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Adele Ridenour’s practice focuses on construction law and commercial litigation. She has developed significant experience litigating construction defect cases involving complex commercial projects, condominiums, warehouses and hotels. She has also successfully represented commercial and individual property owners, and homeowners’ associations in insurance recovery actions.

Recently, the Oregon Court of Appeals issued a decision that may have far reaching impacts for communities looking at whether a particular project constitutes a “capital improvement” under their Covenants, Conditions and Restrictions (more commonly known as CC&Rs). The case, known as Eagle-Air Estates Homeowners Ass’n, Inc. v. Haphey, 272 Or App 651 (2015), involved whether an assessment levied by a homeowners association to pay for certain attorney fees incurred in a prior litigation constitutes a “capital improvement,” and therefore a “special assessment” under the HOA’s CC&Rs.

Relying on Black’s Law Dictionary, the Court of Appeals found that the term capital improvement “is commonly understood to mean a permanent structural improvement to property.” (Emphasis added). The Court also cited to Webster’s Dictionary’s definition of “capital expenditure,” as further explanation of the phrase, noting that a “capital expenditure” refers to “long-term additions or betterments properly chargeable to a capital assets account.”

After analyzing the above two definitions, along with the language in the HOA’s CC&Rs regarding other types of specific capital improvements, the Court of Appeals held that “[a]n assessment to pay for attorney fees in litigation. . . is not the type of expense that an ordinary person would regard as a ‘capital improvement’.” As a result, the assessment did not constitute a “special assessment” under the HOA’s CC&Rs and was therefore not subject to any temporal limits as to how long the assessment may be issued. Continue Reading Just What Is a Capital Improvement and Does a Judgment Against an HOA Have Preclusive Effect on the HOA’S Directors and Members?

On July 22, 2015, the Court of Appeals reaffirmed its prior decision in Alfieri v. Solomon, 263 Or App 494 (2014), petition for review granted, 356 Or 516 (2014) that confidential communications made during and/or in furtherance of a mediation proceeding are protected and shall not be admitted into evidence in any subsequent adjudicatory proceeding under ORS 36.22. Yoshida’s Inc. v. Dunn Carney Allen Higgins & Tongue LLP, 272 Or App 436 (2015). ORS 36.22 states in pertinent part: Continue Reading Protecting Against Disclosure of Prior Settlement Agreements at Trial

The Oregon Court of Appeals recently issued a surprising decision regarding the ultimate timeline to file a construction defect claim involving a “spec home.” (A “spec home” is a house which a builder or developer constructs not for a specific owner but on speculation that the home will sell to the general public upon completion.)  In Shell v The Schollander Companies, Inc. (September 24, 2014), the Court of Appeals decided that ORS 12.115, as opposed to ORS 12.135, supplies the appropriate ten-year statute of repose for an owner seeking a negligent construction claim where the owner does not have a traditional “construction contract” with the builder.  The plaintiff in Shell was the original owner of the home.  She purchased the property midway through construction from the original developer/builder using a real estate sales agreement to complete the transaction. Continue Reading And Then There Were Two: The Oregon Ct. of Appeals Finds There Are Two Possible Statutes of Repose for Negligent Construction Claims

Today the Oregon Court of Appeals handed down a lengthy opinion upholding a money judgment awarded in favor of a judgment creditor in its garnishment action against American Family Insurance Company.  Read about it and get the decision on Ball Janik’s Policyholder Report.

In Oregon, residential owners traditionally have up to ten years from when their home is substantially completed to bring a claim for construction defects.  Less clear is the timeline for townhomes.  Traditionally defect claims involving townhomes in Oregon are brought by a homeowner’s association and on behalf of all owners within the townhome.  This is because the homeowner’s association typically has the maintenance and repair responsibility for all exterior elements of the townhome.  However, unlike a condominium, townhome owners actually own the lot upon which their unit sits.  They likewise own all of the framing, siding, roofing material, and other exterior elements which fall within their individual lot line.

So just what is the statute of repose for a homeowners association seeking to bring a construction defect claim involving a townhome?  Is it ten years from when each unit within the townhome was completed, or ten years from when the townhome project as a whole was completed?  Likewise, what happens if a townhome complex consists of multiple buildings? Does the ten years run from when each building is completed, or ten years from when all buildings are completed?  Washington County recently weighed in on this issue and found that the appropriate timeline is ten years from when the townhomes as a whole are completed.  In other words, regardless of when each individual lot/unit or building is completed, the ten year statute of repose will not begin to run until the townhome project as a whole is substantially complete.  A copy of the full decision from Washington County Court can be viewed here: Bailey Ruling

In Oregon, the ultimate repose period for residential construction (that is the absolute deadline to file a claim arising out of residential construction) is 10 years from “substantial completion.” ORS 12.135. This ultimate repose period provides certainty for contractors and developers that their potential liability for residential construction will come to an end after 10 years from substantial completion. Substantial completion is the date when the contracting parties in writing have agreed that the project may be used for its intended purpose or, in the event there is no written acceptance, the date the contracting parties accept the project as complete. ORS 12.135(4)(b). Continue Reading Substantial Completion is in the Eyes of the Beholder: Judge Denies Dismissal of Claim Under Oregon’s Statute of Repose for Construction Defect Related Claims