Six-year limitation bars claims against subcontractor

By Timothy D. Shea

The six-year statute of repose applies to bar to a general contractor's untimely breach-of-contract claims against its subcontractor, the Washington Court of Appeals recently held.

In Harmony at Madrona Park Owners Assn. v. Madison Harmony Dev., Inc., a condominium homeowners’ association sued the condominium developer, Madison Harmony Development, alleging construction defects. Madison brought a third-party complaint against the Ledcor Industries, the general contractor, in 2002. Ledcor brought a fourth-party complaint against several subcontractors. Ledcor then settled with the developer. On November 30, 2004, Ledcor amended its fourth-party complaint to add more subcontractors to the suit, including Serock Construction. Ledcor alleged that Serock breached its subcontract and failed to meet indemnification obligations that it owed to Ledcor.

Serock had subcontracted to complete exterior trim on 13 condominium buildings. The subcontract required that Serock’s work be done in a workmanlike manner and obligated Serock to defend and indemnify Ledcor from claims arising from work under Serock’s subcontract.

All other subcontractors settled with Ledcor before trial. After a bench trial, the trial court held that although Serock had breached its subcontract as to 11 buildings, the statute of limitations barred Ledcor’s claims as to four of the buildings. Nevertheless, the trial court held that Serock's indemnity obligation applied to those four buildings. The trial court awarded indemnification damages as to those four buildings and breach-of-contract damages to the other seven.

Serock appealed. It contended that the six-year statute of limitations barred all of Ledcor’s breach-of-contract claims, because the statute should have begun running on the date that Serock performed the defective work, or alternatively, when Serock stopped performance, rather than on the date of substantial completion of each building.