HADLOCK, J.
These consolidated cases involve claims related to the allegedly negligent construction of a hotel. Plaintiff PIH Beaverton, the current owner of the hotel, brought a negligent-construction claim against Super One, a general contractor, and various subcontractors (collectively, "defendants"). Super One, in turn, sought indemnity from two subcontractors: (1) Gary Thompson dba Portland Plastering Company (Portland Plastering), via a cross-claim, and (2) Wood Mechanix, Inc., via third-party claims.
In the end, we conclude that the trial court erred when it granted summary judgment to defendants on the ground that plaintiff's negligent construction claim was time-barred. Accordingly, we reverse the trial court's grant of summary judgment to defendants and remand for further proceedings. We reach a different conclusion, however, with respect to the trial court's dismissal of defendant Super One's indemnity claims against Wood Mechanix and Portland Plastering. We affirm that aspect of the trial court's judgment.
As noted above, the trial court granted summary judgment to defendants on the ground that plaintiff's negligent construction claim was time barred. On appeal, plaintiff argues that the trial court erred in concluding that the claim is barred by ORS 12.135(1) (2007),
"On review of a trial court's grant of summary judgment, we view the record in the light most favorable to the party opposing summary judgment to determine whether there is any genuine issue of material fact and, if not, whether the moving party is entitled to judgment as a matter of law." Pincetich v. Nolan, 252 Or.App. 42, 46, 285 P.3d 759 (2012). In this case, there is no dispute about the majority of the historical facts. Rather, the parties' arguments relate primarily to the proper interpretation of ORS 12.135(1) and whether the facts on summary judgment establish, as a matter of law, that plaintiff's action was untimely under that statute.
The facts, described in the light most favorable to plaintiff, are as follows: In December, 1995, VIP'S Industries, Inc., and VIP'S Motor Inns, Inc.,
Regarding the status of the hotel's construction in early 1997, Johnson testified that he did not "have an independent recollection of exact dates," but said that he did "not believe [defendants] had completed their work as of [February 13]." Johnson asserted that he knew that "construction efforts and work by Super One on the job site" continued even after the contractors had submitted all pay applications "because work just needed to be done. Things needed to be completed." Johnson further testified that he specifically recalled "there being quite a bit of work to be done between ourselves in order to * * * complete the project." When asked if particular contractors had performed work after February 13, 1997, Johnson testified that he knew "for a fact" that Super One had. He explained further:
Johnson did not "have a specific recollection of individual items as to the structure," as opposed to the storm-drainage and wetlands work, that were left to be done after February 13, 1997, but reiterated that the company's "typical practice and experience was to have quite a bit of work still left to do" after the initial occupancy, given that it "usually pushed very, very, hard to get into possession and open for business as soon as possible."
Johnson also filed a declaration commenting on when he would have considered the hotel to be complete. Specifically, Johnson declared:
The architect for the hotel similarly declared that he "considered construction of the Hotel to be complete when the appropriate government permitting authority issued a final Certificate of Occupancy." Washington County issued a "Notice of Completion of Final Inspection Requirements and Certificate of Occupancy" for the hotel on September 24, 1997.
Defendants moved for summary judgment, arguing that plaintiff's claims were barred either by ORS 12.115(1) or by ORS 12.135(1). The former statute provides:
ORS 12.115(1). The latter statute provides, as relevant, that
ORS 12.135 (emphasis added).
The trial court granted defendants' motion based on ORS 12.135(1). In doing so, the court rejected defendants' argument that the February 13, 1997, "Notice of Completion" constituted a "written acceptance" under ORS 12.135(3) that, standing alone, would be sufficient to trigger the ultimate-repose period. The court reasoned, however, that the existence of that notice, in combination with select terms of the construction contract, VIP'S undisputed occupancy and use of the hotel on or about February 13, 1997, and a "lack of any specific evidence of work performed after [that date] by any of the defendants on any of the structures that are the subject of the claims in this lawsuit," meant that the project was, in fact, substantially completed by February 13, 1997, and that the repose period therefore began to run on that date.
On appeal, plaintiff argues that the trial court erred in applying ORS 12.135(1). It contends that, under a proper application of the statute, a genuine issue of material fact exists regarding the date on which the ultimate-repose period began to run. Defendants urge us to uphold the trial court's decision under ORS 12.135(1) (although they do not wholly endorse the trial court's reasoning) and alternatively argue that, if ORS 12.135(1) does not bar plaintiff's claim, ORS 12.115 does.
