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Let the Good Times Toll?

Let The Good Times Toll?

House Bill 1131 Proposing Changes to Washington’s Statute of Limitations.

Washington land owners attempting to recover for property damage caused by construction work adjacent to their property may soon see a significant shift in how the statute of limitations applies to their claims.  Washington’s legislature is currently considering House Bill 1131 which would overturn the ruling by the Supreme Court in Oja v. Washington Park Towers, Inc., 89 Wn.2d 72, 569 P.2d 1141 (1977) in order to establish a new framework for interpreting the statute of limitations for claims arising out of “damage to real property resulting from construction, alteration, or repair on an adjacent property.”

Generally, a limitations period begins to run when a cause of action “accrues,” meaning the aggrieved party has suffered damage and has a right to seek recovery in court.  Claims may also be subject to the “discovery rule” which provides that a claim does not “accrue,” (and the limitations period does not begin) until the plaintiff discovers, or reasonably should have discovered, the facts giving rise to their cause of action.  In other words, the discovery rule “tolls,” or delays the beginning of the limitations period until the damage is discovered.

In Oja, the plaintiff alleged that the pile-driving and other construction activity on an adjoining lot caused damage to the plaintiff’s property, the Lakeview Lanai apartments.  From August to September 1966, the defendant property owners began developing their lot for the construction of a condominium apartment building.  During this time, the defendant retained a contractor to drive the pilings necessary to support the foundation of the new building.  However, from September 1966 to October 1967, no work was completed on the site.  Construction resumed on the project in the fall of 1967, and the pile driving work was completed between approximately November 1967 and April 1968.  The defendant’s entire project was completed in 1969.  Thereafter, the plaintiff filed suit on March 2, 1971 to recover for damage allegedly sustained on the Lanai property as a result of the pile driving and construction on the defendant’s property.

The primary issue before the Court was whether the plaintiff’s claims were barred by the three-year statute of limitations for damages to real property, Revised Code of Washintgon 4.16.080.  Ultimately, the Court held that the plaintiff’s cause of action “accrued” when the entire project was substantially completed, rather than when the pile-driving activities were completed.  The Court found that, although the plaintiff was aware that the pile-driving work had caused damage to the Lanai property before the project was substantially complete, the plaintiff “was entitled to wait until the completion of the construction project before filing a cause of action so that it might determine the full extent of the damages… A different rule would force a plaintiff to seek damages in installments in order to comply with the statute of limitations.”

In practical terms, the Court’s ruling has caused some concern for developers of large scale, long-term projects, such as highways.  In such cases, the total project could span many years, while only affecting an adjacent property for a short period of time.  Presumably, the Oja ruling stands for the proposition that even if a plaintiff’s property is damaged in the first year of construction, the property owner could postpone bringing their claims until the entire project is complete, which could be several years after the actual damage occurred.

House Bill 1131 seeks to directly overturn the Oja ruling, and adopt a new standard for claim accrual under the statute of limitations.  Specifically, the bill provides the following:

… [A]ctions for damage to real property resulting from construction, alteration, or repair on an adjacent property, whether alleging negligence, strict liability, trespass, or any other cause of action, must be commenced within the earlier of the following periods:

(a) Within three years after the property owner first discovered or reasonably should have discovered the damage; or

(b) Within three years after completion of the construction, alteration, or repair.

By limiting the period for claim accrual, the legislation would diminish a plaintiff’s ability to delay litigation until project completion.  Rather, once a property owner discovers, or reasonably should have discovered, evidence of damage to their property, their claims have accrued and the limitations period begins to run.

House Bill 1131 is currently being considered by the House Judiciary Committee, and a definitive vote on the bill will likely occur in April 2017.  If approved, this new standard could have a significant impact on the future of construction related real property litigation in Washington.

A complete copy of House Bill 1131 can be found at http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bills/House%20Bills/1131.pdf

Blog by: Michael Slater, Associate, Washington

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