Oregon Ruling: Homeowner negligence claims for construction defect

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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.