{"id":898032,"date":"2020-10-01T13:54:04","date_gmt":"2020-10-01T19:54:04","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=898032"},"modified":"2020-10-01T13:54:08","modified_gmt":"2020-10-01T19:54:08","slug":"liquidated-damages-construction-delay","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/liquidated-damages-construction-delay\/","title":{"rendered":"Delay Days for Liquidated Damages May Be Apportioned Where Permitted by Contract"},"content":{"rendered":"\n<p><a rel=\"noreferrer noopener\" href=\"https:\/\/www.lanepowell.com\/Our-People\/Geoff-F-Palachuk\" target=\"_blank\">Geoff F. Palachuk<\/a> | <a rel=\"noreferrer noopener\" href=\"https:\/\/www.lanepowell.com\/Our-Insights\/212202\/Delay-Days-for-Liquidated-Damages-May-Be-Apportioned-Where-Permitted-by-Contract\" target=\"_blank\">Lane Powell<\/a><\/p>\n\n\n\n<p>Overlapping delays partly caused by a contractor and partly by an owner \u2014 known as <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/mutual-concurrent-delay-caused-by-subcontractors\/\" target=\"_blank\" rel=\"noreferrer noopener\">concurrent delays<\/a> \u2014 typically nullify the assessment of <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/liquidated-damages-applicability\/\" target=\"_blank\" rel=\"noreferrer noopener\">liquidated damages<\/a> in a breach of contract dispute. But a contractor generally will be held liable for liquidated damages if the contractor cannot establish proof of concurrent or owner-caused delays affecting the critical path. Where the parties\u2019 contract provides for the allocation of fault for delays, a trier of fact must analyze each delay day in order to apportion fault. In\u00a0<em>Lake Hills Investments, LLC v. Rushforth Construction Co., Inc.<\/em>, Division One of the Washington Court of Appeals clarified the rule for apportionment of liquidated damages, and held that factfinders can apportion delay days for liquidated damages between the contracting parties, where allowed by contract, depending on each party\u2019s respective fault for causing delays.<\/p>\n\n\n\n<p>The court in&nbsp;<em>Lake Hills&nbsp;<\/em>examined a jury\u2019s assessment and apportionment of liquidated damages by the owner (Lake Hills) against the contractor (AP) for a project in Bellevue. The project was constructed in several phases. AP did not timely complete the project, with delays ranging from 300-500 days for multiple phases.<\/p>\n\n\n\n<p>At trial, Lake Hills sought to assess liquidated damages of $2,500 per day for delays on each phase that were caused by the conduct of AP or its agents. The jury instruction at issue allowed the factfinder to excuse AP for any delays that AP, alone, did not cause. Although the law typically requires that a general contractor like AP carry the burden of proving such delays were the fault of concurrent or owner-caused delays, the jury instruction provided AP with a negative burden of proof focused on contractor-caused delays.<\/p>\n\n\n\n<p>The court of appeals acknowledged that negative phrasing. Without addressing the issues related to each party\u2019s respective burden of proof, however, the court reasoned that the parties\u2019 contract allowed apportionment of delays. The court determined that liquidated damages could be assessed under the contract by \u201cexamining each day of delay, identifying the cause of delay, and adding or subtracting delay days based on the conduct of each party and its agents.\u201d The court adopted the modern rule of \u201ca \u2018strong majority\u2019 of jurisdictions\u201d that a factfinder can apportion liquidated damages between the contracting parties, where allowed by contract, depending on the relative allocation of fault in causing those delays.<\/p>\n\n\n\n<p>The jury was instructed to excuse AP from any delay days \u201cnot solely caused by AP.\u201d But the court of appeals determined that instruction did not reflect the parties\u2019 contract. The court reasoned that \u201c[t]he instruction let the jury excuse AP from any day of delay caused by anything other than itself, including its own agents.\u201d The jury instruction also did not account for any delays caused by AP\u2019s agents, subcontractors, material suppliers, consultants, etc., which normally constitute delays attributable to the general contractor. The trial court provided the narrower and negatively-phrased jury instruction, and the jury ultimately found \u201cAP was not the \u2018sole\u2019 cause of 90 percent of the delay on the project.\u201d<\/p>\n\n\n\n<p>The court of appeals held the instruction \u201cmisled the jury without misstating the law,\u201d but the court also determined that Lake Hills suffered no prejudice. Notwithstanding the appellate court\u2019s ruling on this issue, the case was ultimately reversed and remanded for a new trial\u00a0on other grounds.\u00a0<\/p>\n\n\n\n<p>The lesson from this case is that delay days may be apportioned to the contracting party found at fault for the cause of delay. That rule had not been clarified by the Washington appellate courts for nearly two decades. However, the decision in&nbsp;<em>Lake Hills<\/em>&nbsp;also should not change a contractor\u2019s burden of proof at trial. In order to overcome or nullify the assessment of liquidated damages during trial, a contractor must establish proof of either concurrent or owner-caused delays that affect the critical path. Delays that affect the critical path extend the overall length of construction. Only then, where the delays are attributable to such concurrent or owner-caused delays, a factfinder may apportion delay days to determine the proper assessment of liquidated damages.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Geoff F. Palachuk | Lane Powell Overlapping delays partly caused by a contractor and partly by an owner \u2014 known as concurrent delays \u2014 typically nullify the assessment of liquidated damages in a breach of contract dispute. But a contractor generally will be held liable for liquidated damages if the contractor cannot establish proof of&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/liquidated-damages-construction-delay\/\">Continue reading <span class=\"screen-reader-text\">Delay Days for Liquidated Damages May Be Apportioned Where Permitted by Contract<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14],"tags":[9895,158,9252,12,9112],"class_list":["post-898032","post","type-post","status-publish","format-standard","hentry","category-construction-2","tag-advise-consult","tag-breach-of-contract","tag-concurrent-delay","tag-construction","tag-liquidated-damages","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Delay Days for Liquidated Damages May Be Apportioned Where Permitted by Contract - Advise &amp; 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