BEACON RESIDENTIAL COMMUNITY ASSOCIATION v. SKIDMORE OWINGS AND MERRILL

Respondents’ Petition for Review

Cal.January 23, 2013

Ss me JAN 8 9 2013 IN THE Frank A. MeGuire Cory SUPREME COURT OF CALIFORNER' BEACON RESIDENTIAL COMMUNITY ASSOCIATION, Plaintiff and Appellant, Uv. SKIDMORE, OWINGS & MERRILL LLPetal., Defendants and Respondents. AFTER A DECISION BY THE COURT OF APPEAL, FIRST APPELLATE DISTRICT, DIVISION FIVE CASE No. A134542 PETITION FOR REVIEW HORVITZ & LEVY LLP PEDER K. BATALDEN (BAR No. 205054) PETER ABRAHAMS(BAR NO. 44757) 15760 VENTURA BOULEVARD, 18TH FLOOR ENCINO, CALIFORNIA 91436-3000 (818) 995-0800 * FAX: (818) 995-3157 pabrahams@horvitzlevy.com pbatalden@horvitzlevy.com ATTORNEYS FOR DEFENDANTS AND RESPONDENTS SKIDMORE, OWINGS & MERRILL LLP AND HKS,INC. ROBLES, CASTLES & MEREDITH SCHWARTZ & JANZEN, LLP RICHARD C. YOUNG(BAR No. 205407) NOEL E. MACAULAY(BAR No. 121695) 492 NINTH STREET, SUITE 200 STEVEN H. SCHWARTZ(BAR No. 94637) OAKLAND, CALIFORNIA 94607-4082 12100 WILSHIRE BOULEVARD, SUITE 1125 (415) 632-1586 + FAX: (415) 743-9305 Los ANGELES, CALIFORNIA 90025-7134 rick@remlawgroup.com (310) 979-4090 » FAX: (810) 207-3344 § r@s} .ATTORNEYS FOR DEFENDANT AND RESPONDENT nmacaulay@sjlaw.com SKIDMORE, OWINGS & MERRILL LLP sschwartz@sjlaw.com ATTORNEYS FOR DEFENDANT AND RESPONDENT HKS, INC. TABLE OF CONTENTS Page TABLE OF AUTHORITIES....0...c.ccc cee ccecceecseccessecesecseeecssceesseseeseves li ISSUES PRESENTED o.oocece cee cesecnccsecceeseesseeseeeesscevsuecesueses 1 INTRODUCTION: WHY REVIEW SHOULD BE GRANTED.....2 PROCEDURAL AND FACTUAL BACKGROUND.........cccccccccceeee. 6 LEGAL DISCUSSION o.oo cieccccccccscescesssecsccsesestessesseneesesresseeseens 9 I. THE COURT OF APPEAL’S PUBLISHED OPINION CREATES A CONFLICT IN THE CASE LAW REGARDING WHETHER DESIGN PROFESSIONALS OWEDUTY OF CARE TO PERSONS WITH WHOM THEY ARE NOT IN CONTRACTUALPRIVITY................. 9° Il. THE RIGHT TO REPAIR ACT DID NOT ABROGATE COMMON LAW DEFENSES AVAILABLE TO DESIGN PROFESSIONALS, INCLUDING THE ABSENCE OF DUTY 00... cccccccccccsescessescesesssssevasereesanerens 17 CONCLUSIONooocccceceeceesesseessecseesscseescsesessssssssaevausreesseases 22 CERTIFICATE OF WORD COUNT.........cccccccceessccsseceseeeceeseeseeees 23 TABLE OF AUTHORITIES Page(s) Cases Aas v. Superior Court (2000) 24 Cal.4th 627 0...ieccccccessesseeeeseceeeeeens 2, 4, 18, 19 Baeza v. Superior Court (2011) 201 Cal.App.4th 1214 coccccccccccccccccccscsssssessssssessesstesesseseees 18 Biakanja v. Irving (1958) 49 Cal.2d 647...ececceeceeeeeeseceeeccceececececess passim Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370 ooo... ccccccsseccsseseceesessntteecessnesees passim California Assn. of Health Facilities v. Department of Health Services (1997) 16 Cal.4th 284 ooo...ices ccceesseceeccesseseteeseeeseteeeeeenss 18 Huang v. Garner (1984) 157 Cal.App.3d 404 ..ccccccccccccccscsscssecsscsessssessveseceseeee 15, 19 Kriegler v. Eichler Homes, Inc. (1969) 269 CalApp.2d 224 ooocceccccccccccccsscsscssstssescssssestseveseseseeee 15 Reynolds v. Bement (2005) 36 Cal.4th 1075 oo... cccccececcsessssccccececessseeeessntsteeeees 16 Stearman v. Centex Homes (2000) 78 Cal.App.4th 611oessccceccesssreeeecessneeeeees 15 Ventura County Humane Society v. Holloway (1974) 40 Cal.App.3d 897 ......c ccc ccecssscccceeceesestseceeeentanece 5, 20 Weseloh Family Lid. Partnership v. K.L. Wessell Construction Co., Inc. (2004) 125 Cal.App.4th 152 wo.cceeeeeeessneeccceeees passim u Statutes Civil Code § 895 et SCQ..ccccccecccsessesssssssesessestssestesesessessessesstssvevssessesees 2,4, 8,17 § 896 oooccceccccecssesecscsecsucecsvsucsvssestsusstsusacssessesssssueseseressveseveceseeese 18 § O36 oooceeececcscssvsscsecsecsrcecsvsseeesusstsssatssssessesesssessessesvesesesaveseseees 18, 19 § D455 cocecccccccscsesessecsecsesececsesevsrsacevsucaesussesssstsesessesessesseevavseeeece 19 Rules of Court Cal. Rules of Court, rule 8.500(bD)(1)....cccece eeeeececesecssssscesseseccees 4 Miscellaneous Assem. Com.on Judiciary, analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug.26, 2002.................. 21 Senate Bill 800 occececsceessssseeeesseeessseeesens 2, 4, 8, 17, 20, 21 Sen. Com. on Judiciary, analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002.......00000...... 21 il IN THE SUPREME COURT OF CALIFORNIA BEACON RESIDENTIAL COMMUNITYASSOCIATION, Plaintiff and Appellant, v. SKIDMORE, OWINGS & MERRILL LLPetal., Defendants and Respondents. PETITION FOR REVIEW ISSUES PRESENTED 1. Does a design professional (e.g., an architect or engineer) that provides design recommendationsto the developerof a construction project, but has no involvementin the construction, owe a duty of the care to persons with whom thedesignprofessional is not in contractual privity? In Weseloh Family Ltd. Partnership v. K.L. Wessell Construction Co., Inc. (2004) 125 Cal.App.4th 152 (Weseloh), the Court of Appeal, Fourth Appellate District, Division Three, held a design professional owes no duty in those circumstances. Here, in a published opinion, the Court of Appeal refused to apply Weseloh and held that a design professional does owe a duty of care. 2. Did the Right to Repair Act, Senate Bill 800, Civil Code section 895 et seq., which abrogatedthe holding in Aas v. Superior Court (2000) 24 Cal.4th 627 (Aas), that homeowners may not recover damagesin negligence from the builder of their homes for existing construction defects that had not yet caused property damageor personal injury, also abrogate other commonlaw rules governingthe liability of design professionals prior to the adoption of that Act? INTRODUCTION: WHY REVIEW SHOULD BE GRANTED ISSUE 1 The Court of Appeal’s opinion here constitutes a dramatic expansion of the liability of design professionals that will impact numerous future cases. In Weseloh, the Court of Appealrelied on the duty analysis in Biakanja v. Irving (1958) 49 Cal.2d 647 (Biakanja) and Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370 (Bily) to hold that a design engineer owed no duty of care to third parties. The engineer in that case performed consulting workfor a subcontractor on a project to construct an automobile dealership, including the design of two retaining walls. The court held it was not liable to the ownersof the property after the retaining walls collapsed because the engineer hadno contractual relationship with the owners and had norole in the construction of the walls. Weseloh is irreconcilable with this case, whose facts are not materially different. Here, the defendants, two architecturalfirms, contracted with the developer of a large mixed commercial and residential complex to provide architectural and engineering services. Like the engineer in Weseloh, they had no role in the construction itself. Their contracts with the developer provided that no condominium association or purchaserofthe residential units in the complex would be a third party beneficiary of the architects’ obligations to the developer. After the complex was completed, it was sold to another developer, which marketed and sold the residential units as condominiums. The condominium homeowner's association then brought this action against the architects and 40 other defendants, alleging multiple construction and design defects in the complex. The trial court, relying on Weseloh, sustainedthe architects’ demurrersto the complaint without leave to amend and dismissedthe action. The Court ofAppeal reversed in a published opinion. (Typed opn., 2.) Despite the clear parallels between this case and Weseloh, the Court ofAppeal found that case “to provide limited guidance in the duty analysis here, and to beof little application to the facts before us.” (Typed opn., 7.) Although it acknowledged that “[ljiability concerns may also limit the willingness of design professionals to undertake large residential construction projects at all” (typed opn., 16), it found nothing in the Biakanja/Bily duty analysis! that would preclude imposition of liability in this case (typed opn., 13). 1 “[T]he extent to which the transaction was intendedto affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral (continued...) This court may and should grant review “[w]hen necessary to secure uniformity of decision or to settle an important question of law.” (Cal. Rules of Court, rule 8.500(b)(1).) The conflicting decisions in Weseloh and in this case leave no doubtthat the issue presented here involves a recurring and important yet unsettled question of law, one that has enormousfinancial consequencesfor design professionals such as architects and engineers. Until this court settles the issue, more litigation and conflicting appellate decisions are inevitable. This court should grant review andfinally resolve whether a design professional whose role is limited to providing advice to a builder, and who has no contractual relationship with the ultimate purchasers, may be liable to those purchasersfor its design decisions. ISSUE 2 Implicitly acknowledging the lack of material distinctions between this case and Weseloh, the Court of Appeal “ultimately” rested its decision not on “our assessment of the Biakanja/Bily policy analysis,” but instead on the Right to Repair Act, Senate Bill 800, Civil Code section 895 et seq. (Typed opn., 17.) The Right to Repair Act abrogated this court’s holding in Aas that homeowners may not recover damages in negligence from the builder of their homes for construction defects that have not yet caused either property damageor personalinjury. (...continued) blame attached to the defendant's conduct and the policy of preventing future harm.” (Biakanja, supra, 49 Cal.2d at p. 650.) The Court ofAppeal purportedto find supportfor its holding in provisions of the Right to Repair Act that specify that it applies to design professionals as well as builders, general contractors and subcontractors. But the Court ofAppeal acknowledged that the Act does not create a duty, and that the Legislature merely assumed a duty existed under the common law. Moreover, the statutes on which the court relied makeclear that a design professionalis liable only for a negligent act or omission, andretainsall common law and contractual defenses, which necessarily means a design professional may argue it owes no duty. (Ventura County Humane Society v. Holloway (1974) 40 Cal.App.3d 897, 902 (Holloway).) Because one of the essential elements of a claim for professional negligence is a duty owed by the professional to the plaintiff, the Right to Repair Act refutes rather than supports the Court of Appeal’s conclusion that liability may be imposed on a design professional that would not otherwise exist under the Biakanja/Bily duty analysis. This court should grant review and examine the Court of Appeal’s unprecedented andpotentially far-reaching conclusion that liability may be imposed on a design professional for a violation of the Right to Repair Act even if no liability would exist under the Biakanja/Bily duty analysis. PROCEDURAL AND FACTUAL BACKGROUND Petitioners Skidmore, Owings & Merrill LLP (Skidmore) and HKS, Inc., are architectural firms. They contracted with the developer of a large mixed commercial and residential complex in San Francisco (The Beacon) to provide architectural and engineering services. (2 JA 311.) They had no role in the construction itself. (See 2 JA 313-314; 3 RT 106, 110, 112-114.) Their contracts with the developer provided that they were “solely responsible to Owner and not to... condominium associations or purchasers for performanceor [sic] Architect’s obligations under this Agreement; and ... no such condominium association or purchasershall be a third-party beneficiary or third party obligee with respect to the Architect’s obligations under this Agreement.” (1 JA 47.)