Week 9

Class 9 outlines

Subcontracting

Chain of contracts: improved efficiency? bargaining power?
- Cash flow squeeze
Bidding process: prime contractor reliance
- Subcontractor’s bid: irrevocable offer? quote?
  - Arango v. Success (1986)
- Bid “shopping” and “peddling”
  - WA public works sub listing: RCW 39.30.060 (L 93 ... 02)
    - HB 1766 (L 99): HVAC/plumbing/electrical [ report]
    - SB 6577 (L 02): reaction to McCandlish [ report]
- UCC for suppliers: firm offer: RCW 62A.2-205 (L 25 ... 65)
Selection and approval: listing AIA A201-2007 ¶ 5.2
Rights and duties: subcontract
- Prime contract incorporated by reference: precedence?
- “Conduit” or “flow-down” clause: A201 ¶ 5.3
  - Sime v. WPPSS (1980)
  - 3A v. Turner, 71 Wn. App. 407 (1993)
  - ASA flow-down issues (July 04)
- Standard-form subcontracts
  - AIA A401-2007 (Appendix E)
  - ConsensusDOCS 750 (30 Apr 09)
  - AGC of WA’s revised form (2002)
    
    “The changing face of subcontract forms”
    Seattle Daily Journal of Commerce (11 Apr 03)
Subcontractor defaults
- Claims by prime and other contract parties
- Claims by third parties
- Prime contractor responsibility
Payment claims
- For line item retention A401 ¶ 12.1
  - WA public works (GCCM): HB 2535 (L 00) [ report]
- Against payment conditions: A401 ¶ 11.3
Other claims
- Court judgments
- Statutory claims: exclusive remedies?
- Mechanics’ liens: security interest in property
  - Unjust enrichment? double payment?
  - “New” WA lien law: RCW 60.04 (L 91, 92, 93)
    - Lumberman’s v. Barnhardt, 89 Wn. App. 283 (1997)
    - TPST v. Anderson, 91 Wn. App. 297 (1998)
    - Mannington v. Hazelrigg, 94 Wn. App. 899 (1999)
    - Flag v. Olympic, 109 Wn. App. 286 (2001)
    - Intermountain v. G-A-T, 115 Wn. App. 384 (2003)
    - Geo Exchange v. Cam, 115 Wn. App. 625 (2003)
    - Pacific v. Singh, 120 Wn. App. 1 (2003)
    - DKS v. REICO, 124 Wn. App. 532 (2004)
    - Andries v. Covey, 128 Wn. App. 546 (2005)
    - Henifin v. Keystone, 136 Wn. App. 268 (2006)
    - Haselwood v. Bremerton Ice Arena, 137 Wn. App. 872 (2007)
    - Williams v. Athletic Field, 142 Wn. App. 753 (2006)
    - Woodstream v. Van Wolvelaere, 143 Wn. App. 400 (2008)
    - Special homeowner protection
      - E2SSB 5773 (2005) [ report]
      - SSB 6740 (2006) [ report]
      - SSB 6036 (2007) [ report]
- Stop notices for public and private work
- Trust fund remedies, compulsory payment bonds
  - WA public works: RCW 39.08 (L 1888 ...), 60.28 (L 21 ...)
    - Farwest v. Mainline, 48 Wn. App. 719 (1987)
    - “Person” redefined broadly: 60.28.011(12)(b) (L 92)
    - Keller v. Lydig (1990)
    - National v. NW GM, 107 Wn. App. 657 (2001)
    - BFS v. Transtech, 112 Wn. App. 697 (2002)
    - US Filter v. Katspan, 117 Wn. App. 744 (2003)
    - BFS v. Caicos, 117 Wn. App. 899 (2003)
    - LRS v. Hamre, 153 Wn. 2d 731 (2005)
    - Keystone v. Garco, 135 Wn. App. 927 (2006)
    - Campbell Crane v. Dynamic Int’l, 145 Wn. App. 718 (2008)
- Nonstatutory claims
- Joint checks
Performance claims
- Against prime contractor
- Pass-through against owner: liquidating agreement
- Against third parties

Construction-related accidents

Construction is dangerous work!

