Taylor v. Ramsay-Gerding Construction Co.

• Decision Date: 20 January 2010
• Docket Number: A127434.,015188.
• Citation: 226 P.3d 45,233 Or. App. 272
• Parties: H.H. TAYLOR, C.A. Taylor, and Taylor & Taylor, Inc., an Oregon corporation, Plaintiffs-Appellants Cross-Respondents, v. RAMSAY-GERDING CONSTRUCTION COMPANY, an Oregon corporation, Defendant, and Chemrex, Inc., a foreign corporation, Defendant-Respondent Cross-Appellant. Ramsay-Gerding Construction Company, an Oregon corporation, Third-Party Plaintiff, v. TFC Enterprises, Inc., an Oregon corporation, dba Finishers Drywall; Chemrex, Inc., a foreign corporation; Century West Engineering Corporation, an Oregon corporation; Wyatt Architects and Associates, P.S.; and Donald Trail, Third-Party Defendants.
• Court: Oregon Court of Appeals

226 P.3d 45

233 Or. App. 272

H.H. TAYLOR, C.A. Taylor, and Taylor & Taylor, Inc., an Oregon corporation, Plaintiffs-Appellants Cross-Respondents, v. RAMSAY-GERDING CONSTRUCTION COMPANY, an Oregon corporation, Defendant, and Chemrex, Inc., a foreign corporation, Defendant-Respondent Cross-Appellant.

Ramsay-Gerding Construction Company, an Oregon corporation, Third-Party Plaintiff, v. TFC Enterprises, Inc., an Oregon corporation, dba Finishers Drywall; Chemrex, Inc., a foreign corporation; Century West Engineering Corporation, an Oregon corporation; Wyatt Architects and Associates, P.S.; and Donald Trail, Third-Party Defendants.

015188.

A127434.

Court of Appeals of Oregon.

Submitted on Remand February 20, 2009.

Decided January 20, 2010.

James N. Westwood, Portland, and Stoel Rives LLP and David A. Hilgemann, Salem, and Law Offices of David A. Hilgemann for appellants-cross-respondents.

Todd S. Baran for respondent-cross-appellant.

Ralph C. Spooner, Salem, Melissa J. Ward, and Spooner & Much, P.C., for amicus curiae Ramsay-Gerding Construction Company.

Before SCHUMAN, Presiding Judge, and LANDAU, Judge, and ORTEGA, Judge.

ORTEGA, J.

This case is before us on remand from the Oregon Supreme Court. In our previous decision, we determined in part that, for the purposes of plaintiffs' claim for breach of an express warranty, there was insufficient evidence in the record to permit a jury to find that defendant's territory manager had apparent authority to warrant a stucco siding system manufactured by defendant and installed in plaintiff's hotel. We therefore reversed and remanded for entry of judgment on that claim in favor of defendant. Taylor v. Ramsay-Gerding Construction Co., 215 Or.App. 670, 172 P.3d 251 (2007), rev'd, 345 Or. 403, 196 P.3d 532 (2008).

The Supreme Court allowed review and reversed our decision, concluding that there was sufficient evidence in the record on the apparent authority issue and that the trial court therefore did not err in submitting plaintiffs' breach of warranty claim to the jury. 345 Or. at 411-14, 196 P.3d 532. The court remanded the case to us for consideration of the parties' previously unaddressed assignments of error, relating to whether plaintiffs' claim was asserted within the pertinent statute of limitations, whether the issue of plaintiffs' comparative fault was correctly submitted to the jury and factored into the judgment, whether the trial court abused its discretion in bifurcating the trial, and whether the judgment entered was inconsistent with the verdict. We turn to that task, beginning with a brief overview of the relevant historical and procedural facts, which are undisputed, and affirm.

H.H. (Todd) Taylor and his wife, C.A. Taylor, (plaintiffs) owned a hotel in Lincoln City, and Ramsay-Gerding Construction Co. (Ramsay-Gerding) was the general contractor for the hotel's construction. Ramsay-Gerding hired a subcontractor who, among other tasks, installed a stucco siding system manufactured by ChemRex, Inc. (defendant) on the exterior walls of the hotel. Construction began in May 1998, and application of the stucco siding commenced in late August of that year.

The following month, Todd Taylor became concerned about certain components of the stucco siding system. Plaintiffs met with representatives of Ramsay-Gerding and with defendant's "territory manager" for Oregon, McDonald, as well as the stucco installer. At the meeting, McDonald represented to Taylor that the stucco system came with a five-year warranty. Installation of the system was resumed. In July of the following year, McDonald sent Taylor a letter confirming that defendant warranted the stucco system for five years beginning in March 1999.

