AIA|WA Bill on Contract Fairness Receives Hearing in House

On the first day of the 2012 Legislative Session, the AIA|WA was already pushing its agenda forward. The legislature opened with a hearing in the House Judiciary Committee on EHB 1559; a bill drafted and supported by the AIA|WA and its allies in the design professions.

This bill unanimously passed the House of Representatives in 2011, but ran into a wall of opposition from public agencies in the Senate.

Peter Rasmussen, FAIA, AIA|WA Immediate Past-President testified in support of EHB 1559 along with Stan Beck, an attorney with Lane Powell in Seattle, and other representatives of the design professions.  

EHB 1559, puts a new provision in law that prohibits agencies from requiring that architects indemnify and pay for the agencies’ defense costs for actions not resulting from the architect’s negligence. This is a growing problem as agencies look to shift any costs they can to someone else. As the lead design professional on projects, the risk is highest for architects.

Agencies claim that shifting risk and costs to the architects is fair. They claim they don’t pressure anyone to sign these contracts; they are willing to take them out if asked. But, we know different. We know that agencies present these onerous provisions with an ultimatum: sign the contract or lose the job.

The AIA|WA is fighting to ensure that architects are only responsible for their insurable risks resulting from acts of negligence or errors and omissions. We know that without insurance to protect architects, their businesses and even their homes could be put at risk by a single lawsuit. The public agencies’ lawyers and lobbyists do not care. But, we want a law that is fair and equitable to all parties.

After meeting with many state and local agencies since the last legislative session, the AIA|WA drafted technical changes to address the concerns that they raised. We are hopeful that they bill will move forward this year. Even so, it will be a difficult road as some local government agencies remain steadfastly opposed to giving architects and engineers equitable rights in contracts.

You can watch a recording of the hearing on www.TVW.org. Enter 1559 in the search engine and select today’s House Judiciary Committee hearing.

House Committee Passes Housing Liability Expansion Bill

The House Judiciary Committee passed a bill that would expand liability for architects, engineers, contractors and inspectors involved in the development of single family housing and residential duplexes.

SSB 6385 was originally introduced by Senator Brian Weinstein (D-41, Mercer Island). As passed by the Senate it creates broad new legal liabilities for all design and construction professionals involved in the construction of any improvement on residential property.

Representative Pat Lantz (D-26, Gig Harbor) introduced a striking amendment in the House Judiciary Committee that replaced the text of the bill with new language. Her amendment creates an implied warranty, which cannot be waived and creates new legal causes of action. As mentioned, the language is largely taken from the Condominium Act reforms passed in 2004 and 2005 (RCW 64.34, 64.35, 64.50 and 64.55). It does explicitly apply the statute of repose and statute of limitation provisions of RCW 4.16.310. It also exempts condominiums projects (because they are covered by a separate statute) and non-profit housing developers. No clear reason was given for exempting non-profit developers.

From the perspective of AIA/WA, the bill has many negatives. It uses a few of the provisions of the Condominium Act reforms, but leaves out many of the provisions that have worked to improve construction and reduce litigation. It expands liability with new warranties, but provides little protection from meritless suits.

The bill now goes to the House Rules Committee. It is expected that the bill will be held in the Rules Committee and not pass the House. However, it is unclear if the changes made in the Judiciary Committee will change the views of the House leadership.

Housing Lawsuit Bill Stumbles

ESSB 5550 expanding contractor and designer liability for housing projects hit a major roadblock this week. House Speaker Frank Chopp (D-43, Seattle) has publicly stated that he will kill the bill for 2007. He recognized that some of the ideas in the bill may have merit, but they need to be studied more before being implemented. This would indicate that the legislature is likely to create a study committee to work on the issue after the end of the 2007 legislative session, reporting back for action in 2008. For more background on this story visit the Olympian newspaper at: http://www.theolympian.com/125/story/73859.html.

