Romero v. Amburn

                                       410

Argued and submitted September 26, affirmed December 29, 2022, petition for
                 review denied May 18, 2023 (

)


                        Mitchell ROMERO,
                         Plaintiff-Appellant,
                                   v.
                       Shannon C. AMBURN,
                   dba Amburn Construction, LLC,
                   dba Equity Quest Homes, LLC,
                    dba SCA Construction, LLC,
                    dba Kan Construction, LLC,
                       Defendant-Respondent,
                                 and
                          John DOES 1-20,
                            Defendants.
               AMBURN CONSTRUCTION, LLC,
             an Oregon Limited Liability Company,
                Third-Party Plaintiff-Respondent,
                               v.
                  NSC INSTALLATION, LLC,
           an Oregon limited liability company; and
          Bradley R. Schmautz and Marcus Blackmon,
             individuals dba Reliable Construction,
              Third-Party Defendants-Respondents.
                Multnomah County Circuit Court
                     18CV15985; A175063
                                   

    Plaintiff purchased a newly built house from defendant in 2008. In 2017, he
discovered that construction defects had caused extensive damage to the house.
He later brought this action for breach of contract and negligence. The trial court
dismissed the claims on statute-of-limitations grounds. On appeal, plaintiff chal-
lenges the dismissal of the contract claims, arguing that the six-year statute of
limitations for contract claims in ORS 12.080(1) is subject to the discovery rule.
Plaintiff argues that Waxman v. Waxman & Associates, Inc., 

,

 (2008), in which the Court of Appeals rejected a virtually identical
argument, was implicitly overruled by the Supreme Court in Rice v. Rabb, 

, 

 (2014). Held: ORS 12.080(1) is not subject to the discovery
rule. A long line of case law recognizes that a breach of contract action accrues
upon breach. Although there is some tension between that long-established prin-
ciple and the Rice line of case law, the two lines of case law are not necessarily
irreconcilable so as to result in implicit overruling. The trial court therefore did
Cite as 

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not err in granting summary judgment for defendant based on the statute of
limitations.
   Affirmed.



   Thomas W. Brown, Judge pro tempore. (Judgment)
   Michael A. Greenlick, Judge. (Supplemental Judgment)
   Benjamin M. Karlin argued the cause and filed the briefs
for appellant.
   Jonathan Henderson argued the cause for respondents
Shannon C. Amburn and Amburn Construction, LLC. Also
on the brief were Samuel K. Anderson and Davis Rothwell
Earle & Xóchihua, P.C.
  No appearance for respondents NSC Installation, LLC,
Bradley R. Schmautz, and Marcus Blackmon.
   Before James, Presiding Judge, and Aoyagi, Judge, and
Joyce, Judge.
   AOYAGI, J.
   Affirmed.
412                                                    Romero v. Amburn

         AOYAGI, J.
         Plaintiff purchased a newly built house from defen-
dant in 2008. Nearly 10 years later, he brought this action
alleging hidden construction defects. Defendant moved for
summary judgment on the contract claims, based on the
six-year statute of limitations in ORS 12.080(1). Plaintiff
opposed, arguing that the discovery rule applies to ORS
12.080(1), by virtue of ORS 12.010. Relying on established
case law that a breach of contract action accrues upon
breach—including Waxman v. Waxman & Associates, Inc.,

, 

 (2008), in which we rejected
an argument virtually identical to plaintiff’s—the trial
court granted summary judgment for defendant. Plaintiff
appeals, arguing that the Supreme Court implicitly over-
ruled Waxman in Rice v. Rabb, 

