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Montara Owners Association v. La Noue Development, LLC

Summarized by: 

Date Filed: 12-04-2013
Case #: A140771
Wollheim, J., for the Court; Schuman, P.J.; and Nakamoto, J., concurring.
Full Text Opinion: http://www.publications.ojd.state.or.us/docs/A140771.pdf

Contract Law: A jury instruction based on diminished value must only be given when evidence in the record allows a jury to reach a conclusion as to the diminished value, and an indemnity clause that offends ORS 30.140(1) because it requires a subcontractor to indemnify a contractor for the contractor's own negligence remains enforceable to the extent that it also requires the subcontractor to indemnify the contractor for the subcontractor's negligence.

General contractor and developer of a condominium development (General Contractor) appealed the limited judgment that awarded damages for construction defects attributable to a subcontractor.  General Contractor argued that the trial court erred by (1) granting a jury instruction based on the diminished value of the properties was error, (2) granting a directed verdict that limited the amount of damages it could seek on its breach of contract claim, (3) concluding that the parties' indemnification agreement was entirely void, (4) denying a new trial based on newly discovered evidence, and (5) denying General Contractor’s claim for attorney fees and costs as consequential damages on its breach of contract claim. The Court held the trial court erred by giving a jury instruction based on diminished value of the properties because there was no evidence in the record that would allow a jury to reach any conclusion as to the diminished value of the condominiums; by limiting the damages the plaintiff could recover; and (3) by finding the indemnity clause void, because an indemnity clause that offends ORS 30.140(1) by requiring a subcontractor to indemnify a contractor for the contractor's own negligence remains enforceable to the extent that it also requires the subcontractor to indemnify the contractor for the subcontractor's negligence. The Court rejected the other assignments of error.  Reversed and remanded on claims for breach of contract and indemnity; otherwise affirmed. Motion for remand denied.