Jury must apportion fault to Indian tribe that is immune from suit

By John W. Schedler

Native American tribes and other entities that are not amenable to suit still may be held at fault in a tort claim, the Washington Court of Appeals recently held.

In Humes v. Fritz Cos., Inc., no. 53349-5-I (Jan. 31, 2005), Kenneth Humes worked for Shaffer Crane & Equipment as a crane operator. The Tulalip Tribe operated a casino near Marysville, Washington. The Tribe wanted containers in the casino parking lot moved to another location. The Tribe hired Shaffer Crane to provide a crane and operator, Humes. The Tribe hired Fritz Companies to provide a truck and driver, Joe Crowder.

Casino staff controlled the operation. They worked as “riggers,” directing the crane operator and the truck driver and ensuring that the load of containers was secured to the truck.

Humes successfully loaded most of the containers onto the truck that Crowder was operating. But when Humes was loading the last container onto the truck, Crowder drove away before the container was disconnected from the crane or secured to the truck. Because the container was still connected to the crane, the truck pulled the crane up off its wheels. Humes thought that the crane would topple and crush him. He jumped the cab of the crane to the ground. He suffered a fractured leg and other injuries.

Crowder. During discovery, it became clear that one cause of the accident was the casino staff’s failure to perform the rigging function properly. But the riggers worked for an Indian tribe that runs the casino, and tribes are considered sovereign nations that are immune from suit.

Because juries in negligence cases must apportion fault among all entities whose fault caused the accident, the Court of Appeals was required to decide whether a Native American tribe that was immune from suit nevertheless could be a “nonparty at fault” for the tort. If not, then Fritz, the truck company, could be liable for all of Humes’s damages, even though it would be held only partly at fault for the accident.

The Court of Appeals concluded that a tribe’s sovereign immunity does not preclude an allocation of fault to it. The court noted that in adopting several liability in 1986, the Legislature intended that defendants be liable for only their proportionate shares of the plaintiff’s damages. The purpose of the statute, RCW 4.22.070, was to end the practice of compelling a single, well-financed defendant to pay all of the damages that resulted mainly from the fault of other defendants who were less able to pay a judgment.

The Humes decision is consistent with what the Legislature tried to accomplish when it adopted this statute as part of the 1986 Tort Reform Act. The Court of Appeals wisely avoided plaintiffs’ attempt to undermine that legislative intent under the guise of “interpreting” this statute.

Implied warranty of habitability enforced despite disclaimer

By Eric S. Newman

A home builder can be liable for breach of the implied warranty of habitability even if the builder contractually disclaimed such liability, the Washington Court of Appeals has held.

In Burbo v. Harley C. Douglass, Inc., no. 22720-1-III (Feb. 8, 2005), James Burbo bought a newly built home from Douglass, the builder. As a condition of closing the sale, Douglass required Burbo to sign a contractor’s limited-warranty agreement. The agreement disclaimed liability for implied warranties, including habitability. It provided that even where the builder was liable for defects, the buyer’s only remedy was that the builder would repair the defect.

Burbo almost immediately experienced problems with the home, and Burbo reported them to Douglass. The foundation cracked, and Douglass made inadequate repairs. The driveway cracked, and Douglass refused to repair it. The roof leaked, and Douglass applied a temporary fix that he told Burbo was permanent. Snow came in through a defective seal around a skylight, and Douglass’s repairs of these conditions were ineffectual or made matters worse. The front door did not fit. Burbo’s engineering experts concluded that Douglass had violated the building code in several respects, including the roof installation, a structural column support, and other problems.

Burbo sued Douglass for breach of the implied warranty of habitability, fraudulent concealment, and violation of the Consumer Protection Act. Douglass moved for summary judgment, arguing that Burbo claimed at most simply poor workmanship, which does not render the house uninhabitable, and that the waiver of the implied warranty defeated Burbo’s claims. The trial court granted the motion and dismissed the action. Burbo appealed.

The Court of Appeals evaluated the limited warranty that disclaimed any implied warranty of habitability. The court noted that under prior Washington case law, the warranty of habitability arises by implication from the transaction itself and is independent of the terms of the sales contract. Washington law requires a disclaimer of such implied warranties to be (1) conspicuous, (2) known to the buyer, and (3) specifically bargained for. The court concluded that those elements were not met and held that the disclaimer was ineffective.

The Burbo court next considered Douglass’s argument that it did not breach the warranty of habitability because despite the claimed defects, the house was still fit for occupancy. The court concluded that a house did not have to be literally falling down before the implied warranty of habitability was breached, and it concluded that the wide assortment of defects at issue here could render it uninhabitable. The defects arose from bad construction that violated many aspects of the building code. Because this was a disputed question of fact for the jury, the trial court erred in dismissing the case on summary judgment.

The Court of Appeals then considered whether Burbo had raised issues of fact to defeat summary judgment of dismissal of his claim of fraudulent concealment. There was evidence that Douglass actually knew of the substandard and illegal quality of the construction. Douglass visited the house while it was being built and observed the construction practices. The Burbo court held that this was enough to defeat summary judgment on this claim, and the trial court erred in dismissing it.

