Goodwin v. Kingsmen Plastering, Inc.

694 June 16, 2016 No. 37

IN THE SUPREME COURT OF THE

STATE OF OREGON

J. Michael GOODWIN

and Sheila Goodwin,

husband and wife,

Respondents on Review,

v.

KINGSMEN PLASTERING, INC.,

a Washington corporation;

Petitioner on Review,

and

KINGSMEN CONTRACTING, INC.,

a Washington corporation;

and T & M Pipeline, Inc., an Oregon corporation,

dba T & M Pipeline Construction, Inc.,

Defendants.

(CC 1110128; CA A151821; SC S062925)

On review from the Court of Appeals.*

Argued and submitted September 10, 2015.

Jonathan Henderson, Davis Rothwell Earle & Zochihua

P.C., Portland, argued the cause and filed the briefs for peti-

tioner on review. With him on the briefs was Katie L. Smith,

Henrie & Smith, LLP, Beaverton.

Dean E. Aldrich, Aldrich Eike, P.C., Portland, argued the

cause and filed the brief for respondent on review. With him

on the brief was Christopher C. Grady, Portland.

Lisa T. Hunt, Lake Oswego, filed the brief for amicus cur-

iae Oregon Trial Lawyers Association.

Daniel T. Goldstein, Ball Janik, LLP, Portland, filed the

brief for amici Orenco Gardens Homeowners Association,

Dennis Hurlbut, and Phil and Lisa Lehwalder. With him on

the brief were Adele J. Ridenour and Amy Heverly.

______________

*  Appeal from Benton County. Locke A. Williams, Judge 267 Or App 506,

340 P3d 169 (2014).

Cite as 359 Or 694 (2016) 695

Before Balmer, Chief Justice, Kistler, Walters, Landau,

Baldwin, Brewer and Nakamoto, Justices.**

LANDAU, J.

The decision of the Court of Appeals is affirmed on other

grounds. The judgment of the circuit court is reversed

and the case is remanded to the circuit court for further

proceedings.

Case Summary: Plaintiffs filed a negligence action against defendant, a sub-

contractor involved in the construction of their house, alleging that construction

defects in the siding led to water intrusion and damage to the house. Defendant

moved for summary judgment, arguing that plaintiffs’ claims were time barred

under the applicable statute of limitations. The trial court agreed and granted

the motion. On appeal, the Court of Appeals reversed, holding that the six-year

statute of limitations set out in ORS 12.080(3), applicable to actions for injuries

to interests in land, applied to plaintiffs’ negligence claims and that that statute

of limitations was subject to a discovery rule; it remanded the case to the trial

court to resolve the factual issue of when plaintiffs discovered, or, in the exercise

of reasonable care, should have discovered the injury. Held: Actions like that of

the plaintiffs in this case, for damage to the property itself as opposed to actions

for injury to an “interest” in property, are subject to the two-year statute of lim-

itations set out in ORS 12.110(1), and not the six-year statute of limitations in

ORS 12.080(3), but they are subject to a discovery rule, and there remains a

factual question as to precisely when plaintiffs discovered the damage to their

property.

The decision of the Court of Appeals is affirmed on other grounds. The judg-

ment of the circuit court is reversed and the case is remanded to the circuit court

for further proceedings.

______________

**  Linder, J., retired December 31, 2015, and did not participate in the deci-

sion of this case.

696 Goodwin v. Kingsmen Plastering, Inc.

LANDAU, J.

ORS 12.135(1)(a) provides that an action arising

from the “construction, alteration or repair of any improve-

ment to real property” must be commenced within “[t]he

applicable period of limitation otherwise established by law.”

The question in this construction defect case is precisely

what is the period of limitation “otherwise established by

law.” Plaintiffs argue that their action is subject to a six-

year statute of limitations set out in ORS 12.080(3), which

applies to actions “for interference with or injury to any inter-

est of another in real property.” Defendant argues that the

action is not for injury to an “interest” in real property, but

for damage to the property itself, which is governed by the

two-year statute of limitations described in ORS 12.110(1)

that applies to tort actions generally. The trial court agreed

with plaintiffs that the six year-limitation period applied

but granted summary judgment for defendant on the ground

that plaintiffs brought their action more than six years

after the construction was completed. The Court of Appeals

reversed and remanded, holding that, although the six-year

statute applied, a “discovery rule” applied to that statute,

and there remained an issue of fact as to whether plaintiffs

initiated their action within six years from the time that

they knew or should have known of the injury that formed

the basis for their claim. Goodwin v. Kingsmen Plastering,

Inc., 267 Or App 506, 340 P3d 169 (2014).

We conclude that the Court of Appeals erred in

holding that plaintiffs’ action is subject to the six-year stat-

ute. That statute applies to actions for interference with or

injury to an “interest” in real property, such as trespass or

waste. It does not apply to actions for damage to property

itself, which are subject to the two-year statute of limita-

tions. There remains, however, a question of fact as to pre-

cisely when plaintiffs discovered the damage to their prop-

erty, which starts the two-year limitations period running.

We therefore affirm the decision of the Court of Appeals to

reverse and remand, albeit on different grounds.

