McMILLIN ALBANY v. S.C.Amicus Curiae Brief of Leading Builders of AmericaCal.July 29, 2016SUPREME COURT COPY i EME COURT FILED No. $229762 JUL 2 9 2016 In the Supreme Courtof - The State of California rankA. McGuire Clerk Deputy McMILLIN ALBANY, LLC,etal., Petitioners, VS. THE SUPERIOR COURT COUNTY OF KERN, Respondent. CARL AND SANDRA VAN TASSEL,etal. Real Parties in Interest RELIEF SOUGHT FROM THE PUBLISHED OPINION OF THE COURT OF APPEAL, FIFTH APPELLATE DISTRICT 574 Civ. No. F069370 APPLICATION TO FILE AMICUS CURIAE BRIEF AND AMICUS CURIAE BRIEF IN SUPPORT OF MCMILLIN ALBANY, LLC AND MCMILLIN PARK AVENUE, LLC NEWMEYER & DILLION LLP Alan H. Packer, CBN 124724 J. Nathan Owens, CBN 198546 Jeffrey R. Brower, CBN 265099 895 DoveStreet, Fifth Floor Newport Beach, CA 92660 Telephone: (949) 854-7000 Facsimile: (949) 8540-7099 Attorneys for Proposed Amicus Curiae LEADING BUILDERS OF AMERICA No. 8229762 In the Supreme Courtof The State of California McMILLIN ALBANY,LLC,etal., Petitioners, vs. THE SUPERIOR COURT COUNTY OF KERN, Respondent. CARL AND SANDRA VAN TASSEL,etal. Real Parties in Interest RELIEF SOUGHT FROM THE PUBLISHED OPINION OF THE COURT OF APPEAL, FIFTH APPELLATE DISTRICT 574 Civ. No. F069370 APPLICATION TO FILE AMICUS CURIAE BRIEF AND AMICUS CURIAEBRIEF IN SUPPORT OF MCMILLIN ALBANY, LLC AND MCMILLIN PARK AVENUE, LLC NEWMEYER & DILLION LLP Alan H. Packer, CBN 124724 J. Nathan Owens, CBN 198546 Jeffrey R. Brower, CBN 265099 895 DoveStreet, Fifth Floor Newport Beach, CA 92660 Telephone: (949) 854-7000 Facsimile: (949) 8540-7099 Attorneys for Proposed Amicus Curiae LEADING BUILDERS OF AMERICA APPLICATION FOR LEAVE TO FILE AMICUS CURIAE BRIEF Proposed amicus curiae Leading Builders of America (“LBA”) hereby requests the Court’s permission to file an amicus curiae brief in support of McMillin Albany, LLC and McMillin Park Avenue, LLC’s (collectively, ““McMillin”). The issues before the Court raises important issues regarding the nature, purpose, and scope of California homebuilders’ statutory right to repair pursuant to Civil Code sections 895 et seq. (the “Right to Repair Act” or the “Act”). AMICUS CURIAE The LBAis an association of the top residential homebuilders in the United States, all doing substantial business in California, all ofwhom are significantly affected by the issues before the Court. For decades,the members of the LBA have designed, built and sold thousands of homes and hundreds of communities, including single family homes, condominiums, and townhomesin California. Decadesoframpantresidential construction defectlitigation prior to SBR800 affected ILBA’s members, their trade partners, and consumers, in the form of skyrocketing construction costs, housing prices,litigation expenses, and insurance costs. The “Right to Repair” Act overhauled California’s broken system of construction defect litigation after extensive negotiations between consumers, builders, and insurers, and provided, among other things, a mandatory Right to Repair that gave builders a chance to perform repairs before being sued. LBA membersthen structured their businesses around the requirements of the Act, including their sales documents, warranty procedures, and dispute resolution procedures — as required by the Actitself. Since the Right to Repair Act was enacted in 2003, LBA membershave utilized the procedures in the Act to perform prelitigation repairs that are satisfactory to homeownersandlead to resolution of issues in an economical manneroutside of court. However, recent decisions limiting the Act’s applicability have threatened to undermine the advances madein the last decade. Our law firm was counsel for The William Lyon Companyin Aasv. Superior Court (2000) 24 Cal.4th 627, which, along with the ever- increasing costs of construction defectlitigation, resulted in the Legislature enacting the Right to Repair Act as a comprehensive reform ofall construction defect litigation in California. We were also counsel for Standard Pacific in Standard Pacific