The Court of Appeals breathes new life into the Spearin doctrine, but contractors beware, as future owners may seek to shift design risks to unsuspecting contractors in their construction agreements.
On July 03, 2023, Division One of the Washington Court of Appeals issued a win for contractors in a decision upholding a contractor’s right to assert the affirmative defense of the Spearin doctrine, which bars a contractor’s liability for claims proximately caused from design issues. In the case, the trial court had held that the parties’ contract, which contained a “Correction of Work or Damaged Property” provision, shifted the design risk to the contractor.
The Court’s opinion in King Cnty. v. Walsh Constr. Co. II, LLC, ultimately held that despite the contract provision that Walsh would “repair, replace, or correct all Work not performed in accordance with the Contract at no cost to the County if the material, equipment, workmanship, or Work failed to perform satisfactorily,” Walsh had not waived the Spearin doctrine’s protection from liability for design defects. The Spearin doctrine provides that “[a] contractor is required to build in accordance with plans and specifications furnished by the owner, the [owner] impliedly guarantees that the plans are workable and sufficient.”
Notably, the Court’s decision in Walsh Constr. Co. II, clarified and distinguished previous Washington cases that brought into question whether the Spearin doctrine applied when certain warranty provisions were included in construction contracts. The Court ultimately held that for such a waiver to occur, the contract must contain a “‘wider guarantee” that would necessarily displace the implied warranty of design adequacy.”
The Court cited two cases as examples of contracts containing “wider guarantees” resulting in a waiver of the Spearin doctrine. In a 1959 case, Shopping Center Management Company v. Rupp, the court held that the Spearin doctrine had been waived when the contract contained an “express warranty, [that] goes beyond warranting the [contractor’s] work and also warrants that the materials and equipment installed by the contractor will operate satisfactorily under the plans and specifications of the owner.” Additionally, in a 1923 case, Port of Seattle v. Puget Sound Sheet Metal Works, the court found the Spearin doctrine had been waived when the contract contained the following provision: “We hereby guarantee to keep the roof installed by us . . . in perfect condition for a term of ten years from this date.” The Court in Walsh Constr. Co. II, found that King County’s current warranty provisions were not broad enough to constitute a waiver of Walsh’s Spearin protections.
Although the Court’s decision in Walsh Constr. Co. II, preserves the Spearin doctrine’s protection for contractors, it also provides owners a roadmap for inserting “wider guarantee” language into future contracts in the hope of successfully transferring such liability to contractors. As a result, contractors will need to be vigilant when reviewing and agreeing to future contracts, so as not to accept warranty obligations that result in shifting design risks and waiving the Spearin doctrine’s protections.
For help navigating risk shifting contract provisions, please reach out to Tom Krider or Sydney Sullivan at Smith Currie Oles.
