Court Opinion

ID: 4704722
Source: CourtListenerOpinion
Date Created: 2021-07-19 21:21:18.993642+00
Date Added: 2024-06-11T08:05:31.794211
License: Public Domain

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

GREGORY M. TADYCH and                                           No. 81948-8-I
R. SUE TADYCH, a married couple,
                                                                DIVISION ONE
                      Appellants,
                                                                UNPUBLISHED OPINION
              v.

NOBLE RIDGE CONSTRUCTION, INC., a
Washington Corporation; and WESCO
INSURANCE CO., a foreign surety, Bond
No.46WB025486,

                      Respondents.

       ANDRUS, A.C.J. — Gregory and R. Sue Tadych challenge the summary

 judgment dismissal of their complaint against Noble Ridge Construction Inc. (NRC)

 for breach of their construction contract. The trial court dismissed the Tadychs’

 complaint, concluding that a one-year claim limitations period had expired, making

 their claim time barred. The Tadychs argue that the claim limitation clause is

 unenforceable or, alternatively, that NRC should be estopped from asserting it.

 We disagree and affirm the dismissal.

                                            FACTS

       In 2012, the Tadychs and NRC entered into a written agreement for the

 construction of a custom home in south Seattle. The Tadychs received a draft of

      Citations and pin cites are based on the Westlaw online version of the cited material.
No. 81948-8-I/2

the contract on July 22, 2012, and reviewed it for a few weeks before they signed

it. They did not seek legal advice, and they signed the contract without requesting

any changes to its terms.

       For a base price of $485,068, NRC, as the contractor, agreed to provide all

necessary labor and materials to construct the Tadychs’ residence “in accordance

with the Plans and Specifications and (if applicable) Changes Orders accepted and

agreed to by the parties hereto.” The plans and specifications were incorporated

by reference into the agreement. The Tadychs and NRC agreed that neither party

would deviate from the plans and specifications without a mutual written

agreement to do so. NRC further agreed it would “supervise and direct the Project

using reasonable skill and attention and shall satisfy the building codes and

standards of municipalities or other governmental agencies with jurisdiction over

the Project.”

       The contract provided that the project would be deemed completed when

the building official with jurisdiction over the project established that the home had

been built in accordance with the approved plans and specifications and permits,

and issued a certificate of occupancy. Upon substantial completion and before

occupancy, NRC and the Tadychs agreed they would meet at the project site for

a walk-through inspection and prepare a list, referred to as a “punchlist,” identifying

all components of the project that needed to be completed or corrected.

       The contract’s warranty provision provided in pertinent part:

       Warranty. . . . Any claim or cause of action arising under this
       Agreement, including under this warranty, must be filed in a court of
       competent jurisdiction within one year (or any longer period stated in
       any written warranty provided by the Contractor) from the date of

                                         -2-
No. 81948-8-I/3

       Owner's first occupancy of the Project or the date of completion as
       defined above, whichever comes first. Any claim or cause of action
       not so filed within this period is conclusively considered waived. . . .

       In December 2013, as the project neared completion, the Tadychs worked

with NRC to develop a punchlist of incomplete items. One issue they listed was

that “rainwater pools at the landing at the bottom of the stairs.” Greg Tadych

testified that he personally expressed concern to NRC about this issue throughout

the course of the construction. To address pooling rainwater, NRC sketched a

proposed modification to the landing proposing to slope it away from the door

threshold toward a drain scupper. Greg Tadych testified NRC implemented this

fix. The parties’ revised punchlist, dated April 2, 2014, reflects that NRC poured a

sloped cement surface on the landing and installed tile to direct rain water toward

the gutter. The punchlist identified this line item as “closed.”

       Another item on the December 2013 punchlist was “[n]umerous nicks and

cracks on the stucco exterior walls.” The revised April 2014 punchlist indicated

that “[s]ome work has been done on stucco” and the item remained “open.” There

is no indication in the record that NRC performed any further work on the exterior

stucco to address the identified cracks.

       The Tadychs moved into the home on April 8, 2014. The City of Seattle

Department of Planning and Development conducted its final site inspection on

April 15, 2014, and approved the residence for occupancy on April 23, 2014.

       Sue Tadych testified that in late January or early February 2015 she felt a

“shift” in the home “as though there had been some unexpected movement in the

Project’s structure.” She reported that “in February 2015 she was working in the

                                         -3-
No. 81948-8-I/4

first floor office/bedroom at the NW corner when she heard ‘a loud rubbing noise’

and it ‘felt as though the house shifted south and then down.’” After this event, she

noticed that the door to the back patio was no longer even with the casing, there

were “humps in the flooring when walking into the master closet and the powder

room on the second floor that were not present before the event,” the bathtub was

no longer level and tilted to the south, floor tiles under and adjacent to the toilet

came loose, doors to the roof deck no longer shut properly, and cracks in the

drywall appeared.

