Case Title: Sunset Presbyterian Church v. Brockamp & Jaeger

Citation: 

Docket Number: S061171

State: oregon

Court: Oregon Supreme Court

Date: 2014-04-24T00:00:00Z

Document:
Filed:  April 24, 2014 
IN THE SUPREME COURT OF THE STATE OF OREGON 
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. 
 
(CC C091601CV; CA A146006; SC S061171 (Control)) 
 
 
En Banc 
 
 
On review from the Court of Appeals.* 
 
 
Argued and submitted on January 13, 2014. 
 
 
Anne Cohen, Smith Freed & Eberhard P.C., Portland, argued the cause and filed 
the briefs for petitioner on review Brockamp & Jaeger, Inc. With her on the brief was 
Bruce R. Gilbert. 
 
 
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. 
 
 
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. 
 
*Appeal from Washington County Circuit Court, Donald R. Letourneau, Judge. 
254 Or App 24, 295 P3d 62 (2012). 
 
1 
 
 
WALTERS, J. 
1 
 
 
In this construction defect case, we interpret the meaning of the contractual 
2 
term "date of substantial completion" and the statutory term "substantial completion" to 
3 
decide whether defendants were entitled to summary judgment on the basis that plaintiff's 
4 
tort claims were barred either by the statute of limitations or by the statute of ultimate 
5 
repose.  We conclude that defendants were not entitled to summary judgment, affirm the 
6 
decision of the Court of Appeals, reverse the decision of the trial court, and remand to the 
7 
trial court for further proceedings. 
8 
 
 
We take the following uncontested facts from the record on summary 
9 
judgment.  Plaintiff Sunset Presbyterian Church contracted with defendant Brockamp & 
10 
Jaeger to act as its general contractor and build a new church facility.  Plaintiff and 
11 
defendant executed a standard form contract provided by the American Institute of 
12 
Architects (AIA).  Defendant then subcontracted with Anderson Roofing Company 
13 
(defendant subcontractor) and other subcontractors to perform various specialized 
14 
construction tasks.1  Plaintiff did not enter into a contractual relationship with any of the 
15 
subcontractors. 
16 
 
 
Construction began in 1998.  On February 14, 1999, plaintiff held its first 
17 
services in the church, and on March 14, 1999, held a dedication ceremony.  In May 
18 
1999, defendant general contractor issued plaintiff a warranty that extended for one year 
19 
from February 7, 1999, a date that defendant identified as the "substantial completion 
20 
                                              
 
1  
The other subcontractors were joined as defendants, but they did not seek 
review in this court; we do not discuss them further. 
2 
date."  The county issued a certificate of final occupancy on May 28, 1999, but additional 
1 
work continued during the summer of 1999, and it was not until November 19, 1999, that 
2 
the architect issued approval for final payment to defendant. 
3 
 
 
In early 2009, plaintiff allegedly discovered extensive water damage in the 
4 
church, and on March 16, 2009, it filed an action asserting tort claims against defendants.  
5 
Defendant general contractor filed an affirmative defense alleging that, by the terms of 
6 
the parties' contract, plaintiff's claims accrued on the "date of substantial completion" and 
7 
were time-barred.  Defendant subcontractor, which was not a party to that contract, filed 
8 
an affirmative defense alleging that plaintiff's claims were barred by the statute of 
9 
ultimate repose provided in ORS 12.135.2  Both defendants moved for summary 
10 
                                              
 
2  
ORS 12.135 was amended by the legislature in 2009, effective January 1, 
2010; those amendments do not affect this case, and we refer to the 2007 version of the 
statute.  See Or Laws 2009, ch 715, §1, §3.  When plaintiff filed its action, ORS 12.135 
(2007) provided, in part:  
 
"(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." 
3 
judgment. 
1 
 
 
The trial court granted defendants' motions and dismissed the case.  The 
2 
Court of Appeals reversed.  Sunset Presbyterian Church v. Brockamp & Jaeger, 254 Or 
3 
App 24, 295 P3d 62 (2012).  Defendants then petitioned for review.  This court granted 
4 
defendants' petitions and, for purpose of oral argument, consolidated this case with a 
5 
companion case, PIH Beaverton, LLC v. Super One, Inc., 254 Or App 486, 294 P3d 536 
6 
(2013).  We begin with the issue presented by defendant general contractor and consider 
7 
whether it was entitled to judgment as a matter of law. 
8 
 
