WASHINGTON SUPREME COURT CLARIFIES GRAY AREA OF CONSTRUCTION LIEN STATUTE

Date: January 24th, 2018

Last week, the Washington Supreme Court issued an important decision that provides some clarity to contractors faced with foreclosing a lien against a release of lien bond. As the lower courts have expressly acknowledged, the “Bond in Lieu of Claim” section of the construction lien statute (RCW 60.04.161) has been a source of considerable confusion for contractors, owners and sureties since the 1990s.

The Washington Supreme Court’s decision in Inland Empire Drywall Supply Co. v Western Surety alleviates some of this confusion. Specifically, the Supreme Court affirmed the Court of Appeals decision and ruled that a lien claimant seeking to foreclose its lien against a release of lien bond only needs to sue the surety that issued the bond. This is significant guidance for the construction industry in light of the harsh consequences for a lien claimant’s failure to strictly comply with the construction lien statute’s procedures.

The Supreme Court’s decision adopts much of the reasoning of the Court of Appeals ruling, which I discussed at length in an article published last year. Here is a link to my prior article for those readers that are interested in the specific reasoning behind the new rule.

If you have any questions regarding the Inland Empire decision or any other construction law matter, please contact me at bguthrie@ashbaughbeal.com.