Which Claims Can I Make in my Construction Defect Litigation Case?
There are two general categories of claims that can be made in construction defect litigation: Breach of Contract and Breach of Warranty.
Breach of Contract is the most common claim in construction defect litigation. A homeowner can bring a breach of contract claim against a contractor if the contract imposes a duty, that duty is breached, and the contractor’s breach causes the homeowner damages. The first question that must be answered is whether a valid contract exists. Most consumers assume a written contract must exist, but a written contract is only required by Washington law when the activity cannot be performed within one year. So, the next time you hire a contractor to remodel your deck, don’t be surprised if the only document you sign is a bid estimate, which may or may not be a valid contract. Even if there is not a valid contract and a contractor provides construction services that improve your property, a homeowner is still responsible for paying the contractor the reasonable value of those services (called quantum meruit).
Breach of Warranty is another common claim in new home construction. The warranty must be stated in a written contract, advertising materials, sales materials, or implied by law. All new homes come with a one-year builder’s warranty, which many builders purchase through third-party warranty companies located in other states. Some remodeling projects may also have a warranty clause in their contracts. If you discover a defect, it is wise to consult your contract documents first. Those documents will state how and where to file a warranty claim.
Many people are also familiar with the implied warranty of habitability, but this implied warranty is more limited than most people expect. The implied warranty of habitability only applies to new residential dwellings constructed by commercial builders. The warranty only protects the first occupants of the dwelling, not subsequent purchasers, and only covers structural defects. Disputes can and do arise as to what constitutes a structural defect. Generally speaking, a structural defect is any defect that prevents the structure from being use for its intended purpose.
What about negligent construction? Many people are surprised to learn that negligent construction is not a recognized claim in Washington. Instead, negligent construction may be the basis for pursuing a breach of contract or breach of warranty claim. Alternatively, a homeowner may be able to pursue a claim for simple negligence if someone is injured from the manner in which a house was constructed, but this is a rare type of claim. Just as negligent construction is not recognized in Washington, neither is an implied warranty of workmanlike construction. Thus, there is no implied duty in Washington that construction be done in a good and workmanlike manner. (Many other states do recognize such an implied duty.)
Fraudulent Concealment & Intentional Misrepresentation are less common claims in construction defect litigation because a homeowner must prove that a contractor acted intentionally to conceal a defect or misrepresented a material fact pertaining to the construction that the homeowner relied upon to their detriment. These types of claims can be exceptionally difficult to prove. Alternatively, contractors may be liable for negligent misrepresentations. This can happen when a contractor fails to exercise reasonable care and provides false information to a homeowner, such as using cheaper or substandard materials than required by the construction contract documents.
Which types of damages are recoverable in construction defect litigation?
There are three general categories of recoverable damages intended to compensate homeowners for construction defects:
- Direct damages: These are damages caused by a breach of contract or breach of warranty.
- Stigma damages: These are damages caused by diminution in a home’s value due to defects.
- Delay Damages: These are contract damages caused by construction delays.
What is the statute of limitations on pursuing a construction defect claim?
Construction defect litigation can be highly confusing because there can be many different statutes of limitations. If a claim is based on breach of a written contract, there is a six-year statute of limitations. If a claim is based on an oral contract, there is a three-year statute of limitations. Similarly, there is a three-year statute of limitations for claims based on negligence, including negligent misrepresentation. Claims based on fraud and intentional misrepresentation have a two-year statute of limitations.
The statute of limitations clock starts ticking when a plaintiff’s cause of action accrues. A cause of action accrues when a homeowner suffers some sort of injury or damage due to the defect. Oftentimes a homeowner is unaware of a defect until months or years after construction is complete. When this happens, Washington courts may invoke what is known as the “discovery rule.” The discovery rule temporarily pauses (tolls) the statute of limitations clock until a date when a plaintiff-homeowner should have discovered, through exercise of reasonable diligence, the defect. The discovery rule does not apply to open and obvious defects (e.g., leaking roof).
If that isn’t confusing enough, Washington also has a statute of repose. Washington’s statute of repose is six years. So, if you discover a defect in your house and wait more than six years, you cannot pursue a claim against the contractor. The statute of repose also limits the “discovery rule” to six years, which means if you did not discover a construction defect within six years you cannot bring a claim against your contractor.
Trust Attorney Jeff Aultman with Your Case
Attorney Jeff Aultman has represented many homeowners, contractors, and national insurance carriers in Washington, Idaho, Tennessee, and Texas over the last 18 years. If you have questions about a claim or seek representation of an insured in Benton, Franklin, or surrounding counties, contact Aultman Law. In addition to construction defect litigation, Aultman Law also handles personal injury, business disputes, and insurance defense matters. Trust Aultman Law, a small law firm with big law firm experience.