Remember the Statute of Limitations

Contract claims and negligence claims are subject to different statutes of limitations. In Washington, claims based on written contracts must be commenced within six years of the claimed breach of contract. Claims based on negligence must be brought within three years of when the plaintiff discovers (or with reasonable diligence could discover) the facts underlying the claim. To take a simple example, if a company negligently designs a ladder so that it collapses and causes injury months later, the three-year statute of limitations begins to run only after the injury has occurred. Not all cases are that simple, however, as the following case illustrates.

A contractor was building a highway tunnel in downtown Seattle. After mining about 1,000 feet, the contractor discovered that its tunnel boring machine was damaged. The contractor blamed the damage on a steel well casing that, it said, the project owner should have disclosed. The owner replied that the well casing was disclosed in a report written by its engineer. The contractor claimed the report was incorrect and failed to give adequate notice of the well casing.

The contractor first asserted a claim for breach of contract against the owner and later decided to add a claim for negligence against the engineer, but the negligence claim was filed more than three years after the tunnel boring machine encountered the well casing. The engineer moved to dismiss the contractor’s claim based on the statute of limitations. When the trial court denied the motion, the engineer asked the Court of Appeals to review the matter. Although the Court of Appeals rarely interferes in ongoing lawsuits, it agreed to review whether the trial court should have granted the engineer’s motion. In its review, the Court of Appeals will consider when the contractor discovered the facts underlying its negligence claim.

The contractor argues that, while it quickly concluded the well casing was one possible cause of damage to its tunnel boring machine, it did not become confident of that conclusion until weeks later. Meanwhile, the contractor struggled to make the tunnel boring machine work until finally stopping it for repairs less than three years before filing its claim against the engineer.

The following principles will be relevant to the appellate court’s review:

1. The three-year limitations period begins to run as soon as a plaintiff knows enough facts to support a lawsuit, usually as soon as the plaintiff knows it has been injured. So it will be important to determine when the plaintiff claims the tunnel boring machine was damaged by the well casing and when it knew of that damage (or could with diligence discover it).
2. For the three-year limitations period to begin to run, the plaintiff must know (or with diligence be able to discover) that the defendant is connected somehow with the injury and may be responsible. This will not be an important factor here because the contractor had the report it now claims was incorrect or misleading and the engineer was listed as the author of the report.
3. The limitations period does not wait until the plaintiff is able to prove its case against the defendant. The statute of limitations applies even to cases where the plaintiff’s claim fails and it turns out that the defendant did not cause any injury at all. To set the limitations period in motion, all that is needed is enough information to support a claim of injury and the defendant’s connection to that injury. Once the limitations period begins to run, the plaintiff has three years in which to gather information and prepare to prove its case. So it is not sufficient to say, “I believed the defendant had caused my injury, but I wasn’t sure.”

The foregoing is a general description of issues raised in a Court of Appeals case entitled Washington State Department of Transportation v. Seattle Tunnel Partners, Cause No. 51025-1-II. Those interested in finding out the appellate court’s ultimate ruling may wish to monitor that case.

Enough has been said to indicate that the statute of limitations can create serious risks and raise interesting questions about which parties can disagree. The bottom line is that it is better to be safe than sorry. If you believe you have been injured by another, it is prudent to consult with an attorney to figure out what claims you may have, what statute of limitations applies to those claims, and when the limitations period may run out, leaving you with no remedy.

Originally published as "OP-ED: When something goes wrong, remember the statute of limitations" by the Daily Journal of Commerce, March 16, 2018.