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Oregon Supreme Court Clarifies Statute of Limitations

On June 16, 2016, the Oregon Supreme Court clarified that negligent construction claims in Oregon are governed by a two year statute of limitations.  The law on this point had been very confused in Oregon for the last several years, with different circuit courts applying a six year rule or a two year rule, with or without a discovery rule.[1]  Under Goodwin v. Kingsmen Plastering, however, we now have a clear rule: negligent construction claims must be brought within two years of when the plaintiff knows, or reasonably should know, that she has been injured by the defendant’s negligence.  359 Or 694 (2016).

This case involved stucco work performed in May of 2001.  Plaintiffs bought the house in December of 2004.  The defendant contractor proved that plaintiff had received an inspection report in 2004, noting siding defects, that plaintiff obtained bids for repairs from a contractor, and that that contractor noted further defects during subsequent inspections in 2005, 2007 and 2008.  In March of 2011, plaintiff filed suit seeking money to cover the costs to repair property damage resulting from negligent construction, alleging they learned of their injuries in May 2010.  The trial court applied a six year rule, without tolling for discovery, and granted summary judgment to the contractor.  The Court of Appeals reversed, holding that the six year period only began to run once the plaintiffs discovered their injuries.  The Supreme Court affirmed on other grounds, holding that a two year rule applied, but that that rule included a discovery rule.  Thus, the case was remanded to the trial court for an initial determination as to the sufficiency of the evidence of the accrual of the claim.

This holding is a mixed bag for defendants in Oregon.  On the one hand, the application of the shorter period will force plaintiffs to bring claims sooner, while the defendants are more likely to be able to mount a vigorous defense with fresh evidence.  On the other hand, however, Oregon state courts are very reticent to grant summary judgment on a statute of limitations defense when a discovery rule applies, preferring instead to leave all such determinations to the jury.  Thus, the rule may likely only be beneficial when cases go to trial.

Blog by: Steven Cade, Associate, Portland

 

[1] The Oregon Supreme Court had previously announced this rule in 2011 in the case of Abraham v. T. Henry Construction, Inc. 350 Or 29, 34 n. 3 (2011).  However the issue continued to be litigated extensively because that statement was only dictum and was not essential to the holding of that case.

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