Opinion
2d Civil No. B227256
01-09-2012
DALES BUROW et al., Plaintiffs and Respondents, v. JTL DEVELOPMENT CORPORATION, INC. et al., Defendants and Appellants,
McCarthy & Kroes, Gary S. Grubacich, R. Chris Kroes, for Plaintiffs and Respondents. Braden, Hinchcliffe & Hawley, Everett Hinchcliffe, J. Stacie Johnson, Law Offices of John White, John R. White, Jordan Pistol, for Defendants and Appellants.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. SC045035 C/W SC 045315)
(Ventura County)
Appellants JTL Development Corporation (JTL), Highland Development Company, LLC (Highland), and Turf Construction, Inc. (Turf) appeal from the judgment entered against them after a bench trial on the residential construction defect claims of respondents Dale and Colleen Burow (the Burows), and Charles and Laurie Ball (the Balls). The court found appellants strictly liable for defects arising from construction on improperly compacted and graded soils. It entered judgment in favor of the Burows and the Balls for $700,000 each, and reduced for their share of comparative fault.
Appellants contend the trial court erred when (1) it allowed an unqualified expert to render an opinion and to relay the opinion of a non-testifying expert, (2) awarded future damages, and (3) held appellant Turf strictly liable. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Robert Taylor is a licensed contractor who develops and builds homes. He was the only owner or operator of Turf and its president. At trial, Taylor agreed that "Turf Construction, Inc. for all intents and purposes was Bob Taylor." Joseph Lynch is also a licensed general contractor. He is the only operator of JTL, of which he and his wife are sole shareholders. Taylor and Lynch have shared profits on various projects in the development of about 95 mass produced homes.
In about 1993, Taylor and Turf acquired an undeveloped parcel known as Highland from a client who was unable to pay. Turf initially entered into a partnership with a third party, Griffin Homes (Griffin), to develop the property. Griffin withdrew when a geotechnical and soils engineering firm reported significant problems with soil stability on 14 of the lots. The property had been graded previously. The first 10 feet had been properly compacted, but the 15 feet below that layer had not been compacted resulting in soils too unstable for building.
After Griffin withdrew, Turf partnered with JTL to develop the property and build production homes. Their partnership was named Highland and they agreed to equally share profits from the sale of the homes. Taylor and Lynch testified that Turf contributed the lots to the partnership.
Turf prepared the lots for construction by cutting, filling, compacting and grading the soil. Turf (and Taylor) had never compacted or graded a residential tract before. Taylor testified that he knew there was a significant problem with unstable soils. Respondents presented evidence that Turf compacted and graded the soil improperly.
The Burows and the Balls purchased homes from Highland. They began to notice damage resulting from soil settlement in 2005, and the damage progressively worsened. They each filed complaints for damages from latent defects in the planning and construction of improvements on real property and for negligence. The court consolidated the two cases and all parties waived jury. In their trial brief they alleged that appellants were strictly liable for the defects as developers and sellers of the lots.
Respondents presented evidence that Turf improperly prepared the lots and that their homes were damaged by resulting soil settlement and consolidation. Witnesses testified to interior and exterior damage to the homes and to backyard improvements. The court observed the condition of the properties on a site visit.
Respondents' engineering geologist, William LaChapelle, testified that the soil under respondents' homes was highly compressible, and that there had been tilting and disruption of an inch and a half in both homes and three to five inches in the backyard and pool areas. Over objection, he also testified that there would be four to eight inches of future settlement in the next fifteen to twenty years. In reaching this opinion on future settlement, he relied in part upon an engineering calculation performed by Mark Russell, a non-testifying geotechnical engineer from LaChapelle's laboratory. After conducting a hearing pursuant to Evidence Code section 402, the trial court found that LaChapelle was qualified to give the opinion, that it was within his area of expertise, and that he permissibly relied on matters upon which other experts in the field regularly rely. Respondents presented evidence that the cost of repair to remediate conditions on their lots would be over $2 million for each property, while the loss in value resulting from the defects was about $700,000 for each property.
Appellants' geotechnical engineer testified that soil consolidation was complete and there would be no further settlement. Appellants presented evidence that the damage to the homes was insignificant. They acknowledged significant damage to backyard improvements, including respondents' pools, but testified that these improvements were built by the Burows and the Balls on soil that had been identified to them as only partially remediated, that they had removed a slope and built on natural soil, and that they had filled soil without consulting appropriate professionals.