I. BACKGROUND

The following facts are not disputed. The house that

is at the center of this litigation was built in 2001. Defendant

Cite as 359 Or 694 (2016) 697

was a subcontractor involved in its original construction,

responsible for installing synthetic stucco siding on the

house’s exterior. That work was completed in May 2001.

Plaintiffs bought the house in December 2004.

In March 2011, plaintiffs filed a complaint against

defendant for negligence and negligence per se.1 Their com-

plaint alleged that numerous construction defects in the

siding led to water intrusion, which caused damage to the

house. Plaintiffs alleged that they did not learn of that dam-

age until May 2010.

Defendant moved for summary judgment, arguing

that plaintiffs’ claims were time-barred. Defendant argued

that plaintiffs’ construction negligence claims were subject

to ORS 12.110(1), which has been construed to require tort

claims to be initiated within two years of the date of discov-

ery of the injury or damage. In this case, defendant argued,

plaintiffs initiated their action more than two years from

when they discovered the siding defects and resulting

water damage. In support of its motion, defendant sub-

mitted evidence that plaintiffs had obtained reports from

two experts before purchasing the home in 2004 and that

those expert reports noted defects in the siding. Defendant

also offered evidence that, in response to those reports,

plaintiffs received a bid from a contractor to fix a num-

ber of those problems. Defendant’s evidence also included

reports in 2005, 2007, and 2008 from that contractor not-

ing concerns about cracks in the siding and resulting water

intrusion.

Plaintiffs disputed the significance of the evidence

that defendants had submitted and argued that their claims

were timely under the two-year statute of limitations in

ORS 12.110(1). In the alternative, they argued that their

claim was subject to the six-year statute of limitations set

out in ORS 12.080(3) and that the six-year statute—like the

two-year statute of limitations in ORS 12.110(1)—includes a

discovery rule. In plaintiffs’ view, there was at least a genu-

ine issue of material fact as to whether they knew or should

1

Plaintiffs alleged claims against other defendants as well, but the claims

against those defendants are not at issue in this appeal.

698 Goodwin v. Kingsmen Plastering, Inc.

have known about the negligent construction of their siding

within six years of filing their complaint.

As noted, the trial court granted defendant’s motion

for summary judgment. The trial court agreed with plain-

tiffs that the six-year statute of limitations in ORS 12.080(3)

applied to this negligent construction action. But it ruled

that that statute was not subject to a discovery rule. As a

result, the court concluded, the six-year limitation period

began to run at the time of the completed installation of the

siding—in 2001—and plaintiffs initiated their action well

beyond six years from that date.

Plaintiffs appealed, arguing that, although the trial

court was correct in concluding that the six-year statute of

limitations in ORS 12.080(3) applies, it nevertheless erred

in concluding that the statute is not subject to a discovery

rule. The Court of Appeals agreed and reversed. Relying on

one of its own prior cases, Riverview Condo. Assn v. Cypress

Ventures, 266 Or App 574, 339 P3d 447 (2014), the court first

concluded that construction negligence claims are subject to

the six-year statute of limitations set out in ORS 12.080(3).

The court next held that, in light of this court’s recent deci-

sion in Rice v. Rabb, 354 Or 721, 320 P3d 554 (2014), the six-

year statute of limitations in ORS 12.080(3) is, as plaintiff

had contended, subject to a discovery rule. The court then

remanded the case to the trial court to resolve the remain-

ing factual issue pertaining to when plaintiffs discovered or,

in the exercise of reasonable care, should have discovered

the injury.

II. ANALYSIS

ORS 12.135(1)(a) provides the starting point

for determining the applicable statute of limitations in

claims arising out of the contract construct, alter, or repair

an improvement to real property. Shell v. Schollander

Companies, Inc., 358 Or 552, 564, 369 P3d 1101 (2016).2

That statute provides that “[a]n action against a person * * *

arising from the person having performed the construction,

2

Throughout this opinion, we use a shorthand reference to “construction

defect claim” to refer to such claims that arise out of a contract to construction,

alter, or repair any improvement to real property.

Cite as 359 Or 694 (2016) 699

alteration or repair of any improvement to real property * * *

must be commenced before * * * [t]he applicable period of

limitation otherwise established by the law.” As we noted at

the outset, the issue in this case is what period of limitation

is “otherwise established by the law.” The parties offer two

candidates.

Plaintiffs argue that the period “otherwise estab-

lished by the law” is the six-year statute of limitations in

ORS 12.080(3), which applies to actions “for interference

with or injury to any interest of another in real property.” In

plaintiffs’ view, theirs is an action for “injury to any inter-

est of another in real property.” According to plaintiffs, any

owner of real property has a legally recognized “interest” in

being free from negligently caused damage to that property.

In support, plaintiffs cite Beveridge v. King, 292 Or 771, 643

P3d 332 (1982), which, in their view, held that construc-

tion defect claims such as theirs are subject to the six-year

limitation period in ORS 12.080(3). Plaintiffs acknowledge

that, historically, construction defect claims have been sub-

ject to a two-year limitation period. They nevertheless claim

that the legislature has “abolished” the shorter limitation

period as to those claims.

