Borton Petrini Persuades Fifth District Court of Appeal to Reject Fourth District’s Liberty Mutual Opinion, Forcing Homeowners to Engage in SB800’s Prelitigation Inspection and Repair Procedures; Court’s Opinion Certified for Publication

On August 26, 2015, the Fifth District Court of Appeal held that SB800 provides the exclusive remedy for residential construction defect claims for newly constructed homes purchased after January 1, 2003, and that, consequently, homeowners cannot avoid SB800’s prelitigation inspection and repair procedures by pleading only common law causes of action. Andrew Morgan of Borton Petrini, LLP’s Bakersfield office drafted and argued a Petition for Writ of Mandate in Van Tassel, et al. v. McMillin Albany, LLC et al. to the Fifth District Court of Appeal. (Appellate Case No. F069370.) Borton Petrini represents the builder, McMillin, in that action.

Attorney Morgan argued that the Fourth District Court of Appeal case Liberty Mutual Insurance Company v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 (“Liberty”) should not be followed in the Fifth District because it was wrongly decided. Liberty held that the violations of construction standards set out in the SB800 code (Civil Code § 895 et seq.) “[do] not provide the exclusive remedy in cases where actual damage has occurred because of construction defects” and that SB800 “does not eliminate a property owner’s common law rights and remedies, otherwise recognized by law, where, as here, actual damage has occurred.”

SB800’s Chapter 4 requires homeowners to engage in an inspection and repair procedure before they sue the homebuilder if the builder has complied with certain notice and recording requirements. If a homeowner files a lawsuit without engaging in the prelitigation procedures, the builder has the right to bring a motion to stay the case until the procedures are completed. In the Van Tassel case, McMillin brought a motion to stay that was denied by the Kern County Superior Court.

Relying upon Liberty Mutual’s holding, the Van Tassel plaintiffs assert that they do not have to go through SB800’s prelitigation procedures because they pleaded only common law causes of action for their claimed construction defects, instead of pleading a cause of action for violations of the SB800 construction standards. However, Borton Petrini argued to the Court of Appeal that SB800 was intended to be, and explicitly states that it is, the exclusive remedy for plaintiffs who claim there are construction defects in newly constructed residential homes. If SB800 is the exclusive remedy, then homeowners may only plead a cause of action for violation of the SB800 construction standards, not common law causes of action, and, therefore, the homeowners must also go through SB800’s inspection and repair process before they can sue the builder. The California Building Industry Association and the Leading Builders of America have filed Amicus Briefs in support of Borton Petrini’s position in this writ proceeding.

In its opinion, certified for publication, the Fifth District Court of Appeal accepted Borton Petrini’s argument to reject Liberty’s holding. As a result, trial courts across California will no longer be bound to follow Liberty’s erroneous holding that SB800 is not the exclusive remedy for residential construction defects, and they will be free to enforce what has been held to be the builder’s “absolute right” to engage in the prelitigation inspection and repair procedures.

A copy of the opinion certified for publication can be viewed by clicking on the link below.

Van Tassel Ruling