Construction defect cases make up a significant portion of Oregon’s civil docket, and nearly all include claims of negligent construction. For years, the plaintiffs’ bar and the defense bar have fought over whether such claims are subject to the two-year statutory limitation period in ORS 12.110(1), or the six-year limitation period in ORS 12.080(3), yielding numerous and varying trial court decisions. Appellate decisions added little clarity.[i]
Today, in Goodwin v. Kingsmen Plastering, Inc.,[ii] the Oregon Supreme Court ruled in favor of DREX’s client, concluding that negligent construction claims are subject to the two-year statute of limitations in ORS 12.110(1), and not the six-year statute of limitations in ORS 12.080(3). This ruling is not only favorable to our client in this case, it is favorable to insureds and insurers generally, as it significantly reduces the time in which a construction defect claim may be brought. In fact, many construction defects cases pending in Oregon circuit courts may be dismissed as a result of the ruling.
[i] Compare Taylor v. Settecase, 69 Or App 222, 685 P2d 470 (1984) (applying six-year statute of limitations in ORS 12.080), and Sutter v. Bringham Construction, Inc., 81 Or App 16, 724 P2d 829 (1986) (same), with Donohow v. Mid Valley Glass Co., 84 Or App 584, 735 P2d 11, rev den, 303 Or 534, 738 P2d 977 (1987) (applying ORS 12.110(1) to claim for negligent construction), and Doughton v. Morrow, 255 Or App 422, 298 P3d 578 (2013) (same), and 126 NW Native v. City of Grants Pass, 247 Or App 354, 271 P3d 154 (2011) (unpublished opinion from the Court of Appeals, affirming dismissal of negligent construction claims pursuant to ORS 12.110). See also, Wood Park Terrace Apts., Ltd. P’ship v. Tri Vest, LLC, 254 Or App 690, 692 n.1, 297 P3d 494 (2013) (applying six-year statute of limitations in ORS 12.080(3) to claims for negligent construction, but noting that it did so because the parties agreed that the statute applied, and noting that ORS 12.110(1) may apply to the claims). Additionally, in a Supreme Court decision released in 2011, the Court stated, albeit in dicta, that negligent construction claims were subject to the two-year statute of limitations in ORS 12.110(1). Abraham v. T. Henry Construction, 350 Or 29, 34 n. 3, 249 P3d 534 (2011) pet. for recon. den., 2011 Or LEXIS 433 (May 5, 2011). The Court of Appeals, as well as many trial courts, refused to follow that pronouncement, treating it as nonbinding dictum, and an inaccurate statement of the law.
[ii] 359 Or 694, __ P3d __ (2016).