The court also considered whether Burbo’s proof of a Consumer Protection Act violation was sufficient to go to a jury. The court held that the same facts that supported fraudulent concealment also showed “unfair or deceptive acts” under the CPA. The Act also requires proof of an impact on the public interest. The Court of Appeals found that proof here because the defective home was marketed to the public through the local multiple listing service.

Statute bars construction-defect claim against defunct corporate developer

By Gregory P. Turner

A condominium association may not sue a corporate developer for construction defects more than two years after the defendant corporation has dissolved, according to the Washington Court of Appeals.

In Ballard Square Condo. Owners v. Dynasty Const., no. 53806-0-I (Mar. 14, 2005), Dynasty was a developer and contractor that built Ballard Square, a 20-unit condominium, in 1992. Dynasty was a corporation and was administratively dissolved in 1995. Soon after construction was completed, homeowners observed water intrusion in many locations. After making an insurance claim in 1997, an architect examined the building and informed the homeowners that the building was suffering severe decay, and parts of it were at risk of imminent collapse. In October 2002, the homeowners sued Dynasty for breach of contract and other claims.

Dynasty moved for summary judgment because the corporate-dissolution statute and common law barred claims brought so late after the corporation had dissolved. The trial court granted the motion.

The homeowners appealed. The Court of Appeals addressed two issues. First, the court agreed that the two-year statute of limitations against dissolved corporations, RCW 23B.14.050, did not bar claims that arise only after dissolution.

Second, however, because that statute of limitations did not apply, the court followed common law in determining what limitation period did apply. The court held that Washington’s common law bars claims against a dissolved corporation once it has wound up its affairs.

Around The Firm

The Maritindale-Hubbell Law Directory has conferred an “AV” rating, its highest, on Ketia Berry Wick. An AV rating denotes both “very high to preeminent” legal ability and the highest ethical standards. Congratulations, Ketia!

Craig L. McIvor and Janine E. Leary won the jury trial of Ellis v. Connell, a medical-malpractice action. Plaintiff alleged that a gynecologist had adjusted an IUD improperly, causing infection that resulted in three surgeries and permanent injuries. After deliberating just 30 minutes, the jury returned a defense verdict. ... Alan M. Singer tried the auto-accident action Kumar v. DHL. Plaintiff was turning left at an intersection controlled by a traffic light. Plaintiff alleged that the green light in the truck’s favor had turned red before the truck entered the intersection. The truck driver contended that the light was still green when he entered the intersection. After deliberating just an hour, the jury returned a defense verdict. Alan also recovered $3,500 on a counterclaim for damage to the truck. ... Patricia K. Buchanan and Pamela J. DeVet defended Gambini v. DaVita, a six-day employment-discrimination trial heard in federal court. Plaintiff alleged seven claims against her former employer. Pat and Pam won summary judgment of dismissal of four of those claims; the other three went to trial. After less than an hour of deliberations, the jury unanimously found for the defense.

Steven G. Wraith won a favorable verdict in the five-day jury trial of Power v. Access Group, Inc. Plaintiff, a UPS package delivery person, claimed permanent neck and back injuries and sizeable wage loss after a roll-up door at the premises of Steve’s client hit him on the head. Plaintiff’s last settlement demand was $200,000. Plaintiff’s counsel asked the jury for $450,000. The defense offered $35,000 before trial. The jury returned a verdict of $21,000, less comparative fault of plaintiff of 15 percent. The net verdict for plaintiff was just $17,850, barely half the defense’s settlement offer. ... Philip B. Grennan successfully defended the underinsured-motorists arbitration of Palmer v. Transportation Ins. Co. before a three-arbitrator panel. Claimant suffered injuries to his neck, upper back, and shoulder in a rear-end auto accident on an Interstate 5 freeway offramp. He claimed that the injuries were permanent and affected his ability to work and enjoy golfing and other recreational activities. He sustained $10,000 in medical bills. Plaintiff demanded $125,000 in settlement before the arbitration. The defense offered $25,000. The arbitrators found $45,000 in total damages. After a setoff of $25,000 for the liability-insurance limits that claimant had recovered from the underinsured motorist’s liability insurer, the claimant received a net award of only $20,000, or $5,000 less than the UIM insurer’s settlement offer.

Michael A. Patterson has been elected Chair of the Board of Trustees of Gonzaga University for 2005-07. He has been a member of the university’s Board of Trustees since 1999. ... Mike Patterson and William R. Kiendl won summary judgment of dismissal in Phalan v. Eimers. Plaintiff was a fire commissioner in San Juan County who was charged with theft. Two fire chiefs learned of the arrest, investigated, and terminated plaintiff’s status as a voluntary emergency medical technician. Plaintiff sued the fire chiefs, alleging that they improperly obtained arrest reports and witness statements from the sheriff and the prosecutor. The court agreed with Mike and Bill that plaintiff had failed to prove that the fire chiefs had obtained “nonconviction data” relating to plaintiff and that the arrest reports were available to the public. ... Joel E. Wright and Bill Kiendl won a motion to dismiss Begoun v. Cosco International, a federal copyright-infringement action. They defended an Atlanta lawyer who plaintiff alleged had interfered with a settlement agreement regarding the alleged infringement by the lawyer’s client. The court dismissed the action because it lacked personal jurisdiction.