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Oregon Construction Defect Claims After Abraham - Part II

As we discussed in Part I of this blog series, Abraham v. T. Henry Construction has attempted to shed some light on handling claims in Oregon construction defect cases where damages don’t become apparent until long after the project is complete. 

This issue is of particular importance when, as in this case, the homeowner has a contract claim and negligence claim - each carrying a different statute of limitation.

The Supreme Court determined that negligence claims arising out of residential construction must be brought within two-years from the date on which the plaintiff discovered or should have discovered the damage (the standard limitation for negligence claims).  This means a construction defect case could be brought after the six-year statute of limitations has run on a contract claim, contradicting Waxman v. Waxman & Associates where the Court of Appeals had limited a construction defect claim to a breach of contract claim with a six-years statute of limitations. 

There are two lessons embodied in this case: (1) it seems negligence and contract claims can be brought in Oregon construction defect cases, unlike Washington construction defect cases, potentially allowing for an extended statute of limitations and (2) construction firms should consider including language in their contracts that outlines available remedies and rights, as suggested by the Court.

In response to the ruling, the Abrahams filed a petition for reconsideration seeking to have the Court modify its opinion and omit the reference to the two-year statute of limitations.  They argue that the issue of statute of limitations was not in front of the Court and therefore should not have been decided.   Even though the Court’s reference to a two-year statute of limitations was not essential to the ruling, it denied the Abraham’s petition for reconsideration. 

The final result is that until the Court explores this issue further, there remains some doubt regarding the applicable statute of limitations for construction defect claims. 

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