Defendant argues that ORS 12.080(3) does not

apply because it is limited to actions for interference with

or injury to an “interest” in real property. As defendant sees

it, an injury to an “interest” in real property is distinct from

an injury to the property itself—a distinction that defen-

dant contends has long been recognized in this court’s case

law. Defendant asserts that plaintiffs’ reliance on Beveridge

for a different reading of the statute is misplaced, as that

case was pleaded as one for breach of contract, not for dam-

age to real property. To the contrary, defendant observes,

in Abraham v. T. Henry Construction, Inc., 350 Or 29, 34

n 3, 249 P3d 534 (2011), this court stated that “[t]ort claims

arising out of the construction of a house must be brought

within two years of the date that the cause of action accrues,”

citing ORS 12.110.

Plaintiffs rejoin that the statement in Abraham on

which defendant relies was dictum and incorrect dictum at

that.

700 Goodwin v. Kingsmen Plastering, Inc.

Thus framed, the issue is one of statutory construc-

tion. In resolving that issue, “[o]ur goal is to determine the

meaning of the statute that the legislature that enacted it

most likely intended.” Halperin v. Pitts, 352 Or 482, 486, 287

P3d 1069 (2012). To do that, we examine the text of the stat-

ute in context, along with relevant legislative history and

canons of construction. State v. Gaines, 346 Or 160, 171-72,

206 P3d 1042 (2009).

We begin with the texts of the pertinent statutes.

ORS 12.110(1) provides:

“An action for assault, battery, false imprisonment, or

for any injury to the person or rights of another, not arising

on contract, and not especially enumerated in this chap-

ter, shall be commenced within two years; provided, that in

an action at law based upon fraud or deceit, the limitation

shall be deemed to commence only from the discovery of the

fraud or deceit.”

As the wording suggests, it is a catch-all statute of lim-

itations: “[I]t covers the residual category of those actions

which cannot be said to arise from contracts or from other

sources of liability covered by different statutory limita-

tions.” Securities-Intermountain v. Sunset Fuel, 289 Or 243,

246, 611 P2d 1158 (1980). This is an action that does not

arise from contract. Thus, ORS 12.110 applies unless this

action is covered by some other more specific statute of

limitations.

As we have noted, plaintiffs argue that ORS

12.080(3) is just such a specific statute. It applies to:

“An action for waste or trespass upon or for interference

with or injury to any interest of another in real property,

excepting those mentioned in ORS 12.050, 12.060, 12.135,

12.137 and 273.241[.]”

In this case, plaintiffs do not allege waste or trespass;

rather, they claim that their construction negligence claims

are subject to ORS 12.080(3) because they allege an “injury

to any interest of another in real property.”

Several things cut against plaintiffs’ reading of

ORS 12.080(3). To begin with, the text of ORS 12.080(3)

specifically excepts from its six-year limitation period any

Cite as 359 Or 694 (2016) 701

“interest of another in real property * * * mentioned in * * *

ORS 12.135.” That statute, as we have noted, applies to

actions arising from the “construction, alteration or repair

of any improvement to real property.” There is no dispute

that this is such an action, arising as it does from an agree-

ment to construct a home. By its terms, the six-year limita-

tion period in ORS 12.080(3) appears not to apply.

Putting aside the express exception for the sake of

argument, the wording of ORS 12.080(3) still runs counter

to plaintiffs’ proposed reading of it for at least four reasons.

First, there is the meaning of the statute’s terms, in par-

ticular, the term “interest.” As used in ORS 12.080(3), the

word “interest,” used in reference to rights in real property,

is a term of art. State v. Dickerson, 356 Or 822, 829, 345 P3d

447 (2015) (legal or equitable “interest” in property is a legal

term with a legal meaning). At the time that the legislature

amended ORS 12.080(3), Black’s Law Dictionary explained

that, in its application to lands or things real, the word “inter-

est” was defined as “a right to have the advantage accru-

ing from anything; any right in the nature of property, but

less than title; a partial or undivided right; a title to share.”

Blacks Law Dictionary 950 (4th ed 1968). In that sense, an

injury to an “interest” in property would be something dis-

tinct from an injury or damage to the property itself.

Second, the references to “waste” and “trespass” in

ORS 12.080(3) appear to bear out that reading of the term

“interest.” Both are claims in which a plaintiff alleges an

injury to an “interest * * * in real property” in the more lim-

ited sense that we just described. Waste, for example, is a

“spoil or destruction in houses, gardens, trees or other cor-

poreal hereditaments, to the disherison [disinheritance] of

him that hath the remainder or reversion.” Lytle v. Payette-

Oregon Irr. Dist., 175 Or 276, 288, 152 P2d 934 (1944). See

also In re Stout’s Estate, 151 Or 411, 422, 50 P2d 768 (1935)

(“The question of what constitutes waste [by a life tenant] is

determined primarily by the circumstance of whether or not

the act, either of commission or omission, results in injury

to the reversioner or the remainderman.”). Simply stated,

it is not an action for damage to property itself, but rather

for injury to another’s interest in that property. Similarly,

702 Goodwin v. Kingsmen Plastering, Inc.

trespass is “an actionable invasion of a possessor’s interest

in the exclusive possession of land.” Martin et ux v. Reynolds

Metals Co., 221 Or 86, 90, 342 P2d 790 (1960). It is not an

action for damage to the property itself. In fact, proof of

damage is not even required. Id. at 97.

