Oregon Court of Appeals Rules Construction Defect Claims Subject to 6-Year Statute of Limitation

By Kevin Clonts, Claude Bosworth and Allen Eraut

In Riverview Condominium Ass’n v. Cypress Ventures, Inc., the Oregon Court of Appeals ruled that construction defect claims are subject to a six-year statute of limitation, thereby resolving a conflict among the trial courts. The divide among the trial courts was based upon a tension between case law holding that six years was the statute of limitation for construction defect claims and a footnote in a 2011 Oregon Supreme Court opinion that suggested that the statute of limitation was two years. In resolving the dispute, the Court of Appeals held that ORS 12.080(3)’s six-year statute of limitation controls, because it applies to allegations of injury to the “interest of another in real property.”

 

In holding that construction defect claims are subject to a six-year statute of limitation, the Court of Appeals further clarified that the limitation period is subject to a discovery rule, i.e., the statutory period does not begin to run until the plaintiff either actually knew of the injury or should have known of the injury. Whether a plaintiff either knew or should have known of the injury is an inquiry that ordinarily “presents a factual question for the jury,” though a court could decide the issue as a matter of law under appropriate circumstances.

 

In applying the discovery rule, the Riverview Condominium court concluded that, even though the plaintiff condominium association began noticing water intrusion issues at windows – and was informed by a repair contractor that the water intrusion issues were due to improper installation of building paper by the “original siders” – seven years before it filed its construction defect lawsuit, a jury could reasonably conclude that the plaintiff knew of water intrusion issues involving only certain windows, not issues throughout the project. Therefore, it remained a question of fact as to when the six-year statutory period began to run, thereby precluding summary judgment.

 

Separately, the court ruled that misrepresentation claims related to the development or sale of real estate are subject to a two-year statute of limitation, rejecting the contention that the claims are allegations of injury to the “interest of another in real property.” Instead, the court concluded that misrepresentation claims relate to a plaintiff’s economic interests, not to injuries to real property. As such, generally misrepresentation claims are governed by a two-year statute of limitation.

 

In summary, most construction defect claims are subject to a six-year statute of limitation, which in turn is subject to a discovery rule. However, misrepresentation claims related to the development or sale of real property are subject to a two-year statute of limitation.

 

The case can be found here: http://www.publications.ojd.state.or.us/docs/A150586.pdf



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