Last week, the Oregon Supreme Court held in Goodwin v. Kingsmen Plastering (June 16, 2016), that a property owner must sue a contractor for negligent construction, if at all, within two years of when the property owner “knew or should have known of the injuries or damage that form the basis of their claims” under ORS 12.110(1). The ruling highlights the issue of “discovery,” and appears to be at odds with the Supreme Court’s ruling in Rice v. Rabb, 354 Or 721 (2014), which held that a claim for conversion or replevin must be brought within six years of the time “plaintiff knows or reasonably should know of the elements of such claims[.]” What does it take for a property owner to “discover” its claim?

Historically, the Supreme Court has written that claims accrue only after the potential plaintiff discovers “harm (i.e., injury), causation, and tortious conduct.” Gaston v. Parsons, 318 Or 247, 255-256 (1994). The Oregon Supreme Court has held that such language requires not only knowledge of “injury” in a vacuum, but also knowledge of tortious conduct and causation for that damage. Gaston.

In Gaston, a doctor injected a chemical solution into Gaston’s spinal cord. After the surgery, Gaston’s left arm went numb and no longer functioned. Almost four years after surgery, Gaston sued the doctor for negligence. The trial court granted the doctor’s motion for summary judgment, relying on the two-year statute of limitations for malpractice claims. The Supreme Court reversed the dismissal, holding that under language requiring only knowledge of injury, “the statute of limitations begins to run when the plaintiff knows or in the exercise of reasonable care should have known facts which would make a reasonable person aware of a substantial possibility that each of the three elements (harm, causation, and tortious conduct) exists.” Gaston v. Parsons, 318 Or 247, 256 (1994).

Thus, where the simple language of statutes and potentially Goodwin refers only to “injury” or “damage,” the Supreme Court has held that this term actually encompasses knowledge of tortious conduct and causation as well. Indeed, under this ostensibly injury-based trigger, the Oregon Supreme Court has held the timeline does not begin to run until the plaintiff learns the identity of the tortfeasor as well. Greene v. Legacy Emanuel Hosp. & Health Care Ctr., 335 Or 115 (2002). In Greene, a case where the Court applied the discovery rule, the Oregon Supreme Court affirmed that a plaintiff must know who caused the damages, not merely that damages were caused by an unknown person:

[T]he “tortious conduct” element of the requirement of “injury” under ORS 12.110(4) is satisfied, and the period of limitations commences, if the record on summary judgment demonstrates that the plaintiff either actually discovered or, in the exercise of reasonable care, should have discovered that the defendant violated the plaintiff’s legally protected interest to be free from physical harm at the hands of another.

Id. at 124 (emphasis added); see also Duncan v. Augter, 62 Or App 250, 255 (1983) (holding that the “discovery rule” tolls the limitations period until the plaintiff “knows, or should know through diligent inquiry, facts from which a reasonable fact finder could conclude that [1] the plaintiff’s injury [i.e., harm] [2] was caused by an act of the defendant [i.e., causation] [3] that was somehow negligent [i.e., tortious conduct].”) (emphasis added).

 

Property owners will need to be careful in the years ahead, if defendant contractors and their attorneys argue that Goodwin has created confusion about what it means for an owner to “discover” their claims. Property owners who suspect they have problems, and anyone who believes they may be a victim of any negligence in Oregon, will be well served to quickly investigate and reach out to potential defendants, if possible, to either conduct a protected dialogue or preserve their rights by filing a claim, while the courts sort out a definitive concept of “discovery.”