SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation v. BROCKAMP & JAEGER, INC., an Oregon non-profit corporation, and ANDERSON ROOFING, CO., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, and DIVERS WINDOW & DOOR, INC., an inactive Oregon corporation, et al; and The Harver Company, an Oregon corporation
SC S061171 (Control), S061185; CC C091601CV; CA A146006
Supreme Court of Oregon
April 24, 2014
325 P.3d 730
WALTERS, J.
Argued and submitted on January 13, decision of Court of Appeals affirmed, judgment of circuit court reversed, and case remanded to circuit court for further proceedings April 24, 2014
SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Respondent on Review, v. BROCKAMP & JAEGER, INC., an Oregon non-profit corporation, Petitioner on Review, and ANDERSON ROOFING, CO., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants-Respondents, and DIVERS WINDOW & DOOR, INC., an inactive Oregon corporation, et al; and The Harver Company, an Oregon corporation, Defendants.
SUNSET PRESBYTERIAN CHURCH, an Oregon non-profit corporation, Respondent on Review, v. BROCKAMP & JAEGER, INC., an Oregon corporation; Shupe Roofing, Inc., fka Epuhs, Inc., and/or Dial One Shupe Roofing, an Oregon corporation; Positive Construction, Inc., an inactive Oregon corporation; Woodburn Masonry, an Oregon corporation; Sharp & Associates, Inc., an Oregon corporation; and Portland Sheet Metal Works, Inc., an Oregon corporation, Defendants-Respondents, and ANDERSON ROOFING, CO., an Oregon corporation, Petitioner on Review, and DIVERS WINDOW & DOOR, INC., an inactive Oregon corporation, et al; and The Harver Company, an Oregon corporation, Defendants.
Michael T. Stone, Brisbee & Stockton, LLC, Hillsboro, argued the cause for petitioner on review Anderson Roofing Co., Inc.
Daniel T. Goldstein, Ball Janik, LLP, Portland, argued the cause and filed the briefs for respondent on review.
Michael J. Vial, Vial Fotheringham, LLP, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.
WALTERS, J.
WALTERS, J.
In this construction defect case, we interpret the meaning of the contractual term “date of substantial completion” and the statutory term “substantial completion” to decide whether defendants were entitled to summary judgment on the basis that plaintiff‘s tort claims were barred either by the statute of limitations or by the statute of ultimate repose. We conclude that defendants were not entitled to summary judgment, affirm the decision of the Court of Appeals, reverse the judgment of the trial court, and remand to the trial court for further proceedings.
We take the following uncontested facts from the record on summary judgment. Plaintiff Sunset Presbyterian Church contracted with defendant Brockamp & Jaeger to act as its general contractor and build a new church facility. Plaintiff and defendant executed a standard form contract provided by the American Institute of Architects (AIA). Defendant then subcontracted with Anderson Roofing Company (defendant subcontractor) and other subcontractors to perform various specialized construction tasks.1 Plaintiff did not enter into a contractual relationship with any of the subcontractors.
Construction began in 1998. On February 14, 1999, plaintiff held its first services in the church, and on March 14, 1999, held a dedication ceremony. In May 1999, defendant general contractor issued plaintiff a warranty that extended for one year from February 7, 1999, a date that defendant identified as the “substantial completion date.” The county issued a certificate of final occupancy on May 28, 1999, but additional work continued during the summer of 1999, and it was not until
In early 2009, plaintiff allegedly discovered extensive water damage in the church, and on March 16, 2009, it filed an action asserting tort claims against defendants. Defendant general contractor filed an affirmative defense alleging that, by the terms of the parties’ contract, plaintiff‘s claims accrued on the “date of substantial completion” and were time-barred. Defendant subcontractor, which was not a party to that contract, filed an affirmative defense alleging that plaintiff‘s claims were barred by the statute of ultimate repose provided in
The trial court granted defendants’ motions and dismissed the case. The Court of Appeals reversed. Sunset Presbyterian Church v. Brockamp & Jaeger, 254 Or App 24, 295 P3d 62 (2012). Defendants then petitioned for review. This court granted defendants’ petitions and, for purpose of oral argument, consolidated this case with a companion case, PIH Beaverton, LLC v. Super One, Inc., 254 Or App 486, 294 P3d 536 (2013). We begin with the issue presented by defendant general contractor and consider whether it was entitled to judgment as a matter of law.
Generally, for purposes of the statute of limitations, tort claims accrue when the plaintiff knows or should know that an injury has occurred. See Rice v. Rabb, 354 Or 721, 725, 320 P3d 554 (2014) (holding that discovery rule applies to tort actions referenced in
Paragraph 13.7.1.1 provides that claims arising from “acts or failures to act occurring prior to the relevant date of Substantial Completion” of the construction “accrue[]” and “any applicable statute of limitations shall commence to run *** not later than such date of Substantial Completion.”4 (Emphasis added.) Paragraph 9.8.1 defines “Substantial Completion” 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.” Paragraph 8.1.3 provides that the “date of Substantial Completion is the date certified by
Paragraph 9.8.2 includes steps that the contractor, architect, and owner of the property must take before the architect issues a Certificate of Substantial Completion. First, “[w]hen the Contractor considers that the Work *** is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of items to be completed or corrected.” Then, the architect must perform an “inspection” and thereby determine that the “Work or designated portion thereof is substantially complete.” At that point, the architect
“will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion, shall establish responsibilities of the Owner and Contractor for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix the time within which the Contractor shall finish all items on the list accompanying the Certificate. *** The Certificate of Substantial Completion shall be submitted to the Owner and Contractor for their written acceptance of responsibilities assigned to them in such Certificate.”
