Evidence of Substantial Completion Critical to Statutes of Limitation and Repose Defenses

Sunset Presbyterian Church v. Brockamp & Jaeger, Inc., 254 Or. App. 24 (Or. Ct. App. 2012)

In 2009, plaintiff church sued defendants, a general contractor and a number of subcontractors, alleging negligence claims for defective work on a new church, where services began in 1999.  The trial court granted summary judgment to the defendants based on expiration of statute of limitation and statute of repose time periods.

The general contractor “contended that the two-year statute of limitation . . . had begun to run in 1999 and barred plaintiff’s claims against it.”  It relied on a contractual provision that provided that all statutes of limitation for claims arising from the construction “would begin to run from the ‘date of substantial completion,’” which the contractor asserted occurred in 1999 “when plaintiff occupied and used the facility for its intended purpose.”  The trial court granted the contractor summary judgment dismissing the case.  The appellate court reversed, finding the general contractor failed to produce evidence of the certificate of substantial completion (distinguished from substantial completion by occupancy) as required by the contract, which was critical to commence of the statute of limitations.

The subcontractors asserted a ten year statute of repose for construction projects barred the church claims and the trial court granted the subcontractors’ summary judgment.  The appellate court reversed finding the subcontractors, like the general contractor, did not produce evidence that the church accepted substantial completion in writing.  The statute of repose provided that absence of a writing then required the subcontractors to produce undisputed evidence that the church took, from the general contractor, responsibility for maintenance, alteration and repair on a specified date that would allow calculation for the statue of repose.  Subcontractors did not provide such undisputed unwritten evidence.

The appellate court remanded.

LESSON LEARNED: In asserting statute of limitations and/or repose defenses to claims, be mindful of all the contract provisions regarding substantial completion, especially where a certificate of substantial completion is identified as the trigger for commencing the running of such statutes.  In other words, the owner’s mere occupancy and use of a facility may not commence the running of statutes of limitation and/or repose.