Washington Court Tunnels Deeper Into the Discovery Rule

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Often times, properly analyzing when a statute of limitations begins to run – not just how long it runs – is crucial to timely pleading. In Dep’t of Transp. v. Seattle Tunnel Partners, 2019 Wash.App. LEXIS 281 (Was. Ct. App. Feb. 5, 2019), Division Two of the Court of Appeals of Washington addressed when the discovery rule starts the statute of limitations clock on a negligence cause of action. The court held that the statute of limitations begins to run when the plaintiff knows that the factual elements of the claim against the defendant exist. The clock starts to run even if the plaintiff wants to investigate the possibility of other contributing factors or the defendant identifies opposing viewpoints on the theory of the claim.

In this matter, the Washington State Department of Transportation (WSDOT) contracted with an engineering firm, WSP USA, Inc. (WSP), for an evaluation of the Alaskan Way Viaduct in 2001. As part of this project, WSP retained the services of Shannon and Wilson (S&W), another engineering firm, to conduct geological profile logs, groundwater-pumping tests, and prepare technical memoranda. In 2002, WSP and S&W installed a pumping well with an eight-inch steel casing (TW-2). In 2009, apparently based on the work done by WSP and S&W, WSDOT determined that a bored underground tunnel was the best option for replacing the viaduct.

In January of 2011, WSDOT and Seattle Tunnel Partners (STP) entered into a contract to construct an underground bored tunnel. STP launched its tunnel-boring machine (TBM) on July 30, 2013. A hollow steel casing emerged from the project surface site on December 4, 2013 and STP stopped its boring work two days later to investigate the slow rate of tunneling and rise in temperature of the TBM that ensued after seeing the casing. From December 6, 2013 to January 28, 2014, STP conducted an investigation into the cause of the boring issue. The relevant dates and events are as follows:

December 9, 2013:

STP’s project manager sent an email stating that STP hit a WSDOT well

December 10, 2013:

WSP’s engineer sent an email casting doubt on the issue

December 12, 2013:

STP sent a letter to WSDOT stating they were investigating

December 17, 2013:

WSDOT identified the damaged casing as being from TW-2

January 11, 2014:

STP laid out a plan to resume tunneling

January 15, 2014:

STP responded to questioning from WSDOT, identifying the well casing as the cause of damage

January 28, 2014:

STP resumed tunneling

February 2, 2014:

STP stopped tunneling indefinitely due to damage to the TBM

WSDOT filed suit against STP for breach of contract on October 9, 2015. STP subsequently answered and counterclaimed, alleging that WSDOT failed to disclose the presence of TW-2. In addition, on January 26, 2017, STP filed a complaint against S&W, adding WSP to the action the following day. Thereafter, S&W and WSP filed a joint motion for summary judgment, claiming that STP’s action was barred by the three-year statute of limitations for negligence. S&W and WSP claimed that even with application of the discovery rule, which delays the running of the statute until the plaintiff knows or in the exercise of due diligence should have discovered the factual bases of its cause of action, STP had sufficient knowledge of the facts at issue prior to January 26, 2014, and thus STP’s complaint was untimely. After the lower court found in favor of the STP, S&W and WSP appealed.

In support of its position on appeal, STP argued that there was an insufficient basis to start the running of the statute of limitations by January 26, 2014. STP highlighted internal correspondence between S&W, WSP and WSDOT, questioning the role of TW-2 in the incident. STP also argued that the statute of limitations should not begin to run until it determined that TW-2 was the “true cause” of the incident.

The court found both of STP’s arguments unpersuasive. The court reasoned that it was not when STP knew the bases of the cause of action that triggered the statute, but when STP discovered them. It also held that neither the possibility of other contributing factors existing nor the fact that an investigation is ongoing alters the point in time when the plaintiff has sufficient notice of an accrued claim to trigger the statute of limitations. Based on these principles, the court determined that January 15, 2014, was the latest day it could be argued that STP had sufficient notice, actual or inquiry, for the statute of limitations to begin. Thus, because STP filed its complaint after the three-year statute of limitations had expired, the court reversed the ruling of the lower court.

While the discovery rule has an equitable purpose and can often be helpful in prosecuting claims thought to be untimely, it is not a magic wand. The case described herein is a good example of the rule’s limits. Since the determination of when a plaintiff has sufficient notice under the discovery rule for a statute to begin to run is a factual one that is subject to interpretation, counsel should be aware of the potential for differing interpretations. Thus, whenever possible, practitioners should err on the side of caution when deciding when to file a complaint if a statute of limitation is about to run.

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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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