Frank Coluccio Construction Company v. King County , 416 P.3d 756 ( 2018 )

VILED
COURT OF APPEALS DIV I
STATE OF WAS1-1111GT04
201B lifii -7 tt1.1 8:31
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
FRANK COLUCCIO CONSTRUCTION No. 76334-2-1
COMPANY, (Consolidated with No. 76638-4-1)
Appellant,
V. PUBLISHED OPINION
KING COUNTY,
Respondent. FILED: May 7, 2018
SCHINDLER, J. — RCW 36.01.050 governs the venue of actions by or against a
county. RCW 36.01.050(1) states "All actions by any county shall be commenced in the
superior court of the county in which the defendant resides, or in either of the two
judicial districts nearest to the county bringing the action." In 2015, the legislature
amended the statute to add a new subsection, RCW 36.01.050(3).1 RCW 36.01.050(3)
states,"Any provision in a public works contract with any county that requires actions
arising under the contract to be commenced in the superior court of the county is
against public policy and the provision is void and unenforceable." In February 2015,
King County awarded a public works contract to Frank Coluccio Construction Company
(FCCC). The contract included a provision that states venue "shall vest solely in the
King County ... Superior Court." On December 7, 2016, King County filed a breach of
1 LAWS OF 2015, ch. 138,§ 1.
No. 76334-2-1 (Consol. with No. 76638-4-1)/2
'contract lawsuit against FCCC-in King County Superior Court. FCCC's principal
business office is in Seattle. On December 15, FCCC filed a lawsuit against King
County in Snohomish County Superior Court. Citing the 2015 amendment to RCW
36.01.050, FCCC argued the right to venue in Snohomish County. Snohomish County
Superior Court dismissed the lawsuit. FCCC filed a counterclaim in the King County
lawsuit and a motion to transfer venue to Snohomish County. King County agreed the
public works contract venue provision is void but argued it filed the lawsuit in the county
where FCCC resides. The court denied the motion to transfer venue. FCCC appeals
the Snohomish County Superior Court order granting the motion to dismiss its lawsuit
against King County and the King County Superior Court order denying the motion to
transfer venue to Snohomish County. We hold the 2015 amendment renders the public
works contract venue provision unenforceable but does not abrogate the mandate
under RCW 36.01.050(1) that a county shall file a lawsuit against a contractor in the
county in which the contractor resides. We affirm the order granting the motion to
dismiss and the order denying the motion to transfer venue to Snohomish County.
North Creek Interceptor Sewer Improvement Project
In 2014, King County approved the request for proposal and bidding
requirements and contract for the North Creek Interceptor Sewer Improvement Project.
The contract required the contractor to use "Open Face Shield Tunneling"(OFST)and a
specific dewatering system for the project. The contract set milestone dates for the
completion of certain stages of the project. The "General Terms and Conditions"
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address "LITIGATION," including the mandatory litigation condition precedent of a
certificate of completion and a venue provision.
9.2 LITIGATION
A. As a mandatory condition precedent to the initiation of litigation
by the Contractor against the County, Contractor shall:
1. Comply with all provisions set forth in this Contract;
2. Provide the Project Representative written notice of intent
to participate in an Alternate Dispute Resolution (ADR)
process agreeable to both parties within twenty-one (21)
days from the date the Contractor received a written
determination from the Appeal Officer on a submitted
Appeal; or absent a written response by the Appeal Office,
within eighty-one (81) days following the receipt of the
Appeal by the Appeal Officer. The ADR process may be
postponed by the County for the purpose of administrative
efficiency to allow for all RCO5,[21 Claims and Appeals to be
processed pursuant to the Contract as provided in Articles
5, 6, and 9, so that all disputed Appeal determinations can
be addressed in one ADR process. The ADR process
must be initiated for all disputed Appeals within 300 days
after issuance of the Certificate of Substantial Completion
for the entire Project; and
3. Receive the Certificate of Substantial Completion for the
entire Contract or Final Acceptance if a Certificate of
Substantial Completion for the entire Contract is not issued.
B. Any litigation brought against the County shall be filed and
served on the County within 365 days from either the issuance
of the Certificate of Substantial Completion for the entire
Contract or Final Acceptance if no Certificate of Substantial
Completion of the entire Contract is issued. The requirement
that the parties participate in ADR does not waive the
requirements of this subparagraph.
C. Venue and jurisdiction shall vest solely in the King the [sic]
County Superior Court.
2 Requests for change orders.
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No. 76334-2-1 (Consol. with No. 76638-4-1)/4
The contract states, "Failure to comply with these mandatory condition time
requirements shall constitute a waiver of the Contractor's right to pursue judicial relief
for any Claim arising from work performed under this Contract." Section 9.2(D).
