K&L Gates Construction Law Blog : Construction and Engineering Lawyers & Attorneys : K&L Gates Law Firm : Financing, Development, Dispute Resolution, Government Contracting

Harris v. Suniga, 344 Or. 301, 180 P.3d 12 (Or. 2008)

In this case, the defendant general contractors constructed an apartment building for a California investment company.  The California investment company sold the completed apartment building to the plaintiffs, trustees for the Harris Family Trust.  Following the sale, plaintiffs found the apartment building had problems with leaking water and dry rot and filed a claim for negligent construction against the defendant contractors.  Prior to suit, the plaintiff and defendants were “strangers.”  The plaintiffs did not purchase the apartment building from the defendants, did not contract with the defendants, and did not have any previous contact with the defendants.  Plaintiffs alleged that defendants’ failure to install required flashings in the building caused the dry rot damage, and that the failure constituted negligence.

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Triad Mech. v. Coatings Unlimited, Inc., 2007 WL 2713842 (D. Or. Sept. 12, 2007)

A general contractor successfully obtained a judgment against a subcontractor for breach of contract and negligence arising from a construction project.  The general contractor then sought a garnishment action against one of the subcontractor’s insurers to collect the judgment, which was filed in Oregon state court.  The general contractor was an additional insured under the subcontractor’s comprehensive general liability insurance.  The insurer removed the action to federal court and the general contractor sought remand to state court.  The district court remanded the action to state court.

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Advanced Drainage Sys., Inc. v. City of Portland, 214 Or. App 534, 166 P.3d 580 (2007)

A pipe manufacturer sought a declaratory judgment that the city had violated its state and federal constitutional rights to equal treatment when it rejected the use of a certain type of pipe for a city contract.  The city counterclaimed, asserting that it had complete discretion to choose products for its construction projects.  The trial court agreed with the city.  The court of appeals affirmed, but with a modification.

The city tried to argue that the manufacturer was not a citizen under the Oregon constitution and therefore lacked standing.  The appellate court left that issue for another day, deciding that it would determine standing as an issue of justiciability and not as a matter of constitutional interpretation.  The appellate court then determined that the city’s ordinances which prohibited certain types of pipe materials but not others passed any applicable tests of rationality based upon asserted claims regarding safety and maintenance.  However, the appellate court also determined that, contrary to the city’s argument, the city did not have unfettered discretion in prohibiting certain types of products and hence manufacturers.  Thus, the city could not prohibit products made by “Catholics or Norwegians," for example.

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