It is a familiar rule that the meaning of words in a

statute may be clarified or confirmed by reference to other

words in the same sentence or provision. See, e.g., Johnson v.

Gibson, 358 Or 624, 629-30, 369 P3d 1151 (2016) (explaining

noscitur a sociis textual canon). In this case, the surround-

ing reference in ORS 12.080(3) to “waste” and “trespass”

in the context of describing injuries to “interests” that are

subject to the six-year statute suggests that the interests do

not include damage to property itself.

Third, the wording of other related statutes reflects

the distinction between an injury to property itself, on the

one hand, and an injury to an “interest” in property, on the

other. ORS 12.135(3)(a), for example, sets out the statute

of limitation that applies to actions against architects and

engineers “to recover damages for injury to a person, prop-

erty or to any interest in property” that arises out of the

construction, alteration, or repair of an improvement to real

property. The statute plainly assumes a distinction between

an injury to “property” and an injury to “any interest in

property.” If an injury to an “interest” in property already

encompassed an injury to the property itself—as plaintiffs

assert—then the reference to injury to property itself would

be a meaningless redundancy. Certainly nothing precludes

the legislature from employing a measure of redundancy in

its statutes; sometimes, that is what it intended. Thomas

Creek Lumber and Log Co. v. Dept. of Rev., 344 Or 131, 138,

178 P3d 217 (2008) (“[N]othing prohibits the legislature from

saying the same thing twice.”). But, as this court explained

in State v. Cloutier,

“at the least, an interpretation that renders a statutory

provision meaningless should give us pause, both as a mat-

ter of respect for a coordinate branch of government that

took the trouble to enact the provision into law and as a

matter of complying with the interpretive principle that, if

possible, we give a statute with multiple parts a construc-

tion that will give effect to all of those parts.”

Cite as 359 Or 694 (2016) 703

351 Or 68, 98, 261 P3d 1234 (2011) (internal quotation

marks omitted). See also Baker v. Croslin, 359 Or 147, 157, __

P3d __ (2016) (in general, courts avoid redundancy “unless

there is evidence that that is precisely what the legislature

intended”). In this case, we are aware of no indication in the

text, context, or history of ORS 12.080(3) suggesting that

the legislature intended an injury to “property” to be synon-

ymous with an injury to an “interest in property.”

Fourth, this court’s case law has long recognized

the distinction between damage to property, which triggers

the two-year statute of limitation in ORS 12.110, and injury

to an interest in property, which is subject to the six-year

statute in ORS 12.080. This court’s decision in Reynolds

Metals is relevant in that regard. At issue in that case was

whether the defendant aluminum plant’s airborne effluents

that drifted on to the plaintiffs’ property constituted “non-

trespassory injuries to land” or trespass. If the former, the

court held, the plaintiffs’ claims for resulting harm would be

subject to the two-year statute in ORS 12.110. But if the lat-

ter, the court held, the six-year statute in ORS 12.080 would

apply. 221 Or at 88-89.

In short, an analysis of the text of ORS 12.080(3)

strongly suggests that plaintiffs’ claim in this case for neg-

ligent construction, resulting in damage to their home, does

not constitute a claim for injury to “interest * * * in real

property”; rather, it constitutes a claim for damage to the

property itself, subject to the two-year limitations period in

ORS 12.110.

An examination of the history of ORS 12.080(3)

and related statutes confirms what the foregoing analysis of

the text suggests. Unfortunately, that history is more than

a little convoluted, as the statutes have been repeatedly

amended—including amendments that removed and then

later replaced the same provisions. But in the end, that his-

tory leaves little doubt about the legislature’s intentions.

As this court explained in Securities-Intermountain,

in the early days of statehood, the legislature organized civil

claims for statute of limitations purposes into two catego-

ries. 289 Or at 253. First, it provided for a two-year lim-

itation period, which applied to five specifically enumerated

704 Goodwin v. Kingsmen Plastering, Inc.

claims: libel, slander, assault, battery, and false imprison-

ment. 1862 Or Gen Laws 5, ch 1, § 8. Second, it provided

for a six-year limitation period to apply more generally to

all actions “upon a contract or liability, express or implied,”

to actions for “waste or trespass upon real property,” and

a catch-all category of actions for “any other injury to the

person or rights of another, not arising on contract and not

hereinafter enumerated.” Id., § 6. Under the law at that

time, then, claims for negligence—pleaded in those days as

“trespass on the case”—were subject to a six-year limitation

period. Securities-Intermountain, 289 Or at 253.

In 1870, the legislature amended those statutes so

that the catch-all provision for actions not on contract and not

separately enumerated was subject to the two-year limitation

period. 1870 Or Gen Laws, 34-35. That led to two different

categories: one for actions on contract and actions for waste

and trespass, subject to a six-year limitation period, and the

other for torts generally, subject to a two-year limitation

period. The former category eventually came to be codified at

ORS 12.080, while the latter was codified at ORS 12.110.