As an initial matter, we agree with the trial court that ORS 12.135(1) is the ultimate-repose statute that applies to plaintiff's claim for negligent construction. That statute applies specifically to claims against a person arising from that person's construction of an improvement to real property "whether in contract, tort or otherwise." "Accordingly, it controls over the more general negligence provision of ORS 12.115." Sunset Presbyterian Church v. Brockamp & Jaeger, 254 Or.App. 24, ___, ___, ___ P.3d ___ (2012). The remaining question, then, is whether the trial court properly applied ORS 12.135(1).
As noted, ORS 12.135(1) bars claims arising from the construction of an improvement to real property that are filed more than 10 years after the "substantial completion" of the construction. Unlike some other statutes that also refer to "substantial completion"
ORS 12.135(3).
That definition has two parts. Under the first clause of subsection (3), "substantial completion" occurs — and the ultimate — repose period in ORS 12.135(1) begins to run — on "the date when the contractee accepts in writing the construction, alteration or repair of the improvement to real property or any designated portion thereof as having reached that state of completion when it may be used or occupied for its intended purpose[.]" ORS 12.135(3) (emphasis added). Thus, that first part of the definition contemplates that a construction project may be "substantially completed" before it is finally completed. Importantly, however, no matter how much work has been done on an improvement to real property, that improvement will be considered "substantially complete" under the first clause of ORS 12.135(3) only if the contractee has accepted in writing that it has "reached that state of completion when it may be used or occupied for its intended purpose."
In the absence of that kind of "written acceptance," the second clause of ORS 12.135(3) applies. It dictates that substantial completion will be deemed to occur on the date of the contractee's "acceptance of the completed construction, alteration or repair of such improvement." Significantly — and in contrast to the first clause — that second part of the ORS 12.135(3) definition does not incorporate any notion of less-than-total completion. Rather, it somewhat counterintuitively defines "substantial completion" in terms of the contractee accepting construction of an improvement to real property, or any designated portion thereof, that actually has been "completed."
On appeal, defendants renew their argument that plaintiff's claims are time barred under the first, "written acceptance," clause of ORS 12.135(3). They contend that VIP'S filing of the February 13, 1997, notice of completion constituted a qualifying "written acceptance." We, like the trial court, reject that argument. The February 13 notice of completion states, in part, that "notice is hereby given that the building, structure and other improvements, including site improvements on [the hotel] have been completed." It goes on to notify all persons claiming a construction lien on the property that they should "file a claim as required by ORS 87.035." That notice simply echoes the statutory requirements for notices posted to trigger the 75-day period for perfecting construction liens. Nothing about it purports to constitute "acceptance" of an improvement to real property. And even if the notice could be viewed as an acceptance of something,
We part with the trial court's reasoning, however, with respect to the second clause of that statute, which provides that, absent "written acceptance" under the first clause, substantial completion occurs on "the date of acceptance of the completed construction, alteration or repair of such improvement by the contractee." ORS 12.135(3). The trial court determined that February 13, 1997, was "the date of acceptance of the completed construction" for purposes of that clause. In reaching that conclusion, the trial court relied largely on the notice of completion discussed above, the evidence that VIP'S occupied and utilized the hotel on February 13, 1997, and the construction contract, which defined "substantial completion," for purposes of its provisions, as "the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so the Owner can occupy or utilize the Work for its intended use."
We do not view those considerations as establishing, as a matter of law, that plaintiff had accepted the "completed" improvement to real property on February 13, 1997, for purposes of the second clause of ORS 12.135(3). As explained above, the second clause of subsection (3) does not relate to the date on which an improvement can be occupied or utilized for its intended purpose, as the first clause does. Instead, the second clause references the date on which the contractee "accepts" the construction as "completed." ORS 12.135(3). "Complete," as relevant here, means "possessing all necessary parts, items, components or elements: not lacking anything necessary: ENTIRE, PERFECT," or "brought to an end or to a final or intended condition * * *: CONCLUDED, COMPLETED," Webster's Third New Int'l Dictionary 465 (unabridged ed 2002), and thus does not encompass the incomplete. In short, a consideration of the text shows that the second clause of ORS 12.135(3) applies only when a contractee has accepted construction that actually has been completed. That interpretation is consistent with the legislative history establishing that the point of completion is reached, for purposes of the second clause of ORS 12.135(3), "when the contractee takes from the contractor responsibility for the maintenance, alteration, and repair of the improvement, which typically, if not invariably, will be the point at which little or no work remains to be done by the contractor." Sunset Presbyterian Church, 254 Or.App. at ___, ___ P.3d ___. Thus, it is possible that a contractee might not accept construction of an improvement to real property as having been "completed" (for purposes of the second clause of ORS 12.135(3)) until some time after the date on which the contractee occupied the improvement or otherwise started utilizing the improvement for its intended purpose (and the project would have been considered "substantially complete" under the first clause of ORS 12.135(3) if the contractee had provided the required "written acceptance").