, 

(2014). Plaintiff contends that, under Rice’s reasoning,
the discovery rule necessarily applies to ORS 12.080(1).
As explained below, we recognize some potential tension
between, on the one hand, Rice and its progeny, and on
the other, Waxman and the line of cases on which it relies.
However, we are unpersuaded that the two lines of cases are
necessarily irreconcilable such that one implicitly overruled
the other. Absent clearer guidance from the Supreme Court,
we stand by existing precedent that ORS 12.080(1) is not
subject to the discovery rule. Accordingly, we affirm.
                           FACTS1
         Defendant is a builder. In 2007, defendant built the
house at issue in this case. The house was built on specu-
lation, that is, without a buyer under contract. Defendant
received the final occupancy permit in August 2007.
         In April 2008, plaintiff contracted with defendant
to purchase the house for $250,000. The sale closed in May
2008.
         Nine and one-half years later, in October 2017, plain-
tiff learned that the house had not been constructed prop-
erly, resulting in water intrusion and extensive damage. In
    1
      When reviewing a grant of summary judgment, we state the facts from the
summary judgment record in the light most favorable to the nonmoving party.
Wirth v. Sierra Cascade, LLC, 

, 

, rev den, 

 (2010). We therefore state the facts in the light most favorable to plaintiff.
Cite as 

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April 2018, plaintiff brought this action. The operative com-
plaint contains both contract and negligence claims against
defendant. Only the contract claims are at issue on appeal,
so we limit our discussion to those claims. Plaintiff alleged
that the parties’ contract required defendant to deliver to
plaintiff “a habitable residence free of material defects,”
that defendant had breached the contract by delivering a
house with numerous defects, and that defendant had also
breached the implied warranty of habitability. Plaintiff
alleged that all of the defects were “hidden” and that plaintiff
was “entirely unaware” of them until October 2017. Plaintiff
sought $162,000 in damages for repairs to the house.
         Defendant moved for summary judgment. As rele-
vant here, defendant argued that plaintiff’s contract claims
were time-barred by the six-year statute of limitations in
ORS 12.080(1), as the action was filed more than six years
after the alleged breach. Plaintiff opposed the motion, argu-
ing that the discovery rule applies and that there was a
genuine dispute of material fact as to when plaintiff should
have known of the defects. Relying on established case law
that a breach of contract action accrues upon breach, includ-
ing Waxman, 

, the trial court concluded that
the discovery rule does not apply to ORS 12.080(1) and con-
sequently, that plaintiff’s contract claims were time-barred
by the statute of limitations. The court granted summary
judgment for defendant on that basis.2
       Plaintiff appeals the resulting judgment. In his sole
assignment of error, plaintiff challenges the summary judg-
ment ruling on the contract claims.
                                 ANALYSIS
        Summary judgment is to be granted when “the
pleadings, depositions, affidavits, declarations, and admis-
sions on file show that there is no genuine issue as to any
    2
      The trial court did not reach defendant’s alternative argument that the
contract claims were time-barred under ORS 12.115(1), the 10-year statute of
ultimate repose for actions for negligent injury to person or property. Defendant
raises that issue again on appeal, as an alternative basis to affirm the summary
judgment ruling, arguing that ORS 12.115(1) should apply because the contract
claims were essentially identical to the negligence claims. We need not reach that
issue, given our disposition.
414                                                     Romero v. Amburn

material fact and that the moving party is entitled to pre-
vail as a matter of law.” ORCP 47 C. In this case, whether
defendant was entitled to summary judgment turns entirely
on whether ORS 12.080(1)—which imposes a six-year stat-
ute of limitations on most contract claims—is subject to the
discovery rule.
         The discovery rule is “a rule of interpretation of
statutes of limitation that has the effect of tolling the com-
mencement of such statutes under certain circumstances.”
Rice, 

 (internal quotation marks omitted).
When the discovery rule applies, the limitations period runs
“from the earlier of two possible events: (1) the date of the
plaintiff’s actual discovery of injury; or (2) the date when
a person exercising reasonable care should have discovered
the injury, including learning facts that an inquiry would
have disclosed.” 

