SAN FRANCISCO — The California Supreme Court has granted a stay in a case involving the Right to Repair Act, which was created almost 20 years ago.
Associate Justice Goodwin Liu and five other justices affirmed an appeals court decision to order a stay in the complaint filed by plaintiffs Carl and Sandra Van Tassel and several dozen other homeowners, Carl Van Tassel and others, for the violation of the Right to Repair Act against contractor McMillin Albany LLC for 37 new single-family homes they purchased between 2003 and 2013.
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Confronted with 18-year-old case Aas v. Superior Court, Liu wrote in the Jan. 18 ruling, citing a previous California high court ruling that decided the economic-loss rule prevents homeowners who file a complaint over construction defects from recovering damages when there is no actual property or personal injury damage.
Liu wrote that the court gave the Legislature the freedom to alter recovery limits. Two years after the court granted permission, the Legislature passed the Right to Repair Act (Act) after much lobbying from homeowner and construction interest groups.
“In the Court of Appeal’s view, 'the Legislature intended that all claims arising out of defects in residential construction' involving post-2003 sales of new houses ‘be subject to the standards and the requirements of the Act,'” Lui wrote. “Accordingly, the Court of Appeal held the Act’s prelitigation resolution process applied here even though the Van Tassels had dismissed their statutory claim under the Act.”
Liu wrote in the ruling the justices were asked to decide whether the complaint is subject to the act’s prelitigation notice and cure procedures based on the alleged defects found in the 37 homes' foundations, electrical systems, plumbing, roofs, chimneys, windows and floors.
“For economic losses, the Legislature intended to supersede Aas and provide a statutory basis for recovery,” Lui wrote, adding for personal injuries, the Legislature preserved the position and kept the common law as an avenue for recovery. “And for property damage, the Legislature replaced the common law methods of recovery with the new statutory scheme.”
Liu wrote that the act provides any alleged construction defect claims minus personal injury are treated the same even if the alleged defects give rise to property damage; however, he noted penning imperfections could be mandatory and cited Lewis v. Superior Court 1985 to stress his point.
“A failure to give formal written notice before taking any other action might well be excused in circumstances where a homeowner has acted reasonably to mitigate losses and has provided informal notice, and subsequent written notice, in a manner that is as timely and effective as reasonably practicable under the circumstances,” Lui wrote.
Furthermore, Liu pointed out that “the creation of a mandatory prelitigation process and the granting of a right to repair, would be thwarted if we were to read the Act to permit homeowners to continue to sue as before at common law, without abiding by the procedural requirements of the Act, for construction defect claims involving damages other than economic loss.”
Liu and other justices agreed that since the Van Tassels did not comply with the act’s prelitigation procedures, the suit as it stands cannot move forward.
“Because the Van Tassels have not yet done so, McMillin is entitled to a stay,” Lui wrote in the order.