In October 2001, after discovering what appeared to be defects in the stucco system, plaintiffs initiated an action against Ramsay-Gerding for breach of the construction contract. Ramsay-Gerding answered and, as an affirmative defense, asserted in part that plaintiffs were negligent in selecting the stucco system. In April 2002, Ramsay-Gerding filed third-party claims against defendant for negligence and breach of an express warranty and for indemnity and contribution; it also filed various claims against other entities involved in the design and construction of the hotel. Defendant answered, asserting, among other affirmative defenses, that plaintiffs' damages were caused by their own fault or negligence and that of other third-party defendants.

In August 2003, plaintiffs amended their complaint to add a breach of express warranty claim against defendant. In April 2004, plaintiffs filed their second amended complaint, in which they added the operator of the hotel, Taylor & Taylor, Inc. (the development company), as a plaintiff on the breach of express warranty claim. Defendant answered, denying that it had warranted the stucco system or breached such a warranty.

In May 2004, a hearing was held on plaintiffs' and Ramsay-Gerding's motion to bifurcate the trial to allow their breach of express warranty claims against defendant to be tried first. As we explained in our prior opinion:

"Ramsay-Gerding contended that trial of those claims would not require the presence of the engineering and architectural firms, which were named only in the third-party complaint for indemnity and contribution purposes; it argued that the trial on the breach of warranty claims therefore would be `significantly shorter' yet would resolve `probably 90 percent' of plaintiffs' case. [Defendant] responded in part that it was appropriate, indeed necessary, to try all of the claims together, because plaintiffs were asserting construction defects as well as product defects, because [defendant] was asserting cross-claims for indemnity and contribution against the [project's] design professional and Ramsay-Gerding as provided in ORCP 22 B, and because all of the same witnesses and evidence would be relevant to all of the claims. Ramsay-Gerding replied in part that comparative fault was not a defense to a breach of warranty claim; plaintiffs joined in that assertion."

215 Or.App. at 677, 172 P.3d 251. The trial court granted the motion to bifurcate the trial of the breach of warranty claims.

At the close of trial, the jury found that defendant had provided an express warranty of the stucco system to plaintiffs; that defendant had breached the warranty; that plaintiffs had suffered damages in the amount of $775,000; that defendant was 51 percent at fault and plaintiffs were 49 percent at fault; and that the development company had not filed its own breach of warranty claim within the applicable limitations period and therefore was barred from bringing that claim. The jury separately found that defendant had breached one or more express warranties to Ramsay-Gerding and, as between defendant, Ramsay-Gerding, and plaintiffs, found that defendant was 35 percent at fault, Ramsay-Gerding was 35 percent at fault, and plaintiffs were 30 percent at fault. The trial court entered a limited judgment against defendant, awarding plaintiffs 51 percent of their damages, or $395,250, and dismissing the development company's claim.¹

Plaintiffs appealed, assigning as error the trial court's submission to the jury of defendant's comparative fault defense and its failure to dismiss defendant's statute of limitations defense against the development company. Defendant cross-assigned error to the trial court's denial of its motion for a directed verdict on the development company's claim. Defendant also cross-appealed, assigning error to the trial court's denial of its motion for a directed verdict in its favor on plaintiffs' claim; the court's withdrawal from the jury of its statute of limitations defense against plaintiffs; the court's entry of a judgment that did not conform to the jury's verdict; and the court's order bifurcating the trial of the breach of express warranty claims.

In our prior decision, we began by considering defendant's first assignment of error on cross-appeal, pertaining to the trial court's denial of its motion for a directed verdict on plaintiffs' claim for breach of express warranty. Id. at 680, 172 P.3d 251. As previously discussed, we determined that there was insufficient evidence in the record regarding the apparent authority of McDonald, defendant's territory manager for Oregon, to warrant the stucco system and that the trial court therefore had erred in denying defendant's motion for a directed verdict on the breach of warranty claim. Id. at 680-90, 172 P.3d 251. We further determined that plaintiffs had failed to preserve the issue raised in their second assignment of error on appeal, relating to the trial court's submission to the jury of defendant's statute of limitations defense against the development company's breach of warranty claim. Id. at 690-94, 172 P.3d 251. Finally, we determined that our disposition of those two assignments of error obviated the need to address any of the parties' other assignments of error. Id. at 694, 172 P.3d 251. We reversed and remanded for entry of judgment in defendant's favor. Id. Plaintiffs then sought review of our disposition of defendant's assignment of error relating to McDonald's apparent authority to issue a warranty; as noted, the Supreme Court reversed and remanded the case to this court for further proceedings.² We now address the parties' remaining assignments of error.

A. Withdrawal from Jury of Limitations Defense against Plaintiffs' Claim

Because it could obviate the need to address other assignments of error, we begin with defendant's second assignment of error on cross-appeal, in which it asserts that the trial court erred in "effectively striking [defendant's] statute of limitations defense against" plaintiffs' breach of warranty claim. According to defendant, it preserved that claim of error by moving for a judgment on the pleadings on that ground—a motion that the trial court denied on the ground that plaintiffs...