Robert A. Ferguson, Douglas A. Taylor, Bruce E. Curnutt, Bruce A. McLaughlin, Frank Y. Fukui and Penny Fukui, husband and wife and the marital community composed thereof, Appellants, v. APARTMENT SALES CORPORATION, a Washington corporation, Michael K. Williams and Jane Doe Williams, husband and wife and the marital community composed thereof, Gordon Capretto and Jane Doe Capretto, husband and wife and the marital community composed thereof, Geotech Consultants, Inc., a Washington corporation, Stephen Sullivan, d/b/a Stephen Sullivan Architects, Martha Rose d/b/a Rose Construction Management, Gary Swenson and Jane Doe Swenson, husband and wife and the marital community composed thereof, and RSP/EQE, Inc., a Washington corporation, and the City of Seattle, a municipal corporation, Respondents.

No. 44049-7-I.

Court of Appeals of Washington, Division 1.

August 14, 2000.

Rand Koler, Kevin Ireland, Seattle, for Appellants.

Linda Clapham, Lane Powell Spears Lubersky, Douglas Green, Hight, Green & Yalowitz, Steve Goodman, Estera Gordon, Graham & Dunn, Mark O'Donnell, Charles Willmes, Seattle, for Respondents.

ELLINGTON, J.

Three condominiums were built on a steep Seattle hillside. After a winter storm, they slid downhill and are now uninhabitable. The condominium owners and the Lakeview Boulevard Condominium Association (Lakeview) brought various claims against the project architect, structural engineer, geotechnical engineer and construction manager (hereinafter, the Contractors). The trial court dismissed all claims against the Contractors as barred by the six-year construction statute of repose.

Under the construction repose statute, if six years have passed from either termination of contractor services or "substantial completion," whichever occurs later, a claim cannot accrue against the Contractors. None of the Lakeview units had been occupied for six years at the time of the slide, but the Contractors' services had terminated and the units were substantially complete more than six years before the slide. The statute therefore applies to bar Lakeview's claims.

Lakeview brings two challenges to the constitutionality of the statute. While Lakeview's arguments have merit, we are constrained by precedent to affirm.

FACTS

Apartment Sales Corporation (ASC) owned undeveloped property at 1515-1517 Lakeview Boulevard East in Seattle. The property is triangular; its southern and western boundaries slope downward 25 to 35 degrees. Below the property stands Interstate 5.

In 1988, ASC hired architect Stephen Sullivan, d/b/a Stephen Sullivan Architects (Sullivan), to design three or four single family residences on the property. Sullivan retained Gary and Jane Swenson and RSP/ EQE, Inc. (collectively, "Swenson") to provide structural engineering services for the project.

ASC also hired Geotech Consultants, Inc. (Geotech) to investigate the subsurface conditions and provide design criteria for the foundation. The City later required Geotech to supervise certain aspects of the construction. ASC hired Martha Rose, d/b/a Rose Construction Management (Rose), to serve as project manager.

Sullivan performed his final services under the contract on June 22, 1990. Swenson performed no services related to the project after early January 1990. After December 21, 1989, Geotech representatives did not visit the site. Geotech submitted its final report on July 16, 1990. Rose performed her final services on the project on September 30, 1990.

In June 1990, ASC signed an exclusive sale and listing agreement with a real estate company. The condominiums were selected as the Seattle Times/Seattle Post Intelligencer Home of the Month. To commemorate the award, an open house was held on June 24, 1990. Hundreds of visitors viewed the condominiums that day.

On August 27, 1990, the City of Seattle's Department of Construction and Land Use (DCLU) issued a certificate of occupancy for the Lakeview properties. DCLU cleared the construction permit for the condominiums on September 26, 1990.