? After completion of construction, the 595 residential units in the Beacon were initially rented as apartments. However, the 2 The Association initially named both HKS and Skidmore in a causeof action for “third party beneficiary-breach of contracts and subcontracts,” but set forth only the contract languagerelating to HKS. (1 JA 45-57, capitalization and boldface omitted.) After HKS demurred, noting the contract language providing that the Association was not a third party beneficiary (1 JA 109-110), the Association dismissed HKSfrom that cause of action (1 JA 145-147) and, in subsequentiterations of its complaint, chose not to reassert that cause of action against Skidmore (1 JA 229-239; 2 JA 318-320). Consequently, the Association has implicitly conceded that the contract between Skidmore and the developer included similar language. Beacon was subsequently sold to another developer, which marketed and sold the apartments as condominiums. (2 JA 287.) The Beacon Residential Community Association (the Association), the homeownersassociation that manages the Beacon, filed this lawsuit against Skidmore, HKS, and 40 other defendants alleging multiple defects in the project, including “excessive heat gain, a condition supposedly rendering the condominium units uninhabitable during certain periods due to excessively high temperatures. (2 JA 321.) According to the Association, the solar heat gain was due to Skidmore’s and HKS’s approval of the substitution of less expensive and ultimately nonfunctional windows, as well as a design lacking adequate ventilation within the residential units. ([bid.) The Association’s complaint seeks damagesin excess of $50 million. (2 JA 323.) Skidmore and HKS demurredto the Association’s operative third amended complaint. (2 JA 361-397.) Relying on the duty analysis in Biakanja, Bily, and Weseloh, they argued they owed no duty of care to third parties, such as the Association or its members. Thetrial court found that Weseloh, controlled and Skidmore and HKScould not be liable to the Association for negligent design. Rather, the Association was required to show that petitioners had control of the construction process such that they assumed a role beyondthatofproviding design recommendationsto the developer. (3 RT 106, 110, 112-114.) During oral argument on the demurrer, counselfor the Association conceded that Skidmore and HKShad no control over the construction means and efforts, but asserted that their construction observation gave them a degree of overall “control” of the project that rendered them liable. (8 RT 112.) The court asked counselif she had a goodfaith belief that Skidmore and HKS “went beyond what architects do, which is recommend changes, and actually controlled whether or not the change was implemented.” (3 RT 119.) When counsel stated she did have such a belief, the court granted leave to amend. (38 RT 118-119.) However, the Association elected not to amend and the court therefore sustained the demurrers without leave to amend and dismissed the action against Skidmore and HKS. (2 JA 487-490.) The Court of Appeal reversed in a published opinion.3 Although it found nothing in the Biakanja/Bily duty analysis that would preclude imposition of liability in this case (typed opn., 13), “ultimately, it is not our assessment of the Biakanja/Bily policy analysis that matters.” (Typed opn., 17.) Rather, the Court of Appeal held, the Right to Repair Act, Senate Bill 800, Civil Code section 895 et seq., reflected a legislative policy choice that design professionals should owe a duty of care to third parties. Relying on provisions in the Act subjecting “design professionals’to liability for violation of its construction standards, the Court ofAppeal concluded: “To the extent that a Biakanja/Bily policy analysis is not otherwise dispositive of the scope of duty owed by a design professionals [sic] to a homeowner/buyer, Senate Bill No. 800 is.” (Typed opn., 21.) 3 The Court of Appeal reversed the judgmentin its entirety, even though it acknowledgedthat the trial court properly sustained the demurrerto the cause of action for negligence per se. (Typed opn., 4,fn.5.) It denied petitioners’ petition for rehearing, which pointed out that inconsistencyin its opinion. LEGAL DISCUSSION I. THE COURT OF APPEAL’S PUBLISHED OPINION CREATES A CONFLICT IN THE CASE LAW REGARDING WHETHER DESIGN PROFESSIONALS OWE A DUTY OF CARE TO PERSONS WITH WHOM THEY ARE NOT IN CONTRACTUAL PRIVITY. In Weseloh, a design engineer wasretained by a subcontractor to design tworetaining walls in connection with the construction of an automobile dealership and, following the construction, inspected the walls at the subcontractor’s request. The Court of Appeal held that because there wasnoprivity of contract, the engineer wasnot liable to either the general contractor or the property owner for damages caused whenthe walls collapsed. The Court of Appeal here stated that Weseloh is distinguishable. (Typed opn., 7.) In fact, there are no meaningful distinctions between the facts in Weseloh andthefacts of this case. The Court of Appeal’s refusal to follow Weseloh creates a direct, irreconcilable conflict in the case law regarding the duty of architects and engineers to persons with whom they are notin privity. The court in Weseloh relied on the duty analysis articulated by this court in Biakanja and Bily. In Biakanja, a notary public prepared a will for the plaintiffs brother through which theplaintiff was bequeathedall of his brother’s property. The will was denied probate dueto a lack of sufficient attestation andplaintiff received only a one-eighth intestate share of the brother’s estate. The plaintiff sued the notary public for negligence. This court delineated the following factors which must be balanced to determine whether a defendant will be held liable to a third person with whomit is not in privity: “the extent to which the transaction was intendedto affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm.” (Biakanja, supra, 49 Cal.2d at p. 650.) Applying thesefactors, this court held the notary public was liable to the plaintiff because “the ‘end and aim’of the transaction was to provide for the passing of [the brother’s] estate to plaintiff. [Citation.] Defendant must have been aware from the termsofthe will itself that, if faulty solemnization caused the will to be invalid, plaintiff would suffer the very loss which occurred.” (Biakanja, supra, 49 Cal.2d at p. 650.) Moreover, “drafting and supervising the execution of a will ... was an important transaction requiring specialized skill, and defendant was clearly not qualified to undertake it. His conduct was not only negligent but was also highly improper. He engaged in the unauthorized practice of the law [citations], which is a misdemeanor.... Such conduct should be discouraged and not protected by immunity from civil liability... .” Ud. at p. 651.) In Bily, this court, applying the Biakanja factors, addressed whether a third party could maintain a negligence cause of action against a providerofprofessional services, and held that only those 10 persons with whom theprofessional had directly contracted, or, possibly, those who were express beneficiaries of the contract, were owed a duty of care. Thus, it held that an auditor did not owe a duty of care to investors with whom it had no contractual relationship in the preparation of an independentaudit of a client’s financial statements, even though it was foreseeable the investors would rely on the audit. This court identified “three central concerns” that militated against holding an auditor owed a duty of care to a third parties: (1) an auditor exposed to negligence claims from all foreseeable third parties would face potential liability far out of proportion to its fault; (2) “the generally more sophisticated class of plaintiffs in auditor liability cases . . . permits the effective use of contract rather than tort liability to control and adjust the relevant risks through ‘private ordering”; and (8) “the asserted advantages of more accurate auditing and more efficient loss spreading relied upon by those who advocate a pure foreseeability approach are unlikely to occur.” (Bily, supra, 3 Cal.4th at p. 398.) In Weseloh, supra, 125 Cal.App.4th, the Court ofAppeal held that application of the Biakanja/Bily factors precluded imposition of liability on the design engineer in thatcase. First, considering the extent to which the design of the walls wasintendedto affect the owners, the court in Weseloh noted that the engineerdid not participate in the construction of the walls and there was no evidence of an intended beneficiary clause related to the design that identified the ownersas the intendedbeneficiaries. To the extent the engineer’s participation in the project would also 11 benefit the owners, it was only through the subcontractor. (Weseloh, supra, 125 Cal.App.4th at p. 167.) Second, regarding forseeability, the court in Weseloh noted that under Bily, “ ‘[floreseeability of injury . . . is but one factor to be considered in the imposition of negligence liability. Even when foreseeability was present, we have on several recent occasions declined to allow recovery on a negligence theory when damage awards threaten to impose liability out of proportion to fault or to promote virtually unlimited responsibility for intangible injury.’ ” (Weseloh, supra, 125 Cal.App.4th at p. 167, quoting Bily, supra, 3 Cal.4th at p. 398.) Although the owner in Weseloh sought property damages in addition to economic damages, and it is generally foreseeable that a design defect could result in the failure of a retaining wall, there was no evidence that the engineer’s design was followed without alteration. (Weseloh, at pp. 167-168.) Third, regarding the certainty that the owner sustained injury, and the closenessof the connection between the engineer’s conduct and that injury, the Court of Appeal in Weseloh noted that there was no evidence the engineer either participated in or supervised any physical work in the construction of the retaining walls. “[R]ather, it appears [the engineer] provided engineering services akin to professional advice and opinion.” (Weseloh, supra, 125 Cal.App.4th at pp. 168-169.) Fourth, regarding “moral blame,” the Weseloh court noted that the case was different from Biakanja, “where the injurious conduct at issue involved the unauthorized practice of law, a misdemeanor,by a notary public in preparing a will. This case does 12 ¢ not involve comparable 125 Cal.App.4th at p. 169.) “moral blame.”’” (Weseloh, supra, Fifth, regarding the policy of preventing future harm, the Weseloh court concludedthere is no support for “an argument that greater care in design engineering would result from expanded hability.... The [owners] are not without the remedy of pursuing claims for damages against their general contractor, [the general contractor] is not without the remedy of pursuing its claims for damages against its subcontractor. ... [The design engineer], in turn, would be accountable to [the subcontractor] for any defects in the design that caused damage.” (Weseloh, supra, 125 Cal.App.4th at p. 170.) The Weseloh court then addressed the “three central concerns” on which this court premised its decision in Bily. Regarding the prospectof liability out of proportion to fault, the court in Weseloh noted that. there was no evidence that the subcontractor even followed the engineer’s design. “Yet, the Weseloh plaintiffs’ second amended complaint alleged they sustained $6,000,000 in damages as a result of [the engineer’s] conduct. This amount does not even include the unspecified damages prayedfor [by the subcontractor’s] second amendedcross-complaint. The state of the record shows,if anything, the imposition of a duty of care on [the engineers] to the Weseloh plaintiffs and [the subcontractor] would expose [the engineer] to liability far out of proportion to fault.” (Weseloh, supra, 125 Cal.App.4th at p. 171.) | Regardingthe prospectofprivate ordering, the Weseloh court noted that because the engineer “had nopart in the construction of 13 the retaining walls, [it], like the auditor in Bily, did not have complete control over the creation of the product—the retaining walls. [Moreover], there is no evidence in the record showing[the engineer’s] design was used without alteration.” (Weseloh, supra, 125 Cal.App.4th at pp. 171-172.) Finally, regarding the effect of professional services liability to third persons, the court in Weseloh once again concluded ce there was no evidence favoring ‘the alleged tortfeasor over the 299alleged victim as an effective distributor of loss.’” (Weseloh, supra, 125 Cal.App.4th at p. 172, quoting Bily, supra, 3 Cal.4th at p. 405.) The same considerations apply here to preclude the imposition of liability upon Skidmore and HKS: e Like the engineer in Weseloh, Skidmore’s and HKS’s only role wasto provide architectural and engineering services to the project’s developer, not participate in the construction. And, as in Weseloh, the Association and its members were not intended beneficiaries of the contracts between the developer and Skidmore and HKS. To the contrary, the contracts make clear the absence of any privity of contract with the Association or its members. Although the Court ofAppeal held that Skidmore and HKScould not contract away their tort duty of care (typed opn., 11), the absence of an intended beneficiary clause was one of the facts that informed the Weseloh court’s conclusion that the engineerin that case did not owe a duty of care to the property owner. (Weseloh, supra, 125 Cal.App.4th at p. 167.) ° Just as there was no evidence in Weseloh that the engineer's design was used without alteration, the Association declined the trial court’s invitation to amendits complaint to allege that Skidmore and HKS went beyond recommending changes and actually controlled whether or not the changes were implemented. 14 The Court ofAppeal held that the Association members - could not engage in the same “private ordering” as the plaintiffs in Bily, supra, 3 Cal.4th at page 403, through their own investigation or audit. (Typed opn., 14-15, capitalization and emphasis omitted.) The court ignored the fact that the residential units here were marketed and sold as luxury condominiums, and that buyers, particularly those who purchase high-end properties, are represented by sophisticated real estate agents and brokers. Skidmore’s and HKS’s “moral blame”is certainly no greater than that of the engineers in Weseloh, whose allegedlydefective design caused two retaining walls to collapse, creating the risk of death or serious personal injury. Just as in Weseloh, the imposition of a duty here is unlikely to result in greater care by architects. And, like the owners in that case, the Association is not without a remedy—it may pursueits claims against the developer of the Beacon who, unlike a design professional, may be held strictly liable in tort for damages caused by construction defects. (Krieglerv. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 227- 229; Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 617-623; Huang v. Garner (1984) 157 Cal.App.3d 404, 412, fn. 5 (Huang).) Because Skidmore and HKShadnorole in the actual construction ofthe project, the liability asserted against them—inexcess of $50 million dollars—isclearly out of proportion to their alleged fault. Notwithstanding the undeniable factual parallels between Weseloh and this case, the Court of Appeal found that case “to provide limited guidance in the duty analysis here, and to be of little application to the facts before us.” (Typed opn., 7.) According to the Court ofAppeal, Weseloh wasdistinguishable becauseit “was 15 premised on the evidentiary record before the court andplaintiffs’ failure to satisfy their burden in opposing the defendants’ motion for summary judgment.” (/bid.) However, the primary evidentiary failure by the plaintiffs in Weseloh wastheir failure to demonstrate that the engineer had any involvementin the actual construction of the retaining walls or that the subcontractor followed its design specifications. (Weseloh, supra, 125 Cal.App.4th at pp. 171-172.) This case presents the very same absenceofevidence, making it an ideal vehicle for examiningthe conflicting results in this case and Weseloh. The trial court here gave the Association the opportunity to amendits complaint to allege facts demonstrating that Skidmore’s and HKS’srole went beyond the mere provision of professional advice to the developer and, in addition, involved control of construction. Because the Association declined the opportunity to amend,it must be presumedthatits third amended complaint stated as strong a case as possible. (Reynoldsv. Bement (2005) 386 Cal.4th 1075, 1091.) By declining the opportunity to amend, the Association effectively conceded that petitioners’ role wasnodifferent than the engineer’s role in Weseloh. The Court of Appeal also relied on the Weseloh court’s comment that its “ ‘holding should not be interpreted to create a rule that a subcontractor who provides only professional services can never beliable for general negligence to a property owneror general contractor with whom no contractual privity exists. There mightbe a set of circumstances that would support such a duty, but 999 it is not presented here.’” (Typed opn., 7, quoting Weseloh, supra, 125 Cal.App.4th at p. 173.) However, assuming there may be such 16 circumstances, the circumstanceshere do notdiffer in any material respect from those in Weseloh and the Court ofAppeal’s reliance on that statement simply creates confusion and uncertainty regarding the circumstances underwhichdesign professionals maybeliable to third parties. In sum, the Court ofAppeal’s published opinion here creates a direct conflict in the case law regarding theliability of architects, engineers, and other design professionals whoserole is limited to providing design recommendations to builders. As the Court of Appealitself acknowledged, “[Iiability concerns may .. . limit the willingness of design professionals to undertake large residential construction projects at all.” (Typed opn., 16.) At a minimum,until that conflict is resolved, the potential for the sort of liability that Skidmore and HKSface here will be reflected in higher insurance for design professionals, a cost that will ultimately be passed on to the public and homeownersin the form of higher housing costs. Ii. THE RIGHT TO REPAIR ACT DID NOT ABROGATE COMMON LAW DEFENSES AVAILABLE TO DESIGN PROFESSIONALS, INCLUDING THE ABSENCE OF DUTY. Implicitly acknowledging the lack of material distinctions between this case and Weseloh, the Court of Appeal “ultimately” rested its decision not on “our assessment of the Biakanja/Bily policy analysis,” but instead on the Right to Repair Act, Senate Bill 800, Civil Code section 895 et seq. (Typed opn., 17.) 17 The Court of Appeal was mistaken. The Right to RepairAct abrogated this court’s holding in Aas that homeowners may not recover damagesin negligence from the builder of their homes for construction defects that have not yet caused either property damage or personal injury. In addition, the Act modified various statutes of limitation and provided for pre-litigation notice to “builder[s]” and a correspondingrightof repair. (Baeza v. Superior Court (2011) 201 Cal-App.4th 1214, 1222-1223.) The Court ofAppeal purported to find supportfor its holding in two provisionsofthe Act, Civil Code sections 896 and 936. Those sections specify that, in addition to builders, the Act applies to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals. However, “[a]s a general rule ‘[uJnless expressly provided, statutes should not be interpreted to alter the common law, and should be construed to avoid conflict with common law rules. [Citation.] “A statute will be construed in light of common law decisions, unlessit’s language ‘ “clearly and unequivocally discloses an intention to depart from,alter, or abrogate the common-law rule concerning the particular subject matter....” [Citations.]’ [Citation.]”’ [Citation.] Accordingly,‘[t]here is a presumption that a statute does not, by implication, repeal the common law. [Citation.] Repeal by implication is recognized only where thereis no rational basis for harmonizing two potentially conflicting laws.’ ” (California Assn. of Health Facilities v. Department of Health Services (1997) 16 Cal.4th 284, 297.) Nothing in the text or legislative history of the Right to Repair Act indicates that the 18 Legislature intended to change any commonlaw rule other than the “economic loss” rule established in Aas, supra, 24 Cal.4th at page 636. To the contrary, Civil Code section 936 providesin part: Each and every provision of the other chapters of this title apply to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract. In addition to the affirmative defenses set forth in Section 945.5, a general contractor, subcontractor, material supplier, design professional, individual product manufacturer, or other entity may also offer common law and contractual defenses as applicable to any claimed violation of a standard.... Nothing in this title modifies the law pertaining to joint andseveral liability for builders, general contractors, subcontractors, material suppliers, individual product manufacturer, and design professionals that contribute to any specific violation of this title.4 | (Emphases added.) 4 Civil Code section 936 also states that “the negligence standard in this section does not apply to any general contractor, subcontractor, material supplier, individual product manufacturer, or design professional with respect to claims for which strict liability would apply.” (Emphasis added.) Because design professionals are not subject to strict lability (Huang, supra, 157 Cal.App.3d at p. 412, fn. 5), this portion of section 936 has no application to them, other than to confirm that their liability must be measured by a “negligence standard.” 19 By conditioning a design professional’s liability on a negligent act or omission, preservingall available common law defenses, and stating that nothing in the Act modifies the law pertaining to a design professional’s joint and several liability, this statutory language refutes the Court of Appeal’s conclusion that the Right to Repair Act establishes liability that would not otherwise exist under the Biakanja/Bily duty analysis. As the Court of Appeal in Holloway, supra, 40 Cal.App.3d at p. 902, explained: The elements of a cause of action for professional negligence are .. . well defined. These ingredients are: (1) the duty of the professional to use such skill, prudence and diligence as other members of this profession commonly possess and exercise; (2) breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional negligence. [Citations.] When these elements coexist, they constitute actionable negligence. On the other hand, absenceof, or failure to prove, any of them is fatal to recovery. This applies especially to the all important elementof duty. Thus, a design professional causes“a violation of a particular standard”in the Right to Repair Act “as a result of negligent act or omission” only if it owes a dutyto the plaintiff. Ifthe Biakanja/Bily policy analysis establishes that no duty is owed,one of the essential elements of a negligent act or omission is absent and the design professionalis not liable under either the commonlaw or the Right to Repair Act. According to the Court of Appeal, the legislative history of Senate Bill No. 800 showed “that the Legislature assumed that 20 existing law imposed third party liability upon the design professionals.” (Typed opn., 19.) It relied on a statementin thebill analysis prepared for both the Senate and Assembly that existing law “[p]rovides that a construction defect action may be brought against any person who develops real property or performs or furnishes the design, specifications, surveying, planning,testing, or observation of construction or construction of an improvement to real property.” (Typed opn., 19-20, quoting Assem. Com. on Judiciary, analysis of Sen. Bill No. 800 (2001-2002 Reg.Sess.) as amended Aug. 26, 2002, p. 2 and Sen. Com. on Judiciary, analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, pp. 1-2.) However, the fact that a construction defect action could be brought against a design professional under some circumstances before adoption of the Right to Repair Act does not mean that a court could ignore the Biakanja/Bily duty analysis. Certainly, there were circumstances where that analysis would not preclude an action against a design professional. For example, a contract between a design professional and a developer could make a homeowner’s association an express third-party beneficiary. In addition, homeowners, or a homeownersassociation, could hire a design professional directly. And, the Biakanja/Bily analysis would not preclude an action against a design professional for negligent misrepresentation. Moreover, if, unlike Skidmore, HKS, and the engineer in Weseloh, a design professional was actively involved in the construction itself, as opposed to merely making design recommendationsto a developer, application of the Biakanja/Bily duty analysis might result in liability. 21 In sum, the Court of Appeal’s conclusion that the Right. to Repair Act creates a duty on the part of design professionals that would not otherwise exist under the Biakanja/Bily policy analysis misreads the text and legislative history of that Act. Its interpretation of the Act threatens serious repercussions for all design professionals. The opinion merits review bythis court. CONCLUSION For the foregoing reasons review should be granted. January 22, 2013 HORVITZ & LEVY LLP PEDER K. BATALDEN PETER ABRAHAMS ROBLES, CASTLES & MEREDITH RICHARD C. YOUNG SCHWARTZ & JANZEN, LLP NOEL E. MACAULAY STEVEN H. SCHWARTZ By: b “4 4 Attorneys for Defendants and Respondents SKIDMORE, OWINGS & MERRILL LLP and HKS,INC. 22 '/“PeterAbrahams —. CERTIFICATE OF WORD COUNT (Cal. Rules of Court, rule 8.504(d)(1).) The text of this petition consists of 5,390 words as counted by the Microsoft Word version 2007 word processing program used to generate the petition. LO/ Dated: January 22, 2013 /) Lor f 7}i Petet Abrahams 23 Filed 12/13/12 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION FIVE BEACON RESIDENTIAL COMMUNITY ASSOCIATION, Plaintiff and Appellant, A134542 Vv. SKIDMORE, OWINGS & MERRILL LLP (San Francisco City and County et al., Super. Ct. No. CGC-08-478453) Defendants and Respondents. Skidmore, Owings & Merrill LLP (SOM) and HKS,Inc. (individually & doing business as HKS Architects, Inc.; hereafter HKS) are design professionals. SOM and HKS(collectively Respondents) provided architectural and engineering services, as well as construction administration and construction contract management, for the Beacon Residential Condominiums—595 condominium units and associated common areas located at 250 and 260 King Street, San Francisco, California (the Project). ‘Appellant Beacon Residential Community Association (BRCA), the homeowners’ association that managesthe Project, sued several defendants, including Respondentsfor alleged construction defects. (Civ. Code, § 1368.3, subd. (a).)’ BRCAassertedthat Respondents had a duty of care to it and to future residents in design of the Project, and that their professional negligence caused the Project to violate residential construction standards established by Senate Bill No. 800 (2001-2002 Reg. Sess.) (§§ 895—945.5; hereafter Senate Bill No. 800). ' All further statutory references are to the Civil Code, unless otherwise indicated. Thetrial court sustained demurrers, with partial leave to amend,” to a third amended complaint as to both SOM and HKS on the ground that they owed no duty to BRCAorits members, under either commonlaw or Senate Bill No. 800. We disagree and reverse. | I. FACTUAL AND PROCEDURAL BACKGROUND® Respondents were the architects for the Project. As detailed in the third amended complaint,’ their involvementincluded architecture, landscapearchitecture, and engineering (civil, mechanical, structural, soils, electrical), in addition to construction administration and construction contract management. BRCAalleged multiple defects in the Project caused by negligent architectural and engineering design, observation, and construction work performed by Respondents, including waterinfiltration, inadequate fire separations, structural cracks and otherlife safety hazards. Oneofthe defects alleged is “solar heat gain,” whereby the condominium units are rendered uninhabitable, unhealthy, and unsafe during certain periods due to excessively high temperatures. The solar heat gain is purportedly due to Respondents’ approvalofthe substitution of less expensive, and ultimately nonfunctional, windows, as well as a design lacking adequate ventilation within the residential units. Respondents are named in three causesofaction: * BRCAassertsinits briefing that the demurrers were sustained without leave to amend. Thatis not entirely correct. The court sustained demurrersto the first and second causes of action without leave to amend, and the demurrerto the fifth cause of action with leave to amend. BRCA declined to amend, and judgments of dismissal were entered on December 15, 2011. > Since the matter comesto us from dismissal on demurrer, we take the facts from the operative third amended complaint, “treat[ing] the demurrer as admitting all material facts properly pleaded,” but not “assum[ing] the truth of contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967 (Aubry); Zelig v. County ofLos Angeles (2002) 27 Cal.4th 1112, 1126.) * BRCAfiled a first amended complaint on June 1, 2010. Respondents demurred. Thetrial court sustained the demurrer with leave to amend. A second amended complaint, filed on March 17, 2011, was superseded with the third amended complaint, filed April 27, 2011. The third amended complaint identifies approximately 40 named defendants, including the original developer, a subsequent developer, developer-related marketing entities, the general contractor, several subcontractors, as well as Respondents. the first cause ofaction, for “Civil Code Title 7 — Violation of Statutory Building Standards for Original Construction”; the second cause of action, for “Negligence Per Se in Violation of Statute”; and the fifth cause of action, for “Negligence of Design Professionals and Contractors.” . Respondents demurred to the third amended complaint, arguing that, under Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370 (Bily) and Weseloh Family Ltd. Partnership v. K.L. Wessell Construction Co., Inc. (2004) 125 Cal.App.4th 152(Weseloh), they owed no duty of care to BRCAor its members, and consequently could not be liable. Thetrial court agreed. In sustaining the demurrers, the court took the view thatliability could not be premised on negligent design, and that BRCA wasrequired to showthatthe design professionals had “control”in the construction process, assuming a role beyond that of providing design recommendationsto the owner. The court foundthat “[t]he allegations do not show that [Respondents] went beyondthe typical role of the architect, whichis to make recommendationsto the owner. Even if [Respondents] initiated the substitutions, changes, and other elements of design that [BRCA]alleges to be the cause of serious defects, so long as the final decision rested with the owner, there is no duty by [Respondents] to the future condominium owners,in the Court’s view.” BRCA prepared and submitted an orderto the Court on the demurrer, and the judgments issued. A timely notice of appeal wasfiled on January 20, 2012. IL. DISCUSSION A. Standard ofReview On appeal from an order dismissing an action after the sustaining of a demurrer, we independently review the pleading to determine whetherthe facts alleged state a cause ofaction under any possible legal theory. (McCall v. PacifiCare ofCal., Inc. (2001) 25 Cal.4th 412, 415; Aubry, supra, 2 Cal.4th at p. 967.) B. Design Liability Under Common Law BRCA’s second andfifth causes of action sought to imposeliability on Respondents on negligence theories.” “The threshold elementofa cause of action for negligenceis the existence of a duty to use due care toward aninterest of another that enjoys legal protection against unintentional invasion. [Citations.] Whether this essential prerequisite to a negligence cause of action has beensatisfied in a particular case is a question oflaw to be resolved by the court. [Citation.] [{] A judicial conclusion that a 6 eeduty is present or absent is merely “a shorthand statement. . . rather than an aidto analysis. .. . ‘[D]uty,’ is not sacrosanct in itself, but only an expression of the sum total of those considerations of policy whichlead the lawto say that the particular plaintiff is entitled to protection.” ’ [Citations.] ‘Courts, however, have invoked the concept.of duty to limit generally “the otherwise potentially infinite liability which would follow from every negligent act....”