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Frank Coluccio Construction Co. v. King County

Court of Appeals of Washington, Division 1

May 7, 2018

FRANK COLUCCIO CONSTRUCTION COMPANY, Appellant,
v.
KING COUNTY, Respondent.

          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 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" 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 RCOs, *[2]' 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.

         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 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 ...


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