ARMSTRONG, P.J.
Plaintiff brought this fraud action against defendant, alleging that he had relied on statements by one of defendant's claims adjusters in entering a contract with a contractor for repair work on plaintiff's rental property and, as a consequence, had been damaged by the contractor's failure to obtain the building permits necessary to perform the repairs and to make the repairs in conformance with the Grants Pass building code. The trial court granted defendant's motion for summary judgment on plaintiff's fraud claim on three grounds: plaintiff had not timely filed his claim; plaintiff had failed to adduce evidence on an element of fraud, viz., that plaintiff's reliance on the claim adjuster's statements was justified; and plaintiff had failed to plead and to adduce evidence on the existence of a special relationship between himself and defendant that would entitle him to recover damages against defendant for fraud. Plaintiff appeals the general judgment, advancing two assignments of error that together challenge all three of the court's reasons for granting summary judgment.
Plaintiff owns a residential rental property in Grants Pass that suffered extensive water damage on January 18, 2007. Pursuant to his homeowner's insurance policy with defendant, plaintiff filed a claim with defendant for the damage, and defendant accepted the claim and agreed to pay for the repairs. Roughly a week after the damage occurred, plaintiff met Gould, one of defendant's claims adjusters, and Stewart, a contractor who owns a company that performs restoration work and whom Gould had invited to the property.
Before signing the contract, plaintiff asked Gould and Stewart whether Stewart's proposed repair work would require building permits, pointing out that it seemed to plaintiff that the job would require electrical permits because water had damaged light fixtures in the ceiling of the house. Specifically, plaintiff asked Gould, "[D]o we need any permits to do this job and do it right so we can get it done?" Gould responded, "No, we don't," and Stewart added, "No, we don't need any, it's just a normal restoration job, water damage." Also, at some point during the initial inspection of the home, Gould told plaintiff, regarding Stewart's qualifications, that defendant "use[s] [Stewart] quite often here in town and other places on all our jobs."
During the course of Stewart's ensuing repair work, the issue whether the work had to be performed pursuant to building permits came up twice. First, plaintiff testified at his deposition that he had had a meeting with a Grants Pass building inspector about the need for some type of building permit "probably within a few months" of Stewart's initial inspection of the house on January 25, 2007.
Plaintiff also asked Stewart during the meeting if a building permit would be needed to perform the work, and Stewart told him that a permit would not be necessary. However, plaintiff testified that he still had his doubts.
Stewart completed the work in May 2008, but, at some point after October 1, 2008, a Grants Pass building inspector told plaintiff that he believed that substantial portions of the repair work that Stewart had performed required a building permit. On February 11, 2009, the Grants Pass building safety department issued a notice to plaintiff that asserted that the restoration work had violated the city building code because it had been performed without the required building permits. As a result of the violation, no one could occupy the property and plaintiff had to pay a fine of $495 per day for a period that started on February 2 and ended when plaintiff obtained the required permits, if he did so within 14 days of the notice.
Plaintiff filed this action against defendant for fraud on April 13, 2009, alleging that he had relied on Gould's false statements — viz., that no building permits were required for the repair work and that Stewart was experienced in and knowledgeable about restoration work — in signing the work-authorization contract with Stewart, which resulted in the
Defendant moved for summary judgment in its favor on plaintiff's claim on, as pertinent to this case, three grounds. First, defendant contended that plaintiff's claim, which he filed on April 13, 2009, is time barred by the applicable two-year statute of limitation, ORS 12.110(1), because, under the discovery rule incorporated in the statute, plaintiff should have discovered "at least within three months of entering into [the] contract with Stewart," viz., by April 25, 2007, that Gould's statements were fraudulent — at which point the two-year limitation period would have commenced.
A fraud action must be commenced within two years of the date on which the cause of action accrues. ORS 12.010; ORS 12.110(1).
The overarching inquiry regarding the timeliness of plaintiff's claim is when should plaintiff have discovered that he had suffered an actionable injury resulting from Gould's alleged fraud — which is a determination that must be made by the factfinder unless the evidence compels a certain answer as a matter of law. See, e.g., Mathies, 284 Or. at 543, 588 P.2d 1.
Accordingly, our analysis begins with the predicate inquiry whether the evidence in the record presents a factual issue about whether, during the roughly two and one-half months between the day that Gould made the allegedly fraudulent statements about the building permits and Stewart's qualifications and the outer limit of the two-year limitation period — viz., between January 25, 2007, and roughly April 13, 2007 — plaintiff learned sufficient facts to trigger a duty to investigate Gould's alleged fraud.
Based on the record, there were two occasions during that time that the issue of building permits came to plaintiff's attention.
Therefore, we conclude that the determination whether plaintiff should have discovered that he had suffered an actionable injury as a result of Gould's allegedly fraudulent statements is one that must be made by the jury, and, accordingly, the court erred in granting summary judgment on the ground that plaintiff's claim was not timely.
We turn to the court's conclusion that the evidence proffered by plaintiff failed to establish that plaintiff's reliance on Gould's statements was justified — that is, that plaintiff had a right to rely on the statements. To recover on a fraud claim, a plaintiff must prove the following elements:
Strawn v. Farmers Ins. Co., 350 Or. 336, 352, 258 P.3d 1199, adh'd to on recons., 350 Or. 521, 256 P.3d 100 (2011), cert. den., ___ U.S. ___, 132 S.Ct. 1142, 181 L.Ed.2d 1017 (2012). The requirement that a plaintiff's reliance be justified serves as a balance between, on the one hand, the policy that a person who intentionally deceives another should not be allowed to profit from the deception and, on the other hand, the recognition that the person deceived, as an autonomous individual, should be responsible for protecting his or her own interests when making a decision.
