legal: Washington’s Supreme Court Holds That Tear-Out Damage Is Property Damage Under Contractors’ and Developers’ CGL Policies - 10/23/08 09:47 AM
For many years, Washington attorneys on all sides of the insurance debate have disagreed over the extent to which CGL policies covering “property damage” provide coverage to non-damaged work requiring tear-out and replacement as a result of underlying damaged work.  Today, in its decision in Mutual of Enumclaw v. T&G Construction Co., Inc.,  ___ Wn.2d ___ (2008), the state’s Supreme Court held that tear-out is covered property damage under a CGL policy.
The case arose when the Villas at Harbour Pointe Owners Association sued the project’s developer for construction defects, including water intrusion and resulting damage, at the Villas at Harbour … (0 comments)

legal: Surviving Liability of Dissolved LLCs: Part 4 - 09/04/08 10:22 AM
 
Regardless of the method or date of dissolution and cancellation of an LLC, individual members remain personally liable for actions that constitute grounds to pierce the corporate veil.  In other words, termination of the LLC generally does not affect – either positively or negatively – the personal liability of its members.
 
 
However, Washington Law does limit somewhat the personal liability of members conducting a proper winding-up.  RCW 25.15.300 provides that, where an LLC has been properly wound-up and cancelled pursuant to that statute, including providing for all of the LLC’s known liabilities, the members of the LLC cannot … (1 comments)

legal: Surviving Liability of Dissolved LLCs: Part 3 - 08/11/08 11:10 AM
A member-dissolved LLC is different, as the court in Emily Laneobserved. There, the the members dissolved the LLC, wound it up, and ten days after dissolution the members cancelled the LLC. It was not until eight months after the dissolution that the HOA filed suit. The court of appeals held that the rule in Chadwick and Maplecourtcontrolled, and the LLC could be sued for three years but it could not assert claims against subcontractors.The lack of standing to sue in Emily Lane arises out of similar statues as the liability in the Chadwick and Maplecourt decisions with only minor variations. Where an LLC is dissolved by its members, the members then … (0 comments)

legal: Surviving Liability of Dissolved LLCs: Part 2 - 08/01/08 05:58 AM
In Washington, where an LLC is administratively dissolved by the Secretary of State, the LLC is provided with a period of two years in which it may apply to be reinstated. RCW 25.15.290. If no application for reinstatement is filed within those two years, the Secretary of State “shall” cancel the certificate of formation. Id. Once the certificate of formation is cancelled, an LLC is no longer a separate legal entity. RCW 25.15.070. Thus, according to the recent Division I decisions, an LLC does not have standing to bring claims after it has been cancelled, two years after dissolution. Nevertheless, it can … (0 comments)

legal: Surviving Liability of Dissolved LLCs - 07/25/08 11:51 AM
In 2007, Division 1 of the Washington Court of Appeals decided three cases that may have significant ramifications regarding the continuing liability of single-project LLCs. These cases are: (1) Chadwick Farms Owners Ass’n v. FHC, LLC, 139 Wn. App. 300, 160 P.3d 1061 (2007); (2) Maple Court Seattle Condo. Ass’n v. Roosevelt, LLC, 139 Wn. App. 257, 160 P.3d 1068 (2007); (3) Emily Lane Homeowners Ass’n v. Colonial Dev., L.L.C., 139 Wn. App. 315, 160 P.3d 1073 (2007). These cases hold that a dissolved and cancelled developer-LLC has no standing to sue its contractors, but that due to recent revisions in … (0 comments)

legal: Ninth Circuit Holds That Substandard Construction Absent Intentional Breach Constitutes An “Occurrence” Under Washington Law - 07/16/08 04:16 AM
In October 2006, the trial court issued its order in Mid-Continent Casualty Co. v. Williamsburg Condominium Association (unpublished opinion), holding that defective construction is not an “occurrence” triggering coverage under a CGL policy.  Recently, the Ninth Circuit Court of Appeals overturned this decision to hold that it is. 
Williamsburg arose when the Williamsburg Condominium Association (the “HOA”) sued the developer of the project for defective construction, breach of Washington’s Condominium Act, and other claims.  In turn, the developer sued the general contractor, Titan, and Titan tendered defense and indemnity to its insurance company, Mid-Continent Casualty Company.  The matter settled, and Mid-Continent … (0 comments)