Defendant did not include an architect‘s Certificate of Substantial Completion in the documents that it submitted in support of its motion for summary judgment, nor does it argue that the evidence that it did submit established that such a certificate ever had been issued.5 Rather, defendant argues that Paragraph 13.7.1.1 should be interpreted to mean that the applicable statute of limitations begins to run when construction is “substantially complete” from a functional standpoint: the point at which construction meets the contractual definition of substantial completion (i.e., is sufficiently complete so the owner can occupy or use it as intended). According to defendant, the date that a Certificate of Substantial Completion is issued is one way to prove that functionality, but it is not the only way. Defendant contends that other evidence, such as the date that the construction is occupied or used for its intended purpose, also may establish the date of substantial completion. In this case, defendant argues, plaintiff occupied and used the church for its intended purposes at some point in 1999. Therefore, defendant submits, the statute of limitations began to run in 1999 and, regardless whether a two-year or a six-year statute of limitations applies, plaintiff‘s claims are time-barred.6 Plaintiff did not file its complaint until March 2009, more than 10 years from the date that the church was “substantially complete.”
Thus, the parties’ arguments focus on different contractual provisions. Defendant argues that plaintiff‘s claims accrued when construction was “Substantially Complete,” as that term is defined in Paragraph 9.8.1—“the stage in the progress of the Work when the Work *** is sufficiently complete *** so the Owner can occupy or utilize the Work for its intended use.” Plaintiff contends that, under Paragraph 13.7.1.1, its claims accrued on the date of Substantial Completion and that the “date of substantial completion” is as defined in Paragraph 8.1.3—when an architect determines that the construction is “substantially complete” and issues a certificate to that effect.
Paragraph 9.8.1 defines “Substantial Completion” as a “stage” in the progress of the work, and Paragraph 8.1.3 defines the “date” of Substantial Completion. The contract does not further define the words “stage” or “date,” but the difference in the terms is obvious from their dictionary definitions. The dictionary defines “stage” as “a period or step in a process, activity, or development.” Webster‘s Third New Int‘l Dictionary 2219 (unabridged ed 2002). The dictionary defines “date” as “the point of time at
Accordingly, under the terms of the parties’ contract, if a contractor were to consider construction fit for occupancy or use on, for example, March 1, any date after March 1 would be a date within the “stage” of Substantial Completion. By the terms of the parties’ contract, however, claims do not accrue during the “stage” of Substantial Completion but only on a specific ”date of Substantial Completion.” Paragraph 13.7.1.1 (emphasis added). Paragraph 8.1.3 defines the “date of Substantial Completion” as one date—the “date certified by the Architect in accordance with Paragraph 9.8.” Therefore, in our example, the “date of Substantial Completion” could only be the specific date after March 1 designated by the architect in the Certificate of Substantial Completion.
We therefore agree with plaintiff that evidence that plaintiff occupied and used the property for its intended purpose beginning sometime in February 1999, and at the latest by March 14, 1999, does not establish the date on which plaintiff‘s claims accrued under Paragraph 13.7.1.1. Under that provision, plaintiff‘s claims accrued only on the date that the architect issued a Certificate of Substantial Completion.
Defendant‘s complaints about that result are misdirected. Defendant submits that architects are hired by owners and that there may be many reasons why architects may not issue Certificates of Substantial Completion or may do so inaccurately.7 Therefore, defendant contends, tying accrual to an architect‘s act will create poor public policy for Oregon. But it is the parties’ contract, not otherwise applicable Oregon law, that establishes that accrual date.8 Parties who enter into contracts choose the policies that they wish to have apply to their transactions, and, as the court said in Morgan v. State Farm Life Ins. Co., 240 Or 113, 117, 400 P2d 223 (1965), “we are not at liberty to create a new contract for the parties.” See
Our decision does not mean, of course, that the construction in this case was never substantially complete—indeed, defendant‘s work may well have been fully complete at some point in 1999, when final payment was authorized.
But without evidence that an architect issued a Certificate of Substantial Completion, defendant cannot rely on Paragraph 13.7.1.1 as establishing the date that plaintiff‘s claims accrued. Our decision also does not mean that plaintiff had unlimited time within which to bring its action against defendant. Plaintiff was required to bring its action within the statute of limitations or, at the very latest, within the period of ultimate repose provided by
We now turn to defendant subcontractor‘s argument that plaintiff‘s claims are barred by the statute of ultimate repose provided in
In this case, defendant subcontractor contends that the 10-year limitations period of
In summary, the trial court erred in granting both defendants’ motions for summary judgment.
The decision of the Court of Appeals is affirmed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
Notes
“(1) An action against a person, whether in contract, tort or otherwise, arising from such person having performed the construction, alteration or repair of any improvement to real property *** shall be commenced within the applicable period of limitation otherwise established by law; but in any event such action shall be commenced within 10 years from substantial completion or abandonment of such construction, alteration or repair of the improvement to real property.
“*****
“(3) For purposes of this section, ‘substantial completion’ means 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 or, if there is no such written acceptance, the date of acceptance of the completed construction, alteration or repair of such improvement by the contractee.”
“As to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion.”