Gregory Tadych Et Ano., V. Noble Ridge Construction, Inc.
81948-8
| Wash. Ct. App. | Jul 19, 2021Background
- Gregory and R. Sue Tadych contracted with Noble Ridge Construction (NRC) in 2012 to build a custom home; the written contract contained a clause requiring any claim to be filed within one year of first occupancy or completion.
- The Tadychs occupied the home April 8, 2014; the City approved occupancy April 23, 2014; the one-year contractual claims window ran to April 7, 2015.
- Before that deadline the Tadychs observed stucco cracks (punchlist Dec. 2013/Apr. 2014), felt a structural “shift” Feb. 2015, and received a consultant (CDR) report March 2, 2015 identifying ventilation and other concerns.
- Later events: additional water intrusion evidence appeared Oct. 2016; NRC made some repairs and gave assurances at various times; the Tadychs filed suit Aug. 1, 2017; NRC moved for summary judgment based on the one-year clause.
- Trial court granted summary judgment for NRC, denied plaintiffs’ cross-motion, and awarded NRC attorney fees; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the contract's one-year claim period (unconscionability / reasonableness) | One year is substantively unconscionable and too short to discover latent construction defects | Clause is a bargained-for contractual shortening of the statute of limitations and is reasonable | Clause is enforceable; not substantively unconscionable; one year gave plaintiffs sufficient time to investigate |
| Accrual / discovery rule and RCW 4.16.326(1)(g) | Claim did not accrue until Oct. 2016 when water intrusion was discovered (discovery rule should toll accrual) | Discovery rule inapplicable (defects not latent) or statute precludes discovery tolling | Discovery rule applies to latent defects but plaintiffs discovered or should have discovered actionable facts before Apr. 7, 2015; RCW 4.16.326(g) does not bar discovery rule here because parties contracted for <6 years |
| Equitable estoppel (defendant’s assurances induced delay) | NRC’s repeated assurances and promises to repair lulled plaintiffs into not filing timely suit | NRC denied defects and did not request plaintiffs to delay filing; many assurances postdated limitations period | Estoppel rejected: no clear, convincing evidence NRC induced delay before expiration of the one-year period |
| Attorney fees on appeal | Plaintiffs sought reversal of fee award and fees on appeal | NRC sought fees on appeal under contract prevailing-party clause | Award of attorney fees to NRC below affirmed; NRC awarded fees on appeal; plaintiffs’ fee request denied |
Key Cases Cited
- 1000 Virginia Ltd. P'ship v. Vertecs Corp., 158 Wn.2d 566 (2006) (discovery rule applies to latent construction defects)
- Adler v. Fred Lind Manor, 153 Wn.2d 331 (2004) (contractual shortening of limitations may be unconscionable when it undermines statutory rights or remedies)
- Gandee v. LDL Freedom Enters., Inc., 176 Wn.2d 598 (2013) (very short contractual claim periods in consumer arbitration found unconscionable under Adler)
- Dix v. ICT Group, Inc., 160 Wn.2d 826 (2007) (forum-selection clauses that seriously impair enforcement of statutory rights violate public policy)
- EPIC v. CliftonLarsonAllen LLP, 199 Wn. App. 257 (2017) (parties may shorten limitations periods; enforceability depends on reasonableness and opportunity to investigate)
- Rouse v. Glascam Builders, Inc., 101 Wn.2d 127 (1984) (equitable estoppel may bar reliance on warranty period where defendant’s repair promises induced delay)
- Green v. A.P.C., 136 Wn.2d 87 (1998) (statute of limitations begins when plaintiff sustains appreciable harm; later worsened damage does not reset accrual)