v. Superior Court (2009) 176 Cal.App.4th 828. The appellate court in Standard Pacific confirmedthat construction defect claimants must comply with Civil Code section 910 priorto filing a lawsuit even when only commonlaw claimsareasserted. (Id. at 830-34.) The LBA andits members havea vital interest in the outcome ofthe issues before the Court because reversal of the Fifth Appellate District’s Opinion will undermine the Right to Repair Act by permitting claimants to bypassa builders’ statutory right to repair construction defects prior to litigation. The inevitable result is morelitigation, the opposite of the Legislature’s stated goal to reduce litigation via the Right to Repair Act. The LBAandits counsel participated in the briefing and oral argumentof the underlying published Opinion of the Court of Appeal, Fifth Appellate District, have reviewed the Fifth Appellate District’s published Opinion appealed herein, Van Tassel’s Petition for Review, Opening Brief, andall related responses and briefing, and were involved in the Right to Repair Act’s legislative process on behalf of the LBA’s members. Weare familiar with the issues in this case and believe we canassist this Court by providing additional briefing that materially adds to and complements the parties’ briefs and provides an industry perspective beyond the more limited interests of the specific litigants before the Court. CERTIFICATE OF COMPLIANCE WITH CRC8.520(F)(4) Noparty or counsel for a party in the pending appeal authoredthis proposed amicuscuriae brief in whole or in part, or made a monetary contribution intended to fund the preparation or submission of the proposed amicus curiaebrief. For the foregoing reasons, the LBA respectfully requests permission to file an amicuscuriae brief in support of McMillin. Thatbriefis submitted concurrently. Dated: July 15, 2016 Respectfully submitted, NEWMEYER & DILLION LLP - Nathan Owens Jeffrey R. Brower Attorneys for Applicant Leading Builders ofAmerica Il. IIL. IV. VI. VIL. TABLE OF CONTENTS INTRODUCTION ooo.ceieecesecnestecensecsseeeesesesecesessessseneaaterseaeeeey l BACKGROUND OF LEGISLATION AT ISSUE.....eee 2 THE RIGHT TO REPAIR ACT COVERS CLAIMS FOR RESULTANT PROPERTY DAMAGE....... ccc cecscescessteeesteteeeenees 4 THE LEGISLATURE’S STATED GOAL OF THE RIGHT TO REPAIR ACT WAS TO AMEND THE COMMON LAW AND REDUCELITIGATION... eecscceeeeeseeeeseeeeesuecesaetenseeeeseteeseaeees 7 THE EXPRESS LANGUAGEOF THE RIGHT TO REPAIR ACT PRECLUDES COMMON LAW CLAIMS FOR CONSTRUCTION DEFECTS,occceeccessccsseccsssssceescesecesseeessaeessssaeecesseeeessecsuaeeesaeesegess 10 THE PROPER CONSTRUCTION OF THE RIGHT TO REPAIR ACT IS CRITICAL TO FUTURE RESIDENTIALDEVELOPMENTIN CALIFORNIA.......ee 12 CONCLUSION0ceeceeessceeeceeseesseeseeceeesssaeeeeeseesesseeeseeesesesseeeeees 14 TABLE OF AUTHORITIES Cases Aas v. Superior Court (2000) 24 Cal.4th 627 ...cccecececceeesreeeeeneeneseneeeseeesneetseeeseeeesessesesesieenees 2,7 Anders v. Superior Court (2011) 192 Cal.App.4th 579 [121 Cal.Rptr.3d 465] oo... ee ceeceeeeeerecteeseeesseseseassesessscsseessessseseeeseeeaesaes 11 Baeza v. Superior Court (2011) 201 Cal.App.4th 1214, 1223 [135 Cal.Rptr.3d 557]... 11 Burch v. Superior Court (2014) 223 CalApp.4th 141. eeeseneeceeeeeseeerereneenees 3, 12, 13 Darling v. Superior Court (2012) 211 Cal.App.4th 69 [149 Cal.Rptr.3d 331)...eeeeeseeeereseesessseseseesseeesesesecessessesesssssereseeeeegs 1} KB Home Greater Los Angeles, Inc. v. Superior Court (2014) 223 Cal.App.4th 1471 [168 Cal.Rptr.3d 142] oo. eeeseeneerenerseesenseseeeesesseessseessenseasseeaes 11, 13 Liberty Mutual Insurance Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98 oo... eccesesseceseeceeseesseeeseeesseessavenes 3.12, 13 McCaffrey Group, Inc. v. Superior Court (2014) 224 CalApp.4th 1330 [169 Cal.Rptr.3d 766 |...cece eeeesseeeeeeessessssessesessscssesseeesseeeessseessaeeees 11 Standard Pacific v. Superior Court (2009) 176 Cal.App.4th 828 ooocessessseenseeessesssesteeseseesesteesneaees 2 Statutes Civ. Code, § 896 