Lozano v. Schlesinger

• Decision Date: 21 January 2004
• Parties: Norris LOZANO and Kandace Lozano, Appellants, v. Miles SCHLESINGER, Respondent.
• Court: Oregon Court of Appeals

84 P.3d 816

191 Or. App. 400

Norris LOZANO and Kandace Lozano, Appellants, v. Miles SCHLESINGER, Respondent.

9910-11535, A113569.

Court of Appeals of Oregon.

Argued and Submitted October 6, 2003.

Decided January 21, 2004.

Michael A. Cox, Portland, argued the cause and filed the briefs for appellants.

Richard S. Pope, Portland, argued the cause for respondent. With him on the brief were Brent H. Hall, Portland, and Newcomb, Sabin, Schwartz & Landsverk, LLP.

Before LANDAU, Presiding Judge, and ARMSTRONG and BREWER, Judges.

LANDAU, P.J.

Plaintiffs appeal a summary judgment dismissing their claim of negligence because it is barred by a statute of ultimate repose. We reverse and remand.

The relevant facts are undisputed. Defendant built a house for his own family. He filed a "notice of completion" on May 30, 1989. Such a notice triggers a 75-day period within which potential lien claimants may perfect any construction liens. ORS 87.045. Defendant and his family moved into the house the following month and lived there until 1992, when they sold it to Pavel and Jimison, who lived there for approximately five years.

In June 1997, plaintiffs purchased the house. Within a few months of the purchase, they discovered major water leaks inside the house. The leaks caused severe damage to the house's interior. Ultimately, plaintiffs determined that the leaks were a result of windows and doors that defendant had not properly installed in 1989.

On October 25, 1999, plaintiffs filed a complaint against defendant for negligent construction of the house. Defendant moved for summary judgment on the ground that the action was time-barred. Specifically, he argued that the action had been commenced beyond the 10-year statute of ultimate repose stated in ORS 12.135(1), which provides:

"An action against a person, whether in contract, tort or otherwise, arising from such person having performed the construction, alteration or repair of any improvement to real property or the supervision or inspection thereof, or from such person having furnished the design, planning, surveying, architectural or engineering services for such improvement, shall be commenced within the applicable period of limitation otherwise established by law; but in any event such action shall be commenced within 10 years from substantial completion or abandonment of such construction, alteration or repair of the improvement to real property."

(Emphasis added.) Defendant argued that he had "substantially completed" the construction of the house on May 30, 1989, the date that he filed his notice of completion. As a result, defendant argued, the complaint that plaintiffs filed on October 25, 1999, was time-barred.

Plaintiffs argued that the house had not been "substantially completed" within the meaning of the statute by May 30, 1989. They relied on the definition of the term "substantial completion" in ORS 12.135(3), which provides:

"For the purposes of this section, `substantial completion' means the date when the contractee accepts in writing the construction, alteration or repair of the improvement to real property or any designated portion thereof as having reached that state of completion when it may be used or occupied for its intended purpose or, if there is no such written acceptance, the date of acceptance of the completed construction, alteration or repair of such improvement by the contractee."

(Emphasis added.) According to plaintiffs, the wording of the statute makes clear that ORS 12.135 applies only when there is a contract of construction and the "contractee accepts in writing the construction." In this case, plaintiffs argued, defendant built his own house. There was no such contract and no such acceptance of construction by a "contractee."

The trial court granted defendant's motion. The court concluded that defendant was, in effect, both the contractor and the "contractee" for the purposes of ORS 12.135 and that the notice of completion that he filed for construction lien purposes served as an acceptance of the construction within the meaning of ORS 12.135(3). The court reasoned that any other reading of the statute would lead to the absurd result of leaving contractors who build their own houses forever subject to claims for negligent construction.

On appeal, plaintiffs argue that the trial court erred as a matter of law in concluding that ORS 12.135 applies to their claim, because there was no acceptance of the construction by a contractee more than 10 years before the filing of their complaint. Defendant reiterates the trial court's reasoning that the statute cannot be read literally to require a written acceptance by a party to a construction contract because doing so would lead to absurd results.

Whether ORS 12.135 applies to this case presents an issue of statutory construction, which we resolve by reference to the statute's text in context and, if necessary, legislative history and other aids to construction. PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993).

At issue is what is meant by the "substantial completion" of construction that triggers the 10-year period of ultimate repose in ORS 12.135. The statute defines the term to mean "the date when the contractee accepts in writing" the completion of the construction. ORS 12.135(3). We cannot ignore the wording of the statute, which requires an acceptance by a "contractee." The question for us is what the legislature intended the term to mean.

Interestingly, the word "contractee" cannot be found in the usual dictionary to which Oregon courts turn for common definitions. The word appears to be a linguistic innovation of the legal profession, an example of the practice in the law of indicating the human object of an action simply by adding the suffix "-ee" to the verb. The practice, which dates from the Law French of the middle ages, is quite common and has resulted in a number of legal neologisms, only some of which may be found in ordinary speech. See generally Bryan A. Garner, A Dictionary of Modern Legal Usage 205-06 (1987) (noting such verbal creations as "acquittee," "arrestee," "conscriptee," "detainee," "educatee," "expellee," "inauguree," "indictee," "liberee," "permitee," "selectee," "smugglee," and "telephonee"); Peter M. Tiersma, Legal Language 98-100 (1999) ("asylee," "condemnee," "discriminatee," "tippee").

"Contractee" is perhaps among the less idiosyncratic of those creations. Indeed, it appears to be a quite common expression, particularly in construction contracts; it refers to the recipient of the services of a contractor. See, e.g., Thompson v. Coats, 274 Or. 477, 483, 547 P.2d 92 (1976)

(noting "the general rule that the contractor is not liable to a third person receiving injury or damage as a result of the negligent construction of the work, after the completion and acceptance thereof by the contractee or owner"); Yowell v. General Tire & Rubber, 260 Or. 319, 324, 325-26, 490 P.2d 145 (1971) (referring to the "duty owed by a contractee to the workman of an independent contractor who has been employed to perform services"); see also Virden v. Betts and Beer Const. Co., Inc., 656 N.W.2d 805, 807 (Iowa 2003) ("a building or construction contractor is liable for injuries * * * occurring after the completion of his work and its acceptance by the contractee"); Scoccolo Const., Inc. v. City of Renton, 102 Wash.App. 611, 612-13, 9 P.3d 886 (2000) (upholding construction contractor's contractual right to recover damages from "contractee" due to delays in the completion of work).

In that light, the legislature's use of the term "contractee" in ORS 12.135(3) makes sense. To begin with, the text of the statute...