       In February 2015, concerned about this incident, the Tadychs engaged

Construction Dispute Resolution, Inc. (CDR) to review NRC’s work. According to

the consultant agreement the Tadychs signed, CDR provides “consulting and

expert witness services relative to construction litigation.” For the sum of $1,300,

CDR agreed to “[r]eview flooring issues and shift of structure. Advise Client as

requested.”

       CDR raised concerns about the adequacy of the home’s construction in its

correspondence with the Tadychs. On March 2, 2015, CDR prepared a written

report indicating it had identified deviations from the architectural plans and the

potential risk of inadequate ventilation of the interstitial areas within the framing of

the home. CDR wrote

       All enclosed roof and exposed deck areas together with parapet
       walls and railings need to be ventilated unless they are completely
       filled with foam insulation. This is due to the fact that water may
       condense within the spaces where a conditioned space is adjacent
       to an unconditioned space; for instance a roof or exterior wall.

              ....

                                         -4-
No. 81948-8-I/5

      [I]n just looking at the photographs of your home and comparing
      them to the details on the plans we are concerned that there is
      insufficient ventilation in your walls and roof structures. We are
      unclear as to whether the architect had issued different
      designs/directions for the builder to achieve the ventilation required
      but the lack of 6 inch round holes around your building to ventilate
      the roof areas and the fact that the metal copings are tight to the
      walls at your roof parapets indicate the ventilation may not be in
      place. Together with that, at the roof deck, there is no parapet cap
      flashing at the metal clad railings. It is a mystery how these are
      vented.

      In summary, either we assume that somehow the architect and
      builder have achieved the necessary code mandated ventilation as
      dictated by the plans or some investigative work will have to occur to
      verify

(Emphasis added). It also stated that the stairs and railings did not conform to the

building code or to the plans. CDR noted it could not complete its recommended

investigation within the $1,300 previously budgeted amount.

      Sue Tadych forwarded CDR’s report to Jason Wojtacha, the president of

NRC, asking for clarification regarding the ventilation.     On March 16, 2015,

Wojtacha responded, questioning why the Tadychs had hired a “litigation expert.”

He assured the Tadychs that NRC had exercised “extra care in achieving the

ventilation requirements” for their home. Wojtacha stated that “whatever technique

is used is often changed in the field as the conditions on site often change.” He

stated that there were several different methods of achieving the necessary

venting requirements, the 6-inch vents were not aesthetically pleasing, and there

was adequate room and ventilation between the floor trusses and the pre-sloped

roof trusses. He contended that he had discussed this issue with the Tadychs at

                                       -5-
No. 81948-8-I/6

the time the change occurred. 1 Wojtacha stated that the home had a ventilating

rain screen system that could not be seen and that system put their “home [] in top

5% of our region, maybe even 1%, in dealing with moisture/vapor and dew points

in the northwest region.” Wojtacha stated that the rain screen was specifically

designed to allow vapor out of the house without allowing additional vapor in by

creating a one-fourth inch gap between the wall panels and the stucco. With this

system, coupled with the “HRV unit on the inside [of the house] monitoring humidity

levels and air flow, you are more than covered” with regard to ventilation.

        With regard to the stairs and railings, Wojtacha rejected CDR’s contention

that they were non-conforming. “[T]he building inspector looked at those areas as

well. We specifically had a correction on the roof stair and railing that the inspector

zero’d [sic] in on, and he was the one who gave us the remedy to [p]ass the final.”

He explained that they had had “some minor physical constraints to work with” and

asked for clarification from CDR as to what it believed to be non-conforming.

        On March 30, 2015, Sue Tadych met with CDR and Wojtacha at the home

to discuss the issues CDR had identified in its report, including unlevel flooring, the

ventilation issues, and the possibility that the house had settled. According to Sue

Tadych, Wojtacha assured her and CDR that there were no issues to be concerned

about and that “some settling of like projects was normal and expected.” Following

1 Sue Tadych testified that Wojtacha had approached her about modifying the ventilation design.
“Jason . . . said he had taken a class and learned how to ventilate the house without having all the
caps. I believe there were 18 caps around the outer edge of the building that we both agreed did
not look very pleasing.” She agreed to allow Wojtacha to make this recommended change to the
roof ventilation and had no recollection of consulting the architect before doing so.

                                               -6-
No. 81948-8-I/7

this meeting, NRC agreed to repair and did repair some uneven flooring in the

master bedroom closet.

       On March 13, 2016, Greg Tadych notified NRC that water was again pooling

on the second floor exterior stair landing and that there was a crack in the first floor

drywall ceiling, which he presumed was related to the pooling water.              NRC

dispatched someone to assess the situation and, in May 2016, caulked the landing

to prevent rainwater from draining into the wall.

       Greg Tadych felt that the work NRC did at the landing area was insufficient

to resolve the drainage issue and retained Pacific Northeast Inspection Engineers

(PNIE) to review the home. PNIE’s inspection revealed minor observations about

stucco cracking, but did not identify any water intrusion issues.

