Sunset Presbyterian Church v. Brockamp & Jaeger, Inc.

• Decision Date: 12 December 2012
• Docket Number: C091601CV; A146006.
• Citation: 254 Or.App. 24,295 P.3d 62
• Court: Oregon Court of Appeals
• Parties: SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Plaintiff–Appellant, v. BROCKAMP & JAEGER, INC., an Oregon corporation; 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.

254 Or.App. 24

295 P.3d 62

SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Plaintiff–Appellant,

v.BROCKAMP & JAEGER, INC., an Oregon corporation; 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,andDivers Window & Door, Inc., an inactive Oregon corporation; et al, and The Harver Company, an Oregon corporation, Defendants.

C091601CV; A146006.

Court of Appeals of Oregon.

Argued and submitted March 21, 2012.

Decided Dec. 12, 2012.

Daniel Goldstein, Portland, argued the cause for appellant. On the briefs were Phillip E. Joseph, James C. Prichard, Daniel R. Webert, and Ball Janik, LLP.

Anne Cohen, Portland, argued the cause for respondent Brockamp & Jaeger, Inc. With her on the brief were Bruce R. Gilbert and Smith Freed & Eberhard P.C.

Jonathan W. Henderson, Portland, argued the cause for respondent Portland Sheet Metal Works, Inc. With him on the brief were Elizabeth E. Lampson and Davis Rothwell Earle & Xochihua P.C.

Michael T. Stone filed the brief for respondent Anderson Roofing Co.

John W. Kendall, III and Blunck & Walhood, LLC filed the brief for respondent Positive Construction, Inc.

Rima I. Ghandour, Ann V. Wolf, and Wiles Law Group, LLC, filed the brief for respondent Sharp & Associates, Inc.

Daniel L. Dvorkin, Betsy A. Gillaspy, Salmi & Gillaspy, PLLC, Rima I. Ghandour, Lydia M. Godfrey, and Wiles Law Group, LLC, filed the brief for respondent Shupe Roofing, Inc.

Norma S. Ninomiya filed the brief for respondent Woodburn Masonry.

Before ARMSTRONG, Presiding Judge, and HASELTON, Chief Judge, and DUNCAN, Judge.

ARMSTRONG, P.J.

Plaintiff appeals a judgment for defendants, assigning error to the trial court's grant of summary judgment to defendants, which was based on the court's conclusion that plaintiff's claims were time barred. We conclude that the trial court erred in granting summary judgment and, accordingly, reverse and remand.

Plaintiff is a Portland church. Defendants are the general contractor with which plaintiff contracted to construct the first phase of a new church facility and some of the subcontractors that worked on aspects of it. Plaintiff began to hold religious services in the new facility in February 1999 and held a dedication event for it the weekend of March 13 and 14 of that year. After that weekend, construction work continued to be performed on the facility, including changes to the electrical system, fire-alarm system, and landscaping.

On March 16, 2009, plaintiff filed an action against defendants based on alleged defects in the construction of the facility, asserting, as relevant, claims for negligence and negligence per se. All defendants moved for summary judgment on the ground that the claims asserted against them were time barred.

The general contractor contended that the two-year statute of limitation for plaintiff's negligence claims had begun to run in 1999 and barred plaintiff's claims against it. It relied on a provision in its contract with plaintiff that provided that all statutes of limitation for claims arising from the construction of the facility would begin to run from the “date of substantial completion” of the facility, which, according to the general contractor, occurred when plaintiff occupied and used the facility for its intended purpose in 1999. The trial court agreed with the general contractor's interpretation of the contract and granted its motion.

The subcontractors contended that two statutes of ultimate repose, ORS 12.115 and ORS 12.135, barred plaintiff's claims against them. Those statutes impose ten-year repose periods that, according to the subcontractors, began to run more than ten years before plaintiff filed its claims. The trial court concluded that ORS 12.135 was the applicable statute of ultimate repose and that it had begun to run no later than March 14, 1999. Thus, because plaintiff filed its action on March 16, 2009, the court concluded that its claims against the subcontractors were time barred.

