Court Opinion

ID: 4713540
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:39:28.262359+00
Date Added: 2024-06-11T08:04:18.184432
License: Public Domain

¶17 — Today the majority of this court recognizes a new rule for construction contracts that disregards our precedent. The court overturns this state's completion and acceptance rule for construction contracts and imposes a tort-based (and vague) foreseeability rule. The majority thereby rewrites terms of construction contracts created through private parties' negotiation and agreement.
 ¶18 The completion and acceptance rule is well supported in Washington common law, and our legislature has long declined to overturn that rule. I would affirm the trial court's summary judgment order and uphold the rule, continuing to allow free contracting by parties in this state. I dissent. *Page 422
 ANALYSISThe Completion and Acceptance Rule
 ¶19 Under the completion and acceptance rule, when an independent contractor finishes work on a project as directed by the owner and that work is inspected and accepted, the contractor is no longer liable for injuries to third parties.Andrews v. Del Guzzi, 56 Wn.2d 381, 388, 353 P.2d 422
(1960).
 ¶20 Washington has recognized the completion and acceptance rule for nearly a century. See, e.g., Donaldsonv. Jones, 188 Wash. 46, 61 P.2d 1007 (1936); Thorntonv. Dow, 60 Wash. 622, 111 P. 899 (1910). Recent Court of Appeals decisions evidence its continued employment in Washington. See, e.g., Garza v. McCain Foods, Inc.,124 Wn. App. 908, 913, 103 P.3d 848 (2004); First Church ofChrist Scientist v. City of Seattle, 92 Wn. App. 229, 234,964 P.2d 374 (1998).
 ¶21 Washington recognizes three exceptions to the completion and acceptance rule. The rule will not apply where: (1) the product of the work is inherently or imminently dangerous, Andrews, 56 Wn.2d at 388; (2) the alleged negligence is not part of the contract work but collateral to the contract, First Church, 92 Wn. App. at 234-35; or (3) the contractor has a continuing duty of inspection and care. Axland v. Pac. Heating Co., 159 Wash. 401, 407,293 P. 466 (1930). These exceptions strengthen and support the rule.
Stare Decisis
 ¶22 Where this court is urged to abandon a long-established legal doctrine, the doctrine of stare decisis must be carefully considered. "Stare decisis" means, literally, "[t]o stand by things decided." BLACK'S LAW DICTIONARY 1443 (8th ed. 2004). It involves following rules laid down in previous judicial decisions unless they are found to contravene the ordinary principles of justice. See Windust v. Dep't ofLabor Indus., 52 Wn.2d 33, 35-36, 323 P.2d 241
(1958). Stare *Page 423 
decisis assures that the same rules will apply to each citizen's case and that those rules may be known and relied upon.
 ¶23 Stare decisis furthers unity in the system of justice, assuring that decisions by courts of last resort are reliably binding. State v. Ray, 130 Wn.2d 673, 677,926 P.2d 904 (1996); State ex rel. Wash. State Fin. Comm. v.Martin, 62 Wn.2d 645, 665, 384 P.2d 833 (1963).
 ¶24 We have recognized that without the stabilizing effect of stare decisis, "law could become subject to . . . the whims of current holders of judicial office." In re Rights to Useof Waters of Stranger Creek, 11 Wn.2d 649, 653,466 P.2d 508 (1970). When a rule of the common law has been upheld through generations, there is a great likelihood that such a rule is just and not merely the result of the subjective preferences of jurists. Stare decisis also serves the separation of powers, as the legislature may, in an appropriate area, change the law. If the legislature does not change the law, this further supports citizen reliance on the rule.
 ¶25 Continued adherence to precedent also reflects the important consideration that when a legal principle has been long established, it allows citizens to choose their courses of action with a reasonable expectation of future legal consequences. Crown Controls, Inc. v. Smiley,110 Wn.2d 695, 704-05, 756 P.2d 717 (1988); see also
Stephen Markman, Precedent: Tension Between Continuity inthe Law and the Perpetuation of Wrong Decisions, 8 TEX. REV. L. POL. 283, 284 (2004) (suggesting factors for determining when the presumption favoring precedent may be overcome, including "consideration of the reliance interests of the people, all of whom must carry out their personal and business affairs within the constraints of the legal system").
