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Brian Altman et al v. John Mourier Construction

January 10, 2013

BRIAN ALTMAN ET AL., PLAINTIFFS AND APPELLANTS,
v.
JOHN MOURIER CONSTRUCTION, INC., DEFENDANT AND APPELLANT.



(Super. Ct. No. 06AS01823)

The opinion of the court was delivered by: Murray , J.

Altman v. John Mourier Construction

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Plaintiffs, homeowners Brian Altman et al.,*fn1 filed suit against home designer/builder, defendant John Mourier Construction, Inc. (JMC), alleging that design defects and construction defects of their homes allowed water intrusion causing damage. Plaintiffs alleged theories of strict products liability (design defect), breach of express and implied warranty, breach of contract, and negligence. By special verdicts, the jury rejected the strict liability and warranty claims, finding the houses did not fail to perform "structurally" as an ordinary consumer would have expected or as represented. The jury nevertheless found JMC breached contracts and was negligent in the design or construction of the houses. The jury awarded plaintiffs damages for negligence and breach of contract.

In a bifurcated bench trial, the trial court awarded plaintiffs some but not all of their investigative costs as damages for successfully prosecuting a tort claim in a construction defect case pursuant to Stearman v. Centex Homes (2000) 78 Cal.App.4th 611 (Stearman).

JMC appeals from the judgment, arguing evidentiary error, insufficiency of the evidence, inconsistency of the verdicts, and duplicative damages. JMC also appeals from the trial court's refusal to offset the judgment by an amount plaintiffs received from subcontractors' good faith settlements. (Code Civ. Proc., § 877.)*fn2

Plaintiffs separately appeal from the trial court's partial denial of investigative costs.

We reverse that portion of the judgment that awarded damages for breach of contract, because there was no substantial evidence of contract. We affirm the trial court's ruling regarding investigative costs. We otherwise affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs' Claims

In May 2006, plaintiffs filed this lawsuit against JMC and subcontractors who are not parties to this appeal.*fn3 Some plaintiffs bought their homes directly from JMC between 2000 and 2001, before the homes were completed, after seeing model homes. These plaintiffs asserted claims for strict products liability, breach of express warranty, breach of implied warranty, breach of contract, and negligence. The plaintiffs who bought their homes from original buyers sued JMC for strict products liability and negligence only.

Plaintiffs' Evidence

Plaintiffs presented evidence of design defects and construction defects by JMC, resulting in water intrusion causing cracks and leaks. Design defects involved wind deflection standards and framing. Construction defects involved framing and roofing. Thus, there was an overlap of framing issues -- some attributed to design defect and some attributed to construction/installation defects. Roofing was presented as a separate issue, with separate witnesses and repair costs.

Plaintiffs' expert architect and general contractor Norbert Lohse opined the design plans were defective in calling for wind deflection criteria of "L [length] over 240" (exposure B) which is 50 percent less stiff than L over 360 (exposure C). Exposure C was required to make the buildings stiff enough so that wind would not cause the framing to bow. Lohse said the deficient wind deflection criteria resulted in water intrusion and cracks in the stucco. Lohse also considered the design plans defective in allowing "conventional" braced framing of the second floors, rather than "engineered" framing. The framing is too weak for the wind load. Lohse opined that plywood shear panels were improperly installed with inadequate spacing to allow the wood to expand and contract in response to movement and moisture; he described this as a failure in both design and construction. Lohse also said nails were placed too close to the edge of the plywood, which can happen if workers are not paying attention to what they are doing. Lohse also opined the roofs were improperly installed, with inadequate stapling, which allowed water to get under the roofs. Lohse attributed stucco cracks to the fact the buildings were failing, and "The structural components of the building are failing due to poor design and poor construction of the framing." (Italics added.)

Plaintiffs also presented, as an expert in building standards, George Thomas, the chief building safety official for the City of Pleasanton, who does separate consulting work as a civil engineer. He said building officials do not check everything on design plans for multiple-unit developments; they rely on the engineers who signed and stamped the plans. He opined the design plans used the wrong wind deflection criteria and erroneously called for conventional braced framing on the second floors. As a result, the buildings are too flexible, causing brittle materials like stucco to break.

Plaintiffs' expert on repair costs, William Thomas, developed two sets of repair estimates, excluding the roof problems, one for wind exposure B and the other for wind exposure C. The total cost for repairs, excluding the roofs, for all plaintiffs was $1,332,592.58 for wind exposure B, and $1,600,607.34 for wind exposure C.

