Securities-Intermountain, Inc. v. Sunset Fuel Co.

594 P.2d 1307, 40 Or. App. 291, 1979 Ore. App. LEXIS 2124
CourtCourt of Appeals of Oregon
DecidedMay 14, 1979
DocketA7605 06171, CA 11004
StatusPublished
Cited by7 cases

This text of 594 P.2d 1307 (Securities-Intermountain, Inc. v. Sunset Fuel Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Securities-Intermountain, Inc. v. Sunset Fuel Co., 594 P.2d 1307, 40 Or. App. 291, 1979 Ore. App. LEXIS 2124 (Or. Ct. App. 1979).

Opinions

[293]*293JOSEPH, J.

Securities-Intermountain, Inc., brought this action to recover damages from a subcontractor and an architect who had contracted in writing with plaintiff’s assignors to provide specific services in the construction of an apartment complex. The assignors were general contractors, and plaintiff was the mortgagee. The trial court allowed defendants’ motions for summary judgment on the ground that the action was barred by the statute of limitations. Plaintiff appeals.

ORS 12.135(1) provides:

"An action to recover damages for injuries to a person or to property arising from another person having performed the construction, alteration or repair of any improvement to real property or the supervision or inspection thereof, or from such other person having furnished the design, planning, surveying, architectural or engineering services for such improvement, shall be commenced within two years from the date of such injury to the person or property; provided that such action shall be commenced within 10 years from substantial completion of such construction, alteration or repair of the improvement to real property.”

This action was brought more than two, but less than six years after defendants last rendered services. The parties stipulated that plaintiff began to suffer damages more than two years prior to the commencement of this action. Plaintiff argues that its action was for breach of contract (for which the statute of limitations is ORS 12.080(1)), and that ORS 12.135(1) applies only to tort actions.1 Defendants argue that ORS 12.135(1) was intended to apply to contract actions as well as torts. They also argue that, although the action was pleaded in form as arising from the contract, the "gravamen” was tort, and therefore a two-year limitation period should apply, whether or not ORS 12.135(1) applies to contract actions.

[294]*294The material substance of the pleadings are set out in the margin.2 The fact that the causes of action were [295]*295pled in form as contract actions does not determine their nature for statute of limitations purposes. Lindemeier v. Walker, 272 Or 682, 538 P2d 1266 (1975); Bales for Food v. Poole, 246 Or 253, 424 P2d 892 (1967); Dowell v. Mossberg, 226 Or 173, 355 P2d 624 (1961); see also Ashley v. Fletcher, 275 Or 405, 550 P2d 1385 (1976). As the court noted in Lindemeier:

"[I]t is the gravamen or the predominant characteristic of the action, not plaintiffs election, which governs whether the action is one in contract or in tort.” 272 Or at 685.

In that case the court summarized its holdings in Dowell and Bales for Food as follows:

"In Dowell v. Mossberg, 226 Or 173, 355 P2d 624, 359 P2d 541 (1961), a malpractice case against a physician, plaintiff alleged a cause of action in contract in order to avoid the tort statute of limitations. We held that the implied contract between a patient and a physician is a matter of inducement and not the contractual relationship which gives rise to a cause of action of malpractice. Basically, a malpractice action sounds in tort. Failure to exercise due care in the treatment of a patient is a breach of a legal duty which arises, not out of contract, but out of the relationship of physician and patient. Dowell v. Mossberg, supra, at 190.
[296]*296"We followed the same rule in Bales for Food v. Poole, 246 Or 253, 424 P2d 892 (1967), a malpractice action against an engineer-architect for failure to properly prepare the plans for a shopping center. The complaint there alleged an agreement between plaintiff and defendant, which agreement defendant breached by failing to exercise due care in drafting the plans and supervising the construction. Plaintiff contended that he alleged a cause of action in contract and that the six-year statute of limitations, ORS 12.080, applied. We held that the gravamen of plaintiffs cause of action sounded in tort and the two-year statute applied. The substance of the opinion in Bales is clearly that whether the action is in contract or in tort must be determined on the basis of the predominant characteristic of the action and, further, that the time within which actions must be commenced cannot depend upon the form in which the action is brought.” 272 Or at 683-84.

The first particular of the first cause of action against Sunset Fuel is that it failed to provide the required mechanical details and drawings of the heating system. That appears, on its face, to be the type of allegation which must be contractual. The predominant characteristic is a total failure to perform a specific duty which was established solely by contract and which does not fall within any standard of care imposed by law to govern any contractual undertakings. The prayer for damages,3 however, contains nothing specifically relating directly to the failure to furnish the drawings. While that was not fatal to the cause of action, it does reveal that the gravamen of the cause of action is actually the unworkmanlike manner in which the system was designed.

[297]*297Given the alleged inadequacy of the design, the only conceivable harms that could have resulted to plaintiff from the failure of Sunset Fuel to deliver the drawings were that plaintiff was not able to detect the design inadequacies earlier and that the lack of drawings describing what Sunset Fuel had done may have made it more difficult for the necessary corrections to be made. Both of those possible types of damage, however, are incidental to the design inadequacies. We conclude that the gravamen of the first cause of action is contained in the second particular, i.e., that the system was designed in an unworkmanlike manner, and if completed as designed it would not meet FHA or any reasonable standards. That is tort. Summary judgment was properly granted for defendant Sunset Fuel on that cause of action.

As a second cause of action against Sunset Fuel, plaintiff alleged that Sunset Fuel "fail[ed] to complete the heating system, in that it was never made operational.”4

Although the complaint on its face contained a claim of damages consistent with a cause of action for breach of contract and the rules long applicable under Hadley v. Baxendale, 156 Eng Rep 145 (1845), and the myriad cases since, we are persuaded that the nature of the non-performance alleged is so closely akin to the other causes pleaded and to the claims reviewed and held tortious in Bales For Food, supra, and the other cases cited supra, page 2, that we are constrained to say that the gravamen of the second cause of action against Sunset Fuel is tort. Summary judgment was properly allowed.

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Securities-Intermountain, Inc. v. Sunset Fuel Co.
594 P.2d 1307 (Court of Appeals of Oregon, 1979)

Cite This Page — Counsel Stack

Bluebook (online)
594 P.2d 1307, 40 Or. App. 291, 1979 Ore. App. LEXIS 2124, Counsel Stack Legal Research, https://law.counselstack.com/opinion/securities-intermountain-inc-v-sunset-fuel-co-orctapp-1979.