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Oregon Ruling: Homeowner negligence claims for construction defect

March 22, 2011

Homeowner may pursue negligence claim for construction defect, Oregon Supreme Court holds
By Ater Wynne LLP,
Oregon law firm

Last week the Oregon Supreme Court held that a homeowner seeking to recover against a builder for damages caused by construction defects may sue for common law negligence, absent a contractual provision that forecloses such a claim. In Abraham v. T. Henry Construction, Inc., plaintiff homeowners hired defendant contractors to build a house. When plaintiffs discovered defects in the construction years later, they sued for negligence.

The Court of Appeals held that the parties’ contractual relationship did not prevent a negligence claim, and that plaintiffs were entitled to pursue a negligence per se claim based on a violation of the Oregon Building Code.

The Supreme Court affirmed, but on a somewhat different basis. First, according to the Court, a construction defect claim concerns damage to property — and not mere economic losses — and thus is not barred by the economic loss doctrine. Second, the existence of a contract between plaintiff and defendant does not preclude a common law negligence claim for personal injury or property damage, unless the contract defines the parties’ obligations and remedies in such a way as to limit or foreclose such a claim. As a result, plaintiff is entitled to pursue a tort claim as long as the property damage at issue was a reasonably foreseeable result of defendant’s conduct. Plaintiff is not limited to a negligence per se claim.

See our discussion of the Court of Appeals opinion in Abraham here.

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