Smith v. Superior Court

Opinion

TODD, J.

Bonita Park Homeowners Association (Association), a nonprofit corporation, filed an action on January 21, 1986, against Bonita Park developer McMillin Construction Company. The Association sought damages for latent construction defects in the condominium homes. Upon a motion for summary adjudication the court found the Association failed to timely file suit before 10 years after recordation of valid notices of completion, as required by Code of Civil Procedure section 337.15, subdivision (g) (2).

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All causes of action except the fraud cause of action were time-barred. McMillin recorded the notices of completion on February 25, 1974, for buildings one through eight and on April 4, 1974, for buildings nine through twelve.

[953]

On April 27, 1987, the Association then filed an action for breach of fiduciary duty and negligence against its board of directors and individual directors, including former board president Don Smith (Smith). The Association alleged the board allowed the statute of limitations to run, barring recovery for damages to the common areas. Smith moved to adjudicate the issue “[the Association’s] action for damage to buildings 1-12 of the Bonita Park Condominium Project is conclusively barred by the controlling three-year statute of limitations provided in the Code of Civil Procedure section 359.[

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] ” Smith argued the Association admitted in the complaint the 10-year statutory limitations period expired on April 4, 1984, thus the liability was “created” on that date, and any action against him must have been brought by April 4, 1987. The court denied the motion finding section 359 does not apply to actions for breach of a duty or negligence against directors of a corporation.

A “liability created by law” is one which exists by virtue of an express statute but does not extend to actions arising under the common law.

(Coombes

v.

Getz