In addition to Speaker Chopp, several other of the House Democrat’s leadership team have voiced concerns about the bill. While the press has focused on the Building Industry Association of Washington, every other group involved with design and construction are opposed the bill, including the AIA/WA. Major insurers testified that they would not be able to provide liability insurance if the bill is enacted. At least on insurer said it would pull out of Washington’s market entirely if ESSB 5550 passes. While the bill did pass out of the House Judiciary Committee yesterday, it now appears to be dead for the year.

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UPDATE: Recent news reports have given more details on a meeting between Speaker Chop and the primary sponsors Representative Brendan Williams (D-22, Olympia) and Senator Brian Weinstein (D-41, Mercer Island). The Seattle Times and The Olympian report that the Speaker has not changed his opposition to the bill as a result of the meetings.

AIA/WA Lobbies Against Housing Lawsuit Bill

The House Judiciary Committee held a hearing today on Engrossed Substitute Senate Bill 5550 to create a new avenue for lawsuits on residential construction by creating what is termed a “home warranty.” Under this warranty different parts of a residence would be warranted to be free of defects for up to 10 years (see previous posts).

Mort James, AIA, of Morton Safford James III AIA Architects in Olympia, attended the hearing to testify against the bill on behalf of the AIA Washington Council. Unfortunately, due to time constraints, he was unable to testify.

Mr. James was to testify about his extensive experience in residential construction and concerns about creating a new avenue for lawsuits, which would drive up home prices and not prevent construction defects. The AIA/WA will follow-up with committee members with written comments for the record.

The AIA/WA understands the concerns about faulty residential construction and supports the provision in ESSB550 to create a study committee to analyze the problems in residential construction.

The AIA is further concerned that ESSB 5550 does an end run around the state’s current 6-year statute of repose and 3 year statute of limitations by creating this new warranty. It explicitly creates a new 10-year statute of repose and a 6 year statute of limitations for purposes of the warranty provisions. Repose is the time in which a defect must be found. Limitations are the time after a defect is found or should have been found that a lawsuit must commence.

The AIA/WA also supports efforts to increase qualification standards for contractors and improving efforts to more closely regulate contractors. To that end, the AIA/WA is supporting Substitute House Bill 1843 improving contractor registration provisions and Engrossed Substitute SB 5788 creating a new license requirement for home inspectors.

You can listen to the hearing at www.tvw.org. Enter the bill number 5550 in the search engine and select the House Judiciary Committee hearing on March 23, 2007.

Bill Circumventing Statute of Repose Passes Senate

A bill that would undermine the state’s statute of repose for designers and builders of residences passed the State Senate late yesterday on a 30-19 vote. SB 5550, sponsored by Senator Brian Weinstein (D-41, Mercer Island), creates a new “warranty” requirement for residences. The warranty would be up to 10 years for certain aspects of a residence – nearly doubling the current 6 year statute of repose. The bill does not directly alter the statute of repose, rather it creates new legal rights to sue builders and designers beyond the current 6 year limit. While AIA/WA and its allies were successful in getting the bill narrowed before it came to a vote in the Senate, we remain very concerned about the negative impact the bill would have on housing prices and the availability of professional liability insurance for those that design and build houses.

The bill now goes to the House of Representatives where it will be referred to the House Judiciary Committee. A companion bill, HB 1935, sponsored by Representative Brendan Williams (D-22, Olympia) remains pending on the House Second Reading Calendar.

Housing Liability Expansion Heard in House Committee

The House Judiciary Committee today held a hearing on HB 1935, sponsored by Representative Brendan Williams (D-22, Olympia), to expand liability on housing projects. At the hearing, Representative Williams presented a proposed substitute that would be an exact copy of SB 5550, which was introduced by Senator Brian Weinstein (D-41, Bellevue). SB 5550 is pending further action in the Senate Rules Committee (see the summary posted previously). AIA/WA’s contract lobbyist Cliff Webster testified against the bill. AIA/WA supports the study committee portion of the bill. However, AIA/WA opposes the substantive provisions in the bill, because they presuppose the policy outcome that the study is designed to ascertain. To listen the hearing, go to http://www.tvw.org/ and enter the bill number in the search engine.