The law remained substantially unchanged for

the next 100 years. During that time, negligence claims

were held to be subject to the two-year limitation period.

Securities-Intermountain, 289 Or at 253-54. That included

claims for negligent damage to real property, as we noted

earlier. Reynolds Metals, 221 Or at 88-89.

In 1971, the legislature enacted ORS 12.135, which

carved out a special, two-year statute of limitations for con-

struction defect claims for damage to property. Or Laws

1971, ch 664, §§ 2-4. The statute provided that its two-year

limitation period applied to

“an action to recover damages for injuries to a person or

to property arising from another person having performed

the construction, alteration or repair of any improvement

to real property or the supervision or inspection thereof, or

from such other person having furnished the design, plan-

ning, surveying, architectural or engineering services for

such improvement[.]”

ORS 12.135(1) (1971). As this court explained in Securities-

Intermountain, “this statute does not define its coverage by

Cite as 359 Or 694 (2016) 705

the legal source or nature of the liability on which the action

is founded but on the character of the injuries incurred in a

specific context.” 289 Or at 247. That is, construction defect

claims described in ORS 12.135(1) (1971) were time-barred

after two years irrespective of the theory of recovery, even

if they otherwise would be subject to a longer statute of

limitations.

A short time later, in 1973, the legislature amended

ORS 12.080(3) so that its six-year limitation period applied

not just to actions for waste or trespass but also more broadly

to actions “for interference with or injury to any interest of

another in real property.” Or Laws 1973, ch 363, §1.3 At the

same time, the legislature inserted an exception for actions

3

The impetus for the 1973 amendments was this court’s decision in Martin v.

Union Pacific Railroad, 256 Or 563, 474 P2d 739 (1970). In that case, the plaintiff

brought a claim for trespass against a railroad company for damage caused by

a fire that originated on or near a railroad right of way. The plaintiff brought

the action four years after the fire occurred. The defendant railroad company

argued that the claim was time-barred, because it was actually a negligence

claim, subject to the two-year limitations period in ORS 12.110(1). This court

concluded that the claim sounded in trespass and was thus subject to the six-

year limitations period in ORS 12.080(3). At the conclusion of the opinion, the

court said that the case “serves to remind us of the need for legislative revision of

the statutes on the limitation of actions. There would appear to be no reason for

providing different limitation periods in actions for invasions of interests in land,

* * * whether the conduct causing the invasion is intentional, negligent, reckless,

or ultrahazardous.” 256 Or at 566-67.

In direct response to that suggestion, Senate Bill 341 was introduced to clar-

ify that the six-year limitation period in ORS 12.080(3) applied to all actions for

injury to interests in property, regardless of the nature of the underlying conduct.

The Office of Legislative Counsel, for example, provided an introductory memo-

randum on the bill, explaining that it was “suggested by Chief Justice O’Connell,

in Martin v. Union Pacific Railroad,” and “would include within the six-year

statute of limitation under subsection (3) of ORS 12.080 all actions for injury to

or interference with any interest of another person in real property.” Exhibit M,

Senate Committee on Judiciary, SB 341, March 29, 1973 (memorandum from

Steven J. Hawes, Deputy Legislative Counsel) (emphasis added).

Plaintiffs rely on the emphasized portion of the preceding quote for the

proposition that the legislation was intended to extend the six-year statute to

all actions involving damage to property. The argument ignores the phrasing of

the statute and the quote itself—both of which refer to injury to an “interest” in

real property. Plaintiffs also rely on a statement from a witness who referred to

the bill as extending the six-year limitation period to “claims for damages to real

property.” In context, however, it is clear that the witness was referring to claims

for injury to interests in real property; indeed the same witness referred to the

genesis of the bill as a response to this court’s decision in Martin. Tape Recording,

Senate Committee on Judiciary, SB 341, March 26, 1973, Tape 14, Side 1 (testi-

mony of J. Robert Jordan).

706 Goodwin v. Kingsmen Plastering, Inc.

“mentioned in ORS * * * 12.135[.]” Id. Thus, by excepting

actions mentioned in ORS 12.135 from the six-year limita-

tion period in ORS 12.080(3), the legislature made explicit

its intention that all construction defect cases alleging “dam-

ages for injuries to a person or to property” would continue

to be subject to the two-year statute of limitations of ORS

12.135 (1971), as they had for the previous 100 years.

This court had occasion to apply those amended stat-

utes in Beveridge. In that case, the defendant entered into a

contract with the plaintiffs to sell a residential home that he

was in the process of building. The defendant retained the

title to the home as security for the payment of the agreed

purchase price. 292 Or at 778. When the plaintiffs moved

in, they concluded that the defendant had failed to perform

various tasks called for in the contract. More than two, but

fewer than six, years later, the plaintiffs initiated an action

against the defendant for breach of contract, alleging dam-

ages for the amounts of money required to remedy the defen-

dant’s failure to comply with his contractual obligations. The

defendant argued that the plaintiffs’ claim was time-barred

under the two-year limitation periods of either ORS 12.135

(1971) or ORS 12.110. Beveridge, 292 Or at 774-75.

