A few months ago, we wrote about the Oregon Supreme Court’s decision in Rice v. Rabb and its potential impact on the statute of limitations for construction defect claims. We believed at the time that the case represented a welcome step forward in finally (favorably) resolving a split among the trial courts in determining when a construction defect claim could be barred due to the passage of time. Although we were optimistic that the case finally determined that the longer six-year limitations period prevailed over a two-year period, we had to caution that Rice v. Rabb interpreted statutes only similar to those that apply in construction defect cases. We are pleased to report we were right and that the longer period applies.
A couple of weeks ago, in Riverview Condominium Association v. Cypress Ventures, Inc., the Oregon Court of Appeals finally directly addressed the limitations and repose periods for tort-based construction defect claims.
Among its most significant holdings were:
- ORS 12.135 applies as the statute of repose when a tort claim such as negligence or nuisance arises from a defendant’s construction of an improvement to real property (such as homes, townhomes, apartments and condominiums). Under ORS 12.135, a claim will be barred if brought more than ten years from “substantial completion” of the improvement.
- ORS 12.080(3) applies as the statute of limitations for construction defect claims. Under ORS 12.080(3) a claim must be brought within six years of when a plaintiff discovered or should have discovered the claim. In other words, the court confirmed that a “discovery rule” applies to the statute of limitations for tort-based (non-contractual) construction defect claims.
- ORS 12.110(1) applies to certain types of misrepresentation and breach of fiduciary duty claims asserted in some construction defect cases. Under ORS 12.110, those claims must be brought within two years of when a plaintiff discovered or should have discovered the claim.
The result of the above holdings is that a construction defect tort claim—including negligence and nuisance—must be brought no later than ten years from substantial completion of the construction. Additionally, the claim must be brought within six years of when the claim was discovered or could have been discovered. What do “substantial completion” and “discovery” mean in the context of these authorities? Unfortunately, it’s complicated. A number of other Oregon cases come into play. Your best bet is to act quickly if you suspect you might have a claim and seek the advice of qualified counsel to protect your rights.
As I cautioned in the prior post, be aware that defendants will seize on any evidence of construction defects, leaks, mold etc. to persuade a court that claims were known or should have been known, and that the limitations period has been triggered. An association need not necessarily have completed a building investigation to “know.” A single complaint from an owner about a window leak may be all a court will require.
Is Riverview the final word on the limitations and repose periods in construction defect cases? We hope so. It is possible that the Oregon Supreme could review and subsequently overturn the decision. We will keep you updated. But for now Riverview and its holdings are the law in Oregon.
Feel free to contact me or one of the other attorneys at Barker Martin if you have a question relating to your rights and the time you or one of your communities has to bring claims.