Plaintiffs presented evidence that the total repair cost for all roofs was $124,670.85. At trial, JMC's own expert agreed the roofs needed repair, but disputed what needed to be done to repair the roofs and the cost.

The express warranty admitted into evidence said, "your new home . . . represents the finest achievement in workmanship and design. It is built to last and complies with the rigid building and material standard of [JMC]. [¶] . . . [JMC's one-year warranty] will warrant that we have built your home in compliance with local, state, and federal codes. We will correct, upon notification, defects in your home during the first year of your ownership. [¶] JMC Homes is noted for quality. . . ." The warranty documents also stated, however, that JMC was not responsible for wind damage beyond its control, damaged roof tiles, or hairline cracks in stucco, and referred homeowners to the manufacturer's warranty for window problems.

Defendant's Evidence

JMC presented its own expert engineer, Stephen Pelham, who opined the wind exposure and framing were fine in design and installation and did not cause the stucco cracks. As we discuss post, the trial court prevented the defense from calling as a witness the expert of the stucco subcontractor who settled out of the case.

Jury Instructions

The parties stipulated to the instructions.

The trial court instructed on strict liability -- that plaintiffs claimed JMC "defectively designed and constructed"*fn4 the houses; that each plaintiff could recover under strict liability when a defect in one component of the house causes injury to other components of the house, even though the damage is not to persons or property apart from the structure; and that "[e]ach plaintiff claims their home's design was defective because the homes did not perform as an ordinary consumer would have expected it to perform."

The court instructed on liability for design defects: "Each plaintiff claims that their home was improperly designed and constructed by [JMC], which caused the defects and damages alleged. In determining if [JMC] is liable, you should decide if each plaintiff has proved that the design was improper. In deciding whether the homes were designed improperly you may consider the actions of the [JMC] design department and/or the conduct of the engineers hired by [JMC]." (Italics added.)

Jury Deliberation and Verdicts

During deliberations, the jurors asked if they could award damages for incidentals and were told yes.

In special verdicts -- approved by counsel for both sides -- the jury found as follows as to the individual homes purchased directly from JMC:

"STRICT PRODUCTS LIABILITY - DESIGN DEFECT

"1. Did [JMC] manufacture or sell the house?

" X Yes No

"If your answer to question 1 yes, then answer question 2. . .

"2. Did the house fail to structurally perform as an ordinary consumer would have expected?

"___ Yes X No

". . . If you answered no, then go to the next section -- Implied Warranty. [¶] . . . [¶]

"IMPLIED WARRANTY

"6. Did MR. & MRS. ALTMAN buy the house from [JMC]?

" X Yes No

"If your answer to question 6 is yes, then answer question 7. . .

"7. At the time of purchase, did [JMC] know that MR. & MRS. ALTMAN were relying on [JMC's] skill and judgment to design or structurally design or construct the house that was suitable for the particular purpose?

" X Yes No

"If your answer to question 7 is yes, then answer question 8. . .

"8. Did MR. & MRS. ALTMAN justifiably rely on [JMC's] skill and judgment?

" X Yes No

"If your answer to question 8 is yes, then answer question 9. . .

"9. Was the failure of the house to be structurally suitable a substantial factor in causing harm to MR. & MRS. ALTMAN?

"___ Yes X No

". . . If you answered no, then go to the next section -- Express Warranty. [¶] . . . [¶]

"EXPRESS WARRANTY

"11. Did [JMC] warrant to MR. & MRS. ALTMAN the home was properly designed or structurally designed or constructed?

" X Yes No

"If your answer to question 11 is yes, then answer question 12. . .

"12. Did MR. & MRS. ALTMAN rely on [JMC's] design or structural design or construction in deciding to purchase the house?

" X Yes No

"If your answer to question 12 is yes, then answer question 13. . .

"13. Did the house fail to structurally perform as represented?

"___ Yes X No

". . . f you answered no, then go to the next section -- Breach of Contract. [¶] . . . [¶]

"BREACH OF CONTRACT

"[¶] . . . [¶]

"16. Did MR. & MRS. ALTMAN and [JMC] enter into a contract?

" X Yes No

"If your answer to question 16 is yes, then answer question 17. . .

"17. Did [JMC] fail to do something that the contract required it to do in the design or structural design ...


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