Sunset Presbyterian Church, an Or. Non-Profit Corp. v. Brockamp & Jaeger, Inc.

• Citation: 355 Or. 286,325 P.3d 730
• Decision Date: 24 April 2014
• Docket Number: SC S061171 (Control)).,(CC C091601CV; CA A146006
• Parties: SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Respondent on Review, v. BROCKAMP & JAEGER, INC., an Oregon non-profit corporation, Petitioner on Review, and Anderson Roofing, Co., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants–Respondents, and Divers Window & Door, Inc., an inactive Oregon corporation, et al; and The Harver Company, an Oregon corporation, Defendants. Sunset Presbyterian Church, an Oregon non-profit corporation, Respondent on Review, v. Brockamp & Jaeger, Inc., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants–Respondents, Metal Works, Inc., an Oregon corporation, Defendants–Respondents, and Anderson Roofing, Co., an Oregon corporation, Petitioner on Review, and Divers Window & Door, Inc., an inactive Oregon corporation, et al; and the Harver Company, an Oregon corporation, Defendants.
• Court: Supreme Court of Oregon

355 Or. 286

325 P.3d 730

SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Respondent on Review,

v.BROCKAMP & JAEGER, INC., an Oregon non-profit corporation, Petitioner on Review,andAnderson Roofing, Co., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants–Respondents,

and

Divers Window & Door, Inc., an inactive Oregon corporation, et al; and The Harver Company, an Oregon corporation, Defendants.

Sunset Presbyterian Church, an Oregon non-profit corporation, Respondent on Review,

v.Brockamp & Jaeger, Inc., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants–Respondents,Metal Works, Inc., an Oregon corporation, Defendants–Respondents,andAnderson Roofing, Co., an Oregon corporation, Petitioner on Review,

and

Divers Window & Door, Inc., an inactive Oregon corporation, et al; and the Harver Company, an Oregon corporation, Defendants.

(CC C091601CV; CA A146006; SC S061171 (Control)).

Supreme Court of Oregon,

En Banc.

Argued and Submitted Jan. 13, 2014.

Decided April 24, 2014.

On review from the Court of Appeals.^*

Anne Cohen, Smith Freed & Eberhard P.C., Portland, argued the cause and filed the briefs for petitioner on review Brockamp & Jaeger, Inc. With her on the brief was Bruce R. Gilbert.

Michael T. Stone, Brisbee & Stockton, LLC, Hillsboro, argued the cause for petitioner on review Anderson Roofing Co., Inc.

Daniel T. Goldstein, Ball Janik, LLP, Portland, argued the cause and filed the briefs for respondent on review.

Michael J. Vial, Vial Fotheringham, LLP, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

WALTERS, J.

In this construction defect case, we interpret the meaning of the contractual term “date of substantial completion” and the statutory term “substantial completion” to decide whether defendants were entitled to summary judgment on the basis that plaintiff's tort claims were barred either by the statute of limitations or by the statute of ultimate repose. We conclude that defendants were not entitled to summary judgment, affirm the decision of the Court of Appeals, reverse the decision of the trial court, and remand to the trial court for further proceedings.

We take the following uncontested facts from the record on summary judgment. Plaintiff Sunset Presbyterian Church contracted with defendant Brockamp & Jaeger to act as its general contractor and build a new church facility. Plaintiff and defendant executed a standard form contract provided by the American Institute of Architects (AIA). Defendant then subcontracted with Anderson Roofing Company (defendant subcontractor) and other subcontractors to perform various specialized construction tasks.¹ Plaintiff did not enter into a contractual relationship with any of the subcontractors.

Construction began in 1998. On February 14, 1999, plaintiff held its first services in the church, and on March 14, 1999, held a dedication ceremony. In May 1999, defendant general contractor issued plaintiff a warranty that extended for one year from February 7, 1999, a date that defendant identified as the “substantial completion date.” The county issued a certificate of final occupancy on May 28, 1999, but additional work continued during the summer of 1999, and it was not until November 19, 1999, that the architect issued approval for final payment to defendant.

In early 2009, plaintiff allegedly discovered extensive water damage in the church, and on March 16, 2009, it filed an action asserting tort claims against defendants. Defendant general contractor filed an affirmative defense alleging that, by the terms of the parties' contract, plaintiff's claims accrued on the “date of substantial completion” and were time-barred. Defendant subcontractor, which was not a party to that contract, filed an affirmative defense alleging that plaintiff's claims were barred by the statute of repose provided in ORS 12.135.² Both defendants moved for summary judgment.

