September 13, 2013
A recent state appellate court ruling that California’s Right to Repair Act is not the exclusive remedy for homeowners for actual damages resulting from construction defects will increase homeowner suits over defective construction, predicts David Frenznic, an attorney with the Sacramento law firm Wilke, Fleury, Hoffelt, Gould & Birney LLP.
Although the issues were raised in the context of a subrogation action in which an insurance carrier sought to recoup from a developer relocation expenses it paid a homeowner, the decision has wide-ranging implications, he says.
“We anticipate an increase in residential construction defect litigation in response to this ruling,” says Mr. Frenznick, a construction defect lawyer at Wilke Fleury who represents both homeowners and developers.
In its ruling on Aug. 28, the California 4th District Court of Appeal put to rest the construction industry’s claim that Right to Repair Act eliminated many common law-based construction defect theories favorable to homeowners, including strict liability, and that it substituted new and much shorter statutes of limitations, he says.
Enacted in 2002, the law only recently became the subject of appellate review, due in part to the fact that its application was limited to homes sold after Jan. 1, 2003.
The court concluded that the law was never intended to, and does not, establish exclusive remedies for claims for actual damages for construction defects.
“In effect, the court held that homeowners who suffer actual damages as a result of construction defects have a choice of remedies,” says Mr. Frenznick. “The ruling makes clear that common law claims are still governed by the longer statutes of limitations, up to 10 years for latent construction defects.”