{"id":891961,"date":"2017-04-13T11:14:10","date_gmt":"2017-04-13T17:14:10","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=891961"},"modified":"2017-04-13T11:38:33","modified_gmt":"2017-04-13T17:38:33","slug":"recent-developments-interpretation-californias-right-repair-act","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/recent-developments-interpretation-californias-right-repair-act\/","title":{"rendered":"Recent Developments in the Interpretation of California\u2019s Right to Repair Act"},"content":{"rendered":"

Kevin Meade, Esq. and Scott Halberstadt, Esq. | The Amin Law Group<\/a> | April 10, 2017<\/p>\n

<\/a>
Kevin Meade<\/figcaption><\/figure>\n

While we await the California Supreme Court\u2019s opinion in the matter of McMillin Albany, LLC v. Superior Court, <\/em>239 Cal.App.4th<\/sup> 1132 (2015) (hereinafter \u201cMcMillin<\/em>\u201d)[1]<\/a>, we have received additional guidance regarding the application and interpretation of California\u2019s Right to Repair Act, commonly known as SB800 (California Civil Code <\/em>\u00a7 895 et seq.<\/em>) (hereinafter the \u201cAct\u201d).\u00a0 The following provides a summary of the most recent published cases related to the Act.<\/p>\n

 <\/p>\n

Another Blow to Liberty Mutual – Elliott Homes, Inc. v. Superior Court<\/em><\/u><\/strong><\/p>\n

Since the Fourth Appellate District issued its opinion in the Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC<\/em>, 219 Cal.App.4th<\/sup> 98 (2013) (hereinafter \u201cLiberty Mutual<\/em>\u201d), it has not been unusual for plaintiffs to ignore the pre-litigation notice and non-adversarial pre-litigation procedures contained in the Act, thereby depriving homebuilders of the benefits associated with that notice and procedures.\u00a0 While it has been The Amin Law Group\u2019s experience that SoCal trial courts have, despite the Liberty Mutual <\/em>decision, been receptive to motions to stay\/compel pre-litigation procedures, such was not the case in other parts of CA.<\/p>\n

 <\/p>\n

In Elliott Homes, Inc. v. Superior Court<\/em>, 6 Cal.App.5th<\/sup> 333 (2016) (hereinafter \u201cElliott Homes<\/em>\u201d), the Superior Court of Sacramento County (hereinafter the \u201cSuperior Court\u201d), denied the homebuilder\u2019s motion to stay even though the plaintiffs had not complied with the Acts pre-litigation procedures.\u00a0 Consistent with McMillin<\/em>, The Superior Court reasoned that, relying on Liberty Mutual<\/em>, the pre-litigation procedures are only mandatory where the homeowners plead statutory causes of action under the Act and as the homeowners\u2019 causes of action were limited to those lying in the common law (i.e. negligence and\/or strict liability), the Act\u2019s prelitigation procedures did not have to be followed.<\/p>\n

 <\/p>\n

The homebuilder sought a writ of mandate even though the Courts of Appeal are reluctant to grant such a writ.\u00a0 Nonetheless, the Third Appellate District took up the writ determining that the homebuilder did not have an adequate remedy unless review was granted.\u00a0 Contrary to the Fourth Appellate District\u2019s analysis in Liberty Mutual<\/em>, after analyzing the Act\u2019s legislative history, the Third District held that the \u201cLegislature intended that all claims arising out of deficiencies in residential construction\u2026be subject to the standards and requirements of the Act.\u201d[2]<\/a>\u00a0 The Elliott Homes<\/em> court refused to follow Liberty Mutual<\/em>, finding that the Act applied to all<\/u> claims arising out of alleged construction defects in residential construction.<\/p>\n

 <\/p>\n

With the Third Appellate District\u2019s decision in Elliott Homes<\/em>, two of the six appellate districts in California have issued opinions directly contradictory to Liberty Mutual<\/em>.\u00a0 What should be even more troubling for the proponents of Liberty Mutual<\/em>, is that the McMillin <\/em>and Elliott <\/em>opinions are, arguably more clear, concise and lack the internal contradictions that plague the Liberty Mutual <\/em>opinion.\u00a0 While the California Supreme Court has not yet issued its opinion in McMillin<\/em>, the Elliott Homes <\/em>decision is a source of optimism to those in favor of overturning Liberty Mutual<\/em>.<\/p>\n

Good News for Material Manufacturers, Material Suppliers and Subcontractors \u2013 Acqua Vista Homeowners Assn. v. MWI, Inc.<\/em><\/u><\/strong><\/p>\n

While the McMillin <\/em>and Elliott <\/em>decisions were already a blow to the construction defect plaintiffs\u2019 bar, the Fourth Appellate District\u2019s recent opinion in Acqua Vista Homeowners Assn. v. MWI, Inc.<\/em>, 7 Cal.App.5th<\/sup> 1129 (2017) (hereinafter \u201cAcqua Vista<\/em>\u201d) could prove to be an even bigger blow.\u00a0 In Acqua Vista<\/em> the CA Ct. of Appeals was asked to determine whether the Act requires homeowners suing a material supplier under the Act to go beyond merely proving a violation of the Act\u2019s standards and prove that the material supplier \u201ccaused in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract.\u201d[3]<\/a>\u00a0 In other words, does the Act require that a plaintiff meet the negligence standard for claims against a material supplier?<\/p>\n

 <\/p>\n

The Acqua Vista <\/em>court determined that the Legislature, for the purposes of liability under the Act, did not intend to place a material supplier \u201con par\u201d with a homebuilder and a plaintiff could not simply rely on a strict liability standard as against non-homebuilder defendants, including material suppliers.\u00a0 Instead, plaintiffs have the burden of proof to show that a material supplier failed to use reasonable care to prevent foreseeable harm.<\/p>\n

