Liberty Oaks Homeowners Assn. v. Liberty Oaks, LLC

In a construction defect claim, the subcontractors were not liable as a third party respondent under ORCP 22 C, where the subcontractors’ liability was contingent upon the developers’ liability to the plaintiff.

Liberty Oaks Homeowners Association (HOA) sued original appellants, including Liberty Oaks, LLC and the project developers, for alleged construction defects in the Liberty Oaks townhomes. The developers filed a third-party complaint under ORCP 22 C against subcontractors who worked on the townhomes. The trial court granted summary judgment to the developers against the HOA and to the subcontractors against the developers on the third-party claim because the HOA’s claims, and therefore the developers’ claims, were barred by the statute of limitations; both claims were dismissed under separate judgments. The HOA appealed, but settled with the developers and dismissed its appeal against the developers, leaving the trial court’s dismissal with prejudice in place. In the settlement, the developers assigned their rights in the appeal to the HOA. The HOA continued its appeal of the dismissal of the third-party complaint. The subcontractors argued that the appeal was moot because the subcontractors’ liability was contingent upon the developers being found liable to the HOA. The Court held the appeal was moot because the judgment dismissing the claim by the HOA against the developers established as a matter of law that the developers were not liable, and therefore the subcontractors were not liable. Appeal dismissed with costs allowed, payable by the HOA.