California Court of Appeal Feb 19, 2014 No. B248830Published
Before: Croskey
Filed 2/19/14 CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
CYNTHIA BURCH, B248830
Petitioner, (Los Angeles County Super. Ct. No. SC101002) v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY,
Respondent;
PREMIER HOMES, LLC, et al.,
Real Parties in Interest.
ORIGINAL PROCEEDINGS in mandate. Gerald Rosenberg, Judge. Petition granted. Best Best & Krieger, Victor L. Wolf, Scott W. Ditfurth and Kevin J. Abbott for Petitioner. No appearance for Respondent. Zimmerman & Kahanowitch and Brian F. Zimmerman for Real Parties in Interest. _______________________________________
Cynthia Burch challenges an order granting summary adjudication in favor of
Premier Homes, LLC (Premier Homes), Custom Home Builders, Inc. (Custom Home
Builders), Scott Warren, and Daniel Sahar in a construction defect action. The
defendants argued that the Right to Repair Act (Civ. Code, § 895 et seq.) provides the
exclusive remedy for a homeowner seeking damages for construction defects and
precludes common law causes of action for negligence and breach of implied warranty.
Custom Home Builders, Warren, and Sahar also argued that they owed Burch no duty of
care and that they could not be liable for breach of implied warranty because they were
not parties to any contract with her.
We hold that the Right to Repair Act does not provide the exclusive remedy for
Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1212.) The act
sets forth construction standards the violation of which constitutes a deficiency in
construction for which a “builder,” as defined in the act, and to some extent a general
contractor and others, can be held liable to a homeowner without the need to show
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property damage or other injury. (Civ. Code, §§ 896, 897, 942.) The act also prescribes
a nonadversarial prelitigation procedure for the parties to follow in an attempt to resolve
the dispute, litigation procedures for claims under the act, and the measure of damages.
(Id., §§ 910-945.5.)
Civil Code section 896 states that in any action for damages arising out of or
related to deficiencies in residential construction, a builder’s liability, and to some
extent the liability of a general contractor and others, is limited to liability for violation
of the construction standards set forth in the Right to Repair Act, except as specifically
stated in the act. Civil Code section 944 prescribes the measure of damages for
violation of the standards set forth in the act. Civil Code section 943, subdivision (a)
states, “Except as provided in this title, no other cause of action for a claim covered by
this title or for damages recoverable under Section 944 is allowed. In addition to the
rights under this title, this title does not apply to any action by a claimant to enforce
a contract or express contractual provision, or any action for fraud, personal injury, or
violation of a statute. . . . ” Civil Code section 897 specifically excepts from the
limitation of liability under the act any defect that “causes damage.”1
Thus, the Right to Repair Act abrogates the holding in Aas, supra, 24 Cal.4th
627, by providing a remedy for particular residential construction defects that cause no
property damage. The act, however, does not limit or preclude common law claims for
1 “The standards set forth in this chapter are intended to address every function or component of a structure. To the extent that a function or component of a structure is not addressed by these standards, it shall be actionable if it causes damage.” (Civ. Code, § 897.)
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damages for construction defects that have caused property damage. (Liberty Mutual,
supra, 219 Cal.App.4th at p. 108.) Liberty Mutual examined the act and its legislative
history and concluded that the act does not provide an exclusive remedy and does not
limit or preclude common law claims for damages for construction defects that have
caused property damage. (Id. at pp. 103-108.) We agree.
Burch alleged in her second count for negligence in her third amended complaint
that the defendants breached their duty of care resulting in deficient construction,
including but not limited to specified defects that caused property damage. She alleged
in her third count for breach of implied warranty that the defendants breached an
implied warranty with respect to the construction. Both counts allege common law
claims for damages for construction defects, including defects allegedly resulting in
property damage. We conclude that the Right to Repair Act does not preclude such
common law claims and that the summary adjudication of the second and third counts
on this basis was error.2
4. The Defendants Failed to Establish the Absence of a Duty of Care
Custom Home Builders, Warren, and Sahar also argued in their motion for
summary adjudication that they had no contractual or other relationship with Burch,
owed her no duty of care, and therefore could not be liable for either negligence or
breach of implied warranty. We first will address the negligence count.
2 The Right to Repair Act is expressly inapplicable to an action to enforce a contract. (Civ. Code, § 943, subd. (a).) In light of our conclusion, we need not decide whether an action for damages for breach of an implied warranty is an action to enforce a contract within the meaning of the statute.
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The existence of a duty of care is an essential element of a negligence cause of
action. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397 (Bily).) Whether a duty
of care exists in a particular case is a question of law for the court to decide. (Ibid.)