Frank Coluccio Construction Company(FCCC) bid on the North Creek
Interceptor Sewer Improvement Project. FCCC is a Washington corporation with its
principal office located in Seattle.
King County awarded the North Creek Interceptor Sewer Improvement Project
contract to FCCC in February 2015. The contract required completion of the first
milestone by September 23, 2016. FCCC started work on the project on April 26, 2016.
In September 2016, FCCC suspended tunneling operations. On October 6, King
County notified FCCC its work did not meet the requirements of the contract. King
County demanded a "Corrective Action Plan" that identified "specific steps, methods
and modifications that FCCC will adopt to make its performance compliant." FCCC
requested a change in the project specifications to allow the use of a different type of
tunneling method and a "different type of tunnel boring machine, with the added costs to
be borne by the County." King County did not agree to change the project
specifications. FCCC and King County scheduled a mediation for early December
2016.
King County Lawsuit Against FCCC in King County Superior Court
On December 7, King County filed a lawsuit against FCCC in King County
Superior Court for breach of contract. The complaint alleged,"Venue is proper in King
County Superior Court pursuant to RCW 36.01.050 and RCW 4.12.025 because
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No. 76334-2-1 (Consol. with No. 76638-4-1)/5
defendant FCCC resides in King County, Washington."3 The lawsuit sought a
declaratory judgment that FCCC was in default and damages.
On December 8, King County issued a notice of default. The notice states King
County will terminate the contract unless FCCC provides a Corrective Action Plan.
FCCC Lawsuit Against King County in Snohomish County Superior Court
On December 15, FCCC filed a lawsuit against King County for injunctive and
declaratory relief and damages in Snohomish County Superior Court. FCCC alleged
breach of contract because the OFST method was not feasible.
Dismissal of Snohomish County Lawsuit
King County filed a motion to dismiss the lawsuit filed in Snohomish County
Superior Court. FCCC argued because the venue provision in the contract was void
and unenforceable under the 2015 amendment to RCW 36.01.050,4 FCCC had the
statutory right to file the lawsuit against King County in Snohomish County.
King County agreed the venue contract provision was void under the recent
amendment to the statute. But King County asserted it filed the lawsuit against FCCC
in the county where FCCC resides as mandated under RCW 36.01.050(1). "FCCC
resides (has its home office and does business) in King County, so a suit against FCCC
in King County was perfectly proper."
The Snohomish County Superior Court granted the motion to dismiss. The order
states:
The Court hereby ORDERS as follows:
1. Defendant's Motion to Dismiss is GRANTED.
3 RCW 4.12.025(1) states that a corporation resides in the county where it has an office for the
transaction of business.
4 LAWS 0F2015, ch. 138, § 1.
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No. 76334-2-1 (Consol. with No. 76638-4-1)/6
2. This matter is hereby DISMISSED without prejudice to
Plaintiff's right to pursue its claims and remedies against King County in
the first-filed lawsuit in King County.
3. The Snohomish County court is willing to hear this matter if
the King County court concludes that venue is proper here.
FCCC filed an appeal on January 6, 2017 of the Snohomish County Superior
Court order.
FCCC Counterclaim and Motion To Transfer Venue
On January 6, 2017, FCCC filed a counterclaim to the lawsuit filed in King
County Superior Court. The counterclaim seeks breach of contract damages, a
declaratory judgment that FCCC is not required to use the OFST method, and an
injunction to prevent King County from terminating the contract.
FCCC filed a motion to transfer venue to Snohomish County Superior Court.
RCW 4.12.030 permits a change of venue where it appears:
(1) That the county designated in the complaint is not the proper
county; or
(2) That there is reason to believe that an impartial trial cannot be
had therein; or
(3) That the convenience of witnesses or the ends of justice would
be forwarded by the change.
FCCC argued the 2015 amendment prohibited venue in King County. FCCC
argued venue in King County Superior Court was not proper because "RCW 36.01.050
grants public works contractors an unqualified right to have their claims against a county
heard by an adjoining county's superior court."
King County conceded the contract venue provision was void under RCW
36.01.050(3). But King County pointed out the legislature did not modify the mandatory
language of RCW 36.01.050(1). Because there is no dispute FCCC resides in King
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No. 76334-2-1 (Consol. with No. 76638-4-1)17
County, King County asserted venue was proper under RCW 36.01.050(1).
