Judge: Glenda Sanders, Case: 2013-00649338, Date: 2022-10-21 Tentative Ruling
1. Motion for Summary Judgment and/or Adjudication [Barring homeowners Who Acquired Property After 10 Year Statute Had Run]
2. Motion for Summary Judgment and/or Adjudication [Barring Post Notice Homeowners]
3. Motion to Compel Inspections and Testing
4. Joinder
Motion No. 1: MSA re Homeowners Barred by Ten Year Statute
Defendants Centex Homes and Pulte Home Corporation’s Motion For Summary Adjudication of the Third Amended Complaint (ROA 1296) is denied.
Defendants move for summary adjudication of the following issue:
The First Cause of Action for Violations of the Right to Repair Act is barred by the statute of repose in Civil Code §941(a) as to the homeowners who purchased after the expiration of the ten year period specified in §941(a) (“Time-Barred Homeowners.”)
Defendants contend that there are 108 potential class members in this class action lawsuit who did not own a home built by Centex or Pulte until after expiration of the ten-year period set forth in Civil Code §941(a). Per Defendants, these individuals (the “Time-Barred Homeowners”) had no existing claims during the ten-year statutory period and so there was no claim to equitably toll, nor any legal basis to relate back their claims.
Relation Back: The court finds that the “Time-Barred Homeowners’” claims “relate back” to the filing of the original complaint. California recognizes the “relation back” doctrine which deems that a later filed pleading was filed at the time of an earlier complaint, thus avoiding the expiration of any time-bar which has run in the meanwhile. For the relation-back doctrine to apply, "the amended complaint must (1) rest on the same general set of facts, (2) involve the same injury, and (3) refer to the same instrumentality, as the original one. [Citations.]" Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 408-409.
The First Cause of Action for Violations of the Right to Repair Act in the Third Amended Complaint does not change merely because it is asserted by a subsequent homeowner. The allegations remain the same.
The First Cause of Action, even when asserted by the “Time-Barred Homeowners” as opposed to prior owners, still “rests on the same general set of facts, (2) involves the same injury, and (3) refers to the same instrumentality, as the original [claim].” Norgart, 21 Cal.4th at 408-409.
Defendants argue that the claims do not relate back because the “Time-Barred Homeowners” are seeking to enforce an “independent right or to impose greater liability against the defendants.” San Diego Gas & Electric Co. v. Superior Court (2007) 146 Cal.App.4th 1545, 1550. However, RORA’s statutory scheme expressly provides that RORA rights and obligations extend to “subsequent owners”. It provides that:
“The provisions, standards, rights, and obligations set forth in this title [7] are binding upon all original purchasers and their successors-in-interest.” CC § 945 (emphasis added).
Further, although the Court did not locate a case directly addressing the meaning of “independent right” within the context of the “relation back” doctrine, the general case law suggests that an “independent right” means a right independent of and different from the primary right raised in the original lawsuit. In other words, something which does not rest on the same general set of facts and involve the same injury.
The “Time-Barred Homeowners” do not assert a right “independent” of the original claims. Where, as here, no new claim is asserted and there is no attempt to impose greater liability on the defendant, the claims relate back to the date the original complaint was filed. See Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 507-509; California Air Resources Bd. v. Hart (1993) 21 Cal.App.4th 289, 300-301; and Jensen v. Royal Pools (1975) 48 Cal.App.3d 717, 721.
Tolling: The “Time-Barred Homeowners’” claims are also subject to equitable tolling.
Section 941 specifically includes tolling as to certain claims. As set forth in subsection (e):
(e) Existing statutory and decisional law regarding tolling of the statute of limitations shall apply to the time periods for filing an action or making a claim under this title, except that repairs made pursuant to Chapter 4 (commencing with Section 910), with the exception of the tolling provision contained in Section 927, do not extend the period for filing an action, or restart the time limitations contained in subdivision (a) or (b) of Section 7091 of the Business and Professions Code. …”
In American Pipe and Construction Co v. Utah (1974) 414 U.S. 538, the United States Supreme Court held that the filing of a class action tolls the statute of limitations for putative class members who make timely motions to intervene after certification is denied. In Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, the California Supreme Court recognized that the tolling approved in American Pipe could be applied by California courts in appropriate cases. Under the principles set forth in Jolly, individual claims can be tolled during the pendency of a class action as long as the tolling satisfies two policy considerations:
[F]irst, protection of efficiency and economy in litigation as promoted by the class action device [“first policy consideration”], and, second, effectuation of the purpose of the statute of limitations to protect a defendant from unfair claims [“second policy consideration”]. Crucial to this second consideration is that the initial class action provide the defendant with sufficient notice of the substantive claims brought against it as well as the number and generic identities of the potential plaintiffs.