The court found JTL, Highland and Turf strictly liable for respondents' damages. It found the Burows 25 percent comparatively negligent and the Balls 15 percent comparatively negligent. It based Highland and JTL's strict liability on "the defective construction of [respondents' homes] on the unstable sub-surface soil beneath their respective lots." It based Turf's strict liability on Turf's role as a contractor and seller of the lots. The court's statement of decision does not expressly mention LaChapelle's opinion that there would be future settlement. The court found that respondents were entitled to the lesser of either the cost of repair or the loss in value, that repair would cost more than $2 million dollars per parcel, and that the loss in value was about $700,000 to $800,000 per parcel. Accordingly, it awarded $700,000 to each couple, reduced for comparative negligence.
DISCUSSION
A. LaChappelle's Opinion That There Would Be Four to Eight Inches of Future Settlement
Appellants contend that LaChappelle was not qualified to give the opinion that there would be four to eight inches of future soil settlement because he was not a geotechnical engineer and because he conceded in deposition that he was unable to perform an analysis upon which he relied to reach his opinion. They also contend that he improperly relayed Mark Russell's opinion as independent fact. We disagree.
We review for abuse of discretion a trial court's decision that a proffered expert has the required special knowledge, skill, experience or education to qualify him to render an opinion. We apply the same standard to the trial court's decision that an opinion is within an expert's area of expertise. (Evid. Code, § 720, subd. (a); Jacskon v. Deft, Inc. (1990) 223 Cal.App.3d 1305, 1319-1320; Korsak v. Atlas Hotels, Inc. (1992) 2 Cal.App.4th 1516, 1523.)
The trial court did not abuse its discretion when it determined that LaChapelle was qualified to give the soil consolidation opinion, that it was within his area of expertise, and that Russell's consolidation curves were the type of information ordinarily relied upon by experts such as LaChappelle. LaChappelle testified that he was educated, trained, and registered with the state as an engineering geologist. He testified that he had 38 years of experience during which he had observed and analyzed similar conditions. He reached his opinion after he and a laboratory team took boring samples, tested them in their laboratory, and analyzed resulting data. As the geotechnical engineer on the team, Russell plotted the data onto consolidation curves which LaChappelle used to reach his opinion regarding future soil consolidation. LaChapelle also relied on soil reports, patterns of stress, and his training and experience. He testified that he and Russell, working together, took data from the laboratory tests and devised a technique for projecting the time element to determine whether consolidation had run its course or, if it had not, to determine how long it would take. He said that they arrived at the opinion together, through a cycle of "back and forth" and peer review, and that the opinion that the soil would settle four to eight inches in fifteen to twenty years was his own.
LaChapelle acknowledged at deposition that he was unable to personally perform Russell's calculations, but this did not render LaChapelle's opinions inadmissible. LaChapelle was unable at deposition to state what the value would be at a particular point on a consolidation curve upon which he relied. The following exchange took place: Question: "So if we go straight up we're going to get a number like .08 or .09?" Answer: "Well, no. This -- okay. The -- really what we should be discussing this in terms of precise numbers. That's not my area of expertise." Question: "Whose area of expertise is that?" Answer: "That's an engineering calculation. That's done in the laboratory." Question: "And who did those?" Answer, ". . . Mark Russell." He testified at deposition that he was "not prepared to take these consolidation charts for us and explain how the numbers translate into this," and he said, "What I can't do is tell you how these exact calculation were done." At trial, he explained that he did not have the raw laboratory data at the deposition and that he was being asked about specific numbers that were not on the plotted curves. He said that the data comes from the laboratory, the plots are prepared by the geotechnical engineer according to a prescribed standard procedure, and that LaChapelle's "job [is] to interpret the plot."
The trial court acted within its discretion when it determined that LaChapelle's reliance on the consolidation curve was a matter going to the weight, not the admissibility, of his opinion. LaChapelle's testimony supported a finding that a consolidation curve is a matter upon which other experts in the field regularly rely. An expert may base his opinion upon any matter that is of the type reasonably relied upon by similar experts in the field in forming such opinions, including hearsay. (Evid. Code, § 801, subd. (b).) For example, an architect may rely on a cost estimator for mathematical computations in reaching an opinion on the cost of construction. (Appel v. Burman (1984) 159 Cal.App.3d 1209, 1217.) It is true that an expert may not relay hearsay as independent proof of a fact. (Korsak v. Atlas Hotels, Inc., supra, 2 Cal.App.4th at pp. 1524-1525.) But we are satisfied that the court capably distinguished between the basis for LaChapelle's opinion and independent proof of facts. The bases of LaChapelle's opinions were fully disclosed, examined and challenged on cross-examination and the trial court did not abuse its discretion when it allowed his testimony.
B. Sufficiency of Evidence to Support the Award of Future Damages
Appellants contend that the only evidence of substantial future soil settlement to support an award of future damages was LaChappelle's inadmissible opinion. Having found LaChapelle's opinion admissible, this contention fails.