The existence of a duty of care in the absence of privity of contract is a policy question
that depends on the balancing of several factors, including “[1] the extent to which the
transaction was intended to affect the plaintiff, [2] the foreseeability of harm to [the
plaintiff], [3] the degree of certainty that the plaintiff suffered injury, [4] the closeness
of the connection between the defendant’s conduct and the injury suffered, [5] the moral
blame attached to the defendant’s conduct, and [6] the policy of preventing future
Bily involved an action for professional negligence brought by investors against
an accounting firm that had prepared an independent audit of a client’s financial
statements. (Bily, supra, 3 Cal.4th at pp. 377-379.) Bily focused on “three central
concerns” with allowing “all merely foreseeable third party users of audit reports to sue
the auditor on a theory of professional negligence” (id. at p. 398): (1) the auditor could
face potential liability far out of proportion to its fault; (2) the class of plaintiffs in such
an action, generally more sophisticated business lenders and investors, could control
and adjust the risks by contract rather than rely on tort liability; and (3) potential
liability to third parties would more likely result in an increase in the cost and decrease
in the availability of audit services, rather than more careful audits. (Id. at pp. 398-406.)
In light of these considerations, Bily held that an auditor’s liability for negligence in
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connection with performing an audit of a client’s financial statements is limited to the
client. (Id. at p. 406.)
Biakanja, supra, 49 Cal.2d 647, involved a negligence action against a notary
public who prepared a will in which the plaintiff was named as the sole beneficiary.
The will was denied probate because it lacked proper attestation. As a result, instead of
receiving the entire estate under the will, the plaintiff received only one-eighth of the
estate by intestate succession. (Id. at p. 648.) Applying the six factors listed above
(Biakanja factors), Biakanja stated that the defendant must have been aware that the
plaintiff would suffer a loss if the will were declared invalid, and the plaintiff would
have received the entire estate but for the defendant’s negligence. (Id. at pp. 650-651.)
The defendant clearly was not qualified to draft a will and supervise its execution, and
by doing so he had engaged in the unauthorized practice of law, a misdemeanor. (Id. at
p. 651.) Biakanja concluded that the defendant owed the plaintiff a duty of care despite
the lack of privity of contract. (Ibid.)
Stewart v. Cox (1961) 55 Cal.2d 857 applied the Biakanja factors in holding that
a concrete subcontractor was liable to homeowners for the negligent construction of
a swimming pool, despite the lack of privity of contract. (Id. at p. 863.) The plaintiffs
had settled with the general contractor who agreed to construct the pool for them. (Id. at
p. 860.) Stewart stated that the subcontractor’s work was intended to benefit the
plaintiffs as owners and that it was foreseeable that they would suffer property damage
if the pool was not sound. There was no doubt that the plaintiff suffered serious damage
caused by escaping water, and the trial court found based on ample evidence that the
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injury resulted from the defendant’s negligence. (Id. at p. 863.) Stewart concluded that
the subcontractor “should not be exempted from liability if negligence on his part was
the proximate cause of the damage to plaintiffs.” (Ibid.)
Sabella v. Wisler (1963) 59 Cal.2d 21 held that a developer and contractor who
built a home for the purpose of offering it for sale to the public was liable to the
purchasers for negligent construction. (Id. at pp. 27-30.) The house was negligently
constructed on insufficiently compacted filled land. (Id. at pp. 23-24.) Applying the
Biakanja factors, Sabella stated that although the house was not built specifically for the
plaintiffs, they were members of the class of prospective homebuyers for which the
defendant built the house. (Sabella, supra, at p. 28.) “Thus as a matter of legal effect
the home may be considered to have been intended for the plaintiffs, and Wisler owed
them a duty of care in construction. [Citation.]” (Ibid.) The harm to prospective
homebuyers was foreseeable, it was undisputed that the house was seriously damaged,
and there was a close connection between the defendant’s negligence and the injury
suffered. (Ibid.) “Finally, the prevention of future negligent construction of buildings
upon insufficiently supportive material would not be furthered by exempting defendant
Wisler from liability for his negligence. [Citations.]” (Id. at p. 29.)
Custom Home Builders, Warren, and Sahar as the parties moving for summary
adjudication had the initial burden to present evidence showing that Burch could not
establish an element of her negligence count. In our view, the evidence presented in
support of their motion fails to show that Burch cannot establish a duty of care, and
instead tends to show that a duty of care existed. As in Sabella v. Wisler, supra,
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59 Cal.2d at page 28, Burch is a member of a class of prospective homebuyers for
which the defendants performed the construction, so in legal effect the construction may
be considered to have been intended for her.3 It was foreseeable that a prospective
owner would suffer harm if the construction was deficient, and the defendants have
presented no evidence showing that the harm to Burch is uncertain. There is a close
causal connection between the defendants’ construction of the property as the general
contractor and any construction deficiencies and resulting damage. Finally, the policy
of preventing future harm from deficient construction would not be served if the general
contractor were excused from liability to the prospective owner for its alleged
negligence.4 (Sabella, supra, at pp. 28-29; Stewart v. Cox, supra, 55 Cal.2d at p. 863.)
Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc. (2004)
125 Cal.App.4th 152 (Weseloh), cited by the defendants, is distinguishable. That case
involved the construction of facilities for an automobile dealership. The defendants
were engineers who designed retaining walls for a subcontractor on the project and were
not otherwise involved in the construction. After the retaining walls failed, the owners
and the general contractor sued the design engineers for negligence. The trial court
granted summary judgment in favor of the design engineers. (Id. at pp. 158-160.)
