MacLean Townhomes, LLC v. P.J. Interprize, Inc.

MacLean Townhomes, LLC v. P.J. Interprize, Inc., ___ Wn. App. ___, ____ P.3d ____ (Div. I, July 3, 2006) involved suit by MacLean, developer and general contractor of Summerville Village, a condominium project in Issaquah, against a subcontractor, P.J. Interprize, Inc. MacLean brought indemnity and breach of contract claims against Interprize. After MacLean and the HOA reached a settlement under which MacLean paid the costs of repair of construction defects, Interprize moved for summary judgment dismissing the claim for contractual indemnity, arguing that the indemnification provision of its subcontract only applied to third-party tort claims.

The trial court granted Interprize’s motion. MacLean appealed. The Court of Appeals reversed. The Subcontract provided in pertinent part:

Subcontractor shall defend, indemnify, and hold Contractor harmless from any and all claims, demands, losses and liabilities to or by third parties arising from, resulting from, or connected with, services performed or to be performed under this Subcontract by Subcontractor or Subcontractor’s agents, employees, sub-tier Subcontractors, and suppliers to the fullest extent permitted by law, and subject to limitations provided below: The limitations provided below applied in part to tort claims.

The Court found that they did not limit MacLean’s right to broad-based contractual indemnity. The Court noted that the trial court did not decide two other matters raised in the appeal: whether the economic loss rule has any affect on MacLean’s claims, and whether MacLean could pursue damages related to contract claims separate from Interprize’s duties to defend and indemnify. The Court found that these matters should be addressed on remand.

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