Vern J. Oja and Associates v. Washington Park Towers, Inc.

• Decision Date: 19 April 1976
• Docket Number: No. 2984--I,2984--I
• Citation: 15 Wn.App. 356,549 P.2d 63
• Court: Washington Court of Appeals
• Parties: VERN J. OJA & ASSOCIATES, a partnership, Respondent, v. WASHINGTON PARK TOWERS, INC., Appellant, Cawdrey & Vemo, Inc., and Manson Construction & Engineering Co., Respondents, Larsen Construction Company, Inc., et al., Defendants.

Page 356

15 Wn.App. 356

549 P.2d 63

VERN J. OJA & ASSOCIATES, a partnership, Respondent, v. WASHINGTON PARK TOWERS, INC., Appellant Cawdrey & Vemo, Inc., and Manson Construction & Engineering Co., Respondents Larsen Construction Company, Inc., et al., Defendants.

No. 2984--I.

Court of Appeals of Washington, Division 1.

April 19, 1976.

Murray, Dunham & Waitt, Robert K. Waitt, Barry M. Johnson, Seattle, for appellant.

Schweppe, Doolittle, Krug, Tausend, Beezer & Beierle, Warren A. Doolittle, Seattle, Donald L. Logerwell, Seattle, for respondent.

FARRIS, Judge.

The Lakeview Lanai, a 42-unit apartment building located in Seattle, was constructed in 1959 and purchased by Oja & Associates in 1964. Thereafter, Washington Park Towers, Inc., as owner of property adjacent to the Lakeview Lanai, entered into a contract with Cawdrey & Vemo, Inc. for the construction of a condominium apartment building. Cawdrey & Vemo engaged Manson Construction & Engineering Company to drive the pilings necessary to support the planned building. Manson worked from August 1966 to September 1966. There was no construction activity at the site from September 1966 until October 1967. During this period, Cawdrey & Vemo and Manson were relieved of their responsibilities. Work resumed on the project in the fall of 1967 and Larsen Construction Company completed the pile driving between approximately November 1967 and April 1968. The building was completed in 1969. Oja & Associates filed this action on March 2, 1971, to recover for damage allegedly sustained by the Lakeview Lanai as a result of the pile driving and other construction activity associated with the condominium apartment building. Washington Park Towers, Cawdrey & Vemo and Manson Larsen, Fifth West, Inc., and R. C. Hedreen Co., Inc., were named as defendants. The claims against Cawdrey & Vemo and Manson were dismissed with prejudice on motions for summary judgment. On April 17, 1974, judgment was entered on a jury verdict against Washington Park Towers for $73,100. In a special verdict, the jury attributed 70 percent of the damage to the pile driving which occurred between August and September of 1966 and the remaining 30 percent to the pile driving which occurred between November 1967 and April 1968. Washington Park Towers appeals; Oja cross-appeals.

Washington Park Towers first assigns error to the refusal of the court to dismiss the cause on the ground that it is barred by the statute of limitations. Both parties agree that the 3-year limitation of RCW 4.16.080 applies, ¹ but disagree as to the date that the cause of action accrued under RCW 4.16.010.

Washington Park Towers contends that the cause of action accrued immediately following the commencement of pile driving activities in August of 1966 when the first damage occurred and Oja had a right to apply to the courts for relief. See 51 Am.Jur.2d Limitation of Actions § 109 at 681 (1970); Jones v. Jacobson, 45 Wash.2d 265, 269, 273 P.2d 979 (1954). It is also argued that, at the latest, the cause of action accrued in September of 1966 when the initial pile driving ceased and the first substantial damage had occurred. See Cheskov v. Port of Seattle, 55 Wash.2d 416, 420--21, 348 P.2d 673 (1960). Thus, Washington Park Towers concludes that because the damage which resulted from the November 1967 to April 1968 pile driving was not different in kind for greater in degree than the damage which resulted from the initial pile driving, the action for damages for Both pile driving periods accrued, at the latest, in September of 1966 and is barred. See Cheskov v. Port of Seattle, supra at 420--21, 348 P.2d 673. Finally, even assuming that the pile driving activities constituted separate and distinct situations with a different cause of action arising from each, it is argued that the damages awarded should be reduced by 70 percent because the action on the initial pile driving is barred by the statute of limitations.