This court first concluded that ORS 12.135 (1971)

did not apply because that statute concerned physical injury

to tangible property, not financial losses occasioned by inad-

equate performance of a contract. Beveridge, 292 Or at 775.

The court then concluded that ORS 12.110(1) did not apply,

either. The court explained that that statute could apply

only if the action were one “not arising on contract” and

“not especially enumerated” elsewhere in ORS chapter 12.

The court explained that, assuming for the sake of argu-

ment that the action was not one for breach of contract, the

defendant’s argument still failed because the claim at issue

was “especially enumerated” elsewhere in ORS chapter 12,

namely, in ORS 12.080(3). The court noted that that statute

applied when an action is one for interference or injury to

“any interest of another in real property.” In Beveridge, the

court observed, the plaintiffs did not have title to the prop-

erty, but they nevertheless had an “interest” in the prop-

erty by virtue of their contract. Beveridge, 292 Or at 777-78.

The court did not overrule Reynolds Metals and hold—as

Cite as 359 Or 694 (2016) 707

plaintiffs incorrectly contend in this case—that all claims

for construction defects are subject to ORS 12.080(3). In

fact, the court in Beveridge did not mention Reynolds Metals.

Rather, the court carefully crafted a narrow holding that

the statute applied because of the particular nature of the

plaintiffs’ “interest” in the property at issue.

It is at this point that the account of the relationship

between the various statutes gets a bit more complicated.

In 1983, the legislature returned to ORS 12.135, amending

that statute by removing and inserting the following word-

ing (with deletions in bracketed italics and new wording in

boldface):

“An action [to recover damages for injuries to a person or to

property arising from another] against a person, whether

in contract, tort, or otherwise, arising from such per-

son having performed the construction, alteration or repair

of any improvement to real property or the supervision or

inspection thereof, or from such [other] person having fur-

nished the design, planning, surveying, architectural or

engineering services for such improvement, shall be com-

menced within [two years from the date of such injury to the

person or property; provided that] the applicable period

of limitation otherwise provided by law[.]”

Or Laws 1983, ch 437, § 1. The amendments thus accom-

plished two things. First, they made explicit what this

court said in Securities-Intermountain was implicit in ORS

12.080(3), namely, that ORS 12.135 applies according to

the nature of the acts forming the basis for the action, not

the particular legal theory—whether it be contract, tort, or

something else. Second, the amendments eliminated the

two-year limitation period and substituted in its place a pro-

vision stating that the applicable limitation period is the one

that is “otherwise provided by law.”

From the text of the amended statute, it appears

that, because ORS 12.135(1983) referred to claims sounding

in contract, or in tort, or in some other theory, it no longer

made sense to refer to a two-year limitation period, given

that contract claims, for example, ordinarily were subject to

a six-year limitation period. Accordingly, the legislature did

away with the reference to the two-year limitation period in

favor of whatever statute would otherwise apply, depending

708 Goodwin v. Kingsmen Plastering, Inc.

on whether the claim sounded in contract, tort, or something

else.

In the same bill, the legislature also amended

ORS 12.080(3), the statute that provided a six-year limita-

tion period for actions for trespass, waste, and injuries to

“interests” in real property. Recall that, before 1983, ORS

12.080(3) had provided that its six-year limitation period

did not apply to claims mentioned in ORS 12.135. In the

1983 session, the legislature repealed that exception. Or

Laws 1983, ch 437, § 2.

Plaintiffs assert that the legislature, by eliminating

the two-year limitation period in ORS 12.135 and removing

the exception for claims mentioned in that statute in ORS

12.080(3), effectively “abolished” the two-year statute of

limitation as it might otherwise apply to construction defect

claims. We are not persuaded for two reasons.

First, as we just observed, it appears from the text

of the statutes that the 1983 Legislative Assembly, having

just amended ORS 12.135 to allow for different periods of

limitation depending on the nature of the claim, thought it

no longer necessary to include the exception for the same

reason that it no longer made sense to refer to a two-year

limitation. In amending that statute, the legislature did not

“abolish” anything. Rather, under ORS 12.135 as amended,

the applicable period of limitation simply depends on the

nature of the claim, whether it be contract, tort, or some-

thing else.

Second, the legislative history of the 1983 amend-

ments confirms that the legislature intended just that, and

not to “abolish” any two-year limitation period for construc-

tion defect claims. Statement after statement during hear-

ings on the bill that was adopted as the amendments to

ORS 12.135 repeat the explanation that the purpose of those

amendments was to clarify that the statute was intended

to apply regardless of the particular legal theory—whether

contract, tort, or something else. As a result, the reference

to the two-year statute of limitation was no longer needed,

because the limitation period would now depend on the legal

theory of the claim.

Cite as 359 Or 694 (2016) 709

For example, during hearings before the Senate

Committee on the Judiciary, the chair of the committee,

Senator Jan Wyers, explained that the proposed amendment

“just changes—it takes that two-year language out [of ORS

12.135] and just says that you go to the applicable period of

limitations as otherwise provided. So if it’s a contract you’re

suing under, it’s six years. If it’s a tort, it’s two years.”

