Construction Claims

Limitations & Repose Periods

Statute of Limitations for Breach of Construction Contract:

Contract not in writing: Action must be brought within 8 years. WYO.STAT.ANN. § 1-3-105(a)(ii)(A).

Written Contract: Action must be brought within 10 years. WYO.STAT.ANN. § 1-3-105(a)(i).

Claims for Negligent Construction:

Claims against licensed professionals, including architects, engineers, and licensed surveyors, must be brought within two years of the alleged act, error, or omission; or within two years of discovery of the act error or omission if the act, error, or omission was not discoverable within two years of its occurrence, and in fact the claimant did not discover the act, error, or omission within two years. WYO. STAT.ANN. § 1-3-107

Statute of Repose

Unless the parties to the contract agree otherwise, no action to recover damages, whether in tort, contract, indemnity or otherwise, shall be brought more than ten (10) years after substantial completion of an improvement to real property, against any person constructing, altering or repairing the improvement, manufacturing or furnishing materials incorporated in the improvement, or performing or furnishing services in the design, planning, surveying, supervision, observation or management of construction, or administration of construction contracts for:

(i) Any deficiency in the design, planning, supervision, construction, surveying, manufacturing or supplying of materials or observation or management of construction;

(ii) Injury to any property arising out of any deficiency listed in paragraph (i) of this subsection; or

(iii) Injury to the person or wrongful death arising out of any deficiency listed in paragraph (i) of this subsection. WYO.STAT.ANN. § 1-3-111(a). However, if injury to property or person or wrongful death occurs during ninth year following "substantial completion,” then action may be brought within one year of date of injury or death. Id.

Right to Repair Laws and/or Pre-Suit Statutory Procedures

No statute.

Indemnity and Contribution

Contributory fault shall not bar a recovery by any claimant to recover damages for wrongful death or injury to person or property if the contributory fault of the claimant is not more than 50% of the total fault of all actors. WYO.STAT.ANN. § 1-1-109(b). Whether or not the claimant is free of fault, the court shall: (i) If a jury trial: (A) Direct the jury to determine the total amount of damages sustained by the claimant without regard to the percentage of fault attributed to the claimant, and the percentage of fault attributable to each actor; and (B) Inform the jury of the consequences of its determination of the percentage of fault, or (ii) If a trial before the court without jury, make special findings of fact, determining the total amount of damages sustained by the claimant without regard to the percentage of fault attributed to the claimant, and the percentage of fault attributable to each actor. WYO.STAT. ANN. § 1-1-109(c) . The court shall reduce the amount of damages determined under subsection (c) of this section in proportion to the percentage of fault attributed to the claimant and enter judgment against each defendant in the amount determined under subsection (e) of this section. WYO.STAT. ANN. § 1-1-109(d) . Each defendant is liable only to the extent of that defendant's proportion of the total fault determined under paragraph (c)(i) or (ii) of this section. WYO.STAT. ANN. § 1-1-109(e) .

Certificate of Merit — Experts

Wyoming does not require the filing of a certificate of review, whereby a claiming party’s counsel must certify that he has consulted with a knowledgeable person in a particular field who has opined that there is a reasonable basis for the assertion of a claim against a licensed professional. However, Wyoming does require that a claim arising out of actions or inactions of licensed construction design professionals (standards which are not within the realm of knowledge of the lay community) must be supported by competent testimony of a qualified professional that the actions or inactions of a licensed professional feel beneath the standard of care. Garaman, Inc., v. Williams, 912 P.2d 1121 (Wyo. 1996). Disclosure Rules are, relative to other jurisdictions, fairly new in Wyoming. Thus, disclosures can often appear inadequate to defense counsel outside the jurisdiction. Judges in Wyoming sometimes still respond to inadequate disclosures with advice that opinions can be obtained through deposition, perhaps unnecessarily increasing the costs of litigation.

Economic Loss Doctrine

“Economic loss rule” bars recovery in tort when plaintiff claims purely economic damages unaccompanied by physical injury to persons or property. Rissler & McMurry Co. v. Sheridan Area Water Supply Joint Powers Bd., 929 P.2d 1228, 1234 (Wyo. 1996). Under certain circumstances, a party may be able to maintain an action for intentional interference with contract or claim for intentional misrepresentation or fraud notwithstanding the economic loss rule enunciated in Rissler. Excel Const. Inc. v. HKM Eng’g, 228 P.3d 40, 50 (Wy. 2010).

Contractor Licensing Requirements

Electrical contractors, low voltage electrical contractors and limited electrical contractors shall file with the chief electrical inspector a license application on or before July 1st of each year. Wyo.Stat.Ann § 35-9-125. Water well drilling contractors and water well pump installation contractors shall also apply for licenses. Wyo.Stat.Ann. § 33-42-108 and 109.

