Construction Forecast Issue Home

March 30, 2000

Contractor gets stung for tossing evidence

Keeping evidence intact is critical to construction defect disputes, despite who’s at fault.

By MICHAEL T. ZORETIC
Stanislaw Ashbaugh

In a construction defect dispute, preserving the physical evidence can be essential to the contractor’s position. A recent unpublished decision by the Washington Court of Appeals demonstrates the harsh punishment that may result when a contractor allows evidence to be destroyed.

In the recent case of Newhall Jones, Inc. v Classic Cedar Construction, Inc., a general contractor built a custom home overlooking Lake Sammamish. Shortly after moving in, the owners noticed water leaks in the living room and bathroom. The general contractor investigated and concluded the leaks were caused by improperly installed siding and by unsealed holes around the windows that had been drilled by the security system subcontractor. During the course of its investigation, the general contractor removed the "faulty" living room and bathroom windows and stored them outside its office.

The general contractor brought suit against both its siding subcontractor and security system subcontractor for their alleged role in causing the leaks. The general contractor also submitted a claim to its own insurance agency.

Several months after filing its lawsuit, the general contractor received payment from its insurance company, and destroyed the windows. Although the dispute had been going on for over one year, neither of the subcontractors had inspected the windows by the time the general contractor disposed of them.

The trial court ruled that the general contractor committed a discovery violation by destroying the windows, stating that destruction of this evidence provided the general contractor with a "substantial investigative advantage" because the condition of the windows was relevant to the question of what caused the water infiltration. The court sanctioned the general contractor by barring it from presenting any expert testimony relating to the faulty windows.

In an unpublished decision, Division I of the Washington Court of Appeals upheld the trial court’s various rulings against the general contractor, including the decision to bar testimony about the windows. The appellate court held that the windows were important and relevant evidence as to the comparative fault of the general and its subcontractors.

Although the general contractor had taken pictures of the windows and retained them for over a year, the appellate court agreed with the trial judge that the general obtained a "substantial investigative advantage" by destroying the windows before the subcontractors had inspected them.

The appellate court also upheld the trial court’s determination that the general had acted "intentionally or with conscious disregard" of the subcontractors’ rights in destroying the windows. Although the general contractor claimed it had not intentionally destroyed the windows, and only did so after receiving payment from its insurance company, the appellate court agreed with the trial judge that the general contractor had failed to offer an "innocent explanation" for destroying the windows.

Because it is not a published decision, the Newhall Jones case has no precedential authority with other courts in our state. However, the case provides a clear example of why it is important for contractors to carefully preserve all evidence relating to construction defect claims. As the general contractor discovered in that instance, harsh consequences can result from the destruction of evidence even when the items in question have been stored for extended periods of time.

Whenever possible, contractors faced with a potential construction defect issue should give interested parties an opportunity to inspect the suspected defective work prior to the time it is repaired and/or removed from the project. If circumstances require immediate action, the contractor should store all suspected physical evidence relating to the defect in a dry, safe and secure storage area and contact legal counsel as soon as possible. Evidence relating to a pending dispute should never be destroyed without the contractor consulting its attorneys.