 <\/p>\n

You may be asking, \u201cdoes Acqua Vista <\/em>do abrogate strict liability for material suppliers in construction defect actions?\u201d\u00a0 The answer is unequivocally \u201cNo!\u201d\u00a0 Plaintiffs can still maintain strict liability claims, but only if they can show resulting damage.\u00a0 In Acqua Vista, <\/em>the plaintiff abandoned its strict liability cause of action on the eve of trial \u2013 likely because it could not show resultant damage \u2013 and sought to rely solely upon violations of the Act\u2019s standards as the basis for recovery and failed to produce any evidence that the material supplier failed to use reasonable care to prevent foreseeable harm.<\/p>\n

 <\/p>\n

While Acqua Vista<\/em> involved a material supplier \u2013 specifically a supplier of cast iron pipe manufactured in China (a source of many defect claims in high-rise condo cases in CA) \u2013 it is likely that the decision is applicable to material manufacturers and, potentially, subcontractors.[4]<\/a>\u00a0 While a homeowner can still maintain a strict liability cause of action against material manufacturers and material suppliers if he\/she can show resultant damage<\/em><\/strong>, that homeowner will need to show more than simply a violation of Act\u2019s standard(s) against material manufacturers, material suppliers and\/or subcontractors.\u00a0 To prevail on a cause of action for violation of the Act \u2013 for which no showing of resultant damage is required \u2013 plaintiffs bear the burden to prove that the violation(s) of the Act were the result of a failure to use reasonable care to prevent foreseeable harm.<\/p>\n

 <\/p>\n

As homebuilders continue to be potentially strictly liable for defective construction of mass produced residential housing (not only under the Act, but also under Kriegler v. Eichler Homes, Inc., <\/em>269 Cal.App.2d 224 (1969)), you may be wondering if or how the Acqua Vista <\/em>decision will affect a homebuilder\u2019s ability to prosecute a cross-complaint against material manufacturers, material suppliers and\/or subcontractors.\u00a0 In Greystone Homes, Inc. v. Midtec, Inc., <\/em>168 Cal.App.4th<\/sup> 1194 (2008), a case cited extensively in Acqua Vista<\/em>, the Fourth Appellate District determined that homebuilders, whose indemnity claims are derivative of the homeowner\u2019s loss, can seek reimbursement for damages resulting from a manufacturer\/supplier\u2019s violation of the Act \u2013 regardless of the existence of resultant damages \u2013 upon a showing that the violation of the Act was a result of the manufacturer\/supplier\u2019s negligence or breach of contract.<\/p>\n

Following Acqua Vista<\/em> it is now clear that, in order to prevail against material manufacturers and material suppliers,<\/strong> both plaintiffs and homebuilders cannot simply rely upon a violation of one of the standards of the Act.\u00a0 Instead, they must not only prove the existence of a violation of the Act, but also that the violation resulted from the manufacturer\/supplier\u2019s negligence or breach of contract \u2013 a significant increase in the burden of proof.<\/p>\n

[1]<\/a> Whereas, in the earlier Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC<\/em>, 219 Cal.App.4th<\/sup> 98 (2013) (\u201cLiberty Mutual<\/em>\u201d), the Fourth Appellate District determined that California\u2019s Right to Repair Act (SB800, Civil Code <\/em>\u00a7 895 et seq.<\/em>) was not<\/em><\/strong> the exclusive remedy available to a plaintiff in residential construction defect litigation, in McMillin Albany, LLC v. Superior Court <\/em>(\u201cMcMillin<\/em>\u201d) the Fifth Appellate District determined that the only <\/em><\/strong>remedy available to plaintiffs in such cases was the Right to Repair Act.\u00a0 The California Supreme Court must now determine whether Liberty Mutual <\/em>or McMillin <\/em>will control.<\/p>\n

[2]<\/a> The only exception to that general rule are those claims specifically excluded from the Act in California Civil Code <\/em>\u00a7 943(a) \u2013 i.e. breach of contract, fraud, personal injury or violation of a statute.<\/p>\n

 <\/p>\n

[3]<\/a> California Civil Code <\/em>\u00a7 936.<\/p>\n

[4]<\/a> Generally, subcontractors are not strictly liable for defective products that they furnish and install.\u00a0 Monte Vista Development Corp. v. Superior Court, <\/em>225 Cal.App.3d 1681 (1991).\u00a0 Nonetheless, there are instances where California courts have imposed strict liability on subcontractors when: (1) the subcontractor both manufactured and installed the product (Jimenez v. Superior Court, <\/em>29 Cal.4th<\/sup> 473 (2002)); and (2) when the purchase of a product is the \u201cprimary objective or essence of the transaction\u201d (Hernandezcueva v. E.F. Brady Company, Inc., <\/em>243 Cal.App.4th<\/sup> 249 (2016)).<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Kevin Meade, Esq. and Scott Halberstadt, Esq. | The Amin Law Group | April 10, 2017 While we await the California Supreme Court\u2019s opinion in the matter of McMillin Albany, LLC v. Superior Court, 239 Cal.App.4th 1132 (2015) (hereinafter \u201cMcMillin\u201d)[1], we have received additional guidance regarding the application and interpretation of California\u2019s Right to Repair… Continue reading Recent Developments in the Interpretation of California\u2019s Right to Repair Act<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4],"tags":[9895,88,434,9983],"class_list":["post-891961","post","type-post","status-publish","format-standard","hentry","category-construction-defects","tag-advise-consult","tag-california","tag-right-to-repair-act","tag-sb800","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nRecent Developments in the Interpretation of California\u2019s Right to Repair Act - 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