 
Generally, for purposes of the statute of limitations, tort claims accrue 
9 
when the plaintiff knows or should know that an injury has occurred.  See Rice v. Rabb, 
10 
354 Or 721, 725, 320 P3d 554 (2014) (holding that discovery rule applies to tort actions 
11 
referenced in ORS 12.080 and ORS 12.110).  Defendant contends that, in this case, the 
12 
parties altered, by contract, the date on which plaintiff's claims accrued.  For purposes of 
13 
this opinion only, we will assume that the contractual provision on which defendant relies 
14 
-- Paragraph 13.7.1.1 -- could have that effect and turn to an analysis of that provision.3 
15 
 
 
Paragraph 13.7.1.1 provides that claims arising from "acts or failures to act 
16 
occurring prior to the relevant date of Substantial Completion" of the construction 
17 
"accrue[]" and "any applicable statute of limitations shall commence to run * * * not later 
18 
                                              
 
3 
Plaintiff and amicus curiae Oregon Trial Lawyers Association argue that 
the accrual clause in Paragraph 13.7.1.1 of the parties' contract cannot have the effect that 
defendant proposes.  Plaintiff argues that the accrual of tort claims in this case remains 
independent of the parties' contract because the contract did not clearly and unequivocally 
waive or limit recovery in tort.  Amicus argues that, under Oregon law, a contract may not 
function to waive tort claims.  We do not reach either argument. 
4 
than such date of Substantial Completion."4  (Emphasis added.)  Paragraph 9.8.1 defines 
1 
"Substantial Completion" as "the stage in the progress of the Work when the Work or 
2 
designated portion thereof is sufficiently complete in accordance with the Contract 
3 
Documents so the Owner can occupy or utilize the Work for its intended use."  Paragraph 
4 
8.1.3 provides that the "date of Substantial Completion is the date certified by the 
5 
Architect in accordance with Paragraph 9.8." 
6 
 
 
Paragraph 9.8.2 includes steps that the contractor, architect, and owner of 
7 
the property must take before the architect issues a Certificate of Substantial Completion.  
8 
First, "[w]hen the Contractor considers that the Work * * * is substantially complete, the 
9 
Contractor shall prepare and submit to the Architect a comprehensive list of items to be 
10 
completed or corrected."  Then, the architect must perform an "inspection" and thereby 
11 
determine that the "Work or designated portion thereof is substantially complete."  At 
12 
that point, the architect  
13 
"will prepare a Certificate of Substantial Completion which shall establish 
14 
the date of Substantial Completion, shall establish responsibilities of the 
15 
Owner and Contractor for security, maintenance, heat, utilities, damage to 
16 
the Work and insurance, and shall fix the time within which the Contractor 
17 
shall finish all items on the list accompanying the Certificate. * * * The 
18 
Certificate of Substantial Completion shall be submitted to the Owner and 
19 
Contractor for their written acceptance of responsibilities assigned to them 
20 
in such Certificate." 
21 
                                              
4 
Paragraph 13.7.1.1 provides: 
 
"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." 
5 
 
 
Defendant did not include an architect's Certificate of Substantial 
1 
Completion in the documents that it submitted in support of its motion for summary 
2 
judgment, nor does it argue that the evidence that it did submit established that such a 
3 
certificate ever had been issued.5  Rather, defendant argues that Paragraph 13.7.1.1 
4 
should be interpreted to mean that the applicable statute of limitations begins to run when 
5 
construction is "substantially complete" from a functional standpoint:  the point at which 
6 
construction meets the contractual definition of substantial completion (i.e., is sufficiently 
7 
complete so the owner can occupy or use it as intended).  According to defendant, the 
8 
date that a Certificate of Substantial Completion is issued is one way to prove that 
9 
functionality, but it is not the only way.  Defendant contends that other evidence, such as 
10 
the date that the construction is occupied or used for its intended purpose, also may 
11 
establish the date of substantial completion.  In this case, defendant argues, plaintiff 
12 
occupied and used the church for its intended purposes at some point in 1999.  Therefore, 
13 
defendant submits, the statute of limitations began to run in 1999 and, regardless whether 
14 
a two-year or a six-year statute of limitations applies, plaintiff's claims are time-barred.6  
15 
Plaintiff did not file its complaint until March 2009, more than 10 years from the date 
16 
                                              
 
5  
The parties agree that no Certificate of Substantial Completion can be 
located; we do not know whether that is because no certificate was ever issued. 
 
