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It has been almost 15 years since the Right to Repair Act (“The Act”) became law. Nonetheless, there are not as many judicial opinions interpreting the Act as one might think. At the close of 2016 a new opinion was published.
The Act sets forth a lengthy list of building standards which are meant to address every function or component of a structure. All-told, there are 45 specific standards contained in Civil Code § 896. These standards address “water issues,” “structural issues,” “soil issues,” “fire protection issues,” “plumbing and sewer issues,” “electrical system issues,” and “issues regarding other areas of construction.” Just in case the legislature missed anything, § 897 contains a catch-all provision making actionable any function or component not addressed in § 896, “if it causes damage.” In addition to builders, general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals can find themselves liable under The Act. Liability is triggered when one of these parties causes, “in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract.” The Act appears to have quite a wingspan.
At issue in the newest decision, Acqua Vista Homeowners Association v. MWI, Inc. (4th District, No. D068406, Jan. 26, 2017), was this question: Must homeowners suing a material supplier prove that the supplier, “caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract?” The litigation involved a suit by the Acqua Vista HOA against MWI, a supplier of pipe used in the construction of the condominium development. The HOA alleged that the cast iron pipe supplied by MWI, which had been manufactured in China and used throughout the building, was defective. At the close of trial, the jury awarded the HOA $23,955,796 in damages against MWI.
MWI appealed, insisting that the HOA had failed to prove MWI caused a violation of The Actʼs standards as a result of MWIʼs negligence or breach of contract. The final sentence of § 936—which was pivotal in the courtʼs opinion—reads, “However, the negligence standard in this section does not apply to any general contractor, subcontractor, material supplier, individual product manufacturer, or design professional with respect to claims for which strict liability would apply.” Due to this statutory language, the HOA argued that it did not have to prove the violation of The Act was a result of MWIʼs negligence or breach of contract because it did not have to prove negligence or breach of contract “with respect to claims to which strict liability would have applied at common law.” The HOAʼs argument was based in no small part on the apparent “wingspan” of the Right to Repair Act, whose terminology can seem to suggest it was meant to encompass the gamut of potential defect claims for newly constructed residences.
Ultimately, the appellate court found the HOAʼs arguments unpersuasive, noting that The Act “repeatedly refers to the preservation of common law construction defect claims.” The court provided a number of examples of common law construction defect claims to which The Act expressly does not apply, including another provision within § 936 itself: “All actions by a claimant or builder to enforce an express contract, or any provision thereof, against a general contractor, subcontractor, material supplier, individual product manufacturer, or design professional is preserved.”
Because the HOAʼs claims were brought under The Act, the court concluded the HOA did indeed have to prove that any violations of the plumbing standards occurred as the result of a negligent act or omission or a breach of contract by MWI.
Our wait for more decisions involving The Right to Repair Act will likely not be long. The California Supreme Court is currently considering whether The Act provides the exclusive remedy for “construction defect claims that are actionable under [the Act].” (See McMillin Albany LLC v. Superior Court (2015) 239 Cal. App. 4th 1132, review granted Nov. 24, 2015, S229762 (McMillin).)
Paul Rogoff is a trial lawyer and associate attorney at Hunt Ortmann, a leader in California construction law. If you would like additional information about the subject matter of this bulletin, please contact him at firstname.lastname@example.org.