Children’s Hospital Los Angeles (2015) 237 Cal.App.4th 1454, 1462-1465 (internal quotation marks and citations omitted). See also Becker v. McMillin Construction Co. (1991) 226 Cal.App.3d 1493, 1498-1500 (tolling under American Pipe was proper and the plaintiff’s action was timely); San Francisco Unified School District v. WR Grace (1995) 37 Cal.App.4th 1318, 1337 (“each case should be analyzed to determine whether claims asserted in the class action have placed the defendant on notice of the claims at issue in the individual action.”); Perkin v. San Diego Gas & Electric Co. (2014) 225 Cal.App.4th 492, 501-504.
Here, while the first policy consideration may, in relation to certain homeowners, not be served here, the second policy consideration certainly is. The first policy consideration has to do with a concern that potential class members might be induced to file protective motions to intervene to preserve their claims if the class is later found to be unsuitable. By allowing equitable tolling, this concern is alleviated. Defendants argue that this concern is not served here because the “Time-Barred Homeowners” could not have intervened previously since they were not homeowners and did not have standing. However, the fact that this particular policy consideration may not be served here in some circumstances, does not preclude the application of the general principles of the Relation Back Doctrine, especially when the second policy consideration clearly is served by its application.
As to the second policy consideration, the claims have not changed; Defendants were provided with sufficient notice of the substantive claims brought against them as well as the generic identities of potential plaintiffs and the scope of the injury.
The motion is denied.
The court grants Plaintiffs’ request for judicial notice of Exhibits A and B. The court declines to take judicial notice of the other documents requested by the parties as they were not necessary for the disposition of this motion.
Motion No. 2: MSA Re Post Notice Homeowners
Defendants Centex Homes and Pulte Home Corporation’s Motion For Summary Adjudication of the Third Amended Complaint (ROA 1291) is denied.
Defendants move for summary adjudication of the following issue:
The First Cause of Action for Violations of the Right to Repair Act is barred as to the Post-Class Notice Homeowners because the Right to Repair Act Claims necessarily accrued to a prior owner.
Defendants contend that there are 62 potential class members in this class action lawsuit who purchased a home built by Centex or Pulte after Class Notice was sent to a different, prior owner in February 2018. Per Defendants, these “Post-Class Notice Homeowners/purchasers” have no standing because the claim accrued instead to prior owners/sellers of these properties. Defendants contend that the homeowners who received the class notice in February 2018, are the last possible owners in the chain of title to which the Right to Repair Act claims could accrue.
Procedural Issue
As a preliminary matter, the court questions whether this motion is procedurally proper. Code Civil Procedure 437c(f) provides that:
“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”
(Emphasis added.)
Even if this court were to decide the issue presented in Defendants’ favor, the ruling would not “completely dispose of a cause of action, affirmative defense, claim for damages, or an issue of duty”. It would simply reduce the size of the certified class, and this may ultimately reduce the quantum of damages but not the entire “claim for damages” arising out of the violation.
The court will, nevertheless, consider the merits of the substantive arguments raised.
Substantive Contentions
Much of Defendants’ argument depends upon an assumption that pre-SB 800 principles of discovery and accrual apply to the situation presented in this matter. But the California Supreme Court has confirmed that SB800 supplants common law construction defect claims – making the pre-SB800 principles of discovery and accrual inapplicable here:
“Where common law principles had foreclosed recovery for defects in the absence of property damage or personal injury [citing Aas], the Act supplies a new statutory cause of action for purely economic loss (§§ 896–897, 942–944). And, of direct relevance here, even in some areas where the common law had supplied a remedy for construction defects resulting in property damage but not personal injury, the text and legislative history reflect a clear and unequivocal intent to supplant common law negligence and strict product liability actions with a statutory claim under the Act.”
(McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 249).
Defendants cite to language in Civil Code sections 932 and 929 to support their argument that RORA did not change common law principles for accrual of construction defect claims. Although these sections appear in the prelitigation procedure chapter of RORA , Defendants contend that the language used there is also relevant to the issue of who has standing to bring a claim because they purportedly demonstrate that RORA claims do not run with the land. The Court disagrees.
Under Section 932, “subsequently discovered claims of unmet standards shall be administered separately under [the prelitigation procedure] chapter . . . however, . . . if the subsequently discovered claim is for a violation of the same standard as that which has already been initiated by the same claimant and the subject of a currently pending action, the claimant need not reinitiate the process as to the same standard.” Per Defendants, this shows that RORA treats claims by different owners of the same property as separate claims to be dealt with separately and apart from one another – that they attach to the owner not the land. The court rejects this reasoning.
Section 932 attempts to streamline the administration of the prelitigation procedures so that prelitigation notice of a particular type of violation does not have to be given more than once in certain circumstances. It has nothing to do with the concept of “standing” which is dealt with in an entirely different section --- section 945, which does specifically and expressly deal with standing, and the question of who is “bound by the “provisions, standards, rights, and obligations set forth in this title” that is, Title 7, the Right of Repair Act. It is makes no sense to extrapolate language dealing with the prelitigation procedures to infer legislative intent regarding the wholly different, important concept of standing which is expressly dealt with elsewhere in the statute. (Section 945.)