In response, Oja first refers to its complaint which alleges that the damage to the Lakeview Lanai was caused by the construction activities engaged in by Washington Park Towers in building its condominium apartment building. It is submitted that the construction activity was of a continuing nature and that Oja's claim did not accrue until the building was completed in 1969. See Gillam v. Centralia, 14 Wash.2d 523, 529--30, 128 P.2d 661 (1942). See also Papac v. Montesano, 49 Wash.2d 484, 488--89, 303 P.2d 654 (1956). At the earliest, Oja submits that the accrual date for the action is April 1968 when all of the pile driving had been completed.

We have reviewed the Gillam, Papac and Cheskov decisions. While they all involve situations in which a governmental entity has damaged real property without first going through with a condemnation proceeding, that distinction is not determinative here. The general rule which emerges from those decisions is that if substantial damage has already occurred at the time the project is completed, the action accrues at that point. Papac v. Montesano, supra at 488, 303 P.2d 654, Citing Gillam v. Centralia, supra. However, if the damage has not occurred when the project is completed the action acrues when the first substantial injury is sustained thereafter. Papac v. Montesano, supra at 488, 303 P.2d 654. The pile driving activity here was all a part of the construction of the condominium apartment building. Although the jury found that 100 percent of the damages alleged flowed from the pile driving activity as a whole (even though it assigned percentages to each time period), nothing in the record persuades us that we should deviate here from the general rule that the cause of action accrued when the building was completed. Thus, since the complaint was filed within 3 years of the 1969 completion date, the statute of limitations does not bar Oja's action.

In view of this holding it is unnecessary to adjudicate the contentions by Washington Park Towers that (1) the diary of a certain witness is a physical fact which conclusively establishes that the Lakeview Lanai sustained no noticeable or continued damage after October 31, 1966, and (2) the trial court erred in refusing to grant its motion for a judgment n.o.v. or, in the alternative, a new trial on the ground that the proof offered by Oja relating to the termination date of the second period of pile driving was legally inadequate.

Washington Park Towers next argues that if the dismissal of the actions against Cawdrey & Vemo and Manson Construction & Engineering Company was proper on the ground that the statute of limitations had expired, then it should also have the benefit of the statute of limitations shield. The basis of the argument is the general rule, as phrased by Washington Park Towers, that 'a principal cannot be held derivatively responsible when the agent has been discharged.' Brief for Appellant at 17. See Doremus v. Root, 23 Wash. 710, 717, 63 P. 572 (1901). We disagree. The rule concerning derivative liability is more complex than as expressed by Washington Park Towers:

A valid judgment on the merits and not based on a personal defense, in favor of a person charged with the commission of a tort or a breach of contract, bars a subsequent action by the plaintiff against another responsible for the conduct of such person if the action is based solely upon the existence of a tort or breach of contract by such person, whether or not the other person has a right of indemnity.

Restatement of Judgments § 99 at 493 (1942). Here, the dismissal of Oja's claims against the two construction companies was based upon the statute of limitations rather than the merits. Further, under the facts and law of this case, the statute of limitations defense was uniquely personal to the two construction companies. We therefore reject the contentions by Washington Park Towers that (1) the judgment against it should have been reduced by 70 percent since the statute of limitations had run against that portion of the damage, and (2) the court erred in instructing the jury that the acts of the contractors employed by Washington Park Towers were in fact the acts of Washington Park Towers.

Washington Park Towers next assigns error to the refusal of the court to grant its motion for a mistrial and new trial on the ground that certain statements were improperly made to the jury regarding pretrial settlement discussions. Because Washington Park Towers had anticipated that a partner in Oja & Associates would attempt to comment during his testimony on certain alleged offers of settlement, proceedings were had in the absence of the jury during which the trial court specifically told the witness that any pretrial offers of settlement were not to be brought into evidence. Statement of facts, p. 267. Following further discussion outside the presence of the jury, the witness asked the attorney for Oja & Associates whether he was permitted to mention settlement discussions and was informed that they were not to be discussed. Statement of facts, p. 271--72. The following occurred a short time later in the presence of the jury:

Q Now, following that meeting did you have the impression, sir, that the damage to the Lakeview Lanai would ultimately be taken care of by Washington Park Towers, Inc.?

A That was my impression, yes.

MR. CROWDER: Your Honor, I have got to object to both the question and the answer along the lines that we discussed while the jury was out. I think it is clearly inadmissible.

THE COURT: Sustained.

Washington Park Towers permitted the questioning to continue; the following occurred shortly thereafter:

Q During the first of the pile driving in 1966 did you think you could have increased the rents at that time?

A I just don't remember off-hand the exact dates. Of course, there was a lot of inconvenience with the construction there that you have to put up with before the building began to crack, and the floors and walls, and...