Tag: Oregon

1
Evidence of Substantial Completion Critical to Statutes of Limitation and Repose Defenses
2
The Perils of Settlement Releases on Subsequent Litigation of Assigned Claims
3
Qui Tam Relators for False Claim Actions Must Plead Sufficient Details to Withstand Motions to Dismiss
4
Standards Applicable to Construction Site Safety, Conditions and Injuries
5
Appellate Court Upholds Contract Requirement For Arbitration of Disputes
6
No License; No Claim; No Recovery: Oregon Contractors Beware!
7
Economic Loss Doctrine may not Preclude Claims Against Building Contractors for Negligent Construction that Results in Foreseeable Damage to Property
8
Oregon Federal Court Remands Contractor Garnishment Action to State Court
9
Court Upholds City’s Product Specification for Construction Project, but Notes that City Does Not Have Unfettered Discretion In Prohibiting Products

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.

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The Perils of Settlement Releases on Subsequent Litigation of Assigned Claims

A&T Siding v. Capitol Specialty Ins., No. 3:10-cv-980-AC, 2012 WL 707100 (D. Or. Mar. 1, 2012)

A siding subcontractor sued the CGL insurance carrier to recover amounts claimed due under a policy that was for the benefit of a condominium homeowners association.  This lawsuit arose when a general contractor was sued by the association for construction defects and the general contractor in-turn sued the subcontractor for negligent construction.  The subcontractor tendered its defense to Capitol and Zurich, each of which initially participated in the defense.  Capitol subsequently withdrew its defense because it decided the alleged defects and damage took place prior to inception of its policy.

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Qui Tam Relators for False Claim Actions Must Plead Sufficient Details to Withstand Motions to Dismiss

U.S. v. Hooker Creek Asphalt, No. 6:08-cv-6307-HO, 2012 WL 913229 (D. Or. Mar. 16, 2012)

A qui tam action brought against contractors for alleged violation of the U.S. False Claims Act arising from a road construction contract was dismissed with prejudice.  The qui tam relator’s complaints (following a series of amendments and, with the court’s direction, the inclusion of additional necessary pleading elements) were found lacking as to personal knowledge and failed to provide the “who, what, when, where and how”.  The relator relied on “representative example type pleading” which lacked required particularity.  The court found that permission to allow further amended complaints would be futile.

Standards Applicable to Construction Site Safety, Conditions and Injuries

Cain v. Bovis Lend Lease, Inc., 817 F. Supp. 2d 1251  (D. Or. 2011)

A subcontractor employee fell from a ladder at a hospital renovation site and suffered injuries.  The injured worker sued the hospital, the renovation general contractor, the ladder fabricator (a subcontractor) and the architect.  The worker’s direct employer was statutorily immune from liability.  The case is the review of summary judgment motions by all parties resulting in a recommended series of decisions by a federal magistrate.

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Appellate Court Upholds Contract Requirement For Arbitration of Disputes

Gemstone Builders, Inc. v. Stutz, 261 P.3d 64 (Or. Ct. App. 2011)

Contractor sued homeowners, who had hired contractor to build a home for them.  Contractor sued for breach of contract, unjust enrichment and fraud.  The parties disagreed regarding the interpretation of their contract as it pertained to arbitration.  The contractor argued that the terms were irreconcilably contradictory, making the arbitration provisions unenforceable.  The homeowner sought to compel arbitration.  Addressing the issue, the trial court denied defendants’ petition to compel arbitration and defendants appealed.

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No License; No Claim; No Recovery: Oregon Contractors Beware!

Stellar J Corp. v. Smith & Loveless, Inc., 2010 WL 3118360 (D. Or. Aug. 5, 2010)

By:  Tom Wolfendale, K&L Gates, Seattle

Overview:

A general contractor ("general") brought a claim, originally in state court, against one of its first tier subcontractors ("sub") for breach of contract; in turn, the first tier subcontractor removed the action to federal court and brought claims against the general and its surety for breach and quantum meruit.

On a public works project, the sub was to supply and install equipment for a city wastewater treatment project.  At the time of contracting with the general, the sub did not have an Oregon Contractor’s license.  During the work, the general terminated the sub for failure to perform.  The sub counterclaimed alleging the general breached and also sued the general’s surety for recovery.  The general asserted an affirmative defense that the sub did not have an Oregon license and could not prosecute its counterclaims.

The general contractor sought summary judgment against the sub claims based on the sub’s failure to obtain an Oregon license.  The federal contract dismissed the sub’s claims.

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Economic Loss Doctrine may not Preclude Claims Against Building Contractors for Negligent Construction that Results in Foreseeable Damage to Property

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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Oregon Federal Court Remands Contractor Garnishment Action to State Court

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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Court Upholds City’s Product Specification for Construction Project, but Notes that City Does Not Have Unfettered Discretion In Prohibiting Products

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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