On November 19, 1990, Bruce Curnutt and Bruce McLaughlin entered into a purchase and sale agreement for unit 1517, the middle unit. The purchasers commissioned a private engineering firm to inspect and report on the structural, mechanical, and electrical conditions of the unit. Based on those recommendations, the purchasers and ASC amended their contract to require certain repairs, including securing the building to the foundation; the remaining repairs were minor. None of the Contractors performed these tasks. The sale of unit 1517 closed on February 13, 1991.

On June 1, 1991, Frank and Penny Fukui entered into a purchase and sale agreement with ASC for unit 1519, the northernmost unit. Minor repairs were also required by their agreement, and other minor repairs were made thereafter under a one-year warranty. Again, none of the Contractors performed that work.

On January 21, 1992, Robert Ferguson purchased unit 1515, the southernmost unit. Again, minor repairs were made as a condition of the purchase agreement, and again, none of the Contractors made those repairs.

A severe storm raged during the week before January 3, 1997. On the morning of January 3, the land beneath the units began to slide down the hill. Unit 1519 dropped a vertical distance of approximately four feet. There were concerns that the units would slide all the way to the bottom of the hill and into the piers supporting the freeway, and the police briefly closed I-5. The condominium units were substantially damaged, and are uninhabitable. All three units have since remained vacant.

On February 4, 1997, the Lakeview Boulevard Condominium Association and the owners of each unit (Lakeview) brought suit against ASC,¹ the City of Seattle,² and the Contractors. Claims against the Contractors included negligent survey, negligent foundation design, negligent supervision of foundation construction, and negligent construction, particularly of the drainage system.

The Contractors filed motions for summary judgment. The trial court granted the motions on grounds that the construction statute of repose barred Lakeview's claims. The court also granted certification of final judgment under CR 54(b).³

DISCUSSION

Construction Statute of Repose: Applicability

The first question we must decide is whether the construction statute of repose applies to bar Lakeview's claims. That statute, RCW 4.16.310, provides:

All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitations shall begin to run only during the period 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. The phrase "substantial completion of construction" shall mean the state of completion reached when an improvement upon real property may be used or occupied for its intended use. Any 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; Provided, That this limitation shall not be asserted as a defense by any owner, tenant or other person in possession and control of the improvement at the time such cause of action accrues. The limitations prescribed in this section apply to all claims or causes of action as set forth in RCW 4.16.300 brought in the name or for the benefit of the state which are made or commenced after June 11, 1986.⁴

Lakeview argues the phrase "termination of services" means that a claim against any person who provided an enumerated service is not barred until six years after the termination of all enumerated services by all providers. Thus, Lakeview argues that since services were performed at the homeowners' request "well into 1992," the statute does not bar Lakeview's claims even though none of those services were provided by the named Contractors. But Lakeview's interpretation would render the alternative trigger for the running of the statute ("substantial completion") superfluous.⁵ If all services must have terminated before the six-year period begins to run, there could be no services left to perform that would move a project from a state of "substantial completion" to full completion. For contractors performing those final services, therefore, the statute runs from the date the last service was provided; for the others, it runs from the date of substantial completion.

Regarding the date of substantial completion, Lakeview argues the Legislature intended the period of repose to begin when the improvement is sold, so that the occupant would benefit from the full six-year period before losing the right to file a claim against a contractor. Lakeview thus argues that substantial completion cannot occur before sale. Because the Lakeview homeowners all purchased their units less than six years before the landslide, Lakeview argues their claims are not barred.

In support of this argument, Lakeview relies on a discussion on the Senate floor prior to passage of the statute. Senator Uhlman, responding to a question from Senator Guess, indicated that the Senate Judiciary Committee intended termination of services or substantial completion, "whichever is later," to ensure that "tenants had moved in and had a chance to find out any errors or omissions...."⁶ The bill as passed included the "whichever is later" language. Nothing in the statute indicates, however, that its protections depend on sale of the improvement; obviously many improvements to land are made that are not sold.⁷ Instead, the statute defines "substantial completion" as "the state of completion reached when an improvement upon real property may be used or occupied for its intended use."⁸ Courts look to legislative...