The Construction Defect Is Not Always the Contractor’s Fault, Right? Why Not Look at the Building Products Too?

Author: Bryan D. Scholnick

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February 11, 2019 4:00pm

How often during construction defect litigation does it appear the contractor is certain they did the work in a workmanlike manner?  How often do we hear from the contractor or subcontractor there is no way they caused the defect to arise?  Recently, a building envelope professional was adamant his envelope design was so redundant, there is no way the envelope would allow water to intrude into the building.  After multiple openings were made, it became clear that the self-adhered flashing and sealant used in the system were incompatible.  This issue had never arisen in the past.  From all indication, it appeared either the self-adhered flashing or the sealant may have been defective when manufactured.  This construction defect case now becomes a product defect matter as well.  But, is it too late to bring a cause of action against the products’ manufacturers?

Miller v. Ford Motor Co.

Last year, the Oregon Supreme Court issued its opinion in Miller v. Ford Motor Co., 363 Or 105 (2018) helping answer this question. In Miller, the Court held when a product liability action is properly filed in Oregon, and the case involves a product manufactured in a state that has no statute of repose for an equivalent action, then the Oregon claim is also not subject to a statute of repose.

A statute of repose is a statute that cuts off certain legal rights if they are not acted on by a specified deadline.  Oregon’s product liability statute requires a plaintiff to commence his or her lawsuit for property damage no later than two years after discovery of the defect, or when they reasonably should have discoveredthe product defect caused the damage.  Further, the product liability statute contains a statute of repose such that an action for product liability damages must be commenced no more than ten years from the date on which the product was first purchased, or before the expiration of the applicable statute of repose in the state where the product was manufactured, whichever is later. ORS 30.905(2).

More specifically ORS 30.905 states:

(1) Subject to the limitation imposed by subsection (2) of this section, a product liability civil action for personal injury or property damage must be commenced not later than two years after the plaintiff discovers, or reasonably should have discovered, the personal injury or property damage and the causal relationship between the injury or damage and the product, or the causal relationship between the injury or damage and the conduct of the defendant.

(2) A product liability civil action for personal injury or property damage must be commenced before the later of:

(a) Ten years after the date on which the product was first purchased for use or consumption; or

(b) The expiration of any statute of repose for an equivalent civil action in the state in which the product was manufactured, or, if the product was manufactured in a foreign country, the expiration of any statute of repose for an equivalent civil action in the state into which the product was imported.

In Miller, the plaintiff bought a car, which caught fire in her garage. The car was manufactured in Missouri where there is no statute of repose. Plaintiff sued the manufacturer in Oregon’s U.S. District Court. The car manufacturer moved to dismiss the claim on the basis that the car was purchased more than ten years before the lawsuit was filed. In other words, the manufacturer invoked the statute of repose deadline of ten years from first purchase found in ORS 30.905(2).  The District Court denied the motion, finding because Missouri had no statute of repose for product liability claims, there was no applicable statute of repose on Miller’s claim. So, the Court determined Missouri’s statute of repose applied – a choice of law issue.  The manufacturer appealed and the Ninth Circuit certified the question to the Oregon Supreme Court.

The Oregon Supreme Court held when a product is manufactured outside of Oregon, and the manufacturing state has no statute of repose for product liability actions, the associated Oregon claim likewise has no statute of repose. The Court found, as a matter ofpublic policy, Oregonians should be able to protectagainst products manufactured outside the state.  In order to do so, the Court determined the legislature tied the Oregon statute of repose to the repose period in the manufacturing state. The Court noted it was clear the legislature wanted to avoid a situation where an Oregonian would have to travel to another state to file to gain the advantage of a better statute of repose. That said, if the product was manufactured in Oregon, the 10-year statute of repose would be applicable and enforceable.

Takeaway

The Miller case should be considered when looking at whether it is beneficial to bring in a building product manufacturer for defects.  In this situation, our building envelope consultant would be able to bring a cause of action, or assert a defense, against the sealant and self-adhered flashing manufacturer for producing a product that damaged the property.

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