Tape Recording, Senate Committee on Judiciary, SB 663,

May 18, 1983, Tape 153, Side A (statement of Sen Jan

Wyers). Later in the same hearing, Wyers confirmed that

negligence actions would not be subject to a six-year stat-

ute of limitations; rather, the two-year statute of limitations

still would apply. Id.

Still later in that hearing, Vice-Chair Walt Brown

asked how, specifically, the proposed amendment would

change existing law. Wyers responded that the amendment

would

“tak[e] out the language that says ‘two years from the day

of such injury to person or property’ and instead of that

we’re putting in that you have to commence it within the

‘applicable statute of limitations otherwise established by

law.’ Six years for contracts, two years for negligence.”

Tape Recording, Senate Committee on Judiciary, SB 663,

May 18, 1983, Tape 154, Side A (statements of Sen Walt

Brown and Sen Jan Wyers). The following colloquy then

ensued:

“[Brown:] But what you’re doing here is excising the two-

year language and putting in ‘the applicable statute,’ which

in effect changes this to a six-year statute for breach of con-

tract that results in an injury to a person or property.

“[Wyers:] It doesn’t change it to that. It only makes it clear

that you look to what the statute of limitations laws are.

And if it’s a contract action, you get six years[.]”

Id.

Plaintiffs offer no references to the legislative his-

tory of the 1983 amendments in support of their contention

that those amendments were intended to “abolish” the two-

year limitation period for construction defect claims. And

710 Goodwin v. Kingsmen Plastering, Inc.

our review of the legislative history reveals no hint of an

intention to that effect. To the contrary, as the foregoing

excerpts make clear, the amendments were intended merely

to make the applicable statute of limitations depend on the

nature of the legal theory on which claims are asserted.

The legislature amended ORS 12.135 one more

time, in 1991. Those amendments, however, did nothing to

significantly alter the analysis of which statute of limita-

tions applies to construction defect claims. The 1991 amend-

ments created a new section of ORS 12.135, which speci-

fied that claims against architects, landscape architects, or

engineers for construction defects must be brought within

two years of the date of injury or discovery:

“[n]otwithstanding subsection (1) of this section [provid-

ing, as in the 1983 version, that construction defect actions

must be commenced “within the applicable period of lim-

itations otherwise established by law], an action against

a person for the practice architecture, as defined in ORS

671.010, the practice of landscape architecture, as defined

in ORS 671.310, or the practice of engineering, as defined

in ORS 672.005, to recover damages for injury to a per-

son, property or to any interest in property, including dam-

ages for delay or economic loss, regardless of legal theory,

arising from the construction, alteration or repair of any

improvement to real property shall be commenced within

two years from the date the injury or damage is first discov-

ered or in the exercise of reasonable care should have been

discovered[.]”

Or Laws 1991, ch 968, § 1 (emphasis added). At the same

time, the legislature brought back the provision that it had

repealed in 1983, expressly excepting from the six-year stat-

ute of limitations in ORS 12.080(3) any claims “mentioned

in ORS 12.135.” Or Laws 1991, ch 968, § 2.

Plaintiffs argue that the creation of a special stat-

ute of limitations for so-called “design professionals” demon-

strates that, in the absence of that provision, claims against

those persons for construction defects would have been con-

trolled by the six-year limitation period in ORS 12.080(3),

as they involved claims for injury to “interests” in real prop-

erty. The argument, however, suffers from the fallacy of beg-

ging the question: It assumes the very matter in contention,

Cite as 359 Or 694 (2016) 711

namely, that ORS 12.080(3) would have applied to construc-

tion defect claims in the first place. Aside from that, the

wording of the amendments does not support the conclusion

that plaintiffs draw from it. In fact, plaintiffs have it back-

wards; the 1991 amendments confirm our interpretation of

the statutory scheme.

Begin with the fact that subsection (1) of ORS

12.135 provides that construction defect actions are subject

to the “applicable period of limitations otherwise established

by law.” As we have explained, that simply means that the

applicable period of limitation will depend on the nature of a

particular action, whether it be contract, tort, or something

else. But, as amended, ORS 12.135(2) (1991) provided that,

“notwithstanding subsection (1),” actions against design

professionals for injury to person, property, or an interest

in property is two years, “regardless of legal theory.” As a

result, after the 1991 amendments, all construction defect

actions against design professionals were subject to a two-

year limitation period—even contract actions, which other-

wise would have been subject to the six-year statute of lim-

itations in ORS 12.080(1), and actions to recover damages

for an injury to any interest in property, which would other-

wise have been subject to the six-year statute of limitations

in ORS 12.080(3).

Plaintiffs argue that, in any event, the legislative

history of the 1991 amendments shows that a bill originally

proposed that both contractors and design professionals be

subject to a two-year statute of limitations, and the legisla-

ture elected not to adopt a version that would have applied

that limitation period to both. Relying, in particular, on

the testimony of a representative of the Oregon Association

of Defense Counsel (OADC)—which supported the bill—

plaintiffs contend that witnesses stated that, under then-

existing law, construction defect claims were subject to

the six-year limitation period of ORS 12.080(3), and the

1991 amendments were intended to shorten that period to

two-years.