The trial court granted defendants' motions and dismissed the case. The Court of Appeals reversed. Sunset Presbyterian Church v. Brockamp & Jaeger, 254 Or.App. 24, 295 P.3d 62 (2012). Defendants then petitioned for review. This court granted defendants' petitions and, for purpose of oral argument, consolidated this case with a companion case, PIH Beaverton, LLC v. Super One, Inc., 254 Or.App. 486, 294 P.3d 536 (2013). We begin with the issue presented by defendant general contractor and consider whether it was entitled to judgment as a matter of law.

Generally, for purposes of the statute of limitations, tort claims accrue when the plaintiff knows or should know that an injury has occurred. See Rice v. Rabb, 354 Or. 721, 725, 320 P.3d 554 (2014) (holding that discovery rule applies to tort actions referenced in ORS 12.080 and ORS 12.110). Defendant contends that, in this case, the parties altered, by contract, the date on which plaintiff's claims accrued. For purposes of this opinion only, we will assume that the contractual provision on which defendant relies—Paragraph 13.7.1.1—could have that effect and turn to an analysis of that provision.³

Paragraph 13.7.1.1 provides that claims arising from “acts or failures to act occurring prior to the relevant date of Substantial Completion” of the construction “accrue[ ]” and “any applicable statute of limitations shall commence to run * * * not later than such date of Substantial Completion.” ⁴ (Emphasis added.) Paragraph 9.8.1 defines “Substantial Completion” as “the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so the Owner can occupy or utilize the Work for its intended use.” Paragraph 8.1.3 provides that the “date of Substantial Completion is the date certified by the Architect in accordance with Paragraph 9.8.”

Paragraph 9.8.2 includes steps that the contractor, architect, and owner of the property must take before the architect issues a Certificate of Substantial Completion. First, “[w]hen the Contractor considers that the Work * * * is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of items to be completed or corrected.” Then, the architect must perform an “inspection” and thereby determine that the “Work or designated portion thereof is substantially complete.” At that point, the architect

“will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion, shall establish responsibilities of the Owner and Contractor for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix the time within which the Contractor shall finish all items on the list accompanying the Certificate. * * * The Certificate of Substantial Completion shall be submitted to the Owner and Contractor for their written acceptance of responsibilities assigned to them in such Certificate.”

Defendant did not include an architect's Certificate of Substantial Completion in the documents that it submitted in support of its motion for summary judgment, nor does it argue that the evidence that it did submit established that such a certificate ever had been issued.⁵ Rather, defendant argues that Paragraph 13.7.1.1 should be interpreted to mean that the applicable statute of limitations begins to run when construction is “substantially complete” from a functional standpoint: the point at which construction meets the contractual definition of substantial completion ( i.e., is sufficiently complete so the owner can occupy or use it as intended). According to defendant, the date that a Certificate of Substantial Completion is issued is one way to prove that functionality, but it is not the only way. Defendant contends that other evidence, such as the date that the construction is occupied or used for its intended purpose, also may establish the date of substantial completion. In this case, defendant argues, plaintiff occupied and used the church for its intended purposes at some point in 1999. Therefore, defendant submits, the statute of limitations began to run in 1999 and, regardless whether a two-year or a six-year statute of limitations applies, plaintiff's claims are time-barred.⁶ Plaintiff did not file its complaint until March 2009, more than 10 years from the date that the church was “substantially complete.”

Thus, the parties' arguments focus on different contractual provisions. Defendant argues that plaintiff's claims accrued when construction was “Substantially Complete,” as that term is defined in Paragraph 9.8.1—“the stage in the progress of the Work when the Work * * * is sufficiently complete * * * so the Owner can occupy or utilize the Work for its intended use.” Plaintiff contends that, under Paragraph 13.7.1.1, its claims accrued on the date of Substantial Completion and that the “date of substantial completion” is as defined in Paragraph 8.1.3—when an architect determines that the construction is “substantially complete” and issues a certificate to that effect.

Paragraph 9.8.1 defines “Substantial Completion” as a “stage” in the progress of the work, and Paragraph 8.1.3 defines the “date” of Substantial Completion. The contract does not further define the words “stage” or “date,” but the difference in the terms is obvious from their dictionary definitions. The dictionary defines “stage” as “a period or step in a process, activity, or development.”...