“2008 WA construction fatalities”
Labor and Industries (20 Jan 09)

Workers’ compensation laws: RCW 51 (L 11 ...)

Editorial: “The first two taxes on state businesses” The Seattle Times (22 Jan 03)
“Talks break down over workers’ comp reform” The Seattle Times (17 Apr 03)
Editorial: “A healthy debate about workers’ comp” The Seattle Times (11 Aug 03)
“California OKs change in workers’ comp law” The Seattle Times (17 Apr 04)
“Workers’ comp insurance premiums increasing by 3%” Labor and Industries (1 Dec 08)

WA’s Retrospective Rating (“Retro”) Program
ESHB 3188 (L 04): modify premium liability [ report]
Shellenbarger v. Longview, 125 Wn. App. 41 (2004)
Valencia v. Reardan-Edwall, 125 Wn. App. 348 (2005)
Mandery v. Costco, 126 Wn. App. 851 (2005)
Tri-County v. Westfall, 127 Wn. App. 669 (2005)
French v. Uribe, 132 Wn. App. 1 (2006)
SHB 1278 (L 07): rates for new employers [ report]
SSB 5443 (L 07): “claim suppression” prohibited [ report]
Ball-Foster v. Giovanelli, 163 Wn. 2d 133 (2008)
ESHB 3122 (L 08): independent contractor status [ report]
SB 6839 (L 08): work performed outside WA [ report]
Tobin v. L&I, 145 Wn. App. 607 (2008)
HB 1339 (L 09) contribution rate correction [ report]
SHB 1402 (L 09) medical provider contact limited [ report]
SSB 5613 (L 09) L&I stop work orders [ report]
ESSB 6035 (2009) Retro premium refunds [ report]

“Workers’ comp refund bill OK’d”
Seattle Post-Intelligencer (12 Mar 09)

Opinion: “State needs more oversight over Retro programs”
The Seattle Times (23 Mar 09)

Duty: limited, but expanding
- WA: general contractor’s nondelegable duty
  - Kelley v. Wright, 90 Wn. 2d 323 (1978)
  - Stute v. P.B.M.C. (1990)
  - Weinert v. Bronco, 58 Wn. App. 692 (1990)
  - Hoff v. Mountain, 124 Wn. App. 538 (2004)
  - Salas v. Hi-Tech Erectors, 143 Wn. App. 373 (2008)
- Vicarious liability: independent contractor?
  - Right to control method of performance?
    - Hennig v. Crosby (1991)
    - Doss v. ITT Rayonier, 60 Wn. App. 125 (1991)
    - Phillips v. Kaiser Aluminum (1994)
    - Rogers v. Irving, 85 Wn. App. 455 (1997)
    - Smith v. Myers, 90 Wn. App. 89 (1998)
    - Shingledecker v. Roofmaster, 93 Wn. App. 867 (1999)
    - Hildahl v. Bringolf, 101 Wn. App. 634 (2000)
    - Kamla v. Space Needle, 147 Wn. 2d 114 (2002)
    - MMA v. L&I, 125 Wn. App. 843 (2005)
    - Morris v. Vaagen Bros., 130 Wn. App. 243 (2005)
  - “Loaned servant”?
    - Jones v. Halvorson-Berg (1993)
    - Rideau v. Cort, 110 Wn. App. 301 (2002)
    - Brown v. Labor Ready, 113 Wn. App. 643 (2002)
  - Exception for inherently dangerous work
Standard of conduct: avoid unreasonable risk of harm
- Statutory safety laws
  - Occupational Safety and Health Act of 1970: 29 USC ch 15
    - Administered by OSHA
    - Construction standards: 29 CFR part 1926
    - OSHA-approved state plans
  - WA Industrial Safety and Health Act of 1973: RCW 49.17
    - WISHA administered by Labor & Industries
    - Construction standards: Ch 296-155 WAC
    - WA Regional Directive 27.00 (rev 1 Aug 01)
    - WA Cedar v. L&I, 119 Wn. App. 906 (2004)
    - Legacy Roofing v. L&I, 129 Wn. App. 356 (2005)
    - Centimark v. L&I, 129 Wn. App. 368 (2005)
    - Netversant v. L&I, 133 Wn. App. 813 (2006)
    - Mid Mountain v. L&I, 136 Wn. App. 1 (2006)
    - Robison v. L&I, 136 Wn. App. 369 (2006)
    - WA Cedar v. L&I, 137 Wn. App. 592 (2007)
    - JE Dunn NW v. L&I, 139 Wn. App. 35 (2007)
    - BD Roofing v. L&I, 139 Wn. App. 98 (2007)
    - J&S Servs. v. L&I, 142 Wn. App. 502 (2007)
    - Mt. Baker Roofing v. L&I, 146 Wn. App. 429 (2008)
    - Mowat v. L&I, 148 Wn. App. 920 (2009)
Cause in fact
Proximate cause: superseding act?
Defenses
- Assumption of risk
- Contributory or comparative negligence
- Sovereign immunity
Eliminate third-party claims?
- Extend RCW 51.24.035 immunity?
  - SB 5733 part 6 (1997): contractors, all project parties
  - SB 6520 part 5 (2004): contractors, all project parties
Statutes of repose, limitation

