Wash. State Stadium Pfd v. Huber, Hunt

• Decision Date: 05 March 2009
• Docket Number: No. 81029-0.,81029-0.
• Citation: 202 P.3d 924,165 Wn.2d 679
• Court: Washington Supreme Court
• Parties: WASHINGTON STATE MAJOR LEAGUE BASEBALL STADIUM PUBLIC FACILITIES DISTRICT, a special purpose district of the state of Washington, and The Baseball Club of Seattle, LP, a Washington limited partnership, Appellants, v. HUBER, HUNT & NICHOLS-KIEWIT CONSTRUCTION COMPANY, a Washington joint venture; Hunt Construction Group, Inc., a foreign corporation; and Kiewit Construction Company, a foreign corporation, Respondents/Cross Appellants.

202 P.3d 924

165 Wn.2d 679

WASHINGTON STATE MAJOR LEAGUE BASEBALL STADIUM PUBLIC FACILITIES DISTRICT, a special purpose district of the state of Washington, and The Baseball Club of Seattle, LP, a Washington limited partnership, Appellants, v. HUBER, HUNT & NICHOLS-KIEWIT CONSTRUCTION COMPANY, a Washington joint venture; Hunt Construction Group, Inc., a foreign corporation; and Kiewit Construction Company, a foreign corporation, Respondents/Cross Appellants.

No. 81029-0.

Supreme Court of Washington, En Banc.

Argued March 13, 2008.

Decided March 5, 2009.

Stephen Michael Rummage, Zachary Tomlinson, John Hitchcock Parnass, Davis Wright Tremaine LLP, Seattle, WA, for Appellants.

David Clark Groff Jr., Michael Porter Grace, Groff Murphy PLLC, Richard Miles Stanislaw, Christopher Wright, Stanislaw Ashbaugh LLP, Theodore Alexander Sheffield, Lane Powell PC, Richard Lawrence Martens, Steven A. Stolle, Martens & Associates PS, Seattle, WA, for Respondents/Cross-Appellants.

Douglas R. Roach, Ahlers & Cressman PLLC, Seattle, WA, Amicus Curiae on behalf of Associated General Contractors of Washington.

STEPHENS, J.

¶ 1 The Washington State Major League Baseball Stadium Public Facilities District (PFD) and the Baseball Club of Seattle, LP (Mariners) appeal an order granting summary judgment in favor of Huber, Hunt & Nichols-Kiewit Construction (HK) on their construction defect claims. The appellants contend their action is "for the benefit of the state" and thus exempt from the six year contract statute of limitations under RCW 4.16.160. Br. of Appellants at 19. HK filed a conditional cross-appeal against subcontractors Long Painting, Inc., and Herrick Steel, Inc., contending that if the summary judgment order dismissing the claims of the PFD and the Mariners is reversed, reversal of the order dismissing HK's third party claims against Long Painting and Herrick Steel is warranted. Long Painting in response argues that HK's appeal regarding the dismissal of HK's third party claims is frivolous and asks for attorney fees under RAP 18.9. We reverse and remand for further proceedings.

FACTS

¶ 2 The PFD, a Washington municipal corporation, developed and owns Safeco Field, home field of Major League Baseball's Seattle Mariners. The Mariners perform maintenance and repair of Safeco Field. By agreement, the PFD must reimburse the Mariners for "Unanticipated Capital Costs" incurred in making repairs to the facility. Clerk's Papers (CP) at 201.

¶ 3 HK is a joint venture composed of two of the nation's largest construction companies, Hunt Construction Group and Kiewit Construction Company. On May 6, 1996, the PFD executed a contract (Construction Agreement) with HK, defining terms and obligations in connection with the construction of Safeco Field.

¶ 4 Section 07252 of the Construction Agreement required HK to apply an intumescent fire protection coating system to Safeco Field's exposed structural steel beams and columns. The coating system specifications required HK to engage in a three-layer application process: (1) apply a primer to the raw steel at the place of fabrication, (2) spray the intumescent product on the beam or column, and (3) paint the beam or column.

¶ 5 General contractor HK hired subcontractors Long Painting and Herrick Steel to participate in parts of the application process. Herrick Steel was hired for surface preparation, prime painting, and installation of steel components. Long Painting was hired for application of the intumescent coating on the steel structural members. HK achieved substantial completion of the Construction Agreement on July 1, 1999.

¶ 6 In 2005, the Mariners discovered a catastrophic failure in the intumescent coating system. Following an extensive investigation, the Mariners concluded that the system had failed between the primer layer and intumescent coating layer and the failure resulted from HK's use of an improper primer that was incompatible with the overlain intumescent coating product. As a result of HK's error rather than normal wear and tear or exhaustion of useful life, the intumescent product separated from the beam or column.

¶ 7 The coating failure appeared first as visible blisters. The Mariners attempted to repair these blisters, but removal of a blister routinely caused the intumescent product to fall off the entire column or beam. The Mariners advanced more than $2.46 million to pay for the first phase of repairs, which covered approximately 29,600 square feet of structural steel beams and columns. Additional repair costs have accumulated since the first phase of repairs.