       On October 20, 2016, Sue Tadych noticed water “oozing” from cracks in the

exterior stucco panels adjacent to the front door. Alarmed, she went inside and

moved a bookcase away from the interior wall adjacent to the exterior cracks.

There, she discovered discolored drywall which she suspected was covered in

mold. She also documented a crack in window molding in a window by the front

door, cracks in the ceiling dry wall, and nail heads that appear wet when it rained.

She emailed pictures of these defects to Wojtacha, told him she suspected a leak

in the “membrane” somewhere, and demanded that NRC repair the items.

       NRC believed the issue was related to the second floor exterior stair

landing. On October 25, 2016, Wojtacha and other NRC personnel removed the

discolored drywall and insulation behind the exterior wall. They determined that

the wall cavity was wet. Wojtacha informed the Tadychs that NRC would have to

                                         -7-
No. 81948-8-I/8

pull the second floor exterior stairway door to make the necessary repairs. On

November 8, 2016, Sue Tadych contacted Wojtacha to ask when NRC would be

available to start the work. Wojtacha assured them NRC would make the repairs

and had to work through some scheduling issues. Throughout November and

December 2016, the Tadychs contacted Wojtacha on several occasions trying to

pin NRC down on a date to make repairs. By email dated December 19, 2016,

Wojtacha again assured the Tadyches that NRC intended to repair the leak and

asked to put it off until after the holiday season. The Tadychs did not hear from

Wojtacha or NRC again.

      In early 2017, the Tadychs retained OAC Services to conduct a forensic

inspection of the home. OAC determined that significant construction defects exist

in the home that must be corrected, including water intrusion issues, code

violations, errors in the structural framing, and structure ventilation issues. On

August 1, 2017, the Tadychs filed this breach of contract action against NRC. NRC

filed a third-party complaint against a number of subcontractors whom NRC

asserted were responsible for the defects.

      After the Tadychs filed the lawsuit, OAC participated in an intrusive

investigation to determine the scope of the defects. It identified cracks in the

stucco cladding, defects in the window installation, and inadequate venting to the

roof areas. OAC concluded that “[t]he building enclosure which includes below

grade, exterior walls and roof assemblies, does not meet the Seattle Residential

Code (SRC) Chapter 7 for water resistance. The roof assemblies do not meet the

ventilation required under SRC Chapter 8.” One of NRC’s subcontractors, Master

                                      -8-
No. 81948-8-I/9

Stucco, was responsible for installing the stucco cladding system on the house as

well as installing the waterproof barrier and metal flashings around windows, doors

and openings within the stucco clad wall areas. Wojtacha testified that Master

Stucco was supposed to have installed a drainage mat or rain screen as part of its

scope of work but it appeared it failed to do so.

       OAC also concluded that the house roof trusses and support beams were

improperly installed. The defects led to visible cracking in the ceiling, out-of-plumb

doors, visible displacement of pavers, and bulging at the floor of the master

bedroom closet, powder room, and living space. The framing was not adequately

interconnected to resist and transfer imposed loads and did not appear to meet

building code requirements.      OAC opined that the “damage at the Tadych

Residence associated with its structural performance has been caused by

defective construction, unsatisfactory workmanship and inadequate detailing.”

       After discovery, NRC moved for summary judgment, arguing that the

Tadychs’ lawsuit was time barred under the one-year contractual claim period.

The Tadychs filed a cross motion for partial summary judgment seeking a

determination that NRC had breached its contract through defective workmanship

in the home.

       The trial court granted NRC’s motion, and denied the Tadychs’ cross motion

as moot. It subsequently awarded NRC, as the prevailing party, attorney fees of

$153,744.35 and costs of $4,651.36 based on an attorney fee provision in the

contract.

                                        -9-
No. 81948-8-I/10

                                    ANALYSIS

       The Tadychs challenge the one-year claim period in the NRC contract as

unconscionable. In the alternative, they contend NRC should be precluded from

raising the one-year claim provision as a defense under the doctrine of equitable

estoppel. We reject both arguments.

       We review de novo an order granting a motion for summary judgment.

Saralegui Blanco v. Gonzalez Sandoval, 107 Wn.2d 553, 577, 485 P.3d 326

(2021). Summary judgment is appropriate where there is no genuine issue as to

any material fact, so that the moving party is entitled to judgment as a matter of

law. Id. The moving party bears the burden of demonstrating that there is no

genuine issue as to a material fact. Hartley v. State, 103 Wn.2d 768, 774, 698

P.2d 77 (1985).

       Whether a contract is unconscionable is a question of law appropriately

decided on summary judgment. Nelson v McGoldrick, 127 Wn.2d 124, 131, 896

P.2d 1258 (1995). Whether a defendant should be equitably estopped from raising

a particular defense, such as the statute of limitations, presents questions of fact.