FCCC resides (has its home office and does business) in King County,
and as such, the County's choice of venue in King County was authorized
(indeed mandated) by the applicable venue statute.[6]
The court denied the motion to transfer venue to Snohomish County Superior
Court. The court ruled the contract provision that venue "shall vest solely in the King
County ... Superior Court" is unenforceable under RCW 36.01.050(3). The court
rejected the argument that FCCC had the statutory right to determine venue in the
lawsuit filed by King County against FCCC. The court ruled RCW 36.01.050(1)
authorized King County to file the lawsuit against FCCC in King County Superior Court
because FCCC is a resident of the county. The court also notes that FCCC's right to
file a lawsuit against King County is subject to the contract condition precedent.
Under RCW 36.01.050(1), FCCC has a right to elect to file in Snohomish
County but this right is restricted by Paragraph 9.2(A)(2) and (3) of the
contract. In other words, FCCC's statutory right to select the venue does
not exist until it has received a certificate of completion for the entire
contract. FCCC argues that it had no option but to accept this language
because public works contracts are "take-it-or leave-it" agreements. But
FCCC has provided no legal authority for the proposition that these
provisions are unenforceable or unconscionable. FCCC accepted these
provisions when it chose to bid on this project—knowing full well how risky
underground tunneling projects can be.
On reconsideration, FCCC argued the decision was contrary to RCW
36.01.050(3) and public policy. The court denied the motion for reconsideration but
entered an order for certification under RAP 2.3(b)(4).6 We granted discretionary review
of the order denying FCCC's motion to transfer venue and ordered consolidation with
5 Footnote omitted.
6 RAP 2.3(b)(4) states the appellate court may accept discretionary review where the superior
court certifies that "the order involves a controlling question of law as to which there is substantial ground
for a difference of opinion and that immediate review of the order may materially advance the ultimate
termination of the litigation."
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the appeal of the Snohomish County order dismissing the lawsuit filed by FCCC against
King County.
Appeal of Order Denying Motion To Transfer Venue
FCCC contends the King County Superior Court erred in denying the motion to
transfer venue to Snohomish County Superior Court. FCCC asserts RCW 36.01.050(3)
gives public works contractors the absolute right to have their claims heard in an
adjoining county. The Associated General Contractors of Washington and National
Utility Contractors Association of Washington filed an amicus brief in support of FCCC's
argument. King County asserts the 2015 amendment does not change the plain and
unambiguous language of RCW 36.01.050(1) that authorizes a county to file a lawsuit
against a public works contractor in the county where the contractor resides.
The meaning of a statute is a question of law we review de novo. Pep't of
Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4(2002); W. Plaza, LLC v.
Tison, 184 Wn.2d 702, 707, 364 P.3d 76(2015). Our fundamental objective in
construing a statute is to ascertain and give effect to the intent of the legislature. City of
Spokane v. Rothwell, 166 Wn.2d 872, 876-77, 215 P.3d 162(2009).
Statutory interpretation begins with the plain meaning of the statute. Nat'l Elec.
Contractors Ass'n, Cascade Chapter v. Riveland, 138 Wn.2d 9, 19, 978 P.2d 481(1999); Lake v. Woodcreek Homeowners Ass'n, 169 Wn.2d 516, 526, 243 P.3d 1283(2010). We discern plain meaning from the ordinary meaning of the language, the
context of the statute in which the provision is found, related provisions, and the
statutory scheme as a whole. Lake, 169 Wn.2d at 526. "While we look to the broader
statutory context for guidance, we 'must not add words where the legislature has
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chosen not to include them.'" Lake, 169 Wn.2d at 526(quoting Rest. Dev., Inc. v.
Cananwill, Inc., 150 Wn.2d 674, 682, 80 P.3d 598 (2003)). We "construe statutes such
that all of the language is given effect." Rest. Dev., 150 Wn.2d at 682. We interpret
statutory provisions in relation to each other to harmonize all provisions. Cannabis
Action Coal. v. City of Kent, 180 Wn. App. 455, 477, 322 P.3d 1246 (2014); C.J.C. v.
Corp. of Catholic Bishop of Yakima, 138 Wn.2d 699, 708, 985 P.2d 262(1999). If the
statute is unambiguous after we review the plain meaning, our inquiry is "at an end."
Lake, 169 Wn.2d at 526.
RCW 36.01.050 governs venue in actions by or against counties. RCW
36.01.050(1) states:
All actions against any county may be commenced in the superior court of
such county, or in the superior court of either of the two nearest judicial
districts. All actions by any county shall be commenced in the superior
court of the county in which the defendant resides, or in either of the two
judicial districts nearest to the county bringing the action.
