Construction Defect Class Action Allowed to Proceed Against Homebuilders

Advise & Consult, Inc. | September 1, 2015

This ruling by the California Court of Appeal, Fourth District, could have lasting and long reaching effects on construction defect claims in California as well as on the construction industry as a whole in the state of California.  This decision has reinstated a class action construction defects claim against a national homebuilder and in doing so, reversing a lower court decision which has stricken class allegations from the plaintiffs complaint and reviving the class action.

California has often been viewed as a beneficial state to file state and federal class action lawsuits by the plaintiff’s bar.  Construction defect claims have in the past been viewed as unsuitable for class action, due the believed individual facts that must be determined on a house-by-house basis, but were at times, for case management purposes, pooled together.  The court denied this argument from the defense:

Despite defendant’s attempts to confuse the issue, there is nothing here based on the allegations of the complaint that suggests that each house is so unique that common facts, such as liability and defenses, cannot be considered as a class.

By allowing class actions, the potential for liability for even relatively minor construction defect damage claims as they are distributed among large classes of plaintiffs, could have a serious ripple effect.  It essentially allows the class action to now proceed to discovery and then an evidentiary hearing to determine certification of a class.  As a result, this could open the flood gates of class claims against homebuilders and, potentially, other service providers employed in the homebuilding industry, due to alleged construction defects in California residential development and construction projects.

This is an unpublished decision and, as of right now, it is not made known whether this will be appealed to the California Supreme court.

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