In March of this year, the Oregon Supreme Court issued its opinion in Abraham v. T. Henry Construction, Inc. Unhappy with one aspect of the opinion, the Abrahams promptly filed a petition for reconsideration. Last week, the Oregon Supreme Court denied the Abrahams’ petition. While it was making its way through the appellate courts, Abraham provoked considerable interest from lawyers and construction industry groups alike because of its potential to change Oregon law.
Abraham involved construction defect claims by the Abrahams, homeowners, against their contractors. The central issue in Abraham was whether the Abrahams could recover in negligence for damage to their home even though there was a contract between the Abrahams and their contractors. This was a significant issue for the Abrahams: If their negligence claims were barred, they could not recover because the statute of limitations had expired on their breach of contract claims. The Supreme Court concluded that, in the absence of contract language limiting the Abrahams’ right to assert negligence claims, their allegations of property damage stated a claim for negligence. This meant that the Abrahams’ case against their contractors could move forward.
Still, the Oregon Supreme Court did not stop there. The Court went on to state that that negligence claims arising out of the construction of a house must be brought within two years from the date on which the plaintiff discovers or should have discovered the injury. While a two-year statute of limitations is generally assumed to be the applicable period for negligence claims, at least one recent case (Waxman v. Waxman & Associates) has, for some lawyers, cast doubt on that assumption. Indeed, those same lawyers have contended that rather than two years from discovery, the applicable limitations period for negligence claims is six years from the date of the injury. This apparent conflict has, in some cases, allowed lawyers to argue one of two potentially applicable statutes of limitations, depending on which party they represent and when it appears the injury occurred or was discovered.
By filing their petition for reconsideration, the Abrahams sought to have the Oregon Supreme Court modify its opinion and omit the reference to a two-year statute of limitations for negligence claims. The Abrahams argued that, among other things, they did not ask the Oregon Supreme Court to decide any statute of limitations issues. While it is true that the Court’s reference to a two-year statute of limitation was not essential to the holding in Abraham, it certainly indicates how the Oregon Supreme Court might rule. As a result, Abraham provides some measure of guidance on the issue of which statute of limitations should apply in construction defect cases. However, because Abraham did not decide any statute of limitations issues, it is likely that the two-year versus six-year dispute will continue until Oregon’s appellate courts address it directly.