Appellants also contend that the court awarded speculative damages. Damages which are speculative, remote or imaginary cannot serve as a legal basis for recovery, but recovery is allowed for damages reasonably certain to result from a wrongful act. (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989.) Here, the court did not specify whether it was relying on the soil consolidation opinion as a basis for recovery, but its award was based on evidence of reasonably certain damage. The court's determinations of the costs for repair and the loss in value were amply supported by lay and expert testimony concerning the existing damage to the property, its own observations at the site and the testimony of experts concerning the cost of repair and loss of value. Real estate experts for both sides testified about the impact on the property value that would result from the existing detrimental conditions and the required disclosure of alleged defects and necessary repairs. Their estimates ranged from $700,000 to $800,000 per property, as awarded. Substantial evidence supported the award.
C. Strict Liability of Turf
Appellant contends that the court erred when it applied the doctrine of strict liability to Turf because Turf did not own or sell the properties. We disagree because Turf's grading activities rendered its strictly liable as a manufacturer of the lots.
There was substantial evidence that Turf manufactured the lots in preparation for the Highland development. The manufacturer of a lot for production homes may be held strictly liable for damages suffered as a result of defects in the cutting, grading and compacting of the soil. (Avner v. Longridge Estate (1969) 272 Cal.App.2d 607, 615.) There is substantial evidence in the record to support the court's finding that Turf was liable as a contractor who manufactured the lots in preparation for the development. The court also found that Turf was strictly liable as a seller, but whether or not Turf sold the lots is immaterial to its liability as a manufacturer.
In Avner v. Longridge Estates, supra. 272 Cal.App.2d at p. 614, the court considered strict liability of a manufacturer of a lot as a question of first impression. The owner of a hillside property had developed it into a tract of residential lots. (Id. at p. 608.) A homebuyer alleged that his lot pad settled due to insufficient compaction at the time of the lot preparation. (Id. at p. 609.) He sued the developer and the soils engineer for strict liability as manufacturers of the lot based on defective cutting, grading and compacting of the soil. The trial court sustained a demurrer without leave to amend on the ground that "'there is no doctrine of strict liability as to the manufacture of residential lots.'" (Id. at p. 609.) The appellate court reversed, holding that "that the manufacturer of a lot may be held strictly liable in tort for damages suffered by the owner as a proximate result of any defects in the manufacturing process." (Id. at p. 615.)
Although the developer in Avner was also an owner of the land, the appellate court did not rely on ownership. It relied solely on the allegations that the developer engaged in manufacturing activities of "cutting, grading, filling and compacting for the purpose of sale to the public and the construction of a house thereon" (Avner v. Longridge Estates, supra. 272 Cal.App.2d at p. 615) and the allegation "that the manufacturing process was defective in that it had inadequate provision for drainage, which caused water to accumulate between the fill and bedrock, in that it had organic matter beneath the fill which decomposed, causing the lot pad to settle; and in that it had not been sufficiently compacted, which also caused the lot pad to settle." (Ibid.)
Here, Turf acknowledged that it cut, graded, and compacted the soil in preparation for the development of the tract homes. Substantial evidence, including expert opinion, supported a finding that Turf did not sufficiently compact the soil, resulting in damage from settling soil. The trial court did not err when it held Turf strictly liable as a manufacture of the lots. Whether or not Turf owned the lots is immaterial because Turf is strictly liable as a manufacturer of the lots.
Moreover, there was conflicting evidence presented at trial from which the court could have concluded that Turf had an ownership or controlling interest in the property during its development. Turf argues that there was evidence that another entity was the owner of record when the grading was performed, but there was also testimony from Lynch that Turf sold the land directly to highland after grading it. Lynch testified, "Bob [Taylor] and I agreed that Turf would sell the land to Highland, and prior to transferring the property to Highland, that Turf would grade the land, do whatever is necessary to build upon the land." Taylor and Lynch each testified that Turf contributed the lots to the Highland partnership, and when Taylor was asked, "you provided the land and Joe Lynch provided the expertise, correct?" he answered in the affirmative. Where, as here, different inferences may reasonably be drawn from undisputed evidence, we must accept the conclusion of the trial judge. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.)
DISPOSITION
The judgment is affirmed. Costs on appeal awarded to respondents.
NOT TO BE PUBLISHED.
COFFEE, J. We concur:
YEGAN, Acting P.J.
PERREN, J.
Frederick H. Bysshe, Judge
Superior Court County of Ventura
McCarthy & Kroes, Gary S. Grubacich, R. Chris Kroes, for Plaintiffs and Respondents.
Braden, Hinchcliffe & Hawley, Everett Hinchcliffe, J. Stacie Johnson, Law Offices of John White, John R. White, Jordan Pistol, for Defendants and Appellants.