We spend a lot of effort on this blog talking about the time deadlines for property owners to sue contractors and design professionals for negligence. There are two reasons for this: first, the law on this is rapidly evolving in Oregon. Second, it is of the utmost importance to contractors, design professionals, and property owners because there are very few absolute defenses to a claim for negligent construction besides the timing of claims. Also, since many property owners rightfully loathe to dive into a lawsuit, they may delay filing until absolutely necessary.
The news keeps coming. At the end of October, the Oregon Court of Appeals decided Riverview Condominium Association v. Cypress Ventures, Inc., et al., Case No A150586 (October 29, 2014). There, the defendants developed testimony and documents evidencing that various types of water leaks had been affecting the property for several years. The case discusses the “statute of repose” (the drop-dead deadline date for bringing any claims) as well as the “statute of limitations” (the time limit on bringing various claims).
The statute of limitations is the most interesting issue in the case because, over the last few years following the case Abraham v. T. Henry Construction, Inc., 350 Or 29 (2011), there has been discussion that property owners had to sue contractors within two years of “discovering” the claims against them. This is not as clear as it sounds. Buildings can fail slowly, over time. What looks like window leaks here or there are subsequently compiled to look like “discovery” of a claim that the property owner should have sued on faster.
The Court in Riverview has held, for the first time clearly, that claims for negligent construction are governed by a six-year time limit and not a two-year time limit. To arrive there, the Court extensively reviewed cases prior to Abraham, and demonstrated the logical connection of this rule to decades of other cases. The Court further held that this six-year span runs from the date of “discovery” of a claim, and not completion of a project.
Riverview’s clarification in Oregon law, and the certainty this brings, is good news for both property owners and contractors. Now, contractors will be able to plan their insurance and risk management programs accordingly, and property owners will not be rushed into lawsuits while they investigate issues affecting their properties.