Common Law & Statutory Claims

Claims for negligent construction encompass all claims for damages arising from construction or repair activities causing damage to property. In the context of a negligence or other claim relative to damage to property arising out of construction activity, the scope of duty may be defined by a number of factors. A “[d]uty may arise by contract, statute, common law, or when the relationship of the parties is such that the law imposes an obligation on the defendant to act reasonably for the protection of the plaintiff.” Hatton v. Energy Elec. Co., 148 P.3d 8, 13 (Wyo. 2006). From wherever a duty arises in a construction defect action, compliance with contract requirements, codes, industry standards of care, and the like, should all be considered.

Construction Damages

The lesser of the cost of repair or diminution in value should generally be awarded for breach of contract and breach of warranty. Legacy Builders v. Andrews, 335 P.3d 1063, 1068 (Wyo. 2014). The objective of the law is to compensate the injury party for breach, not provide a windfall. Id.

Cost of Repair

Diminution in Value

Wyoming applies the Restatement (Second) of Contracts § 348 to determine contract damages. Graham v. State, 2001 WY 5, ¶ 10, 16 P.3d 712, 715 (Wyo.2001). That section provides: (2) If a breach results in defective or unfinished construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on (a) the diminution in the market price of the property caused by the breach, or (b) the reasonable cost of completing performance or of remedying defects if that cost is not clearly disproportionate to the probable loss in value to him. Restatement (Second) of Contracts § 348 (1981). If an injured party's costs of repair are “clearly excessive” or “clearly disproportionate” to the actual loss resulting from the breach, then the diminution in market value is the appropriate measure of damages. See Legacy, 335 P.3d at 1068.

In negligence cases, Wyoming courts follow a similar rule: if the damage to the real property is not so extensive as to amount to a taking of the property, the measure of damages will be the difference between the fair market value before and after the damage; if the damage is not so extensive to amount to a taking, the cost of repair will be the measure of damages. Legacy, 335 P.3d 1068-1069 (citing City of Kemmerer v. Wagner, 866 P.2d 1283, 1287–88 (Wyo.1993) (remanded for new trial on the issue of damages); see also Ely v. Kirk, 707 P.2d 706, 713 (Wyo.1985); Belle Fourche Pipeline Co. v. Elmore Livestock Co., 669 P.2d 505, 514 (Wyo.1983); Town Council of Town of Hudson v. Ladd, 37 Wyo. 419, 425–26, 263 P. 703, 705 (1928); Anderson v. Bauer, 681 P.2d 1316, 1324–25 (Wyo.1984)

Punitive Damages

There is no right to punitive damages under Wyoming law; punitive damages are awarded to punish conduct involving some element of outrage similar to that usually found in a crime. Alexander v. Meduna, 47 P.3d 206, 218 (Wyo. 2002). In Hatch v. Walton, 343 P.3d 390, 398-399 (Wyo. 2015)

Attorney's Fees

Attorney fees are recoverable under the American Rule only where a contractual or statutory provision authorizes such recovery, or as a form of punitive damages. Alexander v. Meduna, 47 P.3d 206, 220-221 (Wyo. 2002). In Hatch v. Walton, 343 P.3d 390, 398-399 (Wyo. 2015), the Wyoming Supreme Court upheld the trial court’s decision in a construction defect case not to award attorney fees as punitive damages because evidence of the defendant’s wealth was not presented and the alleged conduct did not appear to satisfy the standard for an award of punitive damages.

Joint and Several Liability (specific to construction)

Wyoming has abolished joint and several liability, and no right of contribution exists. Schneider Nat., Inc. v. Holland Hitch, 843 P.2d 561 (Wyo. 1992). Under the current version of Wyo.Stat.Ann. § 1-1-109, the fact finder in a trial in Wyoming is required to assess the “fault” of all actors, not just negligent tortfeasors, so that the actual causes of harm—to wit, strict liability, product liability, breach of warranty, intentional torts—which are the responsibility of all parties and non-parties at fault are compared. That is to say, the faults of the negligent tortfeasor, the intentional tortfeasor, the manufacturer of a defective product, the plaintiff, and any other party or non-party whose actions caused compensable harm, are all compared, and fault allocated among each actor.

Cost Incurred to Access Repair Areas

Costs incurred to access repair areas are recoverable as consequential damages, subject to the same qualifications of all consequential damages as discussed below. Legacy Builders, 335 P.3d at 1072 (reasonably foreseeable, incidental expenses associated with repair recoverable for construction defect).

Consequential Damages

Property owner may recover consequential or special damages for breach of a building or construction contract by a contractor but only if the damages were foreseeable at the time the contract was made. Legacy, 335 P.3d at 1072. Courts have permitted recovery of consequential damages, including the cost to rent another place to live, interim financing, cost of necessary cleanup, minor repair work incurred by the owner as a result of construction defects and the probable cost of future repairs. Id.