° [Citations.]” (Bily, supra, 3 Cal.4th at p. 397.) A duty of care mayarise throughstatute, contract, the general characterof the activity, or the . relationship betweenthe parties. (J’Aire Corp. v. Gregory (1979) 24 Cal.3d 799, 803.) “The determination whether in a specific case the defendant will be held liable to a third person notin privity is a matter of policy and involves the balancing of various factors, among whichare the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him,the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conductand the injury suffered, the moral blameattached to the defendant’s conduct, and the policy of preventing future harm.[Citations.]” (Biakanja v. Irving (1958) 49 Cal.2d 647, 650-651 (Biakanja).) In Biakanja, supra, 49 Cal.2d 647, the Court held that a defendant’s negligent performanceof a contractual obligation resulting in damageto the property or economic > The second causeofaction alleges negligence per se based on a claim that the design caused the Project to violate residential standards for light and ventilation under Title 24 of the California Code of Regulations. The negligence per se doctrineactually relates to the burden of proof. (Alarid v. Vanier (1958) 50 Cal.2d 617; Evid. Code, § 669.) interests of a person not in privity could support recovery if the defendant was under a duty to protect those interests. The court articulated a case-by-case test for identifying such a duty. (See Aas v. Superior Court (2000) 24 Cal.4th 627, 643-644 (Aas), superseded in other respects by statute.) The court permitted recovery in Biakanja by the intended beneficiary under a will prepared for the decedent by the defendantnotary public, but who then failed to have it properly attested. In concluding the notary owed a duty to an intended beneficiary not to mishandle the will’s drafting and solemnization, - the Supreme Court attached particular importanceto the fact that the “ ‘ “end and aim”’ of the notary’s service to the testator was ‘to providefor the passing of[the] estate to [the] plaintiff’ [citation], and to the high impropriety of, and needto prevent, the unlicensed practice of law [citation].” (Aas, at p. 644; Biakanja, at p. 651.) In Bily, supra, 3 Cal.4th 370, the Supreme Court considered whether an accounting professional’s duty ofcare in preparing an independentaudit ofa client’s financial statements extended to persons other than the client, in the context of the client’s public stock offering. A jury returned a verdict in favor of the investorplaintiffs on a claim of professional negligence. The jury wasinstructedthat “ ‘[a]n accountant owesa further duty ofcare to those third parties who reasonably and foreseeably rely on an audited financial statement prepared by the accountant. A failure to fulfill any such duty is negligence.’ ” (Bily, at p. 379.) The court reversed the judgment, employing the “checklist of factors”articulated in Biakanja to “assess[] legal duty in the absence of privity of contract betweena plaintiff and a defendant.” (Bily, at p. 397; id. at pp. 407, 416.) The Bily court again emphasized the important role ofpolicy factorsin determining negligence, observing that “mere presenceof a foreseeablerisk of injury to third persons[is not] sufficient, standing alone, to imposeliability for negligent conduct” and that “ ‘[p]Jolicy considerations may dictate a cause of action should not be sanctioned no matter how foreseeable the risk . . . for the sound reason that the consequencesof a negligent act must be limited in order to avoid an intolerable burden on society.’ ” (Ud. at p. 399.) Additional considerations the court found pertinent in limiting the auditor’s liability in Bily were: (1) potential imposition ofliability out of proportionto fault, “rais[ing]|the spectre of vast numbersof suits and limitless financial exposure”(id. at p. 400, fn. omitted); (2) the ability of third parties in an audit negligence caseto > 393“ “privately order’ the risk of inaccurate financial reporting throughalternative contractual arrangements(id. at p. 403); and (3) the effect on auditors of third party liability, in light of the relative sophistication of third parties who lend and invest based on audit reports—i.e., “whether auditors are the most efficient absorbers of the losses from inaccuracies in financial information”(id. at p. 405, fn. omitted). In limiting general negligenceliability to the direct clients of the auditor, the Supreme Court observed that“judicial endorsementofthird party negligence suits against auditors limited only by the concept of forseeability raises the spectre of multibillion-dollar professionalliability that is distinctly out of proportion to: (1) the fault of the auditor (whichis necessarily secondary and may be based oncomplex differencesof professional opinion); and (2) the connection between the auditor’s conduct andthe third party’s injury (which will often be attenuated by unrelated business factors that underlie investment and credit decisions). [{] As other courts and commentators have noted, such disproportionate liability cannot fairly be justified on moral, ethical, or economic grounds. [Citations].” (/d. at pp. 401402.) Thetrial court also relied on Weseloh, supra, 125 Cal.App.4th 152,in sustaining the demurrers in favor of the design professionals here. In Weseloh, the defendant engineers prepared the design for a retaining wall for a commercialproperty on behalf of a subcontractor. They were sued by the property ownerand by the general contractor whenthe wall failed. The trial court granted motions for summary judgment onthe ground the design engineers did not owe a duty ofcare to the property ownerorto the general contractor. (/d. at p. 158.) Considering the case to be oneoffirst impression, the Fourth District Court of Appeal applied the Biakanja and Bily factors and affirmed, finding that the plaintiffs had failed to produce evidenceto satisfy their burden to prove the existenceof a dutyorofa triable issue of material fact relevant to the duty issue. (Weseloh, at pp. 167-174.) “With regard to the Biakanja factors, while it was foreseeable that design defects could cause a retaining wall to fail, the . . . plaintiffs . . . failed to produce any evidence showing(1) [defendants’] design wasprimarily intended to affect the . .. plaintiffs... ; (2) the closeness of the . . . plaintiffs’ injury to [defendants’] conduct; (3) any moral blame implicated by [defendants’] conduct; or (4) how, by imposing expandedliability on design engineers undersimilar circumstances, future harm would be prevented. [§] With regard to the Bily factors, the imposition of sucha duty would result in liability out of proportion to fault.With regard to private ordering, the . . . plaintiffs could have required subcontractors to name them as intended beneficiaries of their subcontracts. The . . . plaintiffs could also have required subcontractors to name them asadditionalinsuredsin their insurancepolicies.” (Id. at pp. 172-173.) . It is importantto note that the holding in Weseloh was premised onthe evidentiary record before the court and plaintiffs’ failure to satisfy their burden in opposing the defendants’ motion for summary judgment. The court limited its holdingto the facts before it, stating that “[o]Jur holding shouldnotbe interpreted to create a rule that a subcontractor who provides only professional services can never be liable for general negligence to a property owner orgeneral contractor with whom no contractualprivity exists. There might be a set of circumstancesthat would support such a duty, butit is not presented here.” (Weseloh, supra, 125 Cal.App.4th at p. 173.) Wetherefore find Weseloh to provide limited guidancein the duty analysis here, andto beoflittle application to the facts before us. No California court has yet extended Weseloh to categorically eliminate negligence liability of design professionals to foreseeable purchasers of residential construction as Respondents seem to urge, and, as we discuss post, we believe different policy considerationsare necessarily part of the calculusinthis context. In consideringliability of design professionals to third party purchasers of residential construction, we do not chart unexploredterritory or view this case astruly a ° The defendant engineers were paid a fee of no more than $2,200, the damages claimed exceeded $6,000,000, and the evidence failed to show that the subcontractor had even followed the design specifications. (Weseloh, supra, 125 Cal.App.4th at p. 171.) matter of first impression. Theissue, as we viewit, is not whethera design professional owesa duty of care to these purchasers, but the scopeofthat duty. “ “[A]n architect whoplans and supervises construction work, as an independent contractor, is under a duty to exercise ordinary care in the course thereof for the protection of any person whoforeseeably and with reasonable certainty may beinjured by his failure to do so... .’ [Citations.]” (Mallow v. Tucker, Sadler & Bennett, Architects etc., Inc. (1966) 245 Cal.App.2d 700, 703; see also 6 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 996, p. 260 [same]; 11 Miller & Starr, Cal. Real Est. (3d ed, 2011) §§ 29:32 & 29:37, pp. 29-172, 29-191 [scope of architect’s or engineer’s duty to third parties not in privity of contract determined by balancing several factors]; 6 Cal.Jur.3d (2011) Architects, Etc., § 35, p. 420 [“architect, in his or her capacity as an independent contractor, can be held liable to third persons for negligence in the preparation of plans and specifications” (fn. omitted); damages recoverable when“a third person within the area of foreseeable risk is injured or his or her property damaged as a result of the defective design”].) In Huber, Hunt & Nichols, Inc. v. Moore (1977) | 67 Cal.App.3d 278, 299,the court considered it “now wellsettled that . . . the architect may be sued for negligence in the preparationsof plans and specificationseither by his client or by third persons... .” Our Supreme Courtfirst recognized a remedyinthe law of negligence for construction defects causing property damage, as opposedto personalinjury, in Stewart v. Cox (1961) 55 Cal.2d 857 (liability of subcontractor to owner), relying on the principles enunciated in Biakanja. (Biakanja, supra, 49 Cal.2d at p. 650; see also Sabella v. Wisler (1963) 59 Cal.2d 21 [builder liable for negligent construction in house offered for sale to the public].) In Cooper v. Jevne (1976) 56 Cal.App.3d 860 (Cooper), thetrial court sustained demurrers without leave to amendto negligence claims by purchasers of condominiumsin a 100-unit residential project against defendants including the architects for the project. (/d. at p. 864.) Ashere, the plaintiffs alleged that the architects prepared and furnished to the builder-seller, architectural drawings and plans and specifications for the construction and other improvements within the project and acted as supervising architects in the construction of the buildings within the project. Theplaintiffs further alleged that the architects were under a duty to exercise ordinarycare as architects to avoid reasonably foreseeable injury to purchasers, that they failed to perform this duty, and that the architects knew or should have foreseen with reasonablecertainty that purchasers would suffer the monetary damagesallegedifthey failed to perform this professional duty. (/d. at p. 867.) Albeit without extensive analysis of the individual policy factors enunciated, the Second District Court of Appeal found “nothing in the. . . test enunciated in [Biakanja] that would leadusto refrain from imposing liability for economic loss to the purchasers uponthe architects for the latter’s alleged negligence in the rendition of their professional services.” (Cooper, at p. 868.) Reversing, the court _ held that “the architects’ duty of reasonablecare in the performance oftheir professional services is logically owed to those who purchasedtheallegedly defectively designed and built condominiumswithin the . . . project.” (Id.at p. 869.) Eight years after Bily, our Supreme Court in Aas consideredthe scope oftort remedies in negligence available for alleged deviations from the applicable building codes orindustry standards. (Aas, supra, 24 Cal.4th at p. 635.) While announcing a rule precluding damage recovery for purely economiclosses, the court reiterated that builders of homes had a duty independentof contractual obligations andarising from principals of tort law supporting negligence for construction defects causing property damage. (/d.at p. 643.) While not separately addressingthetort liability of design professionals, the court acknowledged Cooperas a case “[fJocusing on the conductof persons involved in the construction process” and finding “a remedy in the law of negligence” for construction defects that cause property damageor personalinjury. (/d. at pp. 635-636 & fn. 4.) Although distinguishing Cooper, the Supreme Court did not disapproveit. (Aas, at pp. 647-648[finding that the Cooper court’s ruling onliability for economic loss was dictum].)’ Aas did not question or repudiate the establishedrule that “[h]ome buyers ™ Wealsonote that Cooper, supra, 56 Cal.App.3d 860, continues to be viewed as relevant authority in treatises and compendia. (6 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, § 996, p. 260 [duty of architects to exercise due care]; 6 Cal.Jur.3d (2011) in California already enjoy protection under. . . the law of negligence andstrict liability for acts and omissions that cause property damageor personalinjury... .” (Aas, at pp. 652-653.) Aswediscuss post, the Legislature abrogated the 4as economiclossrule in enacting Senate Bill No. 800. The question then is whether the commonlaw policy rationale articulated in Cooper for imposingthird partytort liability on design professionals remains valid. We believe it does. Since Cooper preceded Bily, and did not analyze specific application of the Biakanja policy factors in assessing the scope of duty owed by design professionals to third parties, we do so now. 1, Extent to Which the Transaction Was Intended to Affect the Plaintiff In Aas, the Supreme Court “assume[d] for argument’s sake that the conduct of a person engaged in construction is ‘intendedto affect’ all foreseeable purchasersof the property. [Citations.]” (Aas, supra, 24 Cal.4th at pp. 646-647.) A design professional providing plans and specifications for residential construction cannot be unaware ofthe fact that his or her work will have a direct bearing on the integrity, safety and habitability of property intended for residential occupancy. . In this case, Respondents attemptedto limit their liability by providing in the HKS contract with the developer that: “Except as set forth in this section 12.1, or as expressly agreed in writing by Architect and Owner, no person other than the parties ortheir successors and assignsshall be a third-party beneficiary of the obligation contained in the Agreementor havetheright to enforce any of its provisions. It is understood that (i) Ownerreserves the right to sell portionsofthe Project to one or more condominium associations or purchasers during orafter the conclusion ofthe Project; (ii) Architectis solely responsible to Ownerand not to such condominium associationsor purchasersfor performance or Architect’s obligations under this Agreement; and (iii) no such condominium association or purchaser shall be a third-party beneficiary or third-party Architects, Etc., § 35, pp. 420-421 [liability to third persons]; Acret, Architects and Engineers (4th ed. 2012) § 7:3 [third party recovery of economic damages].) 10 obligee with respect to the Architect’s obligations under this Agreement.” This intended limitation, however, only serves to emphasize the fact that Respondents were more than well aware that future homeowners would necessarily be affected by the work that they performed. And,in any event, liability to foreseeable residential purchasersis determined by the scopeof the duty of professional care, not whether those purchasers are, or are not, third party beneficiaries under contract. While a duty of care arising from contract may perhapsbe contractually limited, a duty of care imposed by law cannot simply be disclaimed. 2. Foreseeability ofHarm to the Plaintiff Foreseeability as to duty is based on whetheran event’s nature might generally give rise to a foreseeable injury. (Laabs v. Southern California Edison Co. (2009) 175 Cal.App.4th 1260, 1272.) BRCAhere alleges that Respondents provided architectural and a variety of engineering services, as well as providing construction administration and construction contract management. Architects and engineers are subject to licensure and registration. (See Bus. & Prof. Code, §§ 5500 et seq., 6700 et seq.) This is because the legislature has determinedthatit is “injuriousto the public interest to allow unskilled and unqualified personsto prepare plans andspecifications for the erection of buildings, owing to the dangers which might arise from defects in plans or construction.” (Binford v. Boyd (1918) 178 Cal. 458, 462.) “The services of experts are sought becauseoftheir special skill.” (Gagne v. Bertran (1954) 43 Cal.2d 481, 489.) Regulated design professionals such as architects and civil engineers are required to sign and affix their stamps to building plans and specifications as evidenceoftheir responsibility for such documents. (See, e.g., Bus. & Prof. Code, §§ 5536.1 [architectural plans], 6735 [civil engineeringplans, calculationsand specifications].) Professional skill is required to prepare the design documents, andfailure to exercise reasonable professional care in the design ofresidential construction presents readily apparentrisks to the health andsafety ofthe ultimate occupants. 11 3, Degree ofCertainty that the PlaintiffSuffered Injury BRCAalleges that, as a consequence of defective work performed by Respondents, there are structural cracksin the project, water infiltration, andlife safety hazards. It also contends that design defects render the units uninhabitable, unhealthy, and unsafe during certain periods. For the purposes of analysis here, we necessarily accept those allegationsastrue.* (Aubry, supra, 2 Cal.4th at p. 967.) 4, Closeness ofConnection Between Defendant’s Conduct and the Injury Suffered Thepleading allegationsassert that the significant defects at issue in the Project resulted directly from the departure by Respondents from the professional standards of care. The fact that others are alleged to have contributed to the injury should not serve to limit the responsibility of those whosetraining and experience uniquely qualify them to make design decisions, and whose expertise the builder presumptively relies upon in implementingthose decisions.” OS, The Moral Blame Attached to Defendant’s Conduct Asthe court noted in Aas, “the degree of blame would appear to depend upon the nature of the deviation.” (Aas, supra, 24 Cal.4th at p. 647.) Less moral blame would attach to defects which do notpresenta risk to health or safety, or to structuralintegrity. For example, BRCA’s third amended complaint alleges defects in specifications for certain Project mechanical components and ventilation issues in nonresidential areas. But ® We do not suggest that every defect alleged by BRCAis necessarily actionable, and as we discuss post, Senate Bill No. 800 mayserveto limit the scope of claims. (See § 896 [“claimant’s claims or causes of action shall be limited to violation of, the following standards, except as specifically set forth in thistitle’”].) * Citing the “value engineering” decisions madein selection of the Project windows(purportedly creating the “heat gain” problems), Respondents contendthat recognition ofliability to third party purchasers would conflict with their duty of loyalty to their client owner,citing RatcliffArchitects v. Vanir Const. Management(2001) 88 Cal.App.4th 595, 606. We do not see how the public policy considerations presented in that case, an action between a construction managerandthe architect, would apply here, or how requiring a design consistent with architectural and statutory standards is in conflict with the duty already owed byanarchitecttothe client. 