OLYMPIA, Wash. - Washington state law may bar claims against contractors for their construction activities but it does not stop lawsuits over their role as a seller or supplier of asbestos-containing products, the Washington Supreme Court ruled.
In an April 30 ruling, the court held that Brand Insulations, which supplied and installed insulation at the ARCO Cherry Point refinery in the early 1970s, could assert the state’s six-year construction statute of repose as an affirmative defense against claims that the asbestos-containing insulation Brand installed at the ARCO plant caused the death of Lee Hetterly, a maintenance technician who began working for Brand at the ARCO refinery in 1971.
ARCO built its Cherry Point refinery in the late 1960s and early 1970s. Brand was hired as an insulation subcontractor to buy and install insulation on the refinery’s piping, vessels, heat exchangers and other vital equipment. Allegedly, the insulation Brand purchased contained asbestos, which was installed throughout the refinery.
Decades after working at the Cherry Point refinery, Hetterly developed mesothelioma and later sued 53 defendants, alleging his mesothelioma was caused by exposures at various residences and workplaces throughout King and Whatcom counties over 50 years.
Among those defendants was Brand, which argued in the trial court that the case should be dismissed on the ground that the state’s statute of repose for construction activities bars Hetterly’s claims.
As the Supreme Court explained, “[s]tatutes of repose differ from statutes of limitation because ‘[a] statute of limitation bars [a] plaintiff from bringing an already accrued claim after a specified period of time,’ whereas a ‘statute of repose terminates a right of action after a specific time, even if the injury has not yet occurred.’”
According to Brand, the six-year construction statute of repose passed sometime in the 1970s even though Hetterly did not discover his injury until 2021.
Hetterly died after bringing the lawsuit and Frederick Polinder III, the estate’s executor, was substituted as plaintiff.
The trial court initially agreed with Brand and dismissed the case on summary judgment based on a 2020 Washington Court of Appeals case, Maxwell v. Atlantic Richfield Co., ruling that the construction statute of repose bars claims against Brand as a matter of law.
The lower court later reversed itself after a 2023 Court of Appeals ruling, in Welch v. Brand Insulations, Inc., came to the opposite conclusion, holding that the statute of repose did not bar asbestos claims against Brand “because the Cherry Point refinery began refining oil before Brand’s services were complete” and, therefore, Brand’s services were not construction activities.
In light of this split in authority, Brand took the unusual step of appealing directly to the state Supreme Court, which agreed to take up the case.
In a 6-3 decision written by Justice Steven Gonzalez, the Washington high court sided with the Welch court in requiring “Brand to show more than its activities simply ‘involve’ construction or ‘relate to’ construction… To benefit from the construction statute of repose, Brand must show its activities contributed to the construction of an improvement on real property or systems that are a normal and integral part of that kind of improvement for the improvement to function as intended.”
Brand met this burden, the court found, citing an expert declaration filed by Brand establishing that thermal insulation is necessary for refineries to operate. Based on this evidence, the court concluded there is “no genuine dispute that Brand’s installation activities contributed to systems that are a normal and integral part of a refinery for the Cherry Point refinery to function as intended.”
That conclusion does not end the case, however. The construction statute of repose may bar claims arising from activities surrounding the installation of normal and integral parts of improvements to real property, but they do not prevent claims “arising from Brand’s independent duties as a product seller or supplier even if such claims may relate to construction activities,” the court stated.
Since that issue had not been addressed, the court sent the case back to the trial court to determine whether Hetterly’s claims arise from Brand’s construction activities, which are barred by the statute of repose, or Brand’s activities as a product supplier or seller, which are not barred.
The court did not offer much guidance on how to distinguish between Brand’s role as a contractor versus its activities as a supplier of products, though elsewhere in its opinion it identified facts suggesting Brand acted as a product seller or supplier when installing the insulation: “ARCO relied on Brand’s insulation expertise; Brand had discretion to select the asbestos-bearing insulation material; Brand purchased and resold the asbestos-bearing insulation to ARCO at a marked-up price; After construction, ARCO retained unused asbestos-bearing insulation material that Brand supplied.”
Justice Sheryl Gordon McCloud, joined by justices Charles Johnson and Barbara Madsen, filed an opinion concurring in part and dissenting in part.
“I agree with the majority’s conclusion on the question that we agreed to review: based on the record in this case, the Washington construction statute of repose… bars all claims against Brand ‘arising from [Brand] having constructed, altered or repaired any improvement upon real property,’” justice McCloud wrote.
“I disagree with the majority’s choice to opine on the question that we were not asked, that is, whether plaintiff’s seller liability claims nevertheless survive because they fall outside the category of claims that ‘aris[e] from [Brand] having constructed, altered or repaired any improvement upon real property.’”
In Justice McCloud’s view, Brand was entitled to summary judgment as the trial court originally ruled, and to the extent “plaintiff wants to press his claim that Brand’s act of providing insulation is so separate from its construction activity of installing that insulation that it is exempt from the construction statute of repose, he should be free to do so on remand.”