See Marsh v. Gen. Adjustment Bureau, Inc., 22 Wn. App. 933, 936, 592 P.2d 676

(1979) (whether statements were made and whether plaintiff reasonably relied on

such statements are questions of fact). In determining whether the evidence

creates a genuine issue of material fact, we consider all facts and reasonable

inferences in the light most favorable to the nonmoving party. Sabey v. Howard

Johnson & Co., 101 Wn. App. 575, 582, 5 P.3d 730 (2000).

                                       - 10 -
No. 81948-8-I/11

A. Enforceability of the One Year Claim Period

        The Tadychs argue the trial court erred in concluding that their claim is time-

barred by the one-year claim limitation clause in the NRC construction contract.

We disagree.

        The statute of limitations for a claim of breach of a written contract is six

years. RCW 4.16.040(1). The Tadychs, however, signed a contract in which they

agreed to shorten the period in which they could sue NRC to one year. Under the

NRC contract, the one-year claims period began to run from the earlier of the date

the Tadychs began living in the home or the date they received a final inspection

sign-off by the City of Seattle. The record indicates the Tadychs occupied the

home on April 8, 2014 and the final inspection occurred on April 15, 2014. The

claims period thus ran from April 8, 2014 to April 7, 2015.

        The Tadychs do not dispute that they agreed to this one-year claim

limitation period. But they maintain that the clause is substantively unconscionable

because they could not have discovered the latent defects in their home within that

time period. 2 A contract term is substantively unconscionable only where it is “one-

sided or overly harsh,” “shocking to the conscience,” “monstrously harsh,” or

“exceedingly calloused.” Adler v. Fred Lind Manor, 153 Wn.2d 331, 344-45, 103

P.3d 773 (2004). No court has held that a contract clause shortening the time for

one party to bring a claim against the other is per se unconscionable. We have

2 The Tadychs also argue that the contract’s one-year claim period is procedurally unconscionable.
But because the Tadychs failed to raise the issue of procedural unconscionability below, we decline
to address it on appeal. See RAP 9.12 (limiting our review of an order granting summary judgment
to “evidence and issues called to the attention of the trial court.”); Silverhawk, LLC v. KeyBank Nat.
Ass'n, 165 Wn. App. 258, 265, 268 P.3d 958 (2011) (“An argument neither pleaded nor argued to
the trial court cannot be raised for the first time on appeal.”).

                                               - 11 -
No. 81948-8-I/12

instead recognized that, in general, parties can contractually agree to shorten a

statute of limitations period. Washington State Major League Baseball Stadium

Pub. Facilities Dist. v. Huber, Hunt & Nichols-Kiewit Const. Co., 176 Wn.2d 502,

512, 296 P.3d 821 (2013).

       A stipulated limitations period will prevail unless prohibited by statute or

public policy or unless the provision is “unreasonable.” EPIC v. CliftonLarsonAllen

LLP, 199 Wn. App. 257, 271, 402 P.3d 320 (2017); Syrett v. Reisner McEwin &

Associates, 107 Wn. App. 524, 527-28, 24 P.3d 1070 (2001). A contractually

shortened limitations period is reasonable in duration if “the time allowed affords

the plaintiff sufficient opportunity to ascertain and investigate the claim and prepare

for the controversy.” EPIC, 199 Wn. App. at 271. Washington courts have found

contractual limitations clauses of one year or less to be reasonable. Id. (citing City

of Seattle v. Kuney, 50 Wn.2d 299, 302, 311 P.2d 420 (1957) (upheld one year

limitation period in construction contract); Absher Constr. Co. v. Kent School Dist.

No. 415, 77 Wn. App. 137, 147-48, 890 P.2d 1071 (1995) (dismissal affirmed

where contractor failed to bring suit against owner within 120 days of substantial

completion as required by contract); Yakima Asphalt Paving Co. v. Dept. of

Transp., 45 Wn. App. 663, 665, 726 P.2d 1021 (1986) (180-day limitation period

in contract was enforceable)).

       The Tadychs contend the contractual claim period is unreasonable because

this is a “consumer” contract, not an agreement between sophisticated commercial

entities, and one year was an insufficient amount of time to discover the latent

defects in their home. We conclude the consumer cases on which the Tadychs

                                        - 12 -
No. 81948-8-I/13

rely are not applicable here. And the record does not support their contention that

they lacked the time to discover the building envelope and structural defects OAC

subsequently identified in its 2018 report.

         The Tadychs ask this court to apply consumer protection cases in

evaluating the validity of the one-year claim period provision in the construction

contract. According to the Tadychs, the one year claim provision is unenforceable

under Adler, Gandee v. LDL Freedom Enters., Inc., 176 Wn.2d 598, 293 P.3d 1197

(2013), and Dix v. ICT Grp., Inc., 160 Wn.2d 826, 161 P.3d 1016 (2007). We do

not find this argument persuasive.

