California Court of Appeal, Second District, Third Division
ORIGINAL PROCEEDINGS in mandate. Gerald Rosenberg, Judge. Petition granted. (Super. Ct. No. SC101002).
[168 Cal.Rptr.3d 83] Best Best & Krieger, Riverside, Victor L. Wolf, Scott W. Ditfurth and Kevin J. Abbott, for Petitioner.
No appearance for Respondent.
Zimmerman & Kahanowitch and Brian F. Zimmerman, Woodland Hills, for Real Parties in Interest.
Cynthia Burch challenges an order granting summary adjudication in favor of Premier Homes, LLC (Premier Homes), Custom Home
Builders, Inc. (Custom Home Builders), Scott Warren, and Daniel Sahar in a construction defect action. The defendants argued that the Right to Repair Act (Civ. Code, § 895 et seq.) provides the exclusive remedy for a homeowner seeking damages for construction defects and precludes common law causes of action for negligence and breach of implied warranty. Custom Home Builders, Warren, and Sahar also argued that they owed Burch no duty of care and that they could not be liable for breach of implied warranty because they were not parties to any contract with her.
We hold that the Right to Repair Act does not provide the exclusive remedy for a homeowner seeking damages for construction defects that have resulted in property damage, as here. In addition, we also conclude that Custom Home Builders, Warren, and Sahar failed to negate a duty of care owed to Burch as a prospective purchaser and failed to negate an implied warranty in favor of Burch as a third party beneficiary of the construction contract. We therefore conclude that the court erred by summarily adjudicating the counts for negligence and breach of implied warranty in favor of the defendants.
FACTUAL AND PROCEDURAL BACKGROUND
1. Factual Background
Custom Home Builders, a general contractor, built a single family residence in Pacific Palisades area of Los Angeles pursuant to a written construction contract with Premier Homes, the developer. The residence was not built specifically for Burch, but instead was built to be marketed to the general public. After the construction was completed and the home was put on the market, Burch purchased it from Premier Homes pursuant to a written sales contract. Warren and Sahar are the principals and owners of both Custom Home Builders and Premier Homes.
Burch filed a complaint against Premier Homes, Custom Home Builders, Warren, Sahar, and others in December 2008. She filed a third amended complaint in August 2012. She alleged in her third amended complaint that the home suffered from numerous construction defects. She also alleged that Premier Homes and Custom Home Builders were the alter egos of the individual defendants. She alleged counts for (1) breach of the sales contract; (2) [168 Cal.Rptr.3d 84] negligence; (3) breach of implied warranty; (4) unjust enrichment; (5) breach of contract/third party beneficiary; and other counts.
Burch alleged in her second count for negligence that the defendants breached their duty of care in connection with the construction, resulting in deficient
construction. She specified several defects that allegedly have resulted in property damage. She alleged in her third count for breach of implied warranty that Premier Homes contracted with Custom Home Builders for the construction and that Custom Home Builders was aware that a party such as Burch would purchase the property. She alleged that the defendants impliedly represented to her, as a third party beneficiary, that they had used reasonable skill and judgment in the construction and alleged that they breached such implied warranty.
3. Summary Adjudication
Custom Home Builders, Warren, and Sahar jointly moved for summary judgment or summary adjudication of several counts. Premier Homes also separately moved for summary judgment or summary adjudication. The defendants argued that the Right to Repair Act established a statutory action for violation of the standards set forth in the act as the exclusive remedy for ...