There are two circumstances in particular on which Oregon courts have focused to make that determination. The first is the ability of the plaintiff to obtain information that would reveal the truth of the fraudulent statement — that is, the difficulty that a plaintiff would encounter in conducting an independent investigation of the truthfulness of the statement. See Miller et ux. v. Protrka et ux., 193 Or. 585, 597, 238 P.2d 753 (1952) (explaining that purchasers did not justifiably rely on the statements of sellers where "the prospective buyers have or can obtain equal means of information" to discern their truth); see also Rosboro Lumber Co. v. Apsel, 144 Or.App. 298, 303-04, 926 P.2d 329 (1996), adh'd to as modified on recons., 146 Or.App. 333, 932 P.2d 110 (1997), rev. dismissed, 326 Or. 530, 971 P.2d 407 (1998) ("Whether the parties have or can obtain equal means of information, in turn, depends on whether it would be unreasonably difficult under the circumstances for the party to whom the representations have been made to perform
Here, the critical inquiry is whether plaintiff had a duty to investigate the truth of Gould's statements before plaintiff signed the work-authorization contract with Stewart in reliance on them — a determination that must be made by the factfinder unless the circumstances of the case compel the conclusion that plaintiff was not justified, as a matter of law, in so relying. See, e.g., Soursby v. Hawkins, 307 Or. 79, 86, 763 P.2d 725 (1988).
Three circumstances are pertinent to our analysis: (1) the availability of information about the need for building permits and about Stewart's qualifications; (2) the relative sophistication of plaintiff and Gould; and (3) the pressure on plaintiff to sign the contract with Stewart almost immediately after Gould made the allegedly fraudulent statements.
First, the information that would reveal the truth of Gould's statements was undoubtedly available; it was not exclusively in Gould's control, and plaintiff certainly could have asked a city building inspector about the permit issue, which he eventually did as the work was progressing, and could have asked other clients or contractors in the area about Stewart's qualifications to perform the restoration work. However, despite the general availability of the information, a jury could still reasonably infer that the information would have been unduly difficult to acquire and, therefore, that plaintiff need not have sought the information in order to justifiably rely on Gould's statements. See Soursby, 307 Or. at 87-88, 763 P.2d 725 (concluding that "purchasers may rely on representations if discovering the truth would be unreasonably difficult" and, in the context of the specific circumstances of the case, "[d]iscovering the zoning restrictions on the property could involve a complex and difficult search, particularly for buyers who are unfamiliar with the process").
Second, as to the relative sophistication of the parties, plaintiff testified at his deposition that he had asked Gould about the need for building permits because he had assumed that Gould, having been trained as a claims adjuster, would be familiar with that issue and would know the answer and that he had asked Gould about Stewart's qualifications because Gould had brought him to the house to assess the water damage. Both statements could be taken to show that Gould was the more sophisticated party. However, plaintiff also testified that he had worked for most of his life as a construction worker, building dams and installing drywall depending on the time of year, and, based on his experience in that field, he knew that some construction projects require building permits. The jury could reasonably infer that plaintiff's construction experience makes him a sophisticated party regarding the subject of Gould's statements or it could reach the opposite inference based on the fact that nothing in the record suggests that plaintiff ever had to assess the need for building permits or had to obtain them as part of his construction employment.
Finally, and most importantly, plaintiff testified that both Gould and Stewart had exerted pressure on him to sign the work-authorization contract immediately to prevent further water damage to the house that would result were he to delay doing that. A jury could certainly infer that the pressure to sign the contract created a situation in which, no matter how available the information revealing the truth of Gould's statements or how sophisticated the parties, plaintiff simply could not be said to have had any opportunity to conduct an independent investigation before signing the contract.
Therefore, we conclude that the question whether plaintiff reasonably should have investigated the need for building permits and Stewart's qualifications before signing the work-authorization contract must be answered by the jury. Accordingly, the court
Finally, we turn to the court's conclusion that, because plaintiff and defendant were parties to an insurance contract, plaintiff could not recover on his fraud claim without pleading and adducing evidence that he had a special relationship with defendant giving rise to a standard of care independent of the one imposed by the contract's terms. As the Oregon Supreme Court has routinely stated in addressing a plaintiff's choice between tort and contract remedies:
Georgetown Realty v. The Home Ins. Co., 313 Or. 97, 106, 831 P.2d 7 (1992) (emphasis added). The court's focus on negligence claims is deliberate because the difficulty that the court addressed in reconciling tort and contract remedies concerns the source — contract or otherwise — that provides the applicable standard of care. Typically, if the contracting parties are in a special relationship, then the relationship serves as the source. Abraham v. T. Henry Construction, Inc., 350 Or. 29, 39-40, 249 P.3d 534 (2011). However, although the source of the standard of care is a crucial consideration for negligence claims, it is not an issue for intentional tort claims, including fraud.
Therefore, and in the absence of case law extending the principle stated in Georgetown Realty to intentional torts,
In conclusion, the court granted summary judgment to defendant on three grounds. We conclude that each of the grounds is insufficient to support the court's decision. Accordingly, we reverse and remand the general judgment.
Reversed and remanded.