         In Adler, the plaintiff alleged his employer terminated him because of his

age and his disability in violation of the Washington Law Against Discrimination

(WLAD). 3 153 Wn.2d at 338-40. Adler had signed an arbitration agreement that

included a 180-day limitations period for bringing discrimination claims.        The

Washington Supreme Court held that this provision was substantively

unconscionable for three reasons.        First, it provided a substantially shorter

limitations period than Adler was entitled to under the WLAD. Id. at 355. Second,

the limitations period could require employees to forego the opportunity to file

discrimination complaints with and have them investigated by the Equal

Employment Opportunity Commission or the Washington Human Rights

Commission. Id. at 357. Finally, it deprived employees of the continuing violation

and tolling doctrines under federal and state discrimination laws. Id. at 356.

3   Ch. 49.60 RCW.

                                        - 13 -
No. 81948-8-I/14

         In Gandee, a debt adjustment business sought to enforce an arbitration

agreement that required all claims to be submitted to binding arbitration in Orange

County, California within 30 days of a dispute. 176 Wn.2d at 602. The Washington

Supreme Court held that this provision, which shortened the limitation period from

4 years under the Consumer Protection Act (CPA), 4 to 1 month, was substantively

unconscionable based on Adler. Id. at 607.

         And in Dix, the plaintiffs filed a class action lawsuit alleging that ICT Group,

a customer-service company working for America Online, Inc. (AOL), had violated

the CPA by conspiring with AOL to charge users for unwanted additional user

accounts created under dubious circumstances. 160 Wn.2d at 829-831. The trial

court dismissed the lawsuit because AOL’s standard contract included a forum-

selection clause dictating that all claims be filed in the courts of Virginia. Id. at 829,

831. In reversing, the Supreme Court held

                 Given the importance of the private right of action to enforce
         the CPA for the protection of all the citizens of the state, we conclude
         that a forum selection clause that seriously impairs a plaintiff's ability
         to bring suit to enforce the CPA violates the public policy of this state.
         It follows, therefore, that a forum selection clause that seriously
         impairs the plaintiff's ability to go forward on a claim of small value
         by eliminating class suits in circumstances where there is no feasible
         alternative for seeking relief violates public policy and is
         unenforceable.

Id. at 837.

         These cases do not support the Tadychs’ argument that the contract

provision here is substantively unconscionable. First, the Tadychs do not seek to

vindicate statutory rights but private contract rights. Second, the one-year claims

4   Ch. 19.86 RCW.

                                           - 14 -
No. 81948-8-I/15

period at issue here is twelve times longer than that in Gandee and at least twice

as long as that in Adler. And, unlike Adler, the claims period here does not require

the Tadychs to forego other statutory rights to which they are otherwise entitled.

       Dix is similarly inapposite.     The forum selection clause at issue there

effectively precluded the plaintiffs from bringing any lawsuit to vindicate their

statutory rights under the CPA. The same cannot be said about the suit limitation

clause at issue here. Allowing the parties to contractually shorten their limitations

period to a reasonable amount of time does not “seriously impair” their ability to

enforce their construction contract rights.

       Nor can we conclude that the Tadychs had insufficient time to investigate a

claim for breach of contract against NRC. OAC identified three main defects: (1)

building envelope issues relating to the stucco cladding resulting in water intrusion

into the home; (2) building ventilation issues resulting in vapor from inside the

home condensing inside of the home’s walls rather than venting to the outside of

the home; and (3) structural issues resulting in the shifting and flexing of the

building. The Tadychs were on notice of each of these potential defects before

April 7, 2015, in sufficient time to investigate a claim and file suit.

       First, the Tadychs knew that cracks existed in the stucco as of December

2013 when they developed the initial punchlist with NRC. They also knew that

these cracks remained unrepaired in early April 2014 when they received NRC’s

revised punchlist. While stucco is a cementitious product susceptible to cracking,

cracking can be a sign of improper installation of the plywood substrate, uneven

stucco thickness, insufficient anchorage to the underlying woven wire lath,

                                         - 15 -
No. 81948-8-I/16

improper positioning of the lath within the stucco, or a lack of adhesion between

two coats. The Tadychs had ample time to retain a consultant to evaluate the

cause of the known stucco cracking before they occupied the home.              They

produced no evidence to suggest otherwise.

       Second, the Tadychs were on notice of NRC’s failure to comply with the

roof venting plans and the resultant risk of vapor condensing inside their home’s

walls and roof by March 2, 2015, the date they received the CDR report. Although

CDR indicated that additional investigation was warranted, it is not unusual for

parties in construction defect cases to initiate litigation before conducting

destructive testing to document the full extent of the defects. Indeed, that occurred

here. The Tadychs filed suit in August 2017 and OAC did not begin its intrusive

investigation until the fall of that same year. Although the Tadychs may not have

known the full extent of the construction defects, they were on notice, at least one

month prior to the April 7, 2015 deadline, for initiating litigation that NRC had not

constructed the home as required by the plans and that this failure could result in

vapor condensing inside the walls of their home.

