Developer temporarily off the hook for alleged faulty construction

By Jennifer Felten

McMillin Albany LLC et al., v. The Superior Court of Kern County

The case results for a lawsuit filed by the owners of 37 homes constructed by a developer,  alleging eight causes of action, including strict products liability, negligence, and breach of express and implied warranty. They alleged the homes were in a defective condition at the time they purchased them, and the defects had resulted in damage to their homes and their component parts. The third cause of action of the first amended complaint alleged violation of the building standards set forth in Civil Code section 896.2. This section is part of a statutory scheme commonly referred to as the Right to Repair Act (“Act”). Under the Act, before a homeowner who claims defective residential construction can file an action against the developer in court, the homeowner must give notice of the claimed defects to the developer and engage in a nonadversarial pre-litigation procedure, which affords the developer an opportunity to attempt to repair the defects. If the homeowner files suit without giving the required notice, the developer may obtain a stay of the litigation, pending completion of the pre-litigation process.

The homeowners in this case did not give McMillin notice of the alleged defects before filing suit. The parties attempted to negotiate a stay of the judicial proceedings to complete the pre-litigation process, but the homeowners’ attorney withdrew from the negotiations, dismissed the third cause of action of the first amended complaint (related to the Act), and contended that the homeowners were no longer required to comply with the statutory pre-litigation process because they had dismissed the cause of action alleging violation of the Act. McMillin filed a motion for a stay, which the homeowners opposed. The trial court denied the motion, concluding the homeowners were entitled to plead common law causes of action in lieu of a cause of action for violation of the building standards set out in the Act, and they were not required to submit to the pre-litigation process of the Act when their complaint did not allege any cause of action for violation of the Act. McMillin filed this petition for a writ of mandate, seeking a writ directing the trial court to vacate its order denying McMillin’s motion for a stay and to enter a new order granting a stay pending completion of the pre-litigation process.

The appellate court overturned the ruling of the trial court. The reasoning was based upon the fact that, the homeowners’ complaint alleged residential construction defects in components or functions for which standards have been established in section 896 of the Act. Thus, their claims fall within the scope of the Act. Section 910 of the Act provides that, before a homeowner files “an action against any party alleged to have contributed to a violation of the standards set forth in Chapter 2,” the homeowner must give written notice to the developer of the claim that the construction of the residence violates any of the standards in that chapter. That notice sets in motion the nonadversarial pre-litigation procedure of Chapter 4, which affords the developer an opportunity to attempt to repair the claimed deficiencies before the homeowner initiates expensive and time-consuming litigation.

Because the homeowners did not comply with the requirements of Chapter 4 to accommodate McMillin’s absolute right to attempt repairs, McMillin is entitled to a stay of the action until the statutory pre-litigation process has been completed. Accordingly, the appellate court granted the developer’s relief sought in the writ petition.

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Jennifer Felten

Jennifer Felten

Jennifer Felten, Esq., Partner, LLP, www.hhlawgroup.com, 699 Hampshire Road, Suite 105, Westlake Village, CA 91361, (805) 265-1031, [email protected].  Ms. Felten specializes in representing both individuals and legal entities, providing representation and guidance on a variety of real estate related matters.

 

Upcoming Speaking Engagements for Ms. Felten

Jennifer Felten, Esq. will be speaking at the following events:

  • Thursday, September 10, 2015: NAHREP Ventura County
  • Tuesday, September 15, 2015: Long Beach Escrow Association

For inquiries or questions about any of these events, please email [email protected].

For more info on these events, feel free to email [email protected].Get Citizensjournal.us Headlines free  SUBSCRIPTION. Keep us publishing – DONATE

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