oiececceceeeesseecneeeteeebeseeceesaeesseessnscsseeecsseenssenersnssenereseetennes passim § 897 vieccccccccccseecesecseeeneeeceeseeseeseeeeceaecaeeeesesssseessssaseseseuseeserseeseeeees 1, 3,5, 10 SOLO oi cccccccsscesseesseceseecsnerseeccesesaceessssaetseeseseseasesseceseesesaserssessaseseateeaeeee 11 § 943cc cccessccseccsseesecesecseceaecesecsaeeeseassaeecseecsaneesaeesseesseessasesssseeseeesseesseess 11 § O38 ccceccccseeceeeterseerecesecsaeesseeeseseesessesseseseessesscseueseeseseeesestessesasseaeseseesgs 4 Other Authorities Assem. Com.on Judiciary, Rep. on SB 800 as amended Aug. 26, 2002.00... cecescereetertertectseerseneeeeseens 8 Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002 0.0...eeeeeeseeees 8 -ii- Other Authorities (cont'd) Sen. Com.on Judiciary, Rep. on SB 652 as amended April 30, 2013 oo...eeeceessseceereeeeetssneeeee 8 Stats. 2002, ch. 722, § 1, SUD. (D) oo.eccccceceesnneeeeeseeereeenateccsneeeeesseueeessaneonaeeeteateesessaes 8, 12 - iii - AMICUS CURIAE BRIEF I. INTRODUCTION Proposed amicus curiae Leading Builders of America (“LBA”) submits this Amicus Brief in support of McMillin Albany, LLC and McMillin Park Avenue, LLC’s (collectively, “McMillin”). The plain language of Civil Code section 895, et seq. (the “Right to Repair Act” or the “Act”) confirmsthat the Act was intendedto be, and is, the exclusive remedy for residential construction defects in California, subject only toits enumerated exceptions, and that the Act provides an absolute right for builders to repair homespriorto the filing of any litigation. Real Parties in Interest Carl & Sandra Van Tassel, et al.’s (“Van Tassel”) briefing obfuscates the language, intent, scope and effect of the Act. If, as Van Tassel claims, the Right to Repair Act was designed only to supplement the commonlaw bycreating more causes ofaction and remedies for construction defects, then the Legislature would not have stated its goals as “reforming” the older system and “reducinglitigation.” Further, Van Tassel’s claim that the Act was designed only to allow for the recovery ofpure economiclossesis belied by the scope of Actionable Defects and damages coveredby the Right to Repair Act, as set forth in Chapter 2 (Civ. Code, §§ 896 and 897). The Right to Repair Act categorically covers construction defects that have resulted in property damage. Moreover, Real Parties’ construction of the statute would virtually eliminate the “Right to Repair” thatis a critical cornerstone of SB800. Van Tassel contendsthat the builder’s statutory Right to Repairis utterly at the claimant’s whim whether to proceeddirectly to litigation or to provide a -|- 6224021.1 Notice of Claim, rendering this right illusory. The ultimate impact would undermine the clear language of SB800 and the Legislature’s expressintent by increasing (rather than decreasing)litigation, eliminating (rather than affording) the opportunity for quick and fair resolution of claims without litigation, and makingit harder (not easier) for construction participants to obtain insurance coverage. Il. BACKGROUND OF LEGISLATION AT ISSUE LBA’s memberssuffered through decades of uncontrolled residential construction defect litigation, with homes they built heading straight to litigation without ever having a chanceto repair the homes. After assessing the impact of this broken system, the California Legislature enacted SB800, the Right to Repair Law, as a means of comprehensive reform of the broken construction defect litigation system. Under SB800, conditions constituting actionable construction defects were categorized into defined actionable functionality standards, plus a catch-all provision for any unspecified conditions causing damage. Homeownerswere provided a remedy for conditions that caused damage, as well as certain conditions that had not yet caused any damage, with causes of action restricted to those expressly permitted underthe act. Mandatory pre-litigation procedures afforded the homebuilders and trades a statutory Right to