The Saga Continues – SB 800 Update – California’s Right to Repair Act

fireThe Right to Repair Act has reared its ugly head again. In Elliott Homes, Inc. v. Superior Court (Hicks) 2016 DJAR 11930, the Third Appellate District issued a writ of mandate ordering a stay of pending litigation until plaintiffs satisfied the pre-litigation procedures mandated by the Right to Repair Act.

Plaintiffs brought a construction defect action against the builder of 17 single-family homes. Their operative complaint alleged common law causes of action for strict products liability; strict components product liability; and negligence. No statutory violations were alleged under the Right to Repair Act, as plaintiffs did not provide pre-litigation notice of the alleged defects to the builder.

The trial court, relying on the Liberty Mutual Ins. Co. v Brookfield Crystal Cove (2013) 219 Cal. App. 4th 98 and Burch v Superior Court (2014) 223 Cal. App. 4th 1411 decisions, ruled that the Right to Repair Act did not require a stay, as only common law causes of action were pled. The Appellate Court held that the statutory scheme was intended to apply to both claims for defects that had not yet caused damages (economic damages) as well as those seeking actual damages.

The threshold question-whether the Right to Repair Act precludes a homeowner from bringing common law causes of action for defective conditions resulting in physical damage-will soon be answered. That issue is pending before the California Supreme Court in McMillin Albany, LLC v. Superior Court (2015) 239 Cal. App. 4th 1132. That decision will definitively explain the scope of the Right To Repair Act, once and for all. Until then, insureds and their subrogating carriers would be well-advised to provide builders with pre-litigation notice of construction defects as mandated by the Right to Repair Act.

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