6 
 ORS 12.080 imposes a six-year statute of limitations for actions for injury 
to any interests of another in real property.  ORS 12.110 imposes a two-year statute of 
limitations for actions for injury to the rights of another not arising on contract and not 
especially enumerated in chapter 12.  We do not decide which of those statutes of 
limitations is applicable in this case.  Defendant general contractor does not argue that the 
statute of ultimate repose provided in ORS 12.135 bars plaintiff's action. 
6 
that the church was "substantially complete." 
1 
 
 
Thus, the parties' arguments focus on different contractual provisions.  
2 
Defendant argues that plaintiff's claims accrued when construction was "Substantially 
3 
Complete," as that term is defined in Paragraph 9.8.1 -- "the stage in the progress of the 
4 
Work when the Work * * * is sufficiently complete * * * so the Owner can occupy or 
5 
utilize the Work for its intended use."  Plaintiff contends that, under Paragraph 13.7.1.1, 
6 
its claims accrued on the date of Substantial Completion and that the "date of substantial 
7 
completion" is as defined in Paragraph 8.1.3 -- when an architect determines that the 
8 
construction is "substantially complete" and issues a certificate to that effect. 
9 
 
 
Paragraph 9.8.1 defines "Substantial Completion" as a "stage" in the 
10 
progress of the work, and Paragraph 8.1.3 defines the "date" of Substantial Completion.  
11 
The contract does not further define the words "stage" or "date," but the difference in the 
12 
terms is obvious from their dictionary definitions.  The dictionary defines "stage" as "a 
13 
period or step in a process, activity, or development."  Webster's Third New Int'l 
14 
Dictionary 2219 (unabridged ed 2002).  The dictionary defines "date" as "the point of 
15 
time at which a transaction or event takes place or is appointed to take place:  a given 
16 
point of time."  Id. at 576.  Thus, a stage may extend over a period of time, while a date is 
17 
a specific point in time. 
18 
 
 
Accordingly, under the terms of the parties' contract, if a contractor were to 
19 
consider construction fit for occupancy or use on, for example, March 1, any date after 
20 
March 1 would be a date within the "stage" of Substantial Completion.  By the terms of 
21 
the parties' contract, however, claims do not accrue during the "stage" of Substantial 
22 
7 
Completion but only on a specific "date of Substantial Completion."  Paragraph 13.7.1.1 
1 
(emphasis added).  Paragraph 8.1.3 defines the "date of Substantial Completion" as one 
2 
date -- the "date certified by the Architect in accordance with Paragraph 9.8."  Therefore, 
3 
in our example, the "date of Substantial Completion" could only be the specific date after 
4 
March 1 designated by the architect in the Certificate of Substantial Completion. 
5 
 
 
We therefore agree with plaintiff that evidence that plaintiff occupied and 
6 
used the property for its intended purpose beginning sometime in February 1999, and at 
7 
the latest by March 14, 1999, does not establish the date on which plaintiff's claims 
8 
accrued under Paragraph 13.7.1.1.  Under that provision, plaintiff's claims accrued only 
9 
on the date that the architect issued a Certificate of Substantial Completion. 
10 
 
 
Defendant's complaints about that result are misdirected.  Defendant 
11 
submits that architects are hired by owners and that there may be many reasons why 
12 
architects may not issue Certificates of Substantial Completion or may do so 
13 
inaccurately. 7  Therefore, defendant contends, tying accrual to an architect's act will 
14 
create poor public policy for Oregon.  But it is the parties' contract, not otherwise 
15 
                                              
 
7 
Defendant raises the possibility that an architect in bad faith could refuse to 
supply a Certificate of Substantial Completion, although defendant does not suggest that 
that occurred in this case.  We note that the parties' contract provides for mediation in the 
event of disputes.  See Paragraph 4.4.1 ("any dispute that may arise under this Agreement 
will be submitted to a mediator agreed to by both parties as soon as such dispute arises").  
We further note that, if a contractor were able to establish that it had taken all possible 
steps to obtain a Certificate of Substantial Completion but that the architect, acting as the 
owner's agent, refused to cooperate in the process, the contractual requirement potentially 
could be deemed satisfied.  See Gilbert v. California Oregon Power Co., 223 Or 1, 15-16, 
353 P2d 870 (1960) (where one party prevents another from performing under the terms 
of a contract, the party preventing performance may not avail itself of the failure).  That 
is not the circumstance here, however. 
8 
applicable Oregon law, that establishes that accrual date.8  Parties who enter into 
1 
contracts choose the policies that they wish to have apply to their transactions, and, as the 
2 
court said in Morgan v. State Farm Life Ins. Co., 240 Or 113, 117, 400 P2d 223 (1965), 
3 
"we are not at liberty to create a new contract for the parties."  See ORS 42.230 (in 
4 
construing a document, court is "to ascertain and declare what is, in terms or in 
5 
substance, contained therein, not to insert what has been omitted, or to omit what has 
6 
been inserted"); Williams v. RJ Reynolds Tobacco Co., 351 Or 368, 379, 271 P3d 103 
7 
(2011) (citing statute). 
8 
 
