Court Opinion

ID: 9578271
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:43:33.307003+00
Date Added: 2024-06-11T13:25:25.883938
License: Public Domain

RICHARDSON, J.,
dissenting.
The majority opinion states " * * * it is clear that this action is a straight forward one for breach of contract for the sale of improved real property, and, as such, is governed by ORS 12.080(1).” 50 Or App at 589. The relationship of plaintiffs and defendant is not simply one of buyer and seller of a home. The parties in their pleadings do not characterize the relationship in those terms. Plaintiffs alleged in their complaint:
"On or about August 14,1975, Plaintiffs and Defendant entered into a contract by which Plaintiffs agreed, for a *590stipulated sum, to purchase a house that was being constructed by Defendant * * *. Defendant to furnish all labor and materials necessary for completing construction of the house * * *.
"An implied term of said contract was that Defendant would construct the house in a workmanlike manner. Plaintiffs relied on Defendant to construct the house in a workmanlike manner.”
In his answer and affirmative defense, defendant alleged:
"On or about August 14,1975, plaintiffs and defendant entered into a contract for the construction of a house pursuant to plaintiffs’ specifications.”
Plaintiffs specifically admitted the truth of that allegation in their reply.
In the real world the majority uses for its contract analysis, these plaintiffs, in addition to purchasing a lot, purchased the professional services of defendant to construct a house on that lot to plaintiffs’ specifications. Although the relationship, on superficial analysis, has some aspects of a simple garden variety purchase and sale of a home, it is more properly characterized as a contract for services of a professional builder.
Beginning with Dalton v. Kelsey, 58 Or 244, 114 P 464 (1911), and ending with Ashley v. Fletcher, 275 Or 405, 550 P2d 1385 (1976), the Supreme Court has sought to determine the "real” character of a plaintiff’s action for statute of limitations purposes rather than accepting at face value the characterization in the pleadings that it is in contract or tort. The court extensively examined these authorities in Securities-Intermountain v. Sunset Fuel, 289 Or 243, 611 P2d 1158 (1980), and concluded that when plaintiffs chose to bring actions for property damage caused by negligence of defendants, whose duty arose from an agreed general undertaking, the plaintiffs who pled the contract as the inducement showing defendants’ duty, and could invoke tort law for the applicable standard of care and damages. In doing so, the plaintiffs had to sue within the two-year limitation period for actions "not arising on contract.” In contrast, when the contract expressly committed defendant to some particular performance and defendant breached the express commitment, the action *591was one in contract and the six-year limitation applied. In summarizing these two positions, the court stated:
"Thus the statutes and the precedents leave us with several variations when an action for damages against one engaged to provide professional or other independent services is commenced after two years and is pleaded as a breach of contract. If the alleged contract merely incorporates by reference or by implication a general standard of skill and care to which the defendant would be bound independent of the contract, and the alleged breach would also be a breach of this noncontractual duty, then ORS 12.110 applies. * * * Conversely, the parties may have spelled out the performance expected by the plaintiff and promised by the defendant in terms that commit the defendant to this performance without reference to and irrespective of any general standard. Such a defendant would be liable on the contract whether he was negligent or not, and regardless of facts that might excuse him from tort liability. Or the nature either of the defendant’s default or of the plaintiff’s loss may be of a kind that would not give rise to liability apart from the terms of their agreement. In such cases, there is no reason why an action upon the contract may not be commenced for the six years allowed by ORS 12.080. * * *” (Emphasis added.) (Footnote omitted.) 289 Or at 259-60.
Contrary to the majority, I believe SecuritiesIntermountain addressed the problem in this case. Examining the real character of this action, plaintiffs have charged defendant with breaching an implied duty to provide the services in a workmanlike manner. I agree with the majority that contracts for the purchase of a house to be constructed by a builder have an implied term that the house will be constructed in a workmanlike manner. Newlee v. Heyting, 167 Or 288, 117 P2d 829 (1941); American Petrofina v. D & L Oil Supply, 283 Or 183, 583 P2d 521 (1978); Amer. Recip. Insurers v. Bessonette, 241 or 500, 405 P2d 529 (1965). But these cases do not solve the riddle whether failure to complete the services in a workmanlike manner is properly redressed in a contract action. As the Supreme Court said in Securities: "If the alleged contract merely incorporates by reference or by implication a general standard of skill and care to which the defendant would be bound independent of the contract, and the alleged breach would also be a breach of this noncontractual duty, then ORS 12.110 applies.” 289 Or at 259.
*592In deciding the precise issue before it in Securities, the Supreme Court stated:
"* * * For the second asserted breach, the complaint alleges:
" 'In designing the heating system in such an unworkmanlike manner that if completed per design it could not and would not produce sufficient heat throughout the apartment complex to meet the minimum Federal Housing Authority requirements nor any reasonable requirements.’
"By inclusion of the phrase 'unworkmanlike manner,’ this allegation appears to invoke a negligence standard or general professional duty of due care and skill rather than a contractual standard. In context it can stand as an alleged breach of contract. Apart from that phrase, the allegation is that Sunset’s heating system would not meet requirements which were incorporated by reference in the contract, and by which Sunset had agreed to be bound. This differs from a case in which a warranty of 'workmanlike’ performance or due care toward achieving the intended result is pleaded as an implied term of general agreement to undertake professional services. * * *” (Citation omitted.) 289 Or at 263.
Had the contract not contained particular specifications regarding the heating system, the plaintiffs in Securities would have been left with an allegation that the defendants failed to design the heating system in a workmanlike manner. It is clear from the Supreme Court’s opinion that the action would then have sounded in tort and plaintiffs would have been limited to bringing the action within two years. That is precisely what has occurred in this case. There are no specifications in the contract for construction of the house. Defendant had a general duty of skill and care in constructing the house. This duty arose, not on contract, but derived from the contractual relationship.
The majority does not explain how defendant, faced with an alleged breach of contract, may defend the claim. Can he prove that his performance met a standard of skill and care of similarly situated builders? If, as the majority concludes, plaintiffs contracted to buy an improved lot, what must they prove to recover? They in fact received an improved lot. Can they recover by proving the roof was improperly installed, i.e., negligently installed? *593In short, what are the perimeters of the implied duty to construct in a workmanlike manner? I conclude the implied duty to provide professional services with skill and care is enforceable in a tort action using tort standards for determining the quality of the performance.
This action in reality is a tort action and ORS 12.110 describes the applicable limitation period. Plaintiffs’ claim is barred because it was not brought within two years of the time the defects in construction were discovered. I would affirm the trial court’s order granting the motion for summary judgment, therefore, I respectfully dissent.
Joseph, Chief Judge, and Thornton and Van Hoomissen, Judges, join in this dissent.