On February 21, 2014, the Court of Appeal for the Second District Division Four (Los Angeles County) held in KB Home Greater Los Angeles, Inc. v. Superior Court (Allstate) (2014) 223 Cal.App.4th 1471 that a homeowner’s failure to give the builder an opportunity to inspect and repair a construction defect excused the builder’s liability under the Right to Repair Act (Civil Code §895, et seq., formerly known as SB 800, the “Act”). The Court of Appeal had ruled that the Act is the exclusive remedy and barred a subrogation action by the homeowner’s insurer (Allstate). This ruling conflicts with the Second Appellate District Division Three in the case of Burch v. Superior Court (2014) 223 Cal.App.4th 1411 which adopted the holding in Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2014) 219 Cal.App.4th 98, which was decided by the Court of Appeal for the Fourth Appellate District Division Three (Orange County). Under the ruling in Liberty Mutual, homeowners may choose to sue builders under common law theories of liability such as strict liability and negligence, in addition to liability under the Act. The ruling in Liberty Mutual undermined the arguments of homebuilders that their liability is limited by the Act and that they have a right to repair after notice of defect from the homeowner. In December 2013, the California Supreme Court denied a request for review of the ruling in Liberty Mutual that the Right to Repair Act is not the exclusive remedy for a homeowner seeking damages for construction defects that have resulted in property damage. The conflicting rulings in KB Home Greater Los Angeles, Inc. v. Superior Court (Allstate) and in Liberty Mutual Ins. Co. v. Brookfield Crystal Cove will likely someday be resolved by the California Supreme Court.
For more information about this topic please contact:
Ted L. Senet, Esq., LEED AP.
Gibbs Giden Locher Turner Senet & Wittbrodt LLP
1880 Century Park East, 12th Floor
Los Angeles, California 90067
Phone: (310) 552-3400
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