 
Our decision does not mean, of course, that the construction in this case 
9 
was never substantially complete -- indeed, defendant's work may well have been fully 
10 
complete at some point in 1999, when final payment was authorized.  But without 
11 
evidence that an architect issued a Certificate of Substantial Completion, defendant 
12 
cannot rely on Paragraph 13.7.1.1 as establishing the date that plaintiff's claims accrued.  
13 
Our decision also does not mean that plaintiff had unlimited time within which to bring 
14 
its action against defendant.  Plaintiff was required to bring its action within the statute of 
15 
limitations or, at the very latest, within the period of ultimate repose provided by ORS 
16 
                                              
 
8 
We note that the current version of the AIA standard form contract now 
leaves the date that the statute of limitations begins to run to state law.  See The American 
Institute of Architects, §13.7 AIA Document Commentary A201-2007 General 
Conditions of the Contract for Construction, Time Limits on Claims, 52 (2007) ("The 
Owner and Contractor shall commence all claims and causes of action * * * within the 
time period specified by applicable law, but in any case not more than 10 years after the 
date of Substantial Completion of the Work."). 
9 
12.135.9 
1 
 
 
We also note, as we did at the outset, that defendant does not argue before 
2 
this court that the evidence that it adduced in support of its motion for summary judgment 
3 
was sufficient to establish that the architect in fact issued a Certificate of Substantial 
4 
Completion, even though it could not be located.  In appropriate circumstances, a party's 
5 
inability to produce a document may not foreclose it from proving its existence.  See, e.g., 
6 
Pac. States Fire Ins. Co. v. C. Rowan Motor Co., 122 Or 665, 670, 260 P 441 (1927) 
7 
(parol evidence admissible to prove the existence of a document but not its contents or 
8 
legal efficacy); President & Trustees of Tualatin Acad. & Pac. Univ. v. Keene, 59 Or 
9 
496, 503, 117 P 424 (1911) (affidavit ascribing to the making and delivery of a mortgage 
10 
and its loss before being recorded admissible to prove the existence of the mortgage).  
11 
However, on the record before us, the trial court erred in granting defendant general 
12 
contractor summary judgment based on Paragraph 13.7.1.1 of the parties' contract. 
13 
 
 
We now turn to defendant subcontractor's argument that plaintiff's claims 
14 
are barred by the statute of ultimate repose provided in ORS 12.135.  We address a 
15 
similar argument in PIH Beaverton v. Super One, Inc., ___ Or ___, ___ P3d ___ (April 
16 
24, 2014), also decided today.  In that case, we conclude that, in the absence of a written 
17 
acceptance, the limitations period of ORS 12.135 begins to run on the date on which the 
18 
contractee accepts the construction as fully complete, as opposed to accepting the 
19 
                                              
 
9 
Plaintiff takes the position that Paragraph 13.7.1.1 does not determine the 
date that its tort claims accrued.  Therefore, plaintiff cannot rely on that paragraph as 
extending the date of accrual until the date that the architect issues a Certificate of 
Substantial Completion.  
10 
construction as "sufficiently complete for its intended use or occupancy."  Id. at ___ (slip 
1 
op at 17, lines 4-5). 
2 
 
 
In this case, defendant subcontractor contends that the 10-year limitations 
3 
period of ORS 12.135 began to run on or before March 14, 1999, when the church held 
4 
its dedication service.  The date of that service is relevant evidence that defendant 
5 
accepted the construction as fully complete on that date, but that is not the only evidence 
6 
in the record.  Plaintiff offered evidence that construction continued after March 14, that 
7 
neither the architect nor the owner considered the construction to be complete on that 
8 
date, and that the county did not issue a certificate of final occupancy until May 28, 1999.  
9 
Because evidence of the date on which construction was fully complete is contested, the 
10 
trial court erred in granting summary judgment to defendant subcontractor. 
11 
 
 
In summary, the trial court erred in granting both defendants' motions for 
12 
summary judgment. 
13 
 
 
The decision of the Court of Appeals is affirmed.  The judgment of the 
14 
circuit court is reversed, and the case is remanded to the circuit court for further 
15 
proceedings. 
16