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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. Continue Reading The Focus is on “Discovery” of Claims after Goodwin v. Kingsmen Plastering, Inc.

Last month, the Oregon Supreme Court issued a decision with important implications for construction litigation. Ball Janik attorneys were heavily involved in the appeal to the Supreme Court.

In Shell v. The Schollander Companies, Inc., 358 Or 552 (2016), the court held that where a home is constructed without a contractual relationship between its builder and its first owner, the applicable statute of repose for negligent construction claims is ten years “from the date of the act or omission complained of.”

The fact that two statutes of repose are potentially applicable to Oregon construction defect litigation has for some time created uncertainty.  Continue Reading Deep In Repose: New Decision Clarifies Longstanding Confusion

With the sanctity of any time-honored tradition, insurers resist discovery of their claim file with the ritualistic incantation that it is protected from discovery because it was prepared in anticipation of litigation, and therefore qualifies as work product.  To support this argument, oftentimes insurers outsource the adjustment of the claim (a normal business activity) to outside attorneys, and then refuse to provide the attorney’s file, or communications with the insurer and the attorney, on the basis that those documents are protected by the attorney-client privilege. Courts across the county have been increasingly dismissive of these arguments, holding that an insurer cannot cloak its claim file with privilege simply by paying a lawyer to do what is otherwise an everyday claim handling activity for the insurer.  Oregon finally has a chance to weigh in on this issue and level the playing field for insureds.  Read more on The Policyholder Report blog.

Statutes of limitation cut off rights to bring a lawsuit after a designated time period, regardless of the strength of your case or how much you’ve been injured. The length of these time periods can vary by the type of claim being brought, and the starting date can vary also. The “discovery rule” – which delays the starting point for periods of limitation until the injured party discovers the cause of action – has the greatest potential impact on this starting date. Oregon law has been unstable regarding application of the discovery rule to claims for breach of contract. Although we appear to be reaching a point of greater certainty on this issue, more refinement may yet be required.

Oregon’s Discovery Rule Generally

Discovery rules in Oregon arise Continue Reading Mockeries and Latent Breaches: Reflections on Oregon’s Discovery Rule

Leave it to Oregon. We proudly possess some of the most confusing statutes of limitation and repose anywhere, especially as they relate to construction claims. We always have interesting questions that linger unanswered for years or even decades before finding resolution by case law or statute. Even when we get answers, those answers always seem to raise more questions. Three current questions warrant brief discussion.

1.      What is the statute of limitations for negligent injury to real property?  Continue Reading 3 Open Questions About Construction Claims and Oregon Law

UPDATE:

The Supreme Court issued an important decision about statutes of limitations under Oregon law on January 30, 2014.  In Rice v. Rabb, 354 Or 721 (2014) the Court held that there is a discovery rule for conversion claims under ORS 12.080(4) and reversed the Court of Appeals, which held that Rice’s conversion claim was time-barred because plaintiff sued more than six years after the tort, the taking of the Queen of the Pendleton Round-Up outfit, was committed.   (See our previous post about the Court of Appeals opinion in that case for the full round-up of the facts.)  The Supreme Court concluded that Rice’s claims “accrued” when she obtained the knowledge of the tort committed on her by Rabb.  Because Rice did not know that Rabb had taken the outfit until 2007, years after Rabb took the outfit, her claim did not accrue until then.

Construction defects and damage caused by construction defects are often not immediately perceptible to owners.  Based on the reasoning of Rice v. Rabb, claims for negligent construction under ORS 12.080(3) are likely subject to a discovery rule and claims for breach of contract under ORS 12.080(1) may also be subject to a discovery rule.  Cases currently pending before the Court of Appeals may answer those questions.

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. Continue Reading How does the theft of the clothes worn by the Queen of the Pendleton Round-Up in 1930 relate to construction litigation?