Parkridge Associates, Ltd v. Ledcor Industries, Inc.

• Decision Date: 23 September 2002
• Docket Number: No. 48337-4-I.,48337-4-I.
• Citation: 113 Wash.App. 592,54 P.3d 225
• Court: Washington Court of Appeals
• Parties: PARKRIDGE ASSOCIATES, LTD., a Washington corporation, Plaintiff, v. LEDCOR INDUSTRIES, INC., a Washington corporation, Appellant, v. Nidash, Inc., d/b/a Roy Freeman Roofing Co., a Washington corporation, Respondent, Coast Plastering, Inc., a Washington corporation; Concrete and Steel Systems, Inc., a Washington corporation; and Pacific Glass & Door, Inc., a Washington corporation, Third Party Defendants.

54 P.3d 225

113 Wash.App. 592

PARKRIDGE ASSOCIATES, LTD., a Washington corporation, Plaintiff, v. LEDCOR INDUSTRIES, INC., a Washington corporation, Appellant, v. Nidash, Inc., d/b/a Roy Freeman Roofing Co., a Washington corporation, Respondent, Coast Plastering, Inc., a Washington corporation; Concrete and Steel Systems, Inc., a Washington corporation; and Pacific Glass & Door, Inc., a Washington corporation, Third Party Defendants.

No. 48337-4-I.

Court of Appeals of Washington, Division 1.

September 23, 2002.

John Dalton, Nathaniel Smith, Merrick, Hofstedt & Lindsey, Seattle, WA, for Appellant.

John Hayes, Ray Cox, Devon Groves, Castromo Preston, Forsberg & Umlauf, Seattle, WA, for Respondent.

COX, A.C.J.

At issue is whether either the statute of repose applicable to claims arising from construction, alteration, or repair of improvements to realty¹ or the respective applicable statutes of limitation for the claims asserted bar this third party action. We also decide whether the statute of repose applies to a claim for equitable indemnity. Because the statute of repose applies to Ledcor Industries, Inc.'s equitable indemnity claim and that claim accrued more than six years after both the substantial completion date of the project and the date of termination of services by Nidash, Inc., d/b/a Roy Freeman Roofing Co. (Freeman), we affirm the trial court's summary dismissal of that claim. We affirm the dismissal of the claim for breach of the contractual duty to indemnify because it also accrued after the term of the statute of repose. We reverse the dismissal of the claim for the alleged failure to perform the work in accordance with the terms of the subcontract because there are genuine issues of material fact regarding accrual of that claim.

The material facts are largely undisputed. Ledcor, a general contractor, sued Freeman, one of its subcontractors, after being sued by Parkridge Associates, Ltd. Ledcor was the general contractor for a construction project at the Parkridge Apartments. Freeman subcontracted with Ledcor to provide roofing, waterproofing, deck coating, and metal work for the Parkridge project in February 1993. An addendum to the subcontract provided that Freeman would defend, indemnify, and hold Ledcor harmless from any claims resulting from services performed by Freeman.

The date of substantial completion of the project was December 30, 1993. The parties dispute whether Freeman continued to perform work at the project until December 5, 1994. They also dispute the nature of the work, if any, that Freeman performed after the date of substantial completion.

On November 29, 1999, Parkridge sued Ledcor for product and workmanship failures and defects at the apartment complex. On May 19, 2000, Ledcor tendered defense of the suit to Freeman. Freeman did not accept that tender. On August 29, 2000, Ledcor commenced this third party action against Freeman and others. Ledcor stated nine causes of action in its third party complaint. Among them were: failure to defend, contractual indemnification, breach of express contractual warranties, and a cause of action described as "breach of contract (other)." This latter claim 3alleges an agreement to "perform work in accordance with the terms and conditions" of the subcontract. In this third party complaint, Ledcor again sought indemnification and defense by Freeman.

On December 22, 2000, Ledcor and Parkridge mediated a settlement. The terms of the settlement are confidential, but Ledcor represents that it and others paid Parkridge a sum "well into seven figures." Neither Freeman nor another third party defendant participated in the settlement.² Ledcor asserts that Freeman's allegedly defective work accounts for a significant portion of the amount of the settlement payment. Therefore, Ledcor primarily seeks contribution from Freeman for a proportionate share of the settlement paid to Parkridge.