       Finally, the Tadychs knew that the home had shifted in February 2015, two

months before the claims deadline, and the shifting was so significant it caused

them to fear structural defects. Sue Tadych testified that they saw “unlevel flooring

on the second floor” of their home after the shifting incident. They were so

concerned that they hired CDR, a litigation consultant, to assist them in reviewing

the construction project. While they may not have known why their home had

                                       - 16 -
No. 81948-8-I/17

shifted, they had two months in which to consult an expert, obtain that expert’s

assessment, and file their lawsuit.

       Because the Tadychs had sufficient time to investigate a claim for breach

of contract against NRC, the one-year claim period is not unreasonably short in

duration.

       The Tadychs next argue that we should invalidate the one-year claims

period because their claim did not accrue until October 2016, when they

discovered that rainwater had intruded into the structure of their home.

Washington courts have refused to enforce a contractual limitation period when

the cause of action did not accrue before the limitations period expired because

“[t]he law will not require that a plaintiff commence action before its pecuniary loss

was capable of ascertainment.” EPIC, 199 Wn. App. at 272 (citing Sheard v.

United States Fidelity & Guaranty Co., 58 Wash. 29, 36, 107 P. 1024 (1910)).

       NRC contends the discovery rule does not apply to this contract action

because the alleged defects are not latent and RCW 4.16.326(1)(g) makes the

discovery rule inapplicable. While we disagree with NRC’s legal arguments, we

also reject the Tadychs’ contention that they did not know the facts underlying their

breach of contract claim until after the one year claims period expired.

       Generally, a cause of action “accrues when the party has the right to apply

to a court for relief.” 1000 Virginia Ltd. P’ship v. Vertecs Corp., 158 Wn.2d 566,

575, 146 P.3d 423 (2006). In general, a breach of contract claim accrues on the

date of the breach, not on discovery of the breach. Id. at 576 (relying on Taylor v.

Puget Sound Power & Light Co., 64 Wn.2d 534, 392 P.2d 802 (1964)). In 1000

                                        - 17 -
No. 81948-8-I/18

Virginia, the Supreme Court created an exception and held that the discovery rule

will apply in a breach of a construction contract case where latent defects are

alleged. Id. at 582.

        Although NRC concedes the Tadychs alleged the presence of latent

defects, it nevertheless argues the defects are not in fact latent. We cannot agree.

A latent defect is one which could not have been discovered upon inspection.

Arrow Transp. Co. v. A.O. Smith Co., 75 Wn.2d 843, 851, 454 P.2d 387 (1969);

Rottinghaus v. Howell, 35 Wn. App. 99, 108, 666 P.2d 899 (1983). In this case,

the defects the Tadychs have identified are latent. For example, the structural

defects outlined in OAC’s report were not visible simply by looking at the as-built

home.    The only way that the Tadychs could have discovered the improper

installation and fastening of the trusses and support beams and improper

installation of the stucco, rain mesh, and window flashing was to cut into the

home’s walls and ceiling to inspect these features. While the Tadychs could see,

upon visual inspection, that the roof lacked the number of vents specified in the

plans, they could not see inside the walls to determine if NRC had installed an

alternative method of ventilation that would serve the same purpose as the missing

six-inch vents. We agree with the Tadychs that their claim is based on latent

defects and the discovery rule under 1000 Virginia applies.

        NRC alternatively maintains that RCW 4.16.326(1)(g), enacted while 1000

Virginia was pending, renders the discovery rule inapplicable even to claims of

latent defects. That statute provides:

        (1) Persons engaged in any activity defined in RCW 4.16.300 may
        be excused, in whole or in part, from any obligation, damage, loss,

                                         - 18 -
No. 81948-8-I/19

        or liability for those defined activities under the principals of
        comparative fault for the following affirmative defenses:

                ....

        (g) To the extent that a cause of action does not accrue within the
        statute of repose pursuant to RCW 4.16.310 or that an actionable
        cause as set forth in RCW 4.16.300 is not filed within the applicable
        statute of limitations. In contract actions the applicable contract
        statute of limitations expires, regardless of discovery, six years after
        substantial completion of construction, or during the period within six
        years after the termination of the services enumerated in RCW
        4.16.300, whichever is later; . . . .