 (internal quotation marks and emphases
omitted). Whether the discovery rule applies to a particu-
lar statute of limitations is a question of law, specifically
statutory construction, making the key inquiry whether the
legislature intended to incorporate a discovery rule into the
particular statute. Hammond v. Hammond, 

, 

 (2019).
         Here, everyone agrees that the relevant statute of
limitations is ORS 12.080(1). ORS 12.080(1) provides that,
subject to certain exceptions not relevant here, “[a]n action
upon a contract or liability, express or implied * * * shall be
commenced within six years.”3 That means that the action
must be commenced within six years of when it “accrues.”
See ORS 12.010 (“Actions shall only be commenced within
the periods prescribed in this chapter, after the cause of
action shall have accrued, except where a different limita-
tion is prescribed by statute.”).
     3
       ORS 12.080(1) contains exceptions for actions “mentioned in ORS 12.070,
12.110 and 12.135” and “as otherwise provided in ORS 72.7250.” None of those
exceptions are relevant here. See ORS 12.070 (statute of limitations for actions on
court judgments, decrees, and certain sealed instruments); ORS 12.110 (statute
of limitations for actions on assault, battery, false imprisonment, certain per-
sonal injuries, forfeiture, penalty, overtime or premium pay, medical or dental
treatment, and nuclear incidents); ORS 12.135 (statute of repose for actions aris-
ing from the construction, alteration, or repair of real property, or the design,
planning, surveying, architectural, or engineering services for an improvement
to real property); ORS 72.7250 (statute of limitations for actions for breach of a
contract of sale under the Oregon Uniform Commercial Code).
Cite as 

 (2022)                             415

         For more than 50 years, it has been established law
that a breach of contract action accrues at the time of breach.
The earliest decisions in that line of cases sought only to pin
down when a known claim could be brought. In Pierce v.
Pierce, 

, 

 (1936), the court stated,
“Until a payor in a contract defaults, no action may be main-
tained against him on the contract. When default is made,
an action may be brought against the payor any place where
he may be found.” In Weaver et al v. Williams, 

, 

 (1957), the court quoted approvingly from
Williston on Contracts, including the statement, “As soon as
a party to a contract breaks any promise he has made, he
is liable to an action.” (Internal quotation marks omitted.)
The court repeated the same statement in Hollin v. Libby,
McNeill & Libby, 

, 

 (1969).
          By 1972, however, the Supreme Court began speak-
ing expressly in terms of “accrual.” In Seattle-First Nat’l Bk.
v. Ore. Pac. Ind., 

, 

 (1972), the
defendant stipulated to having breached certain contracts
on a particular date, but it denied having stipulated to that
date being when the cause of action accrued. The court
rejected that distinction, stating, “The normal inference is
that the cause of action accrues at the time the breach of
contract occurs.” Twenty-four years later, in Vega v. Farmers
Ins. Co., 

, 295 n 2, 

 (1996), the
court addressed “when an action by an insured to enforce
an insurer’s obligations under the underinsured motorist
portion of an insurance policy” accrues for purposes of ORS
12.080(1). Citing “well-established principles of contract
law,” the court held “that, unless the insurance policy pro-
vides otherwise, the statute of limitations for an action to
enforce an insurer’s contractual obligation to pay UM/UIM
benefits begins to run when the insurer breaches the con-
tract.” 

.
         We have regularly relied on the foregoing line of
authority as establishing that a breach of contract action
accrues at breach, triggering the statute of limitations. See,
e.g., MAT, Inc. v. American Tower Asset Sub, LLC, 

, 

 (2021) (“The statute of limitations on a
claim for breach of contract is six years, and it begins to run
at the time of contract breach.”); Doughton v. Morrow, 255
416                                      Romero v. Amburn

Or App 422, 432, 

, rev den, 

 (2013) (“It
is well settled that a contract claim accrues on breach, and
not when that breach is subsequently discovered.” (Internal
quotation marks and brackets omitted.)); Frakes v. Nay, 

, 

 (2012), rev den, 

(2013) (under ORS 12.080, a contract claim “must be com-
menced within six years of its accrual,” and it “is well set-
tled that a contract claim accrues on breach, and not when
that breach is subsequently discovered” (internal quotation
marks omitted)); Pritchard v. Regence BlueCross BlueShield,

, 

, rev den, 

 (2009)
(“A claim for breach of contract accrues when the contract is
breached.”); Waxman, 

 (“Although ORS
12.010 provides that an action must be commenced within
the applicable period after the cause of action accrues, it
is well settled that a contract claim accrues on breach.”);
Assn. of Unit Owners v. Far West Federal Bank, 