 ¶26 This court has repeatedly recognized that stare decisis "`requires a clear showing that an established rule is incorrect and harmful before it is abandoned.'" Riehl v.Foodmaker, Inc., 152 Wn.2d 138, 147, 94 P.3d 930 (2004) (quoting Stranger Creek, 11 Wn.2d at 653). *Page 424 The Completion and Acceptance Rule Is Reasonable
 ¶27 Applying the appropriate test, our completion and acceptance doctrine must be found reasonably supported and neither incorrect nor harmful.
 ¶28 A contracting party's acceptance of a construction project remains a significant event. Formal acceptance usually occurs only after inspection to assure the work has been performed as specified by the contract (as occurred in this case). The inspection by owners is also usually preceded by government agency inspection(s) (also done here). This court has recognized that the completion and acceptance rule finds one important basis in the owner's act of accepting the work after inspections as an intervening cause. Thornton,60 Wash, at 636; see also First Church,92 Wn. App. at 234 (acknowledging "the theory that acceptance of the work by the owner was an intervening cause relieving the contractor of liability"). Emphasis upon an owner's acceptance of the work accords with rights of parties to freely contract. Seealso WASH. CONST. art. I, § 23 ("No . . . law impairing the obligations of contracts shall ever be passed.").
 ¶29 The completion and acceptance rule is a reasonable rule of construction contracting. This court has recognized important key distinctions between the underlying rationales of tort (e.g., product liability) and contract. In rejecting a tort theory of construction liabilities in Stuart v.Coldwell Banker Commercial Group, Inc., 109 Wn.2d 406,745 P.2d 1284 (1987), this court observed that "[t]ort law is concerned with the obligations imposed by law, rather than by bargain." Id. at 420. This court also noted that product liability is different because "it is appropriate that a duty be imposed on manufacturers to produce products that will not unreasonably endanger the safety and health of the public." Id.
 ¶30 "In contrast, contract law protects expectation interests, and provides an appropriate set of rules when an individual bargains for a product of particular quality or for a particular use." Id. In this case we are not dealing with *Page 425 
products designed and mass marketed to enter public commerce but rather with a contracted structure to be used by the contracting owner for a particular purpose on a particular parcel of private property. Here, the pipe size, quality, depth, etc., were all specified in the contract, and the project was independently inspected by the owner before acceptance. If the distinction between tort law and contract law is clear within the area of products liability law, it is even more important in this case (and in all construction contract cases).
 ¶31 This court has noted that the different remedies offered in contract "encourage parties to negotiate toward the risk distribution that is desired or customary."Berschauer/Phillips Constr. Co. v. Seattle Sch. Dist. No., 1, 124 Wn.2d 816, 827, 881 P.2d 986 (1994). This reflects an intent to "preserve the incentive to adequately self-protect during the bargaining process." Id. This court further observed that "[i]f we held to the contrary, a party could bring a cause of action in tort to recover benefits they were unable to obtain in contractual negotiations." Id.
Continued adherence to the completion and acceptance doctrine is consistent with this commitment to allow voluntary contractual arrangement for risk allocation. The most obvious example is an owner choosing a cheaper construction product that will not last as long as a more expensive product and later suing in tort when the cheaper contracted project does not last.
 ¶32 The completion and acceptance rule is particularly important in the construction context. The construction industry is structured through contractual arrangements and specific design plans and specifications. The industry is further constrained by building codes, permits, and agency inspections. The completion and acceptance rule provides a public policy whereby contracting parties are held to the economic expectations defined in their contract documents.
 ¶33 One such economic expectation is that upon project completion, an owner accepts the work because it has met the requirements of the contract and applicable codes. The *Page 426 
owner then assumes subsequent risks related to the project. The owner also maintains and controls subsequent use. The contract here is a good example. See Clerk's Papers (CP) at 309 et seq. The contract and specifications were detailed, providing for inspection by an independent company working for the owner — with the owner retaining power to order changes before acceptance.
 ¶34 For reasons provided above, the completion and acceptance rule is reasonable and neither incorrect nor harmful. Those same reasons weigh heavily against Davis's alternative argument that this court should apply a "latent defect" exception to the rule.3 A court cannot find a "latent" defect here, where the owner had known the problem and had chosen to uncover the pipe well before the accident.
 ¶35 This and the other existing exceptions to our rule are simple and sensible, and strengthen the general rule. By overturning the long-standing rule, the majority imposes into the contracts of private parties terms that the parties themselves never agreed to.
The Construction Statute of Repose Did Not Repeal theRule
 ¶36 Contrary to the majority, I also find unpersuasive the argument that RCW 4.16.300-.320 somehow repealed the completion and acceptance rule.4 *Page 427 
 ¶37 The legislature is presumed to know the existing case law in the areas where it legislates. A statute is not construed in derogation of a common-law rule unless the legislature clearly expressed that purpose. Staats v.Brown, 139 Wn.2d 757, 766, 991 P.2d 615 (2000); Irwinv. Rogers, 91 Wash. 284, 287, 157 P. 690 (1916).
 ¶38 The statute of repose neither expressly nor impliedly supersedes the completion and acceptance rule. The statute was enacted nearly 40 years ago, and no Washington appellate court has held that it supersedes the rule. (Nor has the legislature indicated such understanding.)
 ¶39 Nor is there any conflict between the statute of repose and the completion and acceptance rule. They are distinct in effect. Actions may accrue within the statute of repose period (and within the statute of limitations) but still be barred by the completion and acceptance rule. Conversely, a claim based on an exception to the rule may be barred if the action did not accrue within the repose period.
The Trial Court Properly Struck One Sentence from anExpert's Declaration
 ¶40 I would also uphold the trial court's striking a sentence from the expert's declaration. Under ER 704, expert witnesses may testify on "an ultimate issue to be decided by the trier of fact." When a trial court is presented with a question of law, it may disregard expert affidavits that contain conclusions of law. Eriks v. Denver,118 Wn.2d 451, 458, 824 P.2d 1207 (1992).
 ¶41 In opposition to respondent's summary judgment motion, appellant's expert, Michael Black, PE, testified in a written declaration that pipe damage and escaping water "created a hazardous condition and created a zone of danger." CP at 692. The trial court struck this sentence as a legal conclusion.
 ¶42 To the extent this case involves a question of whether the damaged fitting created an imminently or *Page 428 
inherently dangerous condition, the expert's statement was a legal conclusion and properly stricken.
 CONCLUSION ¶43 Today the majority overturns this state's historic completion and acceptance rule, contrary to stare decisis. By imposing a tort-based foreseeability rule in place of the long-standing rule, the majority disregards the line between tort and contract, which this court — and contracting parties — have previously understood. The majority thereby rewrites terms of private parties' contracts. I would affirm the trial court's summary judgment order based on the completion and acceptance rule and allow private contracting parties to continue to craft mutually beneficial and voluntary contract agreements for construction. This rewriting of our law will cost consumers in the long run. Therefore, I dissent.
ALEXANDER, C.J., and BRIDGE, J., concur with J.M. JOHNSON, J.
3 I also reject appellant's other alternative argument that the imminently or inherently dangerous exception applies here to leaky pipes. Cases involving buried dynamite as "inherently dangerous," Wilton v. City of Spokane, 73 Wash. 619,621, 132 P. 404 (1913), or explosive gas, Andrews,supra, are not comparable.
4 RCW 4.16.310, the statute of repose, in pertinent part provides:
 All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation shall begin to run only during the period within 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. . . .
Whereas a statute of limitation bars plaintiff from bringing an accrued claim after a specified time, "[a] statute of repose terminates a right of action after a specific time, even if the injury has not yet occurred." Rice v. Dow Chem. Co.,124 Wn.2d 205, 212, 875 P.2d 1213 (1994).