PIH Beaverton, LLC v. Super One, Inc.

Posting and filing a completion notice pursuant to ORS 87.045 does not necessarily establish that the owner has accepted construction of the improvement as complete for occupation as required by ORS 12.135, but will be considered along with evidence that must demonstrate written consent or assent to construction as sufficiently complete for its intended use or occupancy; ORS 12.135 will only be satisfied by establishing the date on which the construction was fully complete, not the date on which it was sufficiently complete for its intended use or occupancy.

Super One, Inc. and various subcontractors (Super One) entered into an agreement with VIP’s Industries, Inc. and VIP’s Motor Inns, Inc. (VIP’s) to build a hotel. On or about February 13, 1997, VIP’s posted a completion notice, obtained a certificate for temporary occupancy and began accepting paying guests. Super One continued to perform construction work. The county issued a certificate of final occupancy on September 24, 1997. After VIP’s sold the property in 2006, the new owner noticed defects and filed suit against Super One on May 23, 2007. The trial court granted Super One’s motion for summary judgment because VIP’s had accepted substantial completion of construction when they opened for business. On appeal, the Court of Appeals held that the trial court erred in granting summary judgment because the posting of the notice of completion did not qualify as ORS 12.135 written acceptance, and that in the absence of written acceptance, ORS 12.135 requires evidence of an owner’s approval of fully complete construction. The Court held that posting of written notice was only evidence of the owner’s taking responsibility for the use and maintenance of that portion which is sufficiently complete for its intended use and occupancy, and does not establish written notice under ORS 12.135. The Court also held that where written notice is lacking, Super One would have to show evidence of the date of full completion to establish the date on which the statute began to run, giving rise to a material question of fact regarding the date of VIP’s acceptance. The Court of Appeals decision was affirmed, the trial court judgment was reversed, and the case remanded to the trial court for further proceedings.