2013 is coming to an end. Despite the recession (or maybe because of it), 2013 was a banner year for developments in Oregon construction law. In no particular order, here is a summary of the major construction cases published in 2013:
- In January, the Court of Appeals decided PIH Beaverton, LLC v. Super One, Inc., et al., 254 Or App 486 (2013), which clarified the contours of Oregon’s statute of ultimate repose (the period of time claims arising out of construction must be brought). First, the Court held that a notice of completion for the purposes of ORS 87.045 (which triggers the 75-day period for perfecting construction liens) does not constitute “written acceptance” under Oregon’s statute of ultimate repose that the work is substantially complete. Absent an owner’s “written acceptance” of the work, a project will only be considered “substantially complete” for the purposes of the statute of ultimate repose, when the work is “actually” complete. Next, the Court held that Oregon’s statute of ultimate repose applies to third party indemnity claims (that is, claims between the general contractor and its subcontractors). This places a general contractor in the precarious position of having indemnity claims against subcontractors time barred before the general contractor has any reason to seek indemnity in the first place. The Oregon State Supreme Court has accepted review.
- Also in January, the Court of Appeals decided Wood Park Terrace Apartments Limited Partnership v. Tri-Vest, LLC, 254 Or App 690 (2013), holding that an accrual clause in a construction contract establishes the statute of limitations for all claims including common law negligence claims.
- In February, the Court of Appeals decided Brownstone Homes Condo. Ass’n v. Brownstone Forest Heights, LLC, 255 Or App 390 (2013), holding that ORS 31.825 (permitting assignments of claims against insurers) does not apply when the assignment in the settlement agreement predates the stipulated judgment that was entered. Form over function? Maybe; the Oregon State Supreme Court has accepted review.
- In May, the Court of Appeals decided Marton v. Ater Constr. Co., LLC 256 Or App 554 (2013), holding that a general contractor did not have third-party negligence claims against its subcontractors arising out of defective construction because the general contractor did not allege it suffered property damage, only economic loss (which is traditionally not recoverable in negligence). The court also held that after the general contractor settles with the plaintiff in order for general contractor’s common law indemnity and contribution claims against its subcontractors to survive, the settlement must extinguish the subcontractors’ liability to the homeowner plaintiff.
- In July, the Court of Appeals decided Shelter Prods., Inc. v. Steelwood Constr., Inc., 257 Or App 382 (2013), holding that a general contractor who terminates a subcontractor for convenience was not entitled to offset the amount it owed to the terminated subcontractor by the cost of repairing the terminated subcontractor’s defective work: “[I]n the absence of an opportunity to correct allegedly defective work * * * where a party has terminated a contract for convenience, that party may not then counterclaim for the cost of curing any alleged default.”)
Given that the Oregon Supreme Court has accepted review in PIH Beaverton, LLC and Brownstone Homes Condo. (not to mention Sunset Presbyterian Church v. Brockamp & Jaeger, Inc., 254 Or App 24 (2012) (holding that under a contractual accrual clause, the statute of limitations begins to run from the date the architect certifies the project as substantially complete and that when there is no written acceptance of substantial completion, the statute of ultimate repose under ORS 12.135 runs from the date on which a general contractor transfers control of a completed project to the person who had contracted for its construction), the earth will continue to move in 2014.