RCW 4.16.326(1)(g). The Supreme Court recognized that the legislature enacted

this provision in 2003 as “an affirmative defense precluding the application of a

discovery rule for claims of breach of written construction contracts.” 1000 Virginia,

158 Wn.2d at 582.

        But, under the plain language of the statute, it applies only where the

“applicable contract statute of limitations” is six years. If the applicable statute of

limitations is less than six years, as is the case of a claim based on an oral contract,

the discovery rule will still apply. 1000 Virginia, 158 Wn.2d at 582-83. Here, the

parties agreed to shorten the limitations period from six years to one. Thus, the

applicable statute of limitations is not six years after substantial completion. By

contracting for a limitations period of less than six years, the parties took

themselves out of the scope of RCW 4.16.326(g)(1). This statute does not apply

here and the discovery rule governs the date on which the Tadychs’ claim

accrued. 5

5NRC also contends that the Tadychs agreed that their claim accrued when they first occupied the
home. We disagree with this reading of the contract. The Tadychs agreed that any claims accruing
within one year of occupancy had to be initiated in that one-year period. There is nothing in the
contract to indicate that the Tadychs agreed to waive the discovery rule as to latent defects.

                                             - 19 -
No. 81948-8-I/20

      Under the discovery rule, a cause of action accrues when the plaintiff

discovers, or in the reasonable exercise of diligence should discover, the salient

facts underlying the cause of action's elements. 1000 Virginia, 158 Wn.2d at 576.

The Tadychs argue that a material question of fact exists as to when they

determined that they had sustained damages. They argue that even if they were

on notice of a potential breach of contract by NRC, they had no understanding of

the damages being caused by the “systemic and serious defects in NRC’s work”

until October 2016.

      But “[w]here an injury, although slight, is sustained in consequence of the

wrongful act of another, and the law affords a remedy therefor, the statute of

limitations attaches at once.” Green v. A.P.C., 136 Wn.2d 87, 96, 960 P.2d 912

(1998) (quoting Ruth v. Dight, 75 Wn.2d 660, 453 P.2d 631 (1969)). The statute

of limitations is not postponed by the fact that further, more serious harm may flow

from wrongful conduct. Id. “[T]he running of the statute is not postponed until the

specific damages for which the plaintiff seeks recovery actually occur.” Id. at 97.

      The point at which a plaintiff discovered or should have discovered their

injury is ordinarily a question of fact. Winbun v. Moore, 143 Wn.2d 206, 213, 18

P.3d 576 (2001). But this question of fact may be determined as a matter of law

when reasonable minds can reach only one conclusion. Ruff v. King County, 125

Wn.2d 697, 704, 887 P.2d 886 (1995). Based on the record here, reasonable

minds could only conclude that the Tadychs discovered NRC’s breach of contract

when they knew NRC had not repaired the cracks in the stucco as required by the

punchlist, when they felt their home shift and began to see cracking in the walls

                                       - 20 -
No. 81948-8-I/21

and out-of-plumb doors in February 2015, and when they received CDR’s report

putting them on notice of defects in the roof ventilation. The Tadychs were on

notice that they had experienced “appreciable harm” occasioned by NRC’s breach

of contract sufficient to support a lawsuit before the one-year claim period expired.

        We conclude the one-year claim period to which the Tadychs agreed is valid

and enforceable. It is neither substantively unconscionable nor unreasonable

because they had time to investigate their breach of contract claim and their claim

accrued before the one-year period expired. 6

B. Estoppel

        The Tadychs next contend that NRC should be estopped from relying on

the one-year claim period in the contract because it represented to the Tadychs

that no defects existed, and then, when those defects became obvious, it

misrepresented its intention to repair them.

        Estoppel will preclude a defendant from asserting the statute of limitations

when the defendant's actions have fraudulently or inequitably induced a plaintiff to

delay commencing suit until the applicable period of limitation has expired. Del

Guzzi Constr. Co. v. Global Northwest Ltd., 105 Wn.2d 878, 885, 719 P.2d 120

(1986). Equitable estoppel is disfavored and the party asserting it must prove each

element by clear, cogent, and convincing evidence. Club Envy of Spokane, LLC

v. Ridpath Tower Condo. Ass'n, 184 Wn. App. 593, 601, 337 P.3d 1131 (2014)

6 The Tadychs suggest that if the discovery rule applies, the one-year limitation period runs from

the date of discovery. This argument is not supported by the contract language or the case law
enforcing contractual claim limitation clauses. We apply the discovery rule only to determine if the
contract clause to which the Tadychs agreed is reasonable. Here, the Tadychs’ cause of action
accrued prior to the running of the one-year time period, making the contract clause enforceable,
and it is enforceable as it is written.

                                              - 21 -
No. 81948-8-I/22

(citing Robinson v. City of Seattle, 119 Wn.2d 34, 82, 830 P.2d 318 (1992)). In

order to prevail, the Tadychs must prove (1) the defendant made a statement or

an admission, or took some action that is inconsistent with a claim it is now

asserting; (2) the plaintiff reasonably relied on that statement, admission, or act;

and (3) the plaintiff would be injured if the court allowed the defendant to contradict

or repudiate the prior act, statement, or admission. Id. When invoked to avoid the

statute of limitations, the key question is whether the defendant made

representations or promises to perform which lulled the plaintiff into delaying the

filing of a timely action. Peterson v. Groves, 111 Wn. App. 306, 311, 44 P.3d 894

(2002). When equitable estoppel is rejected on summary judgment, we determine

whether the plaintiff presented sufficient evidence to raise a genuine issue of fact

on any of the elements of this defense. See Id. at 310, 314.