legal: Agents: Many Washington State Builders Miss Out On New Protections From Construction Defect Claims - 07/09/07 05:11 AM
    Many Washington State builders, particularly in the single-family home market, are failing to take advantage of recent changes to Washington law regarding construction defect claims.  Specifically, these builders are failing to include in their purchase and sale agreements a notice to homebuyers that may prevent that homebuyer from commencing a construction defect lawsuit until after the homebuyer has complied with several statutory notice requirements that aim to provide the builder with an opportunity to cure the alleged defects.
     RCW 64.50, the Construction Defect Claims Act, became effective in 2002 at the instance of the construction industry.  The law aims … (4 comments)

legal: Washington Enacts First-Party Insurance Legislation - 06/26/07 11:29 AM
Washington has enacted new legislation governing actions against insurers in the first-party context.  One common form of first-party insurance is standard property insurance coverage.  The new law, known as the Insurance Fair Conduct Act, has several key features:
The IFCA codifies the rule long accepted in Washington that an insurer may not unreasonably deny a first-party insurance claim.The IFCA also codifies the long-standing rule in Washington that, where the claim is unreasonably denied, the insured may sue to recover actual damages, including attorney fees and costs.  In other words, the damages in such a lawsuit against the insurer are not limited to … (1 comments)

legal: Washington Supreme Court Decides Form 17 Case Holding No Cause of Action for Negligent Misrepresentation - 04/20/07 09:27 AM
            In March, the Washington State Supreme Court released an important decision involving a seller’s liability for failure to disclose problems with a home’s septic system on a Form 17.  The Court held that residential buyers have no cause of action against a seller for negligent misrepresentation based upon inaccuracies in the Form 17.
 
            The case arose when Ms. Bull sold her home to the Alejandres.  The home utilized an on-site septic system, and the year before the sale, Ms. Bull noticed soggy ground in the yard over the system.  She had the tank pumped and emptied, and a … (5 comments)

legal: Lacey Homeowners Win Supreme Court Fight Over Tree Removal On Their Property - 02/12/07 09:10 AM
On February 8, 2007, the Washington State Supreme Court unanimously held that a Lacey ordinance regulating tree removal on “undeveloped” and “partially developed” property did not apply to homeowners removing trees in their backyard.
 
The Sleasmans live in a 1,967 square foot, single family residence on .29 acres in Lacey, Washington.  Soon after cutting down eighteen trees on their property, they were notified by the City of Lacey that they violated a Lacey code by removing the trees without a permit.  The Sleasmans were assessed a fine of $16,861, the trees’ appraised value.
 
The code prohibited the removal of … (2 comments)

legal: Why Developers May Consider Registering As Contractors When Acting As General Contractor - 02/05/07 05:05 AM
In general, an owner of property in Washington does not have to register as a contractor when making improvements to that owned property.  However, developers may have to register as a contractor in certain situations.  Here's why.
RCW 18.27.020 requires that: “Every contractor shall register with the department.” Failing to register is a misdemeanor.  A contractor may be either a “contractor” or a “general contractor.”   
The statute defines a contractor in relevant part as follows:
Any person, firm, or corporation who or which, in the pursuit of an independent business undertakes to…construct, for another, any building…or other structure, project, development, … (1 comments)

legal: Liability for Breach of Contract for Failure to Procure Insurance - 01/30/07 06:02 AM
A Division 1 Court of Appeals opinion released last week has determined that a county that promises to procure insurance for its contractor may be liable to the contractor for breach of contract if the county fails to procure that insurance.  However, the contractor must demonstrate that the insurance procured would have covered the damage claimed.
 The issue in Frank Coluccio Construction Company, Inc. v. King County, 2007 WL 137633 (Wn. App. 2007) arose when King County hired Frank Coluccio Construction Company (Coluccio) as a general contractor for a public works project involving construction of a small utility tunnel under the … (0 comments)

legal: Washington Supreme Court Abandons Doctrine of Completion and Acceptance - 01/22/07 02:40 AM
In Davis v. Baugh Industrial Contractors, Inc., the Washington State Supreme Court abandoned the doctrine of completion and acceptance, which shields contractors from certain liability for negligent work after that work has been completed and accepted by the property owner.
 
