A case before the Oregon Supreme Court about the Queen’s outfit might answer some questions about statutes of limitations in Oregon that may impact construction cases.

In Rice v. Rabb, 251 Or App 603 (2012), rev allowed 353 Or 280 (2013), Ms. Rice owned the clothes worn by the Queen of the Pendleton Round-Up in 1930.  Starting in 1964, she allowed the Queen’s outfit to be displayed at the Pendleton Round-Up and Happy Canyon Hall of Fame, where it stayed until Ms. Rabb took the outfit without Rice’s permission in 2000.  Rice is blind, and she did not realize the outfit had been taken until 2007. In 2009, Rice sued, seeking return of the outfit or, in the alternative, damages for the loss of the outfit. Rabb moved for summary judgment, arguing Rice’s claims were untimely because more than six years had passed since Rabb took the outfit to when Rice filed her claim. Rice argued that the clock started running on the statute of limitations when she discovered that the outfit had been taken, which did not occur until 2007 because she is blind, so her claim should be timely.

The trial court agreed with Rabb and dismissed Rice’s claim. The Court of Appeals, although sympathetic to the situation, concluded that the statute of limitations began running when Rabb took the outfit, and consequently, also found in Rabb’s favor. The Court of Appeals’ holding was narrowly tailored to Rice’s claim regarding the theft of the Queen’s outfit.

Rice petitioned the court of last resort, the Oregon Supreme Court, which agreed to hear the case. Before the Supreme Court Rice argued, among other things, that there is a discovery rule for all claims in ORS Chapter 12.

So, how does the theft of the Queen’s outfit relate to construction litigation?  ORS 12.080(4) is the statute of limitations for injuries to personal property (including Rice’s claim). ORS 12.080(3) is the statute of limitations for injuries to real property. Whether there is a discovery rule for construction claims under ORS 12.080(3) is a frequently litigated issue, occurring in almost every construction defect case where the litigation was filed more than six years after construction was complete.  Under a discovery rule, the statute of limitations does not begin running until the plaintiff discovers his or her injury, rather than at the time of the defendant’s tortuous action. Rice argued that it would be unfair for the statute of limitations under ORS 12.080(4) to have begun before she even knew that the outfit had been taken.  Similarly, in construction cases, where property damage may be hidden inside walls, there is an argument that the statute of limitations under ORS 12.080(3) should not begin until the plaintiff discovers the damage.

If the Supreme Court agrees with Rice’s arguments, its holding could implicate a discovery rule in ORS 12.080(3).  On the other hand, if the Supreme Court disagrees with Rice, a very narrow ruling may not effect construction defect litigation or a very broad holding could indicate that there is never a discovery rule under ORS 12.080. If that is the case, then the statute of limitations for negligent construction may start running from the time of construction, even if the owner of the property does not find the damage until, for example, there is a major roof leak or a deck collapses seven years later, and their claim against the builder would not be timely.

We’ll be looking for an opinion from the Supreme Court in early 2014, which will answer the question, “What does the outfit worn by the Queen of the Pendleton Round-Up in 1930 have to do with construction litigation?”

For those Pendleton Round-Up buffs, click here and here to read about the feud .

Photo courtesy of The Milwaukee Journal, June 30, 1930.