McMillin Albany LLC v. Superior Court of Kern County O
of Kern County (2018) 4 Cal.5th
n January 18, 2018, the California Supreme Court decided the matter of McMillin Albany LLC v. Superior Court 241. Te Court
unanimously decided the Right to Repair Act, (Civil Code section 895, et seq.), provides the exclusive remedy for construction defect cases in California.
Civil Code section 896 in the Right to Repair Act states that any action for damages arising out of or related to deficiencies in residential construction is limited to liability for violation of the construction standards set forth in section 896. Sections 910-938 in the Act set forth a number of pre-litigation procedures which a claimant must follow before bringing a construction defect claim under section 896.
Te McMillin case stems from a set of benign facts. In 2013, a group of 37 homeowners who had purchased homes from the developer and general contractor McMillin Albany LLC alleged a litany of construction defects and included common law claims for negligence, strict product liability, breach of contract, and breach of warranty, in addition to a statutory claim for violation of all constructions standards in Civil Code section 896. Te complaint alleged property damage, economic loss, cost of repair and reduction in property values.
McMillin requested a stay on the action until the homeowners completed the statutory pre-litigation process required under the Right to Repair Act. Te homeowners refused and instead dismissed
their section 896 claim, arguing that because the complaint now omitted any claim under the Act (and, thus, contained only common law causes of action), the Act’s informal pre-litigation process did not apply. McMillin moved for a court ordered stay until the pre-litigation procedures were complete. Te trial court denied the stay. McMillin appealed. Te appellate court concluded McMillin was entitled to a stay pending completion of the pre-litigation process.
Te Supreme Court began its analysis with the presumption that unless the Legislature was clear it intended to displace the common law, the Right to Repair Act would not abrogate common law causes of action. In reviewing the legislative history the Court concluded the intent of the Act was to eliminate the common law causes of action for negligence and strict products liability (as to construction defect cases) and replace those claims with the statutory claim provided for under the Act. However, importantly, the Act left the common law claims of breach of contract, fraud and personal injury, which may still be brought in the construction defect context, provided the facts support these claims.
McMillin ultimately makes plaintiff’s challenge to recover for construction defect claims more difficult by limiting the theories of recovery available to plaintiffs. Further, this case underscores the need to comply with the pre-litigation process as a prerequisite to construction defect claims.
www.caioc.org | 21
This article
was writ- ten and submitted
by Howard J. Silldorf, Esq. of
Berding | Weil, LLP.
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