In July 2015, the legislature amended RCW 36.01.050 to add a new subsection
to prohibit the inclusion of a venue provision in a public works contract that requires
"actions arising under the contract to be commenced" in the superior court of that
county. LAWS OF 2015, ch. 138,§ 1; RCW 36.01.050(3).
As amended, RCW 36.01.050 provides:
(1) All actions against any county may be commenced in the superior
court of such county, or in the superior court of either of the two nearest
judicial districts. All actions by any county shall be commenced in the
superior court of the county in which the defendant resides, or in either of
the two judicial districts nearest to the county bringing the action.
(2) The determination of the nearest judicial districts is measured
by the travel time between county seats using major surface routes, as
determined by the administrative office of the courts.
(3) Any provision in a public works contract with any county that
requires actions arising under the contract to be commenced in the
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superior court of the county is against public policy and the provision is
void and unenforceable. This subsection shall not be construed to void
any contract provision requiring a dispute arising under the contract to be
submitted to arbitration.
FCCC argues that because RCW 36.01.050(1) gives a public works contractor
the right to file suit against King County in the two nearest judicial districts, the language
of the new subsection precludes King County from filing a lawsuit against a contractor in
King County Superior Court. Because FCCC's argument ignores the plain and
unambiguous language that mandates a county file a lawsuit against a contractor in the
superior court of the county where the contractor resides, we disagree.
RCW 36.01.050(3) unambiguously prohibits the inclusion of a venue provision in
a public works contract that requires "actions arising under the contract to be
commenced" in that county as "void and unenforceable." RCW 36.01.050(3) also
states, "This subsection" shall not be construed to void any provision "requiring ...
arbitration." While RCW 36.01.050(3) specifically addresses venue provisions in a
public works contract, it does not refer to or alter the plain and unambiguous language
of RCW 36.01.050(1). RCW 36.01.050(1) states, "All actions by any county shall be
commenced in the superior court of the county in which the defendant resides, or in
either of the two judicial districts nearest to the county bringing the action." The
legislature did not change, modify, or alter the language of RCW 36.01.050(1).7
7 The case FCCC cites, Briedablik, Big Valley, Lofall, Edgewater, Surfrest, North End Community
Ass'n v. Kitsap County, 33 Wn. App. 108, 652 P.2d 383(1982), is inapposite. Briedablik addressed the
right to bring an action against a county in an adjoining county under former RCW 36.01.050(1963)and
the statute authorizing change of venue, RCW 4.12.030. Briedablik, 33 Wn. App. at 109. The court held
the two statutes conflict and the statute governing actions by a contractor against a county controlled.
Briedablik, 33 Wn. App. at 118-19. In Save Our Rural Environment v. Snohomish County, 99 Wn.2d 363,
367, 662 P.2d 816(1983), the Washington Supreme Court held that "in actions by or against a county a
trial court may continue to exercise its discretion under RCW 4.12.030. To the extent Briedablik is
contrary to this view, it is overruled."
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FCCC and amidi cite legislative history to argue the legislature intended to
prevent a county from filing a lawsuit against a public works contractor in the superior
court of that county. But we look to the legislative history to determine legislative intent
only if the statute is ambiguous. Rest. Dev., 150 Wn.2d at 682; see also City of
Olympia v. Drebick, 156 Wn.2d 289, 295, 126 P.3d 802(2006)(a reviewing court
resorts to aids such as legislative history only when the language of the statute is not
plain and unambiguous); Lake, 169 Wn.2d at 526 ("If the statute is unambiguous after a
review of the plain meaning, the court's inquiry is at an end.").8
FCCC and amici also argue that as a matter of public policy, a public works
contractor must have the right to bring its claims against a county in an adjoining
county. Public policy arguments should be "addressed to the Legislature, not to the
courts." Blomster v. Nordstrom, Inc., 103 Wn. App. 252, 258, 11 P.3d 883(2000); Doe
v. Wash. State Patrol, 185 Wn.2d 363, 384, 374 P.3d 63(2016); State v. Costich, 152
Wn.2d 463, 479, 98 P.3d 795 (2004); Triplett v. Dep't of Soc. & Health Servs., 166 Wn.
App. 423, 433, 268 P.3d 1027(2012); Donohoe v. State, 135 Wn. App. 824, 851 n.20,
142 P.3d 654(2006); Quadrant Corp. v. Cent. Puget Sound Growth Mgmt. Hr'gs Bd.,
154 Wn.2d 224, 247, 110 P.3d 1132(2005); Burkhart v. Harrod, 110 Wn.2d 381, 385,
755 P.2d 759 (1988); State v. Brown, 94 Wn. App. 327, 341-42, 972 P.2d 112(1999);
Cazzanigi v. Gen. Elec. Credit Corp., 132 Wn.2d 433, 449, 938 P.2d 819 (1997).