, 

 (1993) (“The statute of limitations
for contract claims is six years. ORS 12.080(1). The cause
of action for breach of contract accrues when the contract is
breached.”); Kantor v. Boise Cascade Corp., 

, 

 (1985), rev den, 

 (1986) (“A cause
of action for breach of contract accrues when the contract is
breached.”).
         Meanwhile, a second line of case law has been
developing in parallel, initially relating to when a medical
malpractice action accrues. In 1964, the Supreme Court
held in Vaughn v. Langmack, 

, 

 (1964), that a cause of action for medical malpractice
accrues at the time of the negligent act, not when the neg-
ligence was or might reasonably have been discovered.
However, only two years later, the court reversed course in
Berry v. Branner, 

, 

 (1966), overrul-
ing Vaughn, and adopting the opposite rule. Under Berry,
a cause of action for medical malpractice accrues when the
negligence was or might reasonably have been discovered.

.
         The discovery rule articulated in Berry was soon
extended to other types of negligence claims. See Moore v.
Mutual of Enumclaw Ins. Co., 

, 

(1993) (stating same and citing cases). Without tracing the
Cite as 

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full evolution of the discovery rule, as it is unnecessary for
present purposes, we jump forward to the Supreme Court’s
2014 decision in Rice. The issue in Rice was whether the
discovery rule applies to ORS 12.080(4). 

. ORS
12.080(4) requires actions “for taking, detaining or injuring
personal property, including an action for the specific recov-
ery thereof, excepting an action mentioned in ORS 12.137,”
to “be commenced within six years.” Because ORS 12.080(4)
does not identify the event that begins the statute running,
it is necessary to look to ORS 12.010, which applies to ORS
chapter 12. 

. ORS 12.010 provides, “Actions
shall only be commenced within the periods prescribed in
this chapter, after the cause of action shall have accrued,
except where a different limitation is prescribed by statute.”
(Emphasis added.) Read together with ORS 12.010, ORS
12.080(4) provides for the statute of limitation to begin run-
ning when the cause of action “ ‘accrue[s]’ within the mean-
ing of ORS 12.010[.]” Rice, 

 (first brackets in
original).
         As for the meaning of “accrues,” the Rice court
looked to Berry, which led it to conclude that the discovery
rule applies to ORS 12.080(4). Rice, 

. The court
summarized each step of its reasoning to reach that conclu-
sion as follows:
      “ORS 12.080(4) provides that ‘[a]n action for taking, detain-
      ing or injuring personal property * * * shall be commenced
      within six years’ but it does not specify when the limitation
      begins to run. ORS 12.010 provides that actions ‘shall only
      be commenced within the periods prescribed in this chap-
      ter, after the cause of action shall have accrued,’ unless a
      different limitation is prescribed. Because a different lim-
      itation is not prescribed in ORS 12.080(4) or elsewhere, the
      six-year limitation begins to run when the cause of action
      accrues. Under such circumstances, a cause of action under
      ORS 12.080(4) ‘accrue[s]’ within the meaning of ORS 12.010,
      ‘at the time [a] plaintiff obtained knowledge, or reasonably
      should have obtained knowledge of the tort committed upon
      her person by [a] defendant.’ Berry, 

.”

         Since Rice was decided, we have applied its reason-
ing to several other statutes of limitations that fall within
418                                         Romero v. Amburn

the purview of ORS 12.010. In Tavtigian-Coburn v. All Star
Custom Homes, LLC, 

, 

(2014), and Goodwin v. Kingsmen Plastering, Inc., 

, 

 (2014), aff’d on other grounds, 

, 

 (2016), we relied on Rice and followed
the same reasoning to hold that the discovery rule applies
to ORS 12.080(3). ORS 12.080(3) requires actions “for waste
or trespass upon or for interference with or injury to any
interest of another in real property, excepting those men-
tioned in ORS 12.050, 12.060, 12.135, 12.137 and 273.241,”
to “be commenced within six years.” In Hammond, 

, which involved an ejectment claim, we
relied on Rice and followed the same reasoning to hold that
the discovery rule applies to ORS 12.050. ORS 12.050 pro-
vides that “[a]n action for the recovery of real property, or for
the recovery of the possession thereof, shall be commenced
within 10 years.” And, in Hayes Oyster Co. v. DEQ, 

