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Recent Rulings Jager Law is Working On |
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Discovery Rule; Retroactive Use of Statue July 19, 2005 We recently filed a petition for review with the Washington State Supreme Court to eliminate application of the discovery rule to breach of contract cases and to retroactively apply RCW 4.16.326 (statutory rejection of the application of discovery rule in construction defect cases). In 1000 Virginia Limited Partnership v. Schmidt, No. 54485-3-I, plaintiff acted as its own general contractor for a low income housing facility which it holds to this day. The certificate of substantial completion was issued in 1992. Since 1914 the Washington Supreme Court has held that a cause of action based on breach of contract accrued when the contract was violated, not when the violation is discovered. Under this rule the plaintiff's claim was time barred the later of 6 years after substantial completion or termination of services. This world changed in 2002 when the Court of Appeals, in Architectonics v. Khorram, 111 Wn. App. 725, 45 P.3d 1142 held, for the first time, that the discovery rule applied to breach of contract cases. This decision allowed this plaintiff to file suit in 2002, alleging it did not discover and could not have discovered the defects until 1997 or 1998, even though the building experienced leaks by January of 1994. Shortly after the rule announced in the Architectonics case, the legislature enacted RCW 4.16.326 stating that the discovery rule was not to apply in construction defect cases. Our trial court dismissed the case against our client, the stucco subcontractor. The Court of Appeals however reversed and held that the discovery rule applied to breach of contract cases and held that whether the claim was timely filed is a question of fact. The Court of Appeals also refused to apply RCW 4.16.326 to bar the lawsuit, holding that nothing indicated the legislature intended for the statute to apply retroactively. It further held that RCW 4.16.326 was a new statute of limitation, therefore the new period of limitation started to run from the effective date of the statute. Briefing for the Court of Appeals work is available to our friends. The briefing for the Supreme Court argument is in process. |
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