We hold the plain and unambiguous language of RCW 36.01.050(1) gives a
county the right to file a lawsuit against a public works contractor in the county where
the contractor resides. Because RCW 36.01.050(1) mandates a county shall file suit
8 We note the bill report that amid i cites describes the amendment as "simple" and states the
amendment"solves a very straightforward issue with no change to the law." H.B. REP. ON H.B. 1601, at 2,
64th Leg., Reg. Sess.(Wash. 2015).
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against a defendant in the county where the defendant resides and the 2015
amendment adding subsection (3) does not refer to, alter, or change the language of
RCW 36.01.050(1), the King County Superior Court did not err in denying the motion to
transfer venue.
In the alternative, FCCC claims the litigation condition precedent in the contract
is procedurally and substantively unconscionable and violates RCW 36.01.050(3).
RAP 2.3 governs discretionary review. RAP 2.3(e) gives us the discretion to
determine the scope of discretionary review and specify the "issues as to which review
is granted." We granted review to address the order denying the motion to transfer
venue where the public works contract included an unenforceable forum selection
provision under RCW 36.01.050(3). We decline to consider other issues for which we
did not grant discretionary review. State v. LG Elecs., Inc., 185 Wn. App. 123, 151-52,
340 P.3d 915 (2014); aff'd 186 Wn.2d 1, 375 P.3d 636(2016).
In addition, FCCC did not argue in the motion to transfer venue or the motion for
reconsideration that the litigation condition precedent was procedurally or substantively
unconscionable. We also note the order denying the motion to transfer venue states
FCCC argued it had no option but to accept the language of the contract but "provided
no legal authority for the proposition that these provisions are unenforceable or
unconscionable." We do not consider issues raised for the first time on appeal. RAP
2.5(a); Roberson v. Perez, 156 Wn.2d 33, 39, 123 P.3d 844 (2005).
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Appeal of Order Dismissing Lawsuit Filed in Snohomish County
FCCC asserts the Snohomish County Superior Court erred in dismissing the
lawsuit against King County under the priority of action rule.
We review de novo application of the priority of action rule. Atl. Cas. Ins. Co. v.
Or. Mut. Ins. Co., 137 Wn. App. 296, 302-03, 153 P.3d 211 (2007). Under the priority of
action rule, the court that obtains jurisdiction of a case first "retains the exclusive
authority" over the action "until the controversy is resolved:" Sherwin v. Arveson, 96
Wn.2d 77, 80,633 P.2d 1335(1981). "The reason for the doctrine is that it tends to
prevent unseemly, expensive, and dangerous conflicts of jurisdiction and of process."
Sherwin, 96 Wn.2d at 80.
The priority of action rule does not automatically apply when parties file two
similar cases in different counties. Am. Mobile Homes of Wash., Inc. v. Seattle-First
Nat'l Bank, 115 Wn.2d 307, 317, 796 P.2d 1276 (1990). The rule applies "only when
the cases involved are identical as to subject matter, parties and relief." Sherwin, 96
Wn.2d at 80; Am. Mobile Homes, 115 Wn.2d at 317. Where the identity of the parties,
subject matter, and relief are not met, courts consider equitable factors to determine
whether the priority of action rule applies. Am. Mobile Homes, 115 Wn.2d at 320-21(the Washington Supreme Court considered equitable factors because the two cases
did not involve identical parties or relief).
Here, the parties are identical and the subject matter of the two lawsuits is the
same. Citing American Mobile Homes, FCCC asserts we must consider equitable
factors. FCCC contends the relief requested in the lawsuit filed against King County is
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not the same as the relief requested in the counterclaim filed in King County Superior
Court. We disagree.
In the Snohomish County Superior Court lawsuit, FCCC sought injunctive relief to
prevent King County from terminating the contract based on refusal to use the OFST
method. The counterclaim FCCC filed in the King County Superior Court lawsuit
requested the same injunctive relief—"[i]njunctive relief barring the County from
terminating or enforcing any termination of[FCCC] based on its refusal to use the
unsafe OFST. methodology." The court did not err in dismissing the Snohomish County
lawsuit under the priority of action rule.
Alternatively, FCCC asks us to create an exception to the priority of action rule
where a county sues a public works contractor first in its own county. We decline to
create an exception to the well established priority of action rule.
We affirm the Snohomish County Superior Court order granting the motion to
dismiss and the King County Superior Court order denying the motion to transfer venue.
WE CONCUR:
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