12 the pleadings also identify items such as cracking in concrete structural elements of the Project, water penetration, and ventilation issues affecting the safety and habitability of the residential areas. Unlike the circumstances in Aas, where the plaintiffs failed to show that any of the alleged defects actually posed a seriousrisk of harm to person or property (id. at p. 647), BRCA alleges here significant failures in Project componentsspecified in the design, as well as deficiencies in design, resulting in actual property damage and health safety risks. 6. The Policy ofPreventing Future Harm _ The policy of preventing future harm weighs heavily in favor of recognizing liability. As Justice Traynor observed,“the usual buyer of a homeisill-equipped with experienceor financial meansto discern . . structural defects. [Citation.] Moreover a homeis not only a major investment for the usual buyerbut also the only shelter he has. Henceit becomes doubly important to protect him against structural defects that could prove beyondhis capacity to remedy.” (Connor v. Great Western Sav. & Loan Assn. (1968) 69 Cal.2d 850, 867.) Like our colleagues in Cooper, wefind nothing in the Biakanja factors that would preclude imposition ofliability upon the architects to purchasers of residential construction for alleged negligence in the rendition of professional services. (Cooper, supra, 56 Cal.App.3d at p. 868.) We likewise find nothing in the policy considerations later set forth in Bily that would suggesta different result. Those considerations are: (1) potential imposition ofliability out of proportion to fault; (2) the possibility of private ordering ofthe risk; and (3) the effect on the defendantsof third party liability. (Bily, supra, 3 Cal.4th at pp. 400-405.) a. Liability Out ofProportion to Fault Construction defectlitigation typically involves a multitude of defendants who participated in the developmentand construction process. For this reason,suchlitigation is at least provisionally considered to be complexlitigation. (Cal. Rules of Court, rule 3.400(c)(2).) Here, in addition to respondents, BRCA’s third amended complaint named approximately 40 defendants, including the developers, the general contractor, 13 and several subcontractors, all of whom werealleged to have been responsible in some manner for the defects and damagesalleged. Multiple cross-complaints for contribution and indemnity werefiled, including a cross-complaint by the developerentity against Respondents. Even after the demurrers were sustained in this matter, Respondents remained in the case on the cross-complaints. In other words, Respondents’ comparative fault for any tort damages that BRCAisable to ultimately prove, and their obligation to indemnify other responsible parties for a portion of the loss—or be indemnified by those parties—are issuesthat will necessarily be litigated whetherornotthere is directliability to the purchasers. (See Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1208 (Greystone) [discussing application of the doctrine of comparative equitable indemnity in a construction defect case to “ ‘allow[] loss to be apportioned between plaintiff and defendants accordingto their respective responsibility for the loss’ ”].) Moreover, unlike the unknowable universe of potential investor plaintiffs the auditors faced in Bily, anyliability Respondents face is limited to the purchaser/ownersofthe 595 condominium units, a defined risk potential known when Respondents designed the Project. There appearslittle likelihood that the design professionals could be held responsible for a disproportionate share of any loss to which they contributed. And unlike the engineer in Weseloh, Respondents here were allegedly paid over $5,000,000 for their work on the Project, not an insignificant sum and presumably reflective of the extent their work product was incorporated into the Project. b. Private Ordering In Bily, the court distinguishedthe classof third party investors, creditors, and others whoread andrely on audit reports and financial statements from ordinary consumers. (Bily, supra, 3 Cal.4th at p. 403.) The court noted that, unlike the 399“ “presumptively powerless consumer’ in product liability cases, generally more sophisticated investor/creditor plaintiffs have the ability to “ ‘privately order’ the risk of inaccurate financial reporting,” either through his/her own investigation or audit, or by contractual arrangements with the client. (Jbid.) “As a matter of economic and social 14 policy,third parties should be encouragedto rely on their own prudence,diligence, and contracting power, as well as other informational tools. This kind of self-reliance promotes sound investmentand credit practices and discourages the careless use of monetary resources. If, instead, third parties are simply permitted to recover from the auditor for mistakes in the client’s financial statements, the auditor becomes,in effect, an insurer of notonly the financial statements, but of bad loans and investments in general.” (1bid., fn. omitted.) A purchaserof residential housing is certainly far more fairly characterized as a “consumer” and residential housingas a “product,” and numerous cases have done so.!° In Aas, the Supreme Court cited with approval Kriegler’s explanation ofthe relevant policy considerations, “the average home buyer’s reliance on the builder’s skill and implied representationsof fitness, and the public interest in assigning the cost of foreseeable injuries to the developer whocreated the danger. [Citations.]” (Aas, supra, 24 Cal.4th at p. 639.) While the individuals andentities participating in the development process may have the ability to privately order allocation ofliability among themselves by contract or through structuring of insurance coverage,'’ the buyer does not. Thus, in contrast to Bily, '° The “product” analogy for residential housing wasfirst applied in Krieglerv. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224 (Kriegler). The court held that a residential builder could be subject to strict productliability for consequential property damagestating that in “today’s society, there are no meaningfuldistinctions between {the] mass production and sale of homes and the massproduction andsale of automobiles _ and that the pertinent overriding policy considerations are the same.” (Id. at p. 227; see also Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 617-623[strict product liability of residential builder for defective foundation causing physical damageto other building components].) " Bor example, insurance coverage for large construction projects can sometimes be obtained under comprehensive “wrap-up” insurance policies covering not only the homebuilder, but also the contractor, subcontractors, architects, engineers and other consultants on a project, for construction defectliability and other risks. (Ins. Code, § 11751.82.) 15 it is the alleged tortfeasor(s), and not the home buyers who are capable of being more “effective distributor[s] of loss.” (Bily, supra, 3 Cal.3d at p. 405.) c. Effect ofThird Party Liability The final factor seeks to establish the policy balance between, on the one hand, efficient loss spreading, and, on the other,the potential for dislocation of resources. (Bily, supra, 3 Cal.3d at p. 404.) In Bily, the court questioned the assertion thatliability would “deter auditor mistakes, promote more careful audits, and result in a moreefficient spreadingof the risk of inaccurate financial statements.” (Jbid.) The court opined that the economicresult of unlimited negligence liability for auditors “could just as easily be an increase in the cost and decrease in the availability of audits and audit reports with no compensating improvementin overall audit quality. [Citations.]” (Jd. at pp. 404-405.) Citing a legal economist, the court observed that“‘[t]he deterrent effect ofliability rules is the difference betweenthe probability of incurring liability when performance meets the required standard andthe probability of incurring liability when performanceis below the required standard. Thus, the stronger the probability that liability will be incurred when performanceis adequate, the weakeris the deterrent effect ofliability rules.” ” (id. at p. 404, quoting Fischel, The Regulation ofAccounting: Some Economic Issues (1987) 52 Brooklyn L.Rev. 1051, 1055.) These concernshavelittle application to theliability of a design professionalto an ultimate purchaser. The design professionals will be liable in negligence only if they fail to meet requisite professional standards of care, and will not incurliability “when performance meets the required standard.”"? _ Wedo notignore the obviousfact that any rule ofliability may negatively impact the cost of housing. (See Aas, supra, 24 Cal4th at p. 649.) Liability concerns may also limit the willingness of design professionals to undertake large residential construction projects at all. (See Hannah & Van Atta, Cal. CommonInterest Developments: Law & Practice (2012) § 14:36, pp. 897-898.) 2 “Infallibility” is not required, only “reasonable care and competence.” (Gagne v. Bertran, supra, 43 Cal.2d at p. 489.) 16 But ultimately, it is not our assessmentof the Biakanja/Bily policy analysis that matters. In Aas, the Supreme Court, considering the manysocial policy implications, concludedthat a judicially created rule oftort liability for construction defects “not caus[ing] harm of the sort traditionally compensable in tort” was not justified, and that such determinations werebetter left to the Legislature. (Aas, supra, 24 Cal.4th at p. 652.) The Legislature has since clearly expressed its view of those policy choices in enactment of Senate Bill No. 800. C. Construction Defect Litigation Under Senate Bill No. 800'° BRCA’sfirst cause of action alleged violation of statutory construction defect standards under Senate Bill No. 800. In 2002, the Legislature enacted Senate Bill No. 800, also knownasthe Right to Repair Act, “to ‘specify the rights and requirements of a homeownerto bring an action for construction defects, including applicable standardsfor homeconstruction,the statute of limitations, the burden of proof, the damages recoverable, a detailed prelitigation procedure, and the obligations of the homeowner.’ (Legis. Counsel’s Dig., Sen. Bill No. 800 (2001-2002 Reg. Sess.).)” (Anders v. Superior Court (2011) 192 Cal.App.4th 579, 585.) Senate Bill No. 800 was enacted by the legislature, in part, as a responseto the holding in Aas that homeowners may not recover damages in negligence from the builder of their homesfor existing construction defects that had notyet caused either property damage or personal injury. (Greystone, supra, 168 Cal.App.4th at p. 1202.) Senate Bill No. 800 abrogates the economiclossrule, legislatively superseding Aas, and permits recovery of economic lossfor a violation of ? This law applies to “new residential units where the purchase agreement with the buyer was signedbytheseller on orafter January 1, 2003.” (§ 938, as amended by Stats. 