The Oregon Supreme Court has ruled that a claim for property damage arising from construction defects may lie in tort, in addition to contract.
According to court documents in Abraham v. T. Henry Construction Inc., Richard and Janice Abraham hired Keith Lucas as a general contractor to complete work on their house after substantial work had been done by other contractors. The Abrahams signed a contract with Lucas that required him to perform all work “in a workmanship like manner and in compliance with all building codes and other applicable laws.” The Abrahams also contracted with Kevin Mayo to frame the house. Six years after completion, the Abrahams found water damage and wood rot in the sheathing and framing, which they claimed resulted from defective work. Thus, the Abrahams filed a claim alleging breach of contract and negligence, seeing monetary damages for physical damage to the house, as well as compensation for the house’s diminished value.
The defendants argued that the claim was barred by Oregon’s six-year statute of limitations, and that a “special relationship,” such as one between a doctor and patient, was required to bring a tort claim, which the Abrahams had failed to demonstrate.
The lower court said the plaintiff’s negligence claim was barred because a special relationship did not exist.
The Court of Appeals agreed with the plaintiffs that a statute or administrative rule could establish a standard of care independent of the contract, and that the negligence claim was sufficient as the defendants had failed to comply with the building code.
The Supreme Court ruled that common law negligence principles apply — notwithstanding a contractual relationship — as long as the property damage that the Abraham’s sought recovery for was a “reasonably foreseeable result” of the contractors’ conduct.
The high court ruled that common law negligence principles are an “applicable standard of care, independent of the terms of the contract.”
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