Indeed, this record includes evidence suggesting both that work on the project was not completed until sometime after the date on which VIP'S occupied the hotel and that VIP'S did not accept the construction as completed until that later time. That evidence includes Johnson's testimony that storm-drainage and wetlands work remained to be done after VIP'S took possession and opened the hotel for business, as well as his testimony that he did not consider the hotel to be complete until all "Washington County
The terms of the construction contract between VIP'S and the general contractor (Super One) also could support a finding that VIP'S did not accept the improvement as "completed" until sometime after it occupied the hotel, as the contract distinguishes between "substantial completion" and "final completion." First, the contract required the contractor to prepare and submit a "comprehensive list of items to be completed or corrected" upon substantial completion of "the Work." In other words, the contract contemplated that "substantial completion" — as that term was used in the contract (not in ORS 12.135(3)) — could occur when some work still remained to be done. The contract then discussed "final completion and final payment" in terms of a subsequent post-inspection date on which the architect would approve the construction as having been "completed in accordance with terms and conditions of the Contract." Thus, the contract terms, too, could support a determination that VIP'S's occupancy of the hotel on February 13, 1997, did not equate to VIP'S's having accepted the construction as "completed" on that date.
We conclude that the evidence outlined above raises a genuine issue of material fact as to whether VIP'S's "acceptance of the completed construction" of the improvement to real property occurred on February 13, 1997, as the trial court found, or some time after May 23, 1997 — and thus within 10 years of the date on which plaintiff's complaint was filed. ORS 12.135(1), (3). Accordingly, the trial court erred in granting defendants' motion for summary judgment on plaintiff's negligent construction claim.
As explained above, after plaintiff filed its negligent construction suit against Super One on May 23, 2007, Super One filed a cross-claim against Portland Plastering and a third-party claim against Wood Mechanix for, among other things, contractual indemnity for Super One's defense costs and liability to plaintiff.
On appeal, Super One concedes that its indemnity claims were not commenced within 10 years of the hotel's substantial completion. Nonetheless, it argues, those claims are not time barred because ORS 12.135(1) does not apply to indemnity claims as a matter of law. We conclude, to the contrary, that ORS 12.135(1) does apply to Super One's indemnity claims against the subcontractors. Accordingly, we affirm the trial court's dismissal of those claims.
Again, ORS 12.135(1) provides:
We determine whether the legislature intended ORS 12.135(1) to apply to claims for indemnity by looking to the text, context, and useful legislative history of the provision. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009). Looking first to text, the statute contemplates that the ultimate repose period applies to any action "arising from" certain construction-related activities, regardless of the legal theory that forms the basis for the action — that is the import of the phrase "whether in contract, tort or otherwise." The question posed by this appeal, then, is what it means for an action to "arise from" the construction-related activities described in ORS. 12.135(1).
The Supreme Court's decision in Black v. Arizala, 337 Or. 250, 95 P.3d 1109 (2004), provides a starting point for our analysis, as it explains the meaning of the phrase "action * * * arising from," albeit in a different context. In Black, the court looked to dictionary definitions as it considered the meaning of a contract's reference to actions "arising from" that contract:
Id. at 267, 95 P.3d 1109 (brackets in Black). Thus, the court concluded, an action "arises from" a contract if the contract is "the specific place of origin or the source of the legal action." Id.
The definitions cited by the Supreme Court in Black are equally helpful to our construction of ORS 12.135(1). Applying those definitions, we conclude that the phrase beginning with "arising from" and ending with "such improvement" — that is, the part of ORS 12.135(1) that describes certain construction-related activities — identifies the factual origins from which a legal action must derive for ORS 12.135(1) to apply to that action. Thus, the text of ORS 12.135 suggests that it applies to indemnity actions that, as in this case, ultimately derive from the indemnitor's allegedly defective performance of construction-related activities.
Super One rejects that interpretation of the statute. It contends that its contractual indemnity claims against Portland Plastering and Wood Mechanix do not "arise from" those subcontractors' performance of any construction but, instead, "arise from" the indemnity provisions in the contracts between Super One and the subcontractors.