2003, ch. 762, § 6, p. 5732.) The residential units in the Project were apparently initially rented as apartments. The original developerstransferred the Project to other entities who then sold the units as condominiumsto the public. There is at least some question, which we neednot resolve, whether Senate Bill No. 800 would applyto the Project. For purposes of our discussion, we will presumethat it does. We conclude that Senate Bill No. 800 remains, in any event, an legislative expressionof the socialpolicy choices relevant to a Biakanja/Bily analysis, whetheror not the statutory scheme directly governs BRCA’s defect claims. 17 the statutory standards without having to showthat the violation caused property damage or personal injury. (Greystone, at p. 1202.) Senate Bill No. 800 provides definitions and mandates performance standards pertinent to new residential construction, andit defines certain expectations, rights, warranties, procedures, and obligations between builders and consumers concerning the sale and function of new housing units. (11 Miller & Starr, Cal. Real Est. (3d ed. 2011) § 29:2, pp. 29-8 to 29-9.) Senate Bill No. 800 established “functionality standards” for new residential housing construction, defining what constitutes a defect in construction for which the builder may beheld liable to the homeowner. (§ 896.) Section 896 providesthat in relevantpart that “[i]n any action seeking recovery of damagesarising out of, or related to deficiencies in, the residential construction, design, specifications, surveying, planning, supervision, testing, or observation of construction, a builder, and to the extent set forth in Chapter 4 (commencing with § 910), a general contractor, subcontractor, material supplier, individual product manufacturer, or design professional, shall, except as specifically set forth in thistitle, be liable for, and the claimant’s claims or causes ofaction shall be limited to violation of, the following standards, exceptas specifically set forth in thistitle.”!* (Italics added.) Section 897 providesthat the standards set forth in section 896 “are intended to address every function or componentof a structure. To the extent that a function or componentofa structure is not addressed by these standards, it shall be actionableif it causes damage.” “Thestatute lists 45 specific requirements pertaining to most building systems, including the exterior envelope, structural, soil, fire safety, plumbing, electrical, and other systems.” (11 Miller & Starr, supra, § 29:2 at p. 29-9, fn. omitted.) ‘4 While a “builder”is defined in Senate Bill No. 800 (§ 911),a “design professional”is not. Section 937, however, makes clearthat the term “includ[es] architects and architectural firms.” Section 937 also confirmsthat a certificate of merit under Code of Civil Procedure section 411.35 continues to be a requirementto initiate a professional negligence actions in most instances against architects, engineers or surveyors, indicating that the legislature intended to includethe latter categories of professionals within the meaning of the term “design professional” as well. 18 Senate Bill No. 800 has broad application to those involved in the development of residential housing. “Each and every provision of the other chaptersofthis title apply to general contractors, subcontractors, material suppliers, individual product manufacturers,: and design professionals to the extent that the general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals caused, in wholeorin part, a violation ofa particular standard as the result ofa negligent act or omission or a breach ofcontract. In addition to the affirmative defenses set forth in Section 945.5, a general contractor, subcontractor, material supplier, design professional, individual product manufacturer, or other entity may also offer common law and contractual defenses as applicable to any claimed violation of a standard. All actions bya claimantor builder to enforce an express contract, or any provision thereof, against a general contractor, subcontractor, material supplier, individual product manufacturer, or design professional is preserved. Nothing in thistitle modifies the law pertaining to joint and severalliability for builders, general contractors, subcontractors, material suppliers, individual product manufacturer, and design professionals that contribute to any specific violation ofthis title. However,the negligence standard in this section does not apply to any general contractor, subcontractor, material supplier, individual product manufacturer, or design professional with respect to claims for whichstrict liability would apply.” (§ 936, as amendedbyStats. 2003, ch. 762, § 5, p. 5732,italics added.)"° Asit considered the new statutory scheme under Senate Bill No. 800 for processing andresolving construction defect claims,it is clear in the legislative history that the Legislature assumedthat existing Jaw imposedthird partyliability upon the design professionals. The bill analysis prepared for the both the Senate and Assembly on Senate Bill No. 800 stated that existing law “[p]rovidesthat a construction defect action ’ The last sentence of section 936, as originally enacted, read: “However, this section does not apply to any subcontractor, material supplier, individual product manufacturer, or design professional to which strict liability would apply.” (Stats. 2002, ch. 722, § 3, p. 4249.) The 2003 clarifying amendments to Senate Bill No. 800 added the explicit reference to the “negligence standardin this section.” 19 may be brought against any person who developsreal property or performsor furnishes the design, specifications, surveying, planning, supervision, testing, or observation of construction or construction of an improvementto real property. [(Code of Civ. Proc., §§ 337.1, 337.15.)]”'© (Assem. Com. on Judiciary, analysis of Sen. Bill No. 800 (2001- 2002 Reg. Sess.) as amended Aug. 26, 2002,p. 2; Sen. Com. on Judiciary, analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, pp. 1-2.) The analysis prepared for the Assembly also stated under a headingentitled, “Subcontractors and Design Professionals,”that “[t]his act is intended to apply to subcontractors and design professionals to the extent that the subcontractors, material suppliers, individual product manufacturers and design professionals caused, in wholeorin part, a violation of a particular standardas a result of its negligent act or omission or a breach of contract. These persons mayassert the affirmative defensesto liability set forth in thebill, as well as common law and contractual defenses as applicable. The bill does not modify current law pertaining to joint andseveralliability for subcontractors and design professionals that contribute to any specific violation of the construction defect standards set out in the bill.” (Assem. Com.on Judiciary, analysis of Sen. Bill No. 800 (2001—2002 Reg. Sess.) as amended Aug. 26, 2002, p.4.) The plain language of Senate Bill No. 800 provides that a design professional who “as the result of a negligent act or omission” causes, in whole orin part, a violation of the standards set forth in section 896 for residential housing maybeliable to the ultimate purchasers for damages. Thelegislative history confirmsthe legislature’s intent.'’ In '® Code of Civil Procedure section 337.1 sets forth the four-yearstatute of limitations for patent construction defects, and Code of Civil Procedure section 337.15 provides a 10-year limitations period for latent defects. Both sections refer to actions brought “to recover damages from any person performing or furnishing the design, specifications, surveying, planning, supervision or observation of construction or construction of an improvementto real property... .” (Code Civ. Proc., §§ 337.1, subd.(a), 337.15, subd. (a).): "7 Although recourseto extrinsic material is unnecessary giventhe plain language of statute, we mayconsult it for material that buttresses our construction ofthe statutory language. (In re TobaccoII Cases (2009) 46 Cal.4th 298, 316.) 20 construing a statute, our general goal must alwaysbeto effectuate the legislative intent. (Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 977.) To the extent that a Biakanja/Bily policy analysis is not otherwise dispositive of the scope of duty owed by a design professionals to a homeowner/buyer, Senate Bill No. 800 is. Il. DISPOSITION The order sustaining the demurrers and the judgmentofdismissalare reversed. The trial court is directed to enter a new order overruling the demurrers. Bruiniers,J. We concur: Jones, P. J. Needham,J. 21 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 15760 Ventura Boulevard, 18th Floor, Encino, California 91436-3000. On January 22, 2013, I served true copies of the following document(s) described as PETITION FOR REVIEWontheinterested partiesin this action as follows: SEE ATTACHED SERVICE LIST BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the personsat the addresseslisted in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Horvitz & Levy LLP’s practice for collecting and processing correspondencefor mailing. On the same daythat the correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the lawsofthe State of California that the foregoing is true andcorrect. Executed on January 22, 2013, at Encino, California. trunBabe Victoria Beebe SERVICE LIST Beacon Residential v. Skidmore Owings Court of Appeal Case No. A134542 Ann Rankin Terry Wilkens Law Offices of Ann Rankin 3911 Harrison Street Oakland, CA 94611 Kenneth S. Katzoff Robert R. Riggs Sung E. Shim Stephen G. Preonas Katzoff & Riggs LLP 1500 Park Avenue, Suite 300 Emeryville, CA 94608 Richard C. Young Robles, Castles & Meredith 492 Ninth Street, Suite 200 Oakland, CA 94607 Noel E. Macaulay Steven H. Schwartz Schwartz & Janzen, LLP 12100 Wilshire Boulevard, Suite 1125 Los Angeles, CA 90025 Hon. Richard A. Kramer San Francisco County Superior Court 400 McAllister Street, Dept. 304 San Francisco, CA 94102 Office of the Clerk Court of Appeal First Appellate District Division Five 350 McAllister Street San Francisco, CA 94102 Attorneys for Plaintiff and Appellant Beacon Residential Community Association Attorneys for Plaintiff and Appellant Beacon Residential Community Association Attorneys for Defendant and Respondent Skidmore, Owings & Merrill LLP Attorneys for Defendant and Respondent HKS, Inc., individually and doing business as HKSArchitects, Inc. Case No. CGC08478453 Case No. A134542