Repairprior to any litigation. By specifying what is actionable and whatis not, and by requiring a mandatory pre-litigation attemptto resolve claim, the Legislature took aim at comprehensivetort reform and reducing long-increasinglitigation and insurancecosts. Overa decadeafter these successful tort reform efforts were implemented, an unusual Court of Appeal decision turned the Right to Repair Act on its head. Ironically, the homeat issue in the case had already U C M E P R B H T S T , beenfully repaired by the builder after a catastrophic leak, and went up on appeal over a quibble in the subrogation context over reimbursementof a luxury hotel stay while repairs were made. The Fourth District Court of Appeal’s opinion in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98 (“Liberty Mutual’), if adopted throughout California for construction defect cases, threatensto single- handedly unravel California’s Right to Repair Act. In fact, the Court’s decision actually created a flurry of new construction defect cases, recreating the original problem. The Court’s holding in Liberty Mutual created twoparallel tracks of construction defect litigation in California, one under the Right to Repair Act, and another under the pre-existing commonlaw. This case has resulted in confusion, uncertainty, and unnecessary expense. Moreover, in another Court of Appeal decision, Burch v. Superior Court (2014) 223 Cal.App.4th 1411, the Second District Court of Appeal blindly, and without any analysis, extended the holding ofLiberty Mutual. LBA members have seen these decisionsresult in volleys of new lawsuits and a frenzy of law and motion and appellate work, much ofwhich has produced contrary and inconsistent rulings. Ironically, litigation over the viability of the Right to Repair Act is now atan all-time high throughout the State of California. The simple bottom line is that the Fifth Appellate District got it right in this case. Rather than following Liberty Mutualblindly, the Fifth Appellate District examinedthe statutory language and requirements, and took a more complete view of the Legislative history. It concluded that Liberty Mutual was wrongly decided, and that except as expressly set forth in the Right to Repair Act, the Act functions as the exclusive remedy for residential construction defect claims, regardless of whether defects are alleged to have resulted in damage. The number of homesaffected by a ruling in this matter cannot be overstated. The Right to Repair Act “appliesto original construction intendedto be sold as an individual dwelling unit” after its effective date, January 1, 2003. (Civ. Code, §§ 896, 938.) Even in the recession-impacted period of calendar years 2005 through 2010, the Right to Repair Act applies to at least 360,000 dwellings that could be the subject of construction defect litigation. Indeed, well over a half a million residences are subject to the nowten-yearold law. LBAand its members havea vital interest in ensuring that the extensive tort reform efforts are not undone by unnecessary judicial activism that underminesthe very purpose for enacting the Right to Repair Act. Indeed, if the judicial unraveling of California’s Right to Repair Actis permitted to continue, California will be one of the only states in the country whose construction defect tort “reform” law actually impairs the resolution of construction defect claims and generates MORE litigation. For these reasons and the reasonsset forth in Respondent’s Brief, LBA respectfully requests that this Court affirm the Fifth Appellate District’s Opinion, rather than embark on a course that would render meaningless the reform of SB800 andresult in an increase of construction defect lawsuits. Ill. THE RIGHT TO REPAIR ACT COVERS CLAIMS FOR RESULTANT PROPERTY DAMAGE Despite Van Tassel’s contentions, the Right to Repair Act is not a mechanism for homeownersto recoveronly for “defects that have not caused physical damage”or “purely economic losses.” Unlike the Liberty Mutualdecision, the