As discussed below, two recent Oregon Court of Appeals decisions have shed further light on statute of repose and litigation issues in construction defect cases. The two companion cases are Riverview Condo. Ass’n v. Cypress Ventures, Inc., No. 100710713, 2014 WL 5466505, at (Or. Ct. App. Oct. 29, 2014) and Riverview Condo. Ass’n v. Cypress Ventures, Inc., No. 100710713, 2014 WL 5465524 (Or. Ct. App. Oct. 29, 2014)
In Riverview Condo. Ass’n v. Cypress Ventures, Inc., No. 100710713, 2014 WL 5466505, at (Or. Ct. App. Oct. 29, 2014), plaintiff-homeowner association (“Association”) brought numerous claims against both the general contractor and declarant of a condominium project. Specifically, the Association alleged numerous construction defects resulting from defendants’ negligence during construction, negligent and intentional misrepresentation related to the development and sale of the condominium units, non-disclosure violations under the Oregon Condominium Act, and nuisance. Defendants moved for summary judgment against each of these claims, arguing: (1) that the construction-defect related claims were barred by ORS 12.115, the general statute of ultimate repose for negligence claims; and (2) all claims were barred by the various applicable statutes of limitation. The trial court granted defendants’ motions and entered a general judgment dismissing all claims.
On appeal, the Association challenged the trial court’s determination that ORS 12.115 barred its construction-defect claims. The Association further argued there were genuine issues of material fact as to when the Association had knowledge giving rise to certain claims and that such facts precluded summary judgment on the statutes of limitation under the discovery doctrine.
Statutes of Ultimate Repose and the Association’s Construction Defect Claims
The Court of Appeals, citing newly decided cases, held that ORS 12.115 was inapplicable to construction-defect claims and that ORS 12.135 was the appropriate statute of repose in such cases. ORS 12.135 provides that a claim is barred if not filed within ten years “after substantial completion” of the project. The term “substantial completion” means, among other things, “the date of acceptance of the completed construction . . . by the contractee.”
Defendants argued that the Association’s claims were barred by ORS 12.135 because the date of substantial completion was beyond ten years. In support of their argument, defendants offered declarations regarding when the final permits for the project were issued and when the contractor received final payment for the project. They also provided copies of the final permits and certificates of occupancy. The Court held that none of the proffered evidence established that the work was ever accepted as complete beyond the ten year period of repose. The court noted that the project owner had not filed a notice of completion until seven months after occupancy and well within the ten year period. As a result, a jury “would not be compelled” to draw the inference that substantial completion occurred beyond 10 years.
Statutes of Limitation on the Associations Other Claims
Regarding the construction-defect claims, the Association argued that the six year statute of limitation set forth in ORS 12.080(3) for “interference with or injury to any interest of another in real property” applied. Defendants argued that the two year statute of limitation in ORS 12.110(1) for “injury to the person or rights of another, not arising in contract, and not especially enumerated in this chapter” was the correct statute of limitation. The Court held that construction-defect claims “allege injury to the ‘interest of another in real property’” because “any interest of another in real property” was broad enough to encompass construction-defect claims, and no case in Oregon has held to the contrary. Based on the “discovery” rule applicable to ORS 12.080(3), the Court concluded that genuine issues of material fact as to when the Association should have discovered critical facts relating to the defects precluded summary judgment. Applying the same reasoning and statute, the Court also reversed the trial court’s grant of summary judgment on the Association’s nuisance claim.
With regard to the Association’s negligent and intentional misrepresentation claims, the Association attempted to characterize the claim as one subject to the six year limitation in ORS 12.080(3) because the misrepresentations related to “any interest” in real property. Defendants argued that the two year limitation of ORS 12.110(1) applied because it expressly refers to actions for “deceit.” The Court reject the Association’s argument because “conduct, although related to real property, [causing] only economic loss to the plaintiff,” such as with misrepresentation claims, was not “interference with or injury to any interest of another in real property.” The Court also applied ORS 12.110(1) to the Association’s nondisclosure claim under the Oregon Condominium Act for the same reasons.
Justiciability of Third-Party Claims
In a companion case, Riverview Condo. Ass’n v. Cypress Ventures, Inc., No. 100710713, 2014 WL 5465524 (Or. Ct. App. Oct. 29, 2014), the subcontractors involved in the case via the general contractor’s third-party complaint challenged the Court’s jurisdiction over the case. The subcontractors argued that the general contractor’s claims against them for indemnity and contribution were not ripe because such claims do not accrue until the party seeking the remedy has actually made a payment to a third-party. Thus, the subcontractors argued, ORCP 22 C is unconstitutional as ultra vires because it permits a Court to hear a case before it is ripe.
The Court of Appeals rejected this argument, explaining that the ripeness doctrine depends on whether a controversy involves present facts as opposed to hypothetical future events. In the Court’s view, a case involving the roles and responsibilities of parties relating to an already-complete construction project was plainly justiciable because it did involve such present facts.
 ORCP 22 permits a defending party “as a third party plaintiff” to “cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to the third party plaintiff for all or part of the plaintiff’s claim against the third party plaintiff . . .”