3 Custom Home Builders, Warren, and Sahar did not challenge the alter ego allegations in their motion for summary adjudication and have not shown that the individual defendants should be regarded as any different from Custom Home Builders, the general contractor on the project. 4 The evidence in the record does not suggest that the defendants’ conduct was morally blameworthy apart any moral blame encompassed in the other factors.
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Weseloh stated that the design engineers satisfied their initial burden on the summary
judgment motion to negate the existence of a duty of care by presenting evidence that
they had no contractual privity with either the owners or the general contractor and only
performed professional design services for a subcontractor. The burden on the motion
therefore shifted to the owners and the general contractor. (Id. at p. 164.)
Considering the Biakanja factors and the concerns cited in Bily, supra, 3 Cal.4th
at pages 398-406, Weseloh concluded that the design engineers owed no duty of care to
either the owners or the general contractor. (Weseloh, supra, 125 Cal.App.4th at
pp. 166-173). As in Bily, Weseloh noted the prospect of the design engineers’ liability
far out of proportion to their fault, the sophistication of the owners and the general
contractor and their ability to control and adjust the risks by contract rather than rely on
tort liability, and their failure to show any benefit from imposing liability to third parties
on a provider of professional services in those circumstances. (Weseloh, supra, at
pp. 170-172.) Weseloh stated that the owner could pursue a claim for damages against
the general contractor and the general contractor could pursue a claim for damages
against the subcontractor. (Id. at p. 170.) Weseloh also noted the absence of evidence
that the design engineers’ design was used without alteration and the absence of
evidence of causation in general. (Id. at pp. 168-169.)
Here, in contrast, Custom Home Builders was the general contractor on the
project responsible for the overall construction, rather than a provider of professional
services to a subcontractor, and the defendants have not challenged the element of
causation. The concerns cited in Bily, supra, 3 Cal.4th at pages 398-406, do not apply
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here. We therefore hold that Weseloh, supra, 125 Cal.App.4th 152, does not support the
absence of a duty of care in these circumstances.
Our consideration of the Biakanja factors causes us to conclude that the
defendants failed to establish the absence of a duty of care. Instead, the evidence in the
present record supports the existence of a duty of care. The summary adjudication of
the negligence count in favor of Custom Home Builders, Warren, and Sahar cannot be
upheld based on the absence of a duty of care.
5. The Defendants Failed to Negate a Breach of Implied Warranty
Burch alleged in her third amended complaint that she was a third party
beneficiary of the construction contract between Premier Homes and Custom Home
Builders and that the defendants impliedly represented that Custom Home Builders used
reasonable skill and judgment in the construction.
held that a real property owner could maintain a cause of action against a subcontractor
for breach of an implied warranty of quality and fitness despite the lack of a contract
between the owner and the subcontractor. Gilbert concluded that, in the circumstances
of that case, the owner was an intended beneficiary of the contract between the general
contractor and the subcontractor. (Id. at pp. 69-70.) Gilbert recognized an exception to
the general rule that an implied warranty can arise only in favor of a party to the
contract.
The trial court here granted summary adjudication in favor of the defendants on
the second count for negligence and third count for breach of implied warranty based on
the Right to Repair Act. The court did not conclude that Burch was not an intended
beneficiary of the construction contract and summarily adjudicate the third count for
breach of implied warranty on that basis. Instead, the court concluded that there was
a triable issue of fact as to whether Burch was an intended beneficiary of the
construction contract, and therefore denied summary adjudication of the fifth count for
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breach of contract/third party beneficiary. The defendants do not challenge the court’s
determination that a triable issue of fact exists, have shown no error in that
determination, and therefore are not entitled to summary adjudication of the third count
for breach of implied warranty.
DISPOSITION
The petition for writ of mandate is granted, and the trial court is directed to
vacate its order granting the motion for summary adjudication as to the second count for
negligence and third count for breach of implied warranty and enter a new order
denying the motion on those counts. The operative complaint shall be deemed amended
to include those two counts. Burch is entitled to recover her costs in these appellate
proceedings.
CERTIFIED FOR PUBLICATION
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
KITCHING, J.
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AI Brief
AI-generated · verify before citing
Holding. The Right to Repair Act does not provide the exclusive remedy for construction defect claims involving property damage, and the court erred in summarily adjudicating negligence and implied warranty claims where the defendants failed to negate a duty of care or the existence of an implied warranty.
Issues
Does the Right to Repair Act provide the exclusive remedy for construction defect claims involving property damage?
Did the defendants fail to negate the existence of a duty of care owed to the plaintiff?
Did the defendants fail to negate the existence of an implied warranty in favor of the plaintiff as a third-party beneficiary?
Disposition. reversed
Quotations verified verbatim against the opinion
“The Right to Repair Act does not provide the exclusive remedy for a homeowner seeking damages for construction defects that have resulted in property damage, as here.”
“We conclude that the Right to Repair Act does not preclude such common law claims and that the summary adjudication of the second and third counts on this basis was error.”