, 

 (2021), rev den, 

 (2022),
we relied on Rice and followed the same reasoning to hold
that the discovery rule applies to ORS 12.140, the catch-
all statute of limitations providing that “[a]n action for any
cause not otherwise provided for shall be commenced within
10 years.”
         The present case requires us to consider the rela-
tionship between the Vega/Waxman line of cases and the
Berry/Rice line. Relatedly, we must determine whether our
decision in Waxman is compatible with Rice or, conversely,
so irreconcilable with its reasoning as to drive the conclu-
sion that Rice implicitly overruled Waxman.
         In Waxman, 

, the defendant built
four rowhouses in the mid-1990s and sold one to a couple
who, in 2001, sold it to the plaintiffs. After various construc-
tion defects came to light, the plaintiffs brought an action
against the defendant, including contract claims. 

 The
trial court dismissed the contract claims as barred by the
six-year statute of limitations in ORS 12.080(1). 

.
The trial court rejected the plaintiffs’ argument that the
discovery rule applies to ORS 12.080(1). 

 We affirmed on
appeal. 

. We began from the premise that ORS
12.080(1) and ORS 12.010 must be read together, such that
the six-year limitations period begins to run when the cause
Cite as 

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of action “accrues.” Id. at 511-12. However, we disagreed with
the plaintiffs that we should look to Berry for the meaning of
“accrues.” Id. at 511. We instead looked to Vega and the “well
settled” principle “that a contract claim accrues on breach”
except in cases of fraudulent concealment. Id. at 512. We
explained that, in our view, “Berry simply does not stand for
the proposition that a discovery rule applies to all actions for
which ORS 12.010 is implicated.” Id. at 511-12.
         The crux of plaintiff’s argument in the present case
is that Berry actually does stand for the proposition that a
discovery rule applies to all actions for which ORS 12.010 is
implicated, and that Rice clarified that point, thus implicitly
overruling Waxman. In plaintiff’s view, under the reason-
ing of Rice, any statute of limitations that falls within the
purview of ORS 12.010, and thus begins to run when the
cause of action “accrues,” is subject to Berry’s definition of
“accrues,” i.e., the discovery rule. That would include ORS
12.080(1).
         Defendant disagrees. Defendant emphasizes that
Berry and Rice involved tort claims—specifically, Berry
involved medical malpractice, and Rice involved conver-
sion and replevin—and argues that, in deciding Rice, the
Supreme Court did not intend to overrule Waxman, let alone
the entire Vega/Waxman line of cases.
         Neither party fully engages with the other par-
ty’s argument. Plaintiff dismisses the holding of Waxman
as inconsistent with the reasoning of Rice, but he does not
address Vega (the authority on which Waxman relied), which
itself involved ORS 12.080(1). See Vega, 

,
295 n 2. Meanwhile, defendant does not really address the
specific reasoning of Rice or chart a path to truly reconcile
the Vega/Waxman line of cases with Rice.
         Ultimately, however, it is plaintiff’s obligation as the
appellant to persuade us that the Supreme Court implicitly
overruled Waxman, and we are not so persuaded. There is
language in Rice that could be read to support plaintiff’s
position. For example, at one point, the court states, “We
conclude, following the reasoning of Berry, that a discovery
rule applies to ORS 12.080(4) because that statute falls under
the purview of ORS 12.010.” Rice, 

 (emphasis
420                                                      Romero v. Amburn

added). At another point, the court seemingly adopts Berry’s
definition of “accrues” as the meaning of “accrues” in ORS
12.010. See 

 (“[A] cause of action under ORS 12.080(4)
‘accrue[s]’ within the meaning of ORS 12.010, ‘at the time
[a] plaintiff obtained knowledge, or reasonably should have
obtained knowledge of the tort committed upon her person by
[a] defendant.’ Berry, 