Contribution and indemnification

First instance and ultimate liability
Contribution among wrongdoers
- Washburn v. Beatt, 120 Wn. 2d 246 (1992)
- Waite v. Morisette (1993)
- RCW 4.22 .005, .015, .030, .040, .060, .070 (L 73 ... 93)
- SB 5733 part 3 (1997): clarify joint and several liability
- Kottler v. State, 136 Wn. 2d 437 (1998)
- Tegman v. AMI, 150 Wn. 2d 102 (2003)
- Maguire v. Teuber, 120 Wn. App. 393 (2004)
- HB 2992 (2004): clarify at-fault entities
- SB 6520 part 1 (2004): clarify joint and several liability
- Humes v. Fritz, 125 Wn. App. 477 (2005)
- Coulter v. Asten, 135 Wn. App. 613 (2006)
- Mut. of Enumclaw v. USF Ins., 137 Wn. App. 352 (2007)
- Owners Ass’n v. Mut. of Enumclaw, 137 Wn. App. 751 (2007)
- Owners Ass’n v. Meadow Valley, 137 Wn. App. 810 (2007)
- Martin v. Johnson, 141 Wn. App. 611 (2007)
- Polygon NW v. Am. Nat’l Fire Ins., 143 Wn. App. 753 (2008)
- Owners Ass’n v. Derus Wakefield I, 145 Wn. App. 698 (2008)
Noncontractual indemnity: unjust enrichment of wrongdoer
- Sabey v. Johnson, 101 Wn. App. 575 (2000)
- Homeowners v. Northward, 126 Wn. App. 352 (2005)
- Primary/secondary, active/passive
- Workers’ compensation: employer indemnification
- Comparative negligence
- Preempted by contract?
Implied indemnity
- Central v. Barbee, 133 Wn. 2d 509 (1997)
- Toste v. Durham & Bates, 116 Wn. App. 516 (2003)
- Condo Ass’n v. Fortune Star, 151 Wn. 2d 534 (2004)
Contractual indemnity: compared to exculpation
- Function
- Statutory regulation
  - Brame v. St. Regis, 97 Wn. 2d 748 (1982)
  - Brown v. Prime (1984)
  - G.L.Y. v. Hurlen (1985)
  - RCW 4.24.115 (L 67, 86)
  - Sollitt v. Chapman, 67 Wn. App. 468 (1992)
  - Moen v. Island Steel (1994) reversed
    - Moen v. Island Steel (1996)
  - First Church v. Seattle, 92 Wn. App. 229 (1998)
  - MacLean v. America 1st, 133 Wn. App. 828 (2006)
  - Owners Ass’n v. Plateau 44 II, 139 Wn. App. 743 (2007)
- Specificity requirements
- Interpretation
  - Coverage
  - Work-related?
  - Amount payable
- AIA indemnity clause 1967 comparative: A201 ¶ 3.18
- Insurance coverage?

“Workers’ comp refund bill OK’d” Seattle Post-Intelligencer (12 Mar 09)
Opinion: “State needs more oversight over Retro programs” The Seattle Times (23 Mar 09)