DJC News: A Conversation with Chris Tingey
October 26th, 2007
Author: Libby Tucker
A Conversation with Chris Tingey
Posted: Friday, October 26, 2007
Homeowners in the Quail Hollow community last week filed a $3.5 million lawsuit in Washington County Circuit Court against the town houses’ builder and developer, Brownstone Homes.
It’s the second suit the owners have brought against the developer for alleged construction defects in the 93-unit subdivision.
The Washington County Circuit Court in 2006 dismissed the homeowners’ association’s 2006 suit, saying the association didn’t have the right to sue the builder. The developer argued that town houses aren’t commonly owned, unlike condominiums, which share walls on all sides.
The Oregon Court of Appeals agreed, and the state Supreme Court declined to hear the case.
The argument is now known by some lawyers as the “Quail Hollow argument,” and it’s used as a stall tactic in construction claims cases, said Chris Tingey, a Portland attorney with VF Law representing the homeowners’ association.
But the tactic only delays the inevitable, he said. The Quail Hollow homeowners have gone back and sued the builder for the same defects – but this time the owners are named individually in the same old lawsuit.
DJC: I did a search for Quail Hollow online and it looks like the homeowners sued this builder before. Is this a new complaint, or is the old case back?
Chris Tingey: The case has not been resolved, and I can’t go into a lot of detail because it’s not resolved. Go look at the case history. This is a case that started at the trial court, went to the court of appeals and then to the Oregon Supreme Court. And it’s kind of back, yeah.
DJC: The new case lists “breach of contract, breach of express warranty, and fraud” as the causes for the lawsuit, and the one filed two years ago lists construction defects. What’s the difference?
Tingey: The principal issue in the case is the homeowners’ association wasn’t the right party to bring the lawsuit because they didn’t own the property that was involved. Nobody disputed they had the right to maintain and repair it, but they didn’t own it so the trial court said, “You can’t bring the suit,” and the appellate agreed with that. It went to the Supreme Court, and they ultimately decided they had remorse, and shouldn’t (have agreed to take the case).
DJC: So why can you bring another suit?
Tingey: The HOA is suing again, but this time a large majority of the owners have given their rights to the HOA.
It’s a very technical issue that didn’t go to the merits (of the case). It’s very frustrating because it doesn’t help the owners solve the problem.
DJC: I know the construction claims task force, in addressing the rising cost of construction claims, didn’t address tort reform. Has there been any attempt to fix this particular loophole?
Tingey: The Legislature amended the (condominium) statute to try to take care of the problem in this last session. The Legislature tried to clarify that an association has the authority to sue on property it maintains even if it doesn’t own it. On Sept. 27 the law went into effect.
DJC: So how will existing cases be affected by the revised law?
Tingey: It’s unclear. There are a lot of associations in litigation right now affected by it, and part of the problem I’ve experienced is that the Quail Hollow case dealt with a certain type of community (town houses) that’s not technically condominiums. Some judges are extrapolating the reasoning in Quail Hollow to condos. It’s just making it more difficult for owners to protect their rights. The purpose of the HOA is to allow the collective group to preserve their interests.
DJC: So if all the homeowners need to do is sign over their rights to the association and the case proceeds, why does a builder’s attorney use this argument?
Tingey: They can use it as a stall tactic. They can make the association go through a costly process to get all the owners to sign off on it, and make people go through hoops.
DJC: Why didn’t you apply the new law in your original case?
Tingey: By that time there wasn’t time. The legislative change has affected it somewhat, but really the Quail decision is so new, we’ll have to see how courts will treat it.
DJC: What will the homeowners do in the meantime?
Tingey: At Quail we’re doing what we can to preserve their rights
DJC: The Quail case gives me a hint, but in general, what does the legal landscape for construction claims look like now?
Tingey: It’s a big mess. It’s still a very big and highly litigated area right now. I know our firm has a number of cases out there. I don’t think it’s going to go away any time soon. We’re still on the tail end of the building boom, the real estate market’s slowed down, but we’re behind it because it takes years sometimes for problems to show up.
© 2007 DJC News
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