Coverage Trigger of Coverage

Definition of an Occurrence

CGL policies often define in their terms what constitutes an “occurrence.” Many CGL policies define an occurrence as “an accident, including continuous or repeated exposure to substantially the same, general harmful conditions.” Wyoming courts define the term accident as “a fortuitous circumstance, event or happening as an event happening without any human agency, or if happening wholly or partly through human agency, an event which under the circumstances is unusual and unexpected by the person to whom it happens; an unusual, fortuitous, unexpected, unforeseen or unlooked for event, happening or occurrence; ... chance or contingency; fortune; mishap; some sudden and unexpected event taking place without expectation, upon the instant, rather than something which continues, progresses or develops....but do not further define “accident.” Matlack v. Mountain West Farm Bureau Mut. Ins. Co., 44 P.3d 73, 77 (Wyo. 2000).

Damage arising from poor workmanship is not an unforeseen event and thus not an occurrence. Great Divide Ins. Co. v. Bitterroot Timberframes of Wyo., LLC, 2006 WL3933078, *8 (D. Wyo. Oct. 20, 2006). However, in American Hallmark Ins. Services v. Property Brokers, 2013 WL 11866197 (D.Wyo., August 1, 2013), the Wyoming District Court noted case law from the Tenth Circuit has held that injuries or damages flowing from faulty workmanship constitute an occurrence so long as the resulting damage is to nondefective property but held there was no such resulting damage in the Property Brokers case and thus, no coverage.

Duty to Defend

The duty to defend is broader than the duty to indemnify. Shoshone First Bank v. Pacific Employers Insurance Co., 2 P.3d 510, 513-14 (Wyo. 2000). An insurer must defend where the alleged claimed rationally falls within the policy coverage; if the policy potentially affords coverage for one or more claims, the carrier must defend all claims, and any doubts about coverage should be resolved against the insurer. Matlack v. Mountain West Farm Bureau Mut. Ins. Co., 44 P.3d 73, 79-80 (Wyo. 2002).

Contractual Indemnity

Wyoming allows claims for third-party contractual indemnity where indemnity is expressly provided for in the contract and its parameters are derived from the specific language of the contract; the comparative fault statute does not bar such claims. Diamond Surface v. Cleveland, 963 P.2d 996, 1002-1004 (Wyo. 1998).

Anti-Indemnity Statutes

Wyoming only has a statute prohibiting certain indemnity agreements as to mining and oil drilling. Wyo.Sta.Ann. § 30-1-131(B) (2007).

Additional Insureds

Coverage for Al's own negligence vs. vicarious liability for Named Insured

Additional insured language that extended coverage for liability arising out of named insured’s operations was not limited to the additional insured’s vicarious liability. Marathon Ashland Pipeline v. Maryland Casualty Co., 243 F.3d 1232, 1240 (10th Cir. 2001).

Determining Primary and Non-Contributory vs. Excess Position

Wyoming courts have not addressed this issue.

Al carrier's rights to reimbursement for defense expenses from other, co-primary carriers

Wyoming courts have not addressed this issue.

Insureds Right to Independent Counsel and Consequences of Rejecting a Defense

Wyoming law has not addressed this issue.

Coverage Defenses

In Wyoming, CGL policies do not cover claims for breach of contract. See First Wyoming Bank, N.A., Jackson Hole v. Continental Ins. Co., 860 P.2d 1094, 1099 (Wyo. 1993). Damage arising from poor workmanship is not an unforeseen event and thus not an occurrence. Great Divide Ins. Co. v. Bitterroot Timberframes of Wyo., LLC, 2006 WL 3933078, *8 (D. Wyo. Oct. 20, 2006). However, in American Hallmark Ins. Services v. Property Brokers, 2013 WL 11866197 (D.Wyo., August 1, 2013), the Wyoming District Court noted case law from the Tenth Circuit has held that injuries or damages flowing from faulty workmanship constitute an occurrence so long as the resulting damage is to nondefective property but held there was no such resulting damage in the Property Brokers case and thus, no coverage.

It is not against public policy to insure against liability for punitive damages either imposed vicariously or directly based on willful and wanton misconduct. Sinclair Oil Corp. v. Columbia Cas. Co., 682 P.2d 975, 981 (Wyo. 1984).

Choice of Law (Forum Selection Clauses)

Forum selection clauses are prima facie valid and will be enforced absent a demonstration by the party opposing the clause that it is unreasonable or based upon fraud or unequal bargaining positions. Nuhome Investments v. Weller, 81 P.3d 940, 945 (Wyo. 2003).

Targeted Tenders

Wyoming courts have not addressed this issue.

Consent Judgments

Where a judgment against an insured is determined by a settlement, not by a trial and without participation of the defending carrier, the insured or the claimant (as assignee) has the burden of proving the reasonableness of the settlement. Unless the settlement is reasonable, neither the fact nor the amount of liability is binding on the insurer. Gainsco Ins. Co. v. Amoco Production Co., 53 P.3d 1051, 1070-1073 (Wyo. 2002). A defending insurer who refused an offer to settle within policy limits is not bound to a settlement between the insured and the claimant where the insurer was not given prior notice of the terms of the settlement and not given an opportunity to participate. Id. at 1079