We are not persuaded by Super One's argument, which does not identify any
In arguing to the contrary, Super One relies heavily on Huff v. Shiomi, 73 Or.App. 605, 699 P.2d 1178 (1985). Super One contends that, in that case, "this court recognized that an indemnity claim is different in kind from the underlying action from which the indemnity claim is derived, and thus not governed by the statute of repose applicable to the underlying action." Super One reads too much into our limited discussion concerning the statute of repose that was at issue in Huff. In that case, we summarily concluded that ORS 30.905 (1983) amended by Or. Laws 2009, ch. 485, § 1, which prescribed the limitation and ultimate repose periods for "product liability civil action[s]," did not apply to a common-law indemnity claim that a defendant physician brought against the manufacturer of medication that the physician had prescribed to the plaintiff patient. Our unexplained conclusion may have been based on the statutory definition of a "product liability civil action" as "a civil action brought against a manufacturer, distributor, seller or lessor of a product for damages for personal injury, death or property damages arising out of [specified factual situations]." ORS 30.900 (emphasis added). The indemnity claim in Huff was not an "action * * * for damages for personal injury, death or property damages." Rather, the damages in that case would have been compensation for losses related to the physician's discharge of a common liability between the manufacturer and the physician. Consequently, the claim in Huff would not have qualified as a "product liability civil action" to which ORS 30.905 (1983) would have applied.
Turning to the case at bar, ORS 12.135(1), unlike ORS 30.905 (1983), does not tie the applicability of its repose provisions to claims for which the plaintiff seeks a certain type of damages. ORS 12.135(1) instead applies to any action, "in contract, tort, or otherwise," regardless of the type of damages sought, so long as the action arises out of the specified construction-related circumstances. In short, ORS 12.135(1) covers a broader range of actions than ORS 30.905 (1983), and Huff therefore does not control.
We also reject Super One's argument that the legislative history of ORS 12.135 weighs against a conclusion that the statute covers indemnity claims. In making that contention, Super One points out that nothing in the legislative history of the original 1971 enactment of ORS 12.135, nor in the 1983 amendments to that statute, evidences a legislative intent not to exclude indemnity claims from ORS 12.135(1). That argument overlooks the 1991 amendments to ORS 12.135, which resulted from that year's Senate Bill 722. Or. Laws 1991, ch. 968 § 1. When SB 722 (1991) was first introduced, it contained a provision that, if enacted, would have added a new subsection to ORS 12.135 excluding from the statute's coverage "any action for contribution or indemnity arising out of an action
Our construction of ORS 12.135(1) also is consistent with legislative intent to both "fix[] a starting date for applying the statutory time limits to actions against construction contractors[,]" Securities-Intermountain v. Sunset Fuel, 289 Or. 243, 250, 611 P.2d 1158 (1980), and — by establishing a 10-year repose period — "to provide an absolute cutoff date for the bringing of such actions." Beals v. Breeden Bros., Inc., 113 Or.App. 566, 572, 833 P.2d 348, rev. den., 314 Or. 727, 843 P.2d 454 (1992); see also Shasta View Irrigation Dist. v. Amoco Chemicals, 329 Or. 151, 162, 986 P.2d 536 (1999) (ultimate repose periods provide a "deadline for the initiation of an action whether or not the injury has been discovered or has even occurred," and "cannot be extended regardless of unfairness to the plaintiff (internal quotation marks omitted))." As with other statutory periods of ultimate repose, the 10-year period in ORS 12.135(1) serves two purposes: (1) to avoid "the lack of reliability and availability of evidence after a lapse of long periods of time;" and (2) to allow people, "after the lapse of a reasonable time, to plan their affairs with a degree of certainty, free from the disruptive burden of protracted and unknown liability." Beals, 113 Or.App. at 571, 833 P.2d 348 (internal quotation marks omitted). We perceive no reason why those rationales do not apply as strongly to general contractors' claims against subcontractors as they do to property owners' claims against general contractors, subcontractors, and anybody else who may have "performed the construction, alteration or repair of any improvement to real property," supervised or inspected that work, or "furnished the design, planning, surveying, architectural or engineering services for such improvement[.]" ORS 12.135(1).
The considerations outlined above lead us to conclude that ORS 12.135(1) applies to indemnity actions that ultimately derive from the indemnitor's allegedly defective performance of construction-related activities. The statute thus applies to Super One's indemnity claims against Portland Plastering and Wood Mechanix. Super One has conceded that, if ORS 12.135(1) applies, its claims are time barred because they were filed "more than ten years after the hotel was substantially completed." Given that concession, we conclude that the trial court correctly dismissed Super One's indemnity claims against the subcontractors.
In sum, we hold that the trial court erred in granting summary judgment to defendants on plaintiff's negligent construction claim. Accordingly, we reverse and remand the trial court's dismissal of that claim. We also conclude, however, that the trial court correctly entered judgment in favor of Portland Plastering and Wood Mechanix on Super One's indemnity claims. Accordingly, we affirm that aspect of the trial court's judgment.
In A142268, reversed and remanded. In A142301, affirmed.