¶ 8 On August 14, 2006, the PFD and the Mariners sued HK, seven years after substantial completion of the Construction Agreement by HK. The PFD and the Mariners alleged that HK breached the Construction Agreement by failing to execute the construction at Safeco Field in accordance with the contract specifications and sought to recover all costs and expenses associated with repairs of the defective work.

¶ 9 On October 13, 2006, HK filed its answer, and among many defenses, HK alleged that the claims of the PFD and Mariners were "time barred by the Statute of Limitations." CP at 9, 12. HK also asserted third party claims against subcontractors Long Painting and Herrick Steel. On February 23, 2007, HK brought a motion for summary judgment as to all claims asserted by the PFD and the Mariners contending that the PFD and the Mariners failed to file their complaint within the six year statute of limitations for breach of contract claims.

¶ 10 On March 23, 2007, the trial court entered an order granting HK's motion for summary judgment against the PFD and the Mariners, also dismissing the third party claims by HK against Long Painting and Herrick Steel.

¶ 11 On April 9, 2007, the PFD and the Mariners appealed the summary judgment order to Division One of the Washington State Court of Appeals. On April 19, 2007, HK cross-appealed to the Court of Appeals the dismissal of HK's third party claims in the event that the Court of Appeals reversed the trial court's summary judgment order. In response, Long Painting in its briefing asked for attorney fees against HK for filing a frivolous appeal. Both appeals were transferred pursuant to RAP 4.4 from Division One of the Court of Appeals to this court.

ANALYSIS

¶ 12 First, we address whether summary judgment is appropriate for the claims by the PFD and the Mariners against HK. Second, we examine the third party claims of HK against Long Painting and Herrick Steel.

¶ 13 On review of a summary judgment order, we engage in the same inquiry as the trial court. Korslund v. DynCorp Tri-Cities Servs., Inc., 156 Wash.2d 168, 177, 125 P.3d 119 (2005). All facts and reasonable inferences are considered in a light most favorable to the nonmoving party, while all questions of law are reviewed de novo. Berger v. Sonneland, 144 Wash.2d 91, 102-03, 26 P.3d 257 (2001). Summary judgment is appropriate only when there are no disputed issues of material fact and the prevailing party is entitled to judgment as a matter of law. CR 56(c).

PFD and the Mariners v. HK

¶ 14 HK contends that the claims of the PFD and Mariners accrued no later than July 1, 1999, the date of substantial completion. CP at 174-76. The applicable limitations period for contract claims is six years. RCW 4.16.040. Thus, HK contends that summary judgment was proper because the PFD and Mariners filed their complaint on August 14, 2006, more than seven years after substantial completion. CP at 1-8.

¶ 15 The PFD and Mariners respond that summary judgment was improper because their breach of contract action was brought "`for the benefit of the state'" and is thus exempt from the six year statute of limitations on contract actions. Br. of Appellants at 19. They rely on RCW 4.16.160, which states:

The limitations prescribed in this chapter shall apply to actions brought in the name or for the benefit of any county or other municipality or quasimunicipality of the state, in the same manner as to actions brought by private parties: PROVIDED, That, except as provided in RCW 4.16.310,[¹] there shall be no limitation to actions brought in the name or for the benefit of the state, and no claim of right predicated upon the lapse of time shall ever be asserted against the state: AND FURTHER PROVIDED, That no previously existing statute of limitations shall be interposed as a defense to any action brought in the name or for the benefit of the state, although such statute may have run and become fully operative as a defense prior to February 27, 1903, nor shall any cause of action against the state be predicated upon such a statute.

This provision reflects a facet of sovereign immunity under the old English common law doctrine, "nullum tempus occurrit regi," meaning "no time runs against the king." Sigmund D. Schutz, Time to Reconsider Nullum Tempus Occurrit Regi—The Applicability of Statutes of Limitations Against the State of Maine in Civil Actions, 55 Me. L.Rev. 373, 374 (2003).

¶ 16 This court in Washington Public Power Supply System v. General Electric Co., 113 Wash.2d 288, 295, 778 P.2d 1047 (1989) (WPPSS) determined that when a municipality brings an action that arises out of the exercise of powers traceable to the State's sovereign powers delegated to the municipality, the municipality as an agent of the State is bringing the action "for the benefit of the state" within the meaning of RCW 4.16.160. RCW 4.16.160 exempts a municipality from a statute of limitation in this circumstance. WPPSS, 113 Wash.2d at 295, 778 P.2d 1047.

¶ 17 The "for the benefit of the state" language in RCW 4.16.160 is properly understood to refer to the character or nature of municipal conduct rather than its effect. WPPSS, 113 Wash.2d at 293, 778 P.2d 1047. The only inquiry is whether the municipal action arises from an exercise of powers traceable to delegated sovereign state powers or whether such action is proprietary and...