Plaintiffs misperceive the legislative history of the

1991 amendments. Those amendments were introduced as

Senate Bill (SB) 722 (1991), and they did originally provide

712 Goodwin v. Kingsmen Plastering, Inc.

that all construction defect claims against both contractors

and design professionals—regardless of legal theory—would

be subject to a two-year limitation period. SB 722 (original

draft, Feb 11, 1991). OADC did indeed endorse the bill,

but its representative, Jim Marvin, offered the following

introductory explanation to the Senate Committee on the

Judiciary:

“SB 722 modifies the statute of limitations for certain

causes of action arising out of improvements to real prop-

erty. It clarifies the time within which affected persons can

bring a claim and bring[s] architects and other profession-

als more in line with persons who are involved in construc-

tion and improvements to real property.”

Tape Recording, Senate Committee on the Judiciary, SB 722,

April 8, 1991, Tape 100, Side B (statement of Jim Marvin).

Marvin explained that, under then-current law, the stat-

ute of limitation was not six years under ORS 12.080(3), as

plaintiffs contend, but rather depended on the nature of the

claim:

“As for the statute of limitations for architects and engi-

neers, the statute of limitations is completely dependent on

the pleading ability of the lawyers. It is dependent on the

nature of the action and the damages sought. If the cause

of action is for negligence, typically you need to bring an

action within two years from the date the injury or dam-

age is first noted. * * * If you want to sue for breach of con-

tract, it’s six years. * * * The present statute simply throws

it into other provisions of ORS chapter 12. The result of

having no statute of limitations for designers is that it

calls upon the court to look at a claim being brought in the

pleading by the plaintiff to try to determine the nature of

that cause of action. And, therefore, we do not get uniform

decisions.”

Id. (emphasis added). Thus, the point of SB 722 was to avoid

the uncertainty of leaving the determination of the appli-

cable statute of limitation to pleading and replace it with a

firm two-year limitation period. Nothing in the legislative

history suggests—as plaintiffs contend—that, before the

1991 amendments, the applicable limitation for negligence

actions for construction defects was six years under ORS

12.080(3).

Cite as 359 Or 694 (2016) 713

It was in that context that the 1991 Legislative

Assembly decided not to alter the existing statutes of limita-

tions for contractors. Senator Hill suggested that a two-year

limitation period, regardless of legal theory, seemed “very—

like a very, very short—short period of time.” Id. (statement

of Sen Jim Hill). Marvin responded that, “[i]f you want to

strike contractors and leave it at architects and engineers,

that wouldn’t bother us a bit.” Id. (statement of Jim Marvin).

And the Judiciary Committee did just that, without fur-

ther discussion. Id. Again, the point was not—as plaintiffs

contend—that the legislature understood that the six-year

limitation period of ORS 12.080(3) would apply. To the con-

trary, it was that the legislature determined that it was

better to leave contractors subject to ORS 12.135(1), which

made the applicable limitation period depend on the nature

of the legal theory of the claim against the contractor.

It was also in that context that the 1991 Legislative

Assembly restored the exception from the six-year limita-

tion in ORS 12.080(3). Recall that the 1991 amendments to

ORS 12.135 had the effect of creating a hard-and-fast two-

year limitation period for claims against design profession-

als, regardless of legal theory. That meant that the two-year

limitation period applied even to claims against such design

professionals based on injuries to an “interest of another in

real property” that otherwise would have been subject to

the six-year limitation period under ORS 12.080(3). And the

restored exception makes that clear.4

Interestingly, the restored exception states that the

six-year limitation period under ORS 12.080(3) does not

apply to any claim for injury to “interest of another in real

property * * * mentioned in * * * ORS 12.135.” It is not lim-

ited to claims against design professionals. On its face, it is

broader than that and would seem expressly to cover claims

such as this one against contractors. We need not address

the scope of that exception, however. As we have explained,

even putting aside that exception, plaintiffs’ contentions

concerning the scope of the six-year limitation period in

4

To the same end, the legislature also excepted actions mentioned in ORS

12.135 from the six-year limitations period for contract actions in ORS 12.080(1).

Or Laws 1991, ch 986, § 2.

714 Goodwin v. Kingsmen Plastering, Inc.

ORS 12.080(3) cannot be reconciled with the wording and

history of that statute.

In light of the foregoing, this court’s recent state-

ment in Abraham that “[t]ort claims arising out of the con-

struction of a house must be brought within two years of the

date that the cause of action accrues,” under ORS 12.110,

although dictum, was a correct statement of the law. 350 Or

at 34 n 3. ORS 12.135(1) provides that construction defect

claims may be subject to different statutes of limitation,

depending on the nature of the claim—whether for breach of

contract, tort, or something else. A construction defect claim

for damage to the property itself is subject to the two-year

limitation period of ORS 12.110, unless another limitation

period “especially enumerated” in ORS chapter 12 applies.

In this case, no other such limitation period applies.

There remains the factual question about whether

plaintiffs knew or should have known of the injuries or dam-

age that form the basis of their claims within the two-year

limitation period that ORS 12.110 provides. The trial court

never addressed that issue. It can do so on remand.

The decision of the Court of Appeals is affirmed on

other grounds. The judgment of the circuit court is reversed

and the case is remanded to the circuit court for further

proceedings.