Yakima Asphalt Paving Co. v. Department of Transportation
Docket: No. 8759-6-II
Court: Court of Appeals of Washington; October 14, 1986; Washington; State Appellate Court
Yakima Asphalt Paving Company filed a lawsuit against the Washington State Department of Transportation, seeking an "asphalt cement adjustment" based on a price adjustment clause in a contract between the Department and Northwest Construction, Inc. The Superior Court dismissed the case, ruling that Yakima Asphalt's claim for one project was not filed within the 180-day limit set by RCW 47.28.120, and that claims for both projects were barred because Northwest had signed full releases of all claims. Yakima Asphalt argued that RCW 47.28.120 was unconstitutional and that the releases were invalid. However, the court affirmed the dismissal, stating the 180-day limitation was enforceable and the releases were valid.
Contracts 1772 and 1759, concerning highway projects, were signed by Northwest and the Department in December 1979 and January 1980, respectively. Both contracts required Northwest to certify completion and release the State from claims. The work under contract 1759 was accepted on November 15, 1982, and under contract 1772 on February 22, 1983. Northwest certified completion and released claims for both projects. Yakima Asphalt initiated its claim in June 1983, but the Department moved to dismiss, asserting the releases and the 180-day limitation barred the claims. The trial court agreed, noting that the statute and contract limitation were identical.
The court did not address Yakima Asphalt's constitutional challenge, adhering to the principle that non-constitutional grounds should be resolved first. It found the contract limitation enforceable and concluded that it, along with Northwest's releases, barred the claims on both contracts. The ruling emphasized that contracting parties can establish shorter limitation periods than those prescribed by general statutes, and such contractual limitations prevail unless overridden by statute, public policy, or deemed unreasonable.
Northwest established that all claims must be brought within a 180-day contractual period, which is not prohibited by any statute. RCW 47.28.120 supports this limitation for public works contracts. Yakima Asphalt argued the limitation was unreasonable, but the court found it justifiable due to legislative appropriations, budget constraints, federal funding issues, and the nature of public works contracts. The court noted contractors should be aware of potential claims before project completion.
Yakima Asphalt also challenged the enforceability of releases signed by Northwest, claiming lack of consideration since Northwest received payment it was already entitled to. The court disagreed, citing Inland Empire Builders, Inc. v. United States, which upheld similar contract provisions requiring a release for final payment. The court concluded that a release mandated by a contract is supported by the same consideration as the contract itself.
Additionally, Yakima Asphalt contended that the releases were enforceable only against Northwest as a third-party beneficiary. The court rejected this claim, stating that Yakima Asphalt was not an intended beneficiary since there was no evidence of intent by the parties to create such an obligation at the time of contract formation. The court affirmed its decision, dismissing Yakima Asphalt’s other arguments as meritless. Reconsideration was denied on November 6, 1986, and review by the Supreme Court was denied on March 3, 1987. RCW 47.28.120 mandates that actions related to public works contracts must be filed within 180 days following final acceptance and approval of work. Northwest joined the action as a plaintiff but assigned its claim to Yakima Asphalt, which involved a contract provision related to asphalt pricing and alleged underpayment due to incorrect data used by the Department.