Plaintiff appeals, assigning error to the trial court's grant of summary judgment to defendants. Because the grounds on which the trial court granted summary judgment to the general contractor and the subcontractors differ, we address the arguments relating to them separately.

As noted, the general contractor relied on the accrual clause in the parties' contract to establish that plaintiff's claims against it were time barred. The accrual clause, which is in paragraph 13.7.1.1 of the contract, provides that any claim for acts and omissions occurring before the date of substantial completion of the improvement shall be deemed to have accrued, and any applicable statutes of limitation shall begin to run, no later than the “date of substantial completion” of the improvement. The contract defines the date of substantial completion as “the date certified by the Architect in accordance with Paragraph 9.8.”

Paragraph 9.8.1 provides that “Substantial Completion is 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 and utilize the Work for its intended use.” Paragraph 9.8.2 provides, in turn, as relevant:

“When 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. * * * Upon receipt of the Contractor's list, the Architect will make an inspection to determine whether the Work or designated portion thereof is substantially complete. * * * When the Work or designated portion therefore is substantially complete, the Architect will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion[.] * * * 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.”

The general contractor contends that, pursuant to the accrual clause, the two-year statute of limitation for plaintiff's negligence claims, ORS 12.110(1), began to run in 1999 when the improvement reached the state of completion at which it could be occupied and used by plaintiff for its intended purpose. We disagree.

The accrual clause provides that statutes of limitation will run from the date of substantial completion, not from the date on which the improvement is substantially complete. The term “date of substantial completion” is defined in the contract as the date certified by the architect pursuant to paragraph 9.8, and paragraph 9.8.2 provides, in turn, that the certificate of substantial completion “shall establish the date of Substantial Completion.”

The general contractor submitted no evidence establishing the date that was certified by the architect in the certificate of substantial completion as the date of substantial completion of the improvement. It argued, instead, that the accrual clause runs from the date on which the improvement was substantially complete, as defined in paragraph 9.8.1. When read in context, paragraph 9.8.1 provides the general contractor and the architect with the criterion by which to determine when the general contractor should submit its request for issuance of a certificate of substantial completion and when the architect should issue the certificate. For us to interpret the accrual clause according to the more general definition of substantial completion in paragraph 9.8.1 would ignore the parties' decision to use the defined term “date of substantial completion” in the accrual clause. SeeORS 42.240 (providing that the objective in construing a contract is to give effect to the parties' intention); Andres v. American Standard Ins. Co., 205 Or.App. 419, 423–24, 134 P.3d 1061 (2006) (explaining that the objective in construing a contract is to determine the intent of the parties, particularly in accordance with any definitions included in the contract). Therefore, we conclude that, under the accrual clause, statutes of limitation begin to run from the date certified by the architect in the certificate of substantial completion as the date that the improvement was substantially complete.

Because the only ground on which the general contractor relied for summary judgment was that plaintiff's claims were time barred pursuant to the accrual clause, which is an affirmative defense on which the general contractor bears the burden of proof at trial, the general contractor bore the burden of producing sufficient evidence to support the defense. ORCP 47 C; Fredericks v. Universal Underwriters Ins. Co., 140 Or.App. 269, 280–81, 915 P.2d 472 (1996). The general contractor submitted no evidence establishing the date on which the architect certified the improvement to be substantially complete pursuant to paragraph 9.8 and, therefore, failed to offer evidence establishing when the statute of limitation for plaintiff's negligence claims began to run. Consequently, the trial court erred in granting the general contractor's summary judgment motion.¹

Each of the subcontractors involved in the appeal filed its own motion for summary judgment against plaintiff. Because there is no material factual difference among the subcontractors, we do not distinguish among them in our discussion of the court's grant of summary judgment to them.

ORS 12.135 establishes a ten-year repose period for all claims arising from the construction, alteration, or repair of an improvement to real property. It provides, as relevant, that an

“action against a person * * * arising from such person having performed the construction, alteration or repair of...