Freeman moved for summary judgment on Ledcor's claims, arguing that they were barred by the six-year written contract statute of limitations and the construction statute of repose. The trial court concluded that the statute of repose barred all claims asserted in the third-party complaint, and dismissed the action.

Ledcor appeals.

STATUTE OF REPOSE

Ledcor argues that the record shows that Freeman provided services at the Parkridge apartments until December 5, 1994, and that the beginning of the six-year period of the statute of repose should be calculated from that date. Considering all facts and reasonable inferences in the light most favorable to Ledcor, we agree that the relevant date for summary judgment purposes is December 5, 1994, the date of "termination of [enumerated] services" under the statute of repose.

We may affirm an order granting summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.³ All facts and reasonable inferences must be considered in the light most favorable to the nonmoving party.⁴ We review questions of law de novo.⁵ A material fact is one upon which the outcome of the litigation depends.⁶ Summary judgment is proper when reasonable minds could reach but one conclusion regarding the material facts.⁷

Our Supreme Court, in Del Guzzi Construction Co., Inc. v. Global Northwest, Ltd., Inc.,⁸ explained that RCW 4.16.310, the statute of repose, requires a two-step analysis. "First, the cause of action must accrue within 6 years of substantial completion of the improvement [or the date of termination of the enumerated services, whichever is later]; and second, a party then must file suit within the applicable statute of limitation, depending on the type of action."⁹ Our Supreme Court has also described the difference between a statute of limitation and a statute of repose. While a statute of limitation "bars plaintiff from bringing an already accrued claim after a specified period of time[,]" a statute of repose "terminates a right of action after a specific time, even if the injury has not yet occurred."¹⁰

As Del Guzzi directs, our analysis begins with the statute of repose, RCW 4.16.310:

[a]ll claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation 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.[¹¹]

Furthermore, RCW 4.16.300 through RCW 4.16.320 apply to:

all claims or causes of action of any kind against any person, arising from such person having constructed, altered or repaired any improvement upon real property, or having performed or furnished any design, planning, surveying, architectural or construction or engineering services, or supervision or observation of construction, or administration of construction contracts for any construction, alteration or repair of any improvement upon real property.[¹²]

Ledcor argues and provides evidence that the work Freeman performed at Parkridge until December 5, 1994 qualifies as "services" for purposes of RCW 4.16.300. In response, Freeman argues that there must be a nexus between the services performed and the cause of action.

We agree with both contentions. The plain language of RCW 4.16.300, describing actions or claims "arising from" various services, shows that the services considered in this assessment must be those that gave rise to the cause of action. More importantly, considering the evidence in this record in the light most favorable to Ledcor, Freeman provided services of the type required by the statute until December 5, 1994.

This court's opinion in 1519-1525 Lakeview Boulevard Condominium Ass'n v. Apartment Sales Corporation¹³ is instructive. There, condominium owners and their association sued several contractors who had built a group of condominiums. While some of the contractors provided services after the date of substantial completion, not all did. This court held that for the contractors performing those final services, the statute ran from the date the last service was provided; but for the others it ran from the date of substantial completion.¹⁴ Here, the work Freeman did after the date of substantial completion and until December 5, 1994 was arguably work from which Ledcor's cause of action arose. In any event, Freeman failed in its burden to show the absence of a genuine issue of material fact on this issue.

Freeman claims that the work performed after the date of substantial completion was "warranty repairs" or "punch list" work that had no nexus to the contract and initial construction work on which the lawsuit is based. Nothing in the record supports this bare assertion. But even if Freeman had provided evidence to support this argument, there would be, at most, a genuine issue of material fact on the question. Summary judgment would not have been proper. Accordingly, the date of termination of services, December 5, 1994, controls, not the December 30, 1993 date of substantial completion of the project.

Del Guzzi requires that we determine the dates within which each asserted claim must accrue. Because we hold that for summary judgment purposes the controlling date for the beginning of the relevant period is December 5, 1994, the end of the relevant period for the statute of repose was December 5, 2000, six years later. Therefore, each of Ledcor's claims must have accrued within that term to satisfy the statute of repose.

EQUITABLE INDEMNITY

Ledcor argues that RCW 4.16.310 does not apply to its equitable indemnification claim because the claim did not arise from construction problems but from Ledcor's payment of a debt rightfully Freeman's. Ledcor also argues that this claim accrued when Parkridge commenced the underlying action. We disagree with both contentions.

Ledcor relies on Central Washington Refrigeration, Inc. v. Barbee,¹⁵ to...