Statute of Limitations

We spend a lot of effort on this blog talking about the time deadlines for property owners to sue contractors and design professionals for negligence.  There are two reasons for this:  first, the law on this is rapidly evolving in Oregon.  Second, it is of the utmost importance to contractors, design professionals, and property owners because there are very few absolute defenses to a claim for negligent construction besides the timing of claims.  Also, since many property owners rightfully loathe to dive into a lawsuit, they may delay filing until absolutely necessary.

The news keeps coming.  At the end of October, the Oregon Court of Appeals decided Riverview Condominium Association v. Cypress Ventures, Inc., et al., Case No A150586 (October 29, 2014).  There, the defendants developed testimony and documents evidencing that various types of water leaks had been affecting the property for several years.  The case discusses the “statute of repose” (the drop-dead deadline date for bringing any claims) as well as the “statute of limitations” (the time limit on bringing various claims).
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Division III of the Washington Court of Appeals published an opinion two days ago interpreting, for the first time, RCW 64.34.264(2), the one-year statute of limitations for challenges to the validity of an amendment to a condominium’s declaration. In Club Envy of Spokane, LLC, et al v. The Ridpath Tower Condo. Assoc. et al., No.31913-0-III, the Court held the one-year limitations period does not apply when the amendment is “void from its inception.” In other words, when the amendment was improperly passed under the Condominium Act, the one-year limitations period to challenge the amendment’s validity does not apply.

The Unique Facts of Club Envy

The facts in Club Envy are rather unique. In February 2008, the Ridpath Tower Condominium was created and the Association formed.
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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.
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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? 
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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

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.
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