        We conclude the Tadychs have not sustained their burden of producing

evidence to establish that NRC lulled them into not filing a lawsuit before April 7,

2015.    First, while the Tadychs identify a number of statements NRC made

regarding its intent to repair identified defects, many of these statements occurred

after April 2015 and therefore cannot support equitable estoppel. Any statements

made after the claims period had expired could not have induced the Tadychs to

refrain from bringing a timely lawsuit.

        The only relevant statements or actions by NRC for purposes of equitable

estoppel are those set out in the March 16, 2015 email exchange between Sue

Tadych and Jason Wojtacha, NRC’s president, and statements Wojtacha made

during the March 30, 2015 meeting with the Tadychs and CDR. But there is no

                                          - 22 -
No. 81948-8-I/23

evidence that in either the March 16 email or the March 30 meeting, NRC asked

or encouraged the Tadychs to hold off on filing a lawsuit until it could remedy the

defects they or CDR pointed out. While Wojtacha expressed his “hope” that the

Tadychs were not considering litigation, NRC did not ask the Tadychs to delay

filing suit.

        The Tadychs rely on Rouse v. Glascam Builders, Inc., 101 Wn.2d 127, 677

P.2d 125 (1984) and Marsh to support their argument that NRC’s repeated

assurances that its work was not defective should estop NRC from asserting the

one-year claims period as an affirmative defense.

        In Rouse, the plaintiff bought a condominium from Glascam Builders. Id. at

128-29. Within the one-year warranty period, Rouse reported a defect in the patio.

Id. at 129. Glascam acknowledged the defect and promised to fix it. Id. For

several years, Rouse repeatedly contacted Glascam and Glascam repeatedly

promised to correct it. Id. Approximately four years after purchasing the home,

Rouse filed suit when Glascam changed its position and refused to perform the

promised repairs. Glascam asserted Rouse could not prosecute its warranty claim

because the warranty itself had expired. Id.

        The Supreme Court concluded that Glascam’s promises, made within the

warranty period, had induced Rouse not to bring legal action and, as a result, it

was estopped from raising the contractual warranty period as a basis for denying

the homeowner’s request for an award of attorney fees under the contract. Id. at

136.

                                       - 23 -
No. 81948-8-I/24

       In Marsh, the plaintiff fell on a stairway at a college and filed a claim with

the school’s insurance representative. 22 Wn. App. at 934-35. The representative

told Marsh that he did not believe the school was liable but would still submit her

claim. Id. at 935. The representative also told her that it often took between six

months and a year to process claims and that Marsh should not be concerned if

she did not hear about the claim before then. Id. The statute of limitations on

Marsh’s claim expired seven months after that discussion. Id. The trial court

granted the insurance company’s summary judgment motion based on the

expiration of the statute of limitations.    Id. at 934.   Division III reversed and

concluded that genuine issues of material fact existed, including whether Marsh

reasonably relied on the representative’s statement such that equitable estoppel

precluded the statute of limitations from barring the claim. Id. at 936.

       Rouse and Marsh are both factually distinguishable.          Unlike in Rouse,

where the defendant repeatedly acknowledged the existence of defects, NRC

repeatedly denied that its work was improperly performed and consistently

indicated that no defects existed in the home. It is not unusual for one party to a

contract to claim a breach occurred and the other party to deny it. Such a denial

is not the type of statement, admission or act that would support equitable

estoppel.

       And unlike Marsh, there is no evidence that NRC ever asked the Tadychs

to delay filing suit or indicated that they should wait before doing so. Prior to April

2015 and the expiration of the claims period, NRC did not encourage a delay in

litigation by promising to correct defective work and then subsequently fail to

                                        - 24 -
No. 81948-8-I/25

perform that work. Based on this record, the trial court did not err in concluding

that NRC is not estopped from asserting the contractual claims period as an

affirmative defense.

C. Attorney Fees

       Finally, the Tadychs request that we reverse the trial court’s award of

attorney fees to NRC and to award it attorney fees on appeal. NRC in turn asks

us to award it fees on appeal.

       A party may request an award of attorney fees and costs if the applicable

law provides the right to recover fees and costs on appeal. RAP 18.1(a). The

contract between the Tadychs and NRC provides that “[t]he prevailing party in any

dispute over this Agreement shall be entitled to recover from the other party its

reasonable costs and attorneys' fees incurred in connection therewith, whether

before or at trial, on appeal or in bankruptcy.” Because NRC is the prevailing party

on appeal, we affirm the award of attorney fees to NRC below and award attorney

fees to NRC on appeal. Because the Tadychs are not the prevailing party on

appeal, their request for fees is denied.

       We affirm.

WE CONCUR:

                                       - 25 -