The case is the first published case to interpret when dissolution occurs under Washington's Limited Liability Act, RCW 25.15 et seq., which was enacted in June 2006.  The question before the court was when is the "effective date of dissolution" for an LLC that has been administratively dissolved.  Under the statute, the statute of limitations for claims against LLCs is three years after the "effective date of dissolution."

The subcontractor in this case argued that the effective date of dissolution occurred when the subcontractor's LLC was administratively dissolved.  The general contractor argued that the effective date for an LLC that has been administratively dissolved did not occur until two years after administrative dissolution when the LLC's affairs have been "wound up" under RCW 25.15.270 and its certificate of formation is cancelled by the Secretary of State under RCW 25.15.290(4).

The Court of Appeals sided with the subcontractor and ruled that the "effective date of dissolution" occurred when the LLC was administratively dissolved.  Therefore, the three year statute of limitations began to run on the date of administrative dissolution.

Serock argued that Ledcor's breach of contract claims were barred by the contract statute of limitations because Ledcor did not file suit against Serock until over 6 years after Serock's last day of work on the project.  Ledcor argued that the statute of limitations did not begin until substantial completion of the project or that the discovery rule applied and under both scenarios Ledcor's claims against Serock would not be barred by the 6 year statute of limitations.

The Court of Appeals held first that the 6 year contractual statute of limitations began to run (or accrued) no later than Serock's last day of work on the project.  Also, the Court of Appeals further held that the discovery rule did not apply to toll the statute of limitations because Ledcor had failed to allege in its complaint against Serock that the defects were latent (or not discoverable upon a reasonable inspection). 

At the end of the day, Ledcor did not lose entirely because the Court of Appeals held that Ledcor's indemnity claims against Serock were not barred by the statute of limitations. 

Shortly after purchasing the home from the first purchaser, Nguyen discovered that water damage on the interior of the home.  Nguyen alleged that the water damage was the result of defective construction performed by Doak on the exterior of the home.

However, the Court of Appeals dismissed Nguyen's claims against Doak because Nguyen had not purchased the home directly from Doak.  Doak had no affirmative duty to disclose any defective conditions to Nguyen because Nguyen was the second purchaser of the home. 

In this case, Lakemont Ridge Homeowner's Association v. Lakemont Ridge LP, No. 76850-1, ____ Wn.2d ____, ____ P.3d ____ (April 16, 2006), the Lakemont Ridge Homeowner's Association commenced a construction defect action against the project's developer without first providing the written notice required by RCW 64.50.020. The developer moved to dismiss its action. The Homeowner's Association argued it was not required to give notice because this project was begun and completed before RCW 64.50 had been enacted and that the developer had not included the notice in its contract required by the statute (RCW 64.50.050) to trigger the statute's applicability. The Homeowner's Association prevailed, and the developer and other defendants appealed.

On appeal, the Court of Appeals reversed, holding that pre-litigation written notice was required even though the developer had not included the statutorily-required language in its contracts with the condominium owners. The Court noted that the written notice requirement of RCW 64.50.020 applied to "every" construction defect action and not just to those involving projects begun after RCW 64.50 was enacted. The Court also stated that the Homeowner's Association's interpretation would delay the chapter's intended effect of reducing construction defect litigation. The Court rationalized that homeowners would not be prejudiced by its interpretation, because the failure to give notice would only result in a dismissal of the defect action "without prejudice" and that the homeowner could simply re-file after giving notice and following the procedures of RCW 64.50. The Court of Appeals held that the requirement of RCW 64.50.050 (notice to the homeowner in its contract) applied only to those projects which commenced after the statute was enacted.

The Washington Supreme Court reversed finding that the pre-litigation notice requirement and opportunity to cure only became operative when the construction professionals in question had given prior written notice to the homeowner of the requirement. The Supreme Court cured the situation created by the Court of Appeals' opinion that a homeowner was required to provide a notice which was not required at the time of the purchase and which the homeowner had never received written notice specified in the statute.