The case arose when Baugh, through its subcontractor, installed underground piping at a processing facility.  The work was accepted by the owner, and approximately three years later, a leak in the piping caused a pond to form.  An employee of the owner was killed trying to repair the work, and the employee’s estate filed a negligence action against the contractor.  … (2 comments)

legal: State Supreme Court Holds That RCW 18.27 Provides Attorney Fees Only In Actions Against Contractor’s Bond, Not Contractor - 01/15/07 04:57 AM
On December 28, 2006, the Washington State Supreme Court decided in Cosmopolitan Engineering Group, Inc. v. Ondeo Degremont, Inc. that the state’s registration of contractors act, RCW 18.27, provides for attorney fees for the prevailing party in an action against the bond, but not in an action against the contractor.
The case arose when Miller Brewing Company hired Ondeo Degremont, Inc., to design an onsite wastewater treatment facility, and other development work, for its brewery in Tumwater, Washington. Ondeo subcontracted with Cosmopolitan Engineering Group, Inc. for engineering services.
Cosmopolitan was not paid for all of its services. Cosmopolitan filed a complaint … (0 comments)

legal: Compliance with Condo Act Renovation Requirements by Apartments and Conversions - 01/09/07 03:50 AM
In years past, the construction industry saw a wave of lawsuits arising out of water intrusion damage to condominiums resulting from improperly designed or constructed siding systems.  In response, the Washington legislature imposed a number of testing and inspection requirements affecting “multiunit residential buildings.”  
 
The testing and inspection requirements are triggered when applying for a building permit for new construction, or a permit for exterior renovation of a building enclosure if the cost of that work is more than five percent of the assessed value of the building.  The applicant must submit design documents, including subsequent changes, signed by … (4 comments)

legal: Property Insurance After Storms and Other Disasters - 12/18/06 11:02 AM
On Thursday night and early into Friday morning, Western Washington was hit with one of the worst wind storms in the region’s history. Puget Sound Energy reported almost one million customers without power, and despite round-the-clock repairs by approximately 350 crews from nine different states and Canada, power has been restored to less than half of their customers. The damage, however, goes beyond power outages. Many homes and businesses have sustained varying degrees of damage from fallen and uprooted trees. Thus, property insurance will play a major role in repairing and rebuilding after the storm.
Like any other agreement, property insurance … (0 comments)

legal: Supreme Court Rules That Condominium Homeowner’s Association Cannot Sue Developer More Than Two Years After Developer’s Dissolution - 12/08/06 09:30 AM
The Supreme Court recently ruled in Ballard Square Condominium Owners Association v. Dynasty Construction Company that a 2006 amendment to Washington’s laws regarding lawsuits against dissolved businesses applies retroactively to bar lawsuits initiated prior to the law’s effective date.
Ballard Square arose when a condominium homeowner’s association filed suit against the developer alleging water intrusion damage caused by, among other things, defective building siding.  The developer corporation had dissolved in October of 1995, shortly after sale of the last Ballard Square unit, but the association did not discover the damage until 1996 and 1997, and did not file suit until October … (3 comments)

 

Devon Thurtle

Kirkland, WA

More about me…

Heffernan Law Firm

Address: 1201 Market Street, Kirkland, WA, 98033

Office: (425) 284-6250

Fax: (425) 861-6969

News, tips, and tricks from the attorney's point of view.


Links

Archives

RSS 2.0 Feed for this blog