decision of the Fifth Appellate District in this matter correctly found that SB800 applied both to defects causing damage,as well as specified conditions that have not yet caused damage. Van Tassel arguesfirst that the Act does not cover claimsfor resultant property damage and second,therefore, that the Act cannot be the exclusive remedy for such claims. To the contrary, the Act exhaustingly covers claims for resultant property damage. Chapter 2 (Civ. Code, §§ 896 and 897) sets forth the “Actionable Defects” allowed under the Right to Repair Act: Section 896(a)(3) — “Windows,patio doors, deck doors, and their systemsshall not allow excessive condensation to enter the structure and cause damage to another component.” Section 896(a)(6) — “Decks, deck systems, balconies, balcony systems, exteriorstairs, and stair systems shall not allow unintended water to pass within the systems themselves and cause damageto the systems.” Section 896(a)(7) — “Foundation systemsandslabs shall not allow water or vaporto enter into the structure so as to cause damageto another building component.” Section 896(a)(9) — “Hardscape, including paths and patios, irrigation systems, landscaping systems, and drainage systems, that are installed as part of original construction, shall not be installed in such a way as to cause wateror soil erosion to enter into or come in contact with the structure so as to cause damageto another building component.” Section 896(a)(11) — “Stucco, exterior siding, and exterior walls shall not allow excessive condensation to enter the structure and cause damage to another component.” Section 896(a)(12) — “Retaining and site walls and their associated drainage systemsshall not allow unintended water to pass beyond, around, or through its designed or actual moisture barriers, including, without limitation, any internal barriers, so as to cause damage.” Section 896(a)(18) — “The waterproofing system behind or under ceramictile and tile countertops shall not allow water into the interior walls, flooring systems, or other components so as to cause damage.” Section 896(c)(1) — “Soils and engineered retaining walls shall not cause, in whole or in part, damageto the structure built upon the soil or engineeredretaining wall.” Section 897 — “To the extent that a function or componentof a structure is not addressed by these standards,it shall be actionableifit causes damage.” As demonstrated above, the Legislature intended that the Right to Repair Act coverall claims for construction defects, including claims that result in property damage. Civil Code section 944, further confirmsthat the Right to Repair Act occupies the field of resultant property damageclaims: If a claim for damages is made underthistitle, the homeowneris only entitled to damagesfor. . . the reasonable cost of repairing and rectifying any damagesresulting from thefailure of the hometo meetthe standards. LBA doesnotdispute that one of the purposes of the SB800 Legislation was to providea statutory basis for relief for certain construction defects that have not yet caused resultant damage. (Such defects were held by this Court not to be actionable in tort in Aasv. Superior Court (2000) 24 Cal.4th 627.) However, to portray this as the only basis of SB800 would require ignoring the entirety of the legislation andits history, as well as its stated intent to implement comprehensive reform ofthe residential construction defect litigation system. It would also require ignoring the statutory implementation of pre-litigation procedures that provided a mandatory Right to Repairto builders, allowing builders to perform repairs to defects (regardless of damage) before litigation is commenced. This distinction is critical to LBA’s members, whoprior to SB800 were routinely subjected to litigation over purported defect claims without having an opportunity to perform repairs. Real Parties in Interest’s position transparently implies that claimants may always bypass thestatutorily mandatedpre-litