416 P.3d 1286
Wash. Ct. App.2018Background
- BTS developed a condominium completed by May–July 2009; first unit conveyed May 19, 2009, certificate of occupancy issued July 8, 2009.
- BTS defaulted on its construction loan in Nov. 2009; lender foreclosed and successor BTS Marketing (Marketing) acquired the property Nov. 2, 2010, and obtained the special declarant rights.
- Marketing retained the right to appoint the condominium association board; unit-owner control of the board was not achieved until March 1, 2014 (75% of units conveyed to non-declarants).
- The Association learned of a construction defect in Aug. 2013 but took no action; it sent written notice of claims to BTS/Marketing on Feb. 26, 2015 and sued Apr. 29, 2015 under the Washington Condominium Act (WCA), RCW ch. 64.34.
- The trial court granted summary judgment to BTS, ruling the WCA claims time-barred by the 4-year statute of limitations; the Court of Appeals reversed, holding declarant control tolled the limitations period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether period of declarant control continued after transfer of declarant rights to a successor, thus tolling WCA limitations | Period of declarant control is a single continuing period measured by whether any declarant controls the association; successor declarant’s control keeps the period alive | Period ends when the original declarant loses control or transfers ownership (so successor control shouldn't extend original declarant’s period for limitation purposes) | The period of declarant control continues if any successor declarant holds and exercises special declarant rights; here it continued after Marketing acquired those rights |
| Whether transfer of declarant rights via foreclosure/settlement constitutes "surrender" or "exercise" to end declarant control under RCW 64.34.308(5) | Transfer to successor does not constitute surrender or exercise; statutory end events did not occur until unit owners controlled the board in March 2014 | Transfer/foreclosure effectively ended the original declarant’s control and thus the period should end earlier (Nov. 2010 or Nov. 2012) | Conveyance to a successor declarant does not trigger the specific termination events (surrender amendment or exercise of development rights); control ended March 2014 per the 75% conveyance rule |
| Whether the WCA’s 4-year accrual date expired before the Association sued | Since declarant control continued through Marketing until March 2014, the statute did not expire before suit; accrual no later than July 8, 2009 but tolled by declarant control | If declarant control ended earlier (2010 or 2012), the 4-year period expired before the 2015 suit | Declarant control tolled accrual; period ended March 2014 so the WCA claim window extended accordingly |
| Whether notice under RCW 64.50.020 tolled the limitations/repose period further | Written notice served Feb. 26, 2015 tolled limitations per RCW 64.34.452(4) until 60 days after the 45-day notice period (total 105 days), extending final deadline to June 11, 2015 | No meaningful contrary argument presented by BTS on tolling by notice | Court agrees notice timely tolled limitations; the Apr. 29, 2015 complaint was timely filed |
Key Cases Cited
- Eagle Point Condo. Owners Ass'n v. Coy, 102 Wn. App. 697 (recognizes consumer-protection purpose of WCA and declarant liability principles)
- One Pac. Towers Homeowners' Ass'n v. HAL Real Estate Invs., Inc., 148 Wn.2d 319 (clarifies transferor declarant remains liable for pre-transfer obligations under WCA)
- Filmore LLLP v. Unit Owners Ass'n of Ctr. Pointe Condo., 183 Wn. App. 328 (discusses WCA protections for unit owners and declarant duties)
- Park Ave. Condo. Owners' Ass'n v. Buchan Devs., LLC, 117 Wn. App. 369 (addresses warranty and defect claims under the WCA)
- Burns v. McClinton, 135 Wn. App. 285 (explains statute-of-limitation policy against stale claims)
- Muckleshoot Indian Tribe v. Dep't of Ecology, 112 Wn. App. 712 (statutory interpretation: consider statute as a whole to determine legislative intent)