.” (First brackets added.)).
         On closer scrutiny, however, we are not persuaded
that Rice goes as far as plaintiff contends. The fact is that
Rice did not involve a contract action. There is a long line
of authority from the Supreme Court and this court that a
contract action “accrues” at breach, including Vega, which
specifically involved ORS 12.080(1). No one advocated for a
discovery rule in Vega or many of the cases in the Vega/
Waxman line, but the fact remains that those cases say over
and over that a contract action accrues at breach. Holding
otherwise would be a major shift in contract law.
         It is also important to recognize that Vega, Waxman,
and other cases in the Vega/Waxman line specifically use the
term “accrues.” Under the reasoning of Rice, there is no ques-
tion that the limitations period in ORS 12.080(1) begins to
run when the contract action “accrues.” See Rice, 

 (explaining that, because ORS 12.080(4) does not specify
when the six-year limitation period begins to run, the court
looks to ORS 12.010, and it follows that the “the six-year lim-
itation begins to run when the cause of action accrues”). If
the Vega/Waxman line of cases was premised on ORS 12.010
not applying or something other than accrual triggering the
limitations period to begin running, we might be compelled
to conclude that Rice overruled them. But that is not the
case. Waxman accepted the premise that ORS 12.080(1) and
ORS 12.010 must be read together, such that the limitations
period begins to run when the contract action “accrues,”
and it relied on Vega as establishing that a contract action
“accrues” at breach. Waxman, 

.
         We are therefore faced with two separate lines of
case law, each addressing when particular types of actions
“accrue.” 4 We are not persuaded that those two lines of case
    4
      Neither party mentions Moore. That case involved an action for breach of
contract, specifically a fire insurance policy. 

. The applicable statute
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law cannot coexist. That is particularly so in the absence of
efforts by the parties to put the two lines of case law into
sufficient historical context to make clear whether they
are actually in tension or not. There is potential tension.
We do not foreclose the possibility that the Supreme Court
may see fit to clarify the law in a way that results in over-
ruling Waxman. However, we believe that Berry and Rice
allow room for at least the possibility that contract actions
“accrue” at the time of breach, as the Vega/Waxman line
of cases states, even if most other types of actions “accrue”
when the plaintiff knew or reasonably should have known of
the wrong, under the reasoning of Rice. As long as there is
a legitimate possibility of reconciling the two lines of cases,
we cannot say that one implicitly overruled the other.5
         Accordingly, we reaffirm our holding in Waxman
that the statute of limitations in ORS 12.080(1) is not sub-
ject to the discovery rule. It follows that plaintiffs’ contract
claims are time-barred under ORS 12.080(1). The trial court
did not err in granting summary judgment for defendant.
           Affirmed.

of limitations required the action to be “ ‘commenced within twelve months next
after inception of the loss.’ ” 

 at 238 (quoting ORS 742.240 (1991)). The primary
issue on review was whether the defendant had waived the statute of limitations;
the Supreme Court concluded that there was no evidence of waiver. 

. The court then considered the plaintiff’s alternative argument, based on
Berry, that the discovery rule applied. 

. In rejecting that argument, the
court distinguished Berry and other negligence cases on the basis that they “fell
within the purview of ORS 12.010” and that the use of the term “accrued” in ORS
12.010 “provided a basis for recognizing a discovery rule,” whereas the limita-
tions period in ORS 742.240 was triggered by the “inception of loss,” which “does
not provide an equivalent basis for recognizing a discovery rule.” 

.
The court went on to explain that the legislative history showed that a discovery
rule was not intended with respect to ORS 742.240 and that, in any event, “the
phrase in question is not amenable to a discovery rule as a matter of English.”

. Moore gives us some pause, given its reasoning, so we acknowledge
it. However, Vega specifically addressed when a contract action “accrued” for
purposes of the statute of limitations in ORS 12.080(1), and the Supreme Court
decided Vega three years after Moore. On the whole, Moore does not persuade us
to read Vega more narrowly than we did in Waxman.
     5
       We note that, if Waxman stood alone, we would have authority to reconsider
it, even if Rice did not strictly overrule it, because Waxman is a decision of this
court. We do not have that type of authority with respect to Supreme Court cases
such as Vega, which are binding on us. The practical effect of the distinction is
that an appellant must persuade us that there is no possible way to reconcile two
Supreme Court cases before we will say that one implicitly overruled the other.