Washington Appellate Court Provides Guidance on Application of Spearin Doctrine and Allocation of Delay

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On September 14, 2020, Division One of the Washington Court of Appeals provided clarification in the case of Lake Hill Investments, LLC. V Rushforth Construction Company, Inc., Case No. 79116-8-I, on how the Spearin Doctrine should be applied as a defense to a claim for faulty construction. The court also discussed how delay should be allocated for purposes of imposition of liquidated damages.

The Spearin Doctrine provides that an owner impliedly warrantied that the plans and specifications provided to a contractor are workable and sufficient for construction. Breach of that warranty may be a basis for an affirmative defense to a claim for defective construction.

The court noted that an affirmative defense is an absolute bar to liability. Since it is an absolute bar to liability, the court held that the contractor must establish that the defective plans and specifications were the sole cause for the faulty construction and not merely a cause of the faulty construction.

The court went on to discuss how delay should be allocated for purposes of imposing liquidated damages. The court first noted that the terms of the contract determine the method for apportioning liquidated damages. However, where there is no prescribed method of apportioning liquidated damages, then the preferred method is to apportion liquidated damages based on causation of delay as between the owner and contractor.

The effect of these two holdings is that both in the application of the Spearin Doctrine and in the apportionment of liquidated damages, the parties will want to be more discrete in their examination of the alleged defects and delays.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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