Washington Court of Appeals Signals Change in Notice Requirements Under Construction Contracts

14037102660_da39bb71f9_oDivision III acknowledges hairline cracks in Mike M. Johnson rule.

“Close enough” only counts in horseshoes and hand grenades, and nowhere is that more true than when Washington courts are interpreting notice and claim procedures in construction contracts. As a result of the Washington State Supreme Court’s 2003 decision in Mike M. Johnson, Inc. v. Spokane County, Washington follows a rule of uniquely strict contract construction, whereby a contractor’s failure to follow exactly any proscribed notice and claim provision of the contract can doom the contractor’s later claims for extra work, even if the owner had actual notice of the claims and was not prejudiced by the failure to follow all claims procedures perfectly. The opinion has been oft-criticized, and there have even been attempts to overturn it legislatively, but Mike M. Johnson remains good law, and a trap for unwary contractors. Continue Reading

Individual Laborers Granted Lien Rights by Court

framing contractorIt has been generally assumed that only licensed contractors were entitled to file lien claims in the state of Washington for work they performed on real property for which they were not paid in full.1 That assumption has now been discarded in the recent decision Guillen v. Pearson, decided August 16, 2016.

In Guillen v. Pearson, ABSI Builders, Inc., a framing subcontractor, was hired on an apartment construction project by the project’s owner and general contractor, Milestone at Wynnstone, LLC. When ABSI did not pay its laborers’ wages, five ABSI laborers filed a construction lien against Milestone’s property and then sued to foreclose the lien. Milestone argued the traditional view that only licensed contractors that contract to perform work on real property have construction lien rights under RCW 60.04.021, and that employees of such contractors do not. However, the Court broke with the traditional view and chose to interpret RCW 60.04.021 broadly under the plain meaning of the statute which used the words “any person furnishing labor.” Continue Reading

Isn’t One Trial Enough? Jury Award Reversed and Remanded for Insufficient Evidence of Damages in Construction Contract Claim.

Past_Due_BillsOn October 26, 2016, the Oregon Court of Appeals reversed a general judgment and money award in favor of a general contractor because (1) the general contractor had failed to support its claim for damages for bonding and insurance costs with sufficient evidence, and (2) the money award improperly included a contractual markup on costs that was not specified in the parties’ contract.  Big River Construction, Inc. v. City of Tillamook, 281 Or App 787, __ P3d __ (2016).  The court remanded the case for a retrial of damages. Continue Reading

Portland’s Construction Boom

Where the cranes arePortland is quickly joining the ranks of American cities with the most significant construction projects.

According to a report Friday from the Seattle Times, Portland now ranks seventh in the nation in the number of construction cranes—just behind San Francisco and Chicago, and ahead of larger cities ranging from Denver and Phoenix to Houston and Dallas. But while Portland rises in this development metric, it still lags behind Seattle, which leads every other city in the nation by 45 percent or more.

Washington State Sets Carbon Dioxide Emission Reduction Requirements for Major Sources

PulpMillToday the Washington State Department of Ecology adopted a new rule to limit carbon dioxide emissions from major sources.

Beginning in 2017, entities that emit more than 100,000 metric tons of carbon dioxide per year must reduce their emissions by 1.7 percent each year. Entities with lower emissions will be phased in over two decades.  Continue Reading

LUBA Decision Blocks Proposed Right 2 Dream Too Move to the Central Eastside

R2D2-3The City of Portland has been struggling for several years to find a permanent location for the Right 2 Dream Too (“R2DToo”) tent camp, currently located at the corner of NW 4th and Burnside. An August 30, 2016, decision by the Oregon Land Use Board of Appeals (“LUBA”) effectively blocks the latest solution.

The City had proposed moving R2Dtoo to a city-owned property in the Central Eastside industrial area zoned IGI and within a designated industrial sanctuary. The IGI zone generally prohibits residential uses, including group living, and expressly prohibits “mass shelters” and short-term housing.  Continue Reading

A Housing Price Slowdown in Portland? Not So Fast

Home SoldNational numbers released this morning show that home prices rose 5.1 percent year to year nationwide—although, according to The Wall Street Journal, “[p]rice growth did show some sign of slowing in the country’s largest cities.” But is this “slowing” being seen in Portland? It appears not.

Housing prices in the Portland area increased 12.6 percent from June 2015 to June 2016—a 147 percent higher rate of growth than seen nationally, and good for the fastest pace of growth across the top 20 markets (topping Seattle’s 11 percent growth and Denver’s 9.2 percent growth). Portland’s housing prices grew 1.6 percent just from May 2016 to June 2016. So much for a slowdown.

Opening the Door to Owner and General Contractor Liability Under Oregon’s Employer Liability Law

Open DoorGeneral contractors and other employers (even some owners) have greater exposure under Oregon’s Employer Liability Law (the “ELL”) to injured workers based on the recent Oregon Supreme Court decision in Yeatts v. Polygon Northwest Co. The ELL imposes liability on all “owners, contractors or subcontractors and other persons having charge of, or responsibility for,” work involving a risk or danger. ORS 654.305. The ELL also imposes liability on an “indirect employer,” such as an owner or contractor, for a subtier contractor’s worker’s safety on a jobsite if the indirect employer retains the right to control how risky activities are performed.

For the last 50-plus years before Yeatts, an owner or contractor could insulate itself from liability under the ELL by delegating site safety responsibility to subtier contractors, while still maintaining the right to inspect the safety procedures or requiring greater safety measures than those imposed by law. In other words, merely having the right to inspect the safety procedures or require additional safety measures did not mean that an owner or contractor “controlled” the risky activity, thereby subjecting it to liability as an “indirect employer.” Continue Reading

Lack of Evidence of Prior Use Not Fatal to Implied Easement Claim

motocross-1283197_640On August 10, 2016, the Oregon Court of Appeals issued a decision on an implied easement claim, finding that the lack of evidence regarding the use of the easement before the initial conveyance of the benefited property was not fatal to the claim. Dayton v. Jordan, 280 Or App 236 (2016)

In Dayton, the parties own abutting properties, with the northern property line of the Jordan parcel abutting the southern boundary line of the Dayton parcel. An east-west private road runs along the southern boundary of the Dayton parcel. Both Dayton and Jordan run ATV rental businesses on their respective properties, and both properties use the private road across the Dayton parcel to reach the dunes. Not surprisingly, there is friction between the two property owners with their similar business uses.  Continue Reading

Smelter Not Liable Under CERCLA as an Arranger for Disposal

TVA_phosphate_smelting_furnaceA Ninth Circuit panel reversed a district court’s denial of a smelter owner’s motion to dismiss, holding that the owner/operator of a facility that emits airborne hazardous substances cannot be held liable as an arranger for disposal under CERCLA.

The case involves a smelter owned and operated by Teck Cominco Metals, Ltd., and located about ten miles north of the U.S.-Canada border. The plaintiffs alleged that the smelter had emitted hazardous substances into the air that later fell onto the cleanup site, leading to the incurrence of response costs. Continue Reading

LexBlog