Defendants also cite to §929, which provides that a builder may make a cash offer in lieu of a repair and that the builder may obtain a reasonable release in exchange for the cash payment. Defendants argue that this provision, which is also within the prelitigation chapter, demonstrates that RORA claims do not run with the land. Defendants contend that if the claim automatically transfers to the next homeowner, the builder could be liable multiple times on the same claim, even though the builder has already paid a prior owner under §929. This is not so since §929 explicitly states that the builder may obtain a release in exchange for a cash payment.
Furthermore, §945.5(f) provides that the release may be raised as an affirmative defense “[a]s to a particular violation for which the builder has obtained a valid release.” This allows a release to be asserted against the claim of a subsequent homeowner because it pertains to the “particular violation” rather than just the owner from whom the builder obtained the release. The release is effective against a subsequent owner who was not a party to the agreement releasing the builder.
Finally, the definition of the class excludes liability for violations as to which a release has been given.
Defendants next argue that §945.5(b) supports their argument that the claim accrues upon discovery. Section 945.5(b) provides another affirmative defense available to builders. It states:
“To the extent it [a claimed violation] is caused by a homeowner’s unreasonable failure to minimize or prevent those damages in a timely manner, including the failure of the homeowner to allow reasonable and timely access for inspections and repairs under this title. This includes the failure to give timely notice to the builder after discovery of a violation, but does not include damages due to the untimely or inadequate response of a builder to the homeowner’s claim.”
Defendants contend that the use of the word “discovery” in this section demonstrates that RORA standing is based on common law accrual principles. This is not so. It is merely a mitigation provision designed to minimize damage caused by a claimant’s failure to give timely notice to the builder and so delay expeditious repair. (See McMillin, supra, 4 Cal.5th at 257).
Furthermore, while failure to mitigate might reduce a plaintiff’s damages, the elements of a statutory claim under RORA do not require proof of causation. Section §942 provides :
“In order to make a claim for violation of the [SB800] standards … a homeowner need only demonstrate…that the home does not meet the applicable standard…. No further showing of causation or damages is required to meet the burden of proof regarding a violation of a standard … provided that the violation arises out of, pertains to, or is related to, the original construction.”
This section and Civil Code §944 further clarify that the homeowner is entitled to “damages for the reasonable value of repairing any violation of the standards set forth in this title.” Entitlement to damages is not based upon a homeowner’s knowledge or discovery of the defect. A homeowner “need only demonstrate… that the home does not meet the applicable standard”. (Id.)
If the standard is violated there is a defect. Mere discovery of the violation does not impact the claim. Rather, the issue is whether the standard has been violated and whether that defect has been remedied. The burden then shifts to a defendant to exclude or limit liability where plaintiff, exacerbated or caused the violation by failing to give timely notice to the builder.
Further, under §945, successors-in-interest expressly have standing to bring or maintain the claim as the real party in interest. That section provides:
“The provisions, standards, rights, and obligations set forth in this title are binding upon all original purchasers and their successors-in-interest.”
The claim effectively runs with the home until the violation of the standard has been corrected. The builder is obligated to repair irrespective of whether the homeowner is the original purchaser or her successor in interest. And the successor in interest is likewise obligated to comply with the prelitigation procedures where those are applicable -- even if that successor does not have contractual privity with the builder.
Not only does the plain meaning of the statute expressly confer standing upon an original purchaser’s successor in interest, the legislative history also tellingly cites as one of the benefits of the statute, the fact that these construction standards are “enforceable by subsequent purchasers, not just the original buyer.” (Plaintiff’s RJN, Exhibits A and B.)
In addition, relation-back and tolling apply as discussed more fully in this court’s ruling on another concurrently filed motion for summary adjudication (ROA 1296).
The motion is denied.
The court grants Plaintiffs’ request for judicial notice of Exhibits A and B. The court declines to take judicial notice of the other documents requested by the parties as they were not necessary for the disposition of this motion.
Plaintiff to give notice.
Motion No. 3: Motion to Compel Inspections and Testing
Centex Homes and Pulte Home Corporation’s Motion to Compel Inspections and Testing Pursuant to Defendants’ Notice of Testing of Pipes/Water, joined by Cambridge-Lee Industries, LLC, is granted.
Plaintiffs’ counsel is ordered, in compliance with Defendants’ August 1, 2022 Notice of Testing of Pipes/Water Pursuant to Case Management Order No. 2, to:
(1) Produce all copper pipes with prior reported pinhole leaks for inspection and testing;
(2) Produce all class homes for visual inspections and water sampling; and
(3) Provide access to all homes that have not previously reported a PEX re-pipe or epoxy-coating for the collection of copper samples at the water heaters.
The Court has considered the factors listed in California Rule of Court 3.768(d) and finds that those factors militate in favor of the above.
Plaintiff to give notice.