Washington Supreme Court Abandons Doctrine of Completion and Acceptance

By
Real Estate Services with Heffernan Law Firm

In Davis v. Baugh Industrial Contractors, Inc., the Washington State Supreme Court abandoned the doctrine of completion and acceptance, which shields contractors from certain liability for negligent work after that work has been completed and accepted by the property owner.

 

The case arose when Baugh, through its subcontractor, installed underground piping at a processing facility.  The work was accepted by the owner, and approximately three years later, a leak in the piping caused a pond to form.  An employee of the owner was killed trying to repair the work, and the employee’s estate filed a negligence action against the contractor.  The trial court granted summary judgment in favor of Baugh on the grounds that the completion and acceptance doctrine relieved Baugh of liability for negligence after the work was completed and accepted by the property owner.

 (c) 2006 Richard Anderson http://www.flickr.com/photos/techsavvy

The Supreme Court overruled, abandoning the doctrine of completion and acceptance.  That doctrine holds that, once an independent contractor finishes work on a project and the work has been accepted by the owner, the contractor is no longer liable for injuries to third parties, even if the work was negligently performed. 

 

In abandoning the doctrine, the Court observed that the doctrine has not been addressed in Washington in over forty years; in the meantime, thirty-seven states rejected it.  Furthermore, accepted principles of liability had changed since the doctrine was last visited.  The doctrine of completion and acceptance, the court explained, was rooted in a view of liability that rested only on contract, but modern law has abandoned such a contractual requirement.  The Court cited the products liability context as an example of an area where contractual liability is no longer the only means of establishing liability for an injury.  Furthermore, in Washington, any intervening negligence on the part of the owner does not necessarily break the chain of causation leading to the injury, and thus the contractor should still remain at least potentially liable for the injury.  Finally, in a highly scientific and complex construction environment, the nonexpert landowner cannot be held to have performed an informed inspection of a contractor’s work prior to final acceptance of that work. 

 

In further support of its ruling, the Court explained that the completion and acceptance doctrine is no longer necessary where the state has enacted a statute of repose to protect contractors from negligence claims six years after substantial completion of construction; the doctrine, according to the Court, is also unnecessarily complex with its numerous exceptions, and harmful because it weakens the deterrent effect that tort law may have on an otherwise negligent contractor. 

 

This dissent criticized that the Court’s holding threatens to undermine the stability of risk allocation within the construction industry, which operates on the assumption that parties to a construction contract are able to allocate their risk through the terms of their agreement.  The dissent also points out that the holding overturns nearly a century’s worth of caselaw on the subject, which the state’s courts of appeals had applied regularly in the modern day.

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completion and acceptance
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Ambassador
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Rich Jacobson
Your Kitsap County WA Real Estate Broker
Keller Williams West Sound Realty
Devon, I always enjoy reading case law. This one is rather unsettling for the building industry. What do you think will be the longterm effects of this one?
January 22, 2007 12:08 PM
Rainer
10,211
Devon Thurtle
Heffernan Law Firm
Rich, sorry for the delayed response.  Not sure at this point - more likely than not, the risk will be more particularly allocated by contract.  The problem with that, however, is that it can lead to interpretation problems.  Hopefully the contracts will be able to take care of it, although owners will likely be hesitant to sign new provisions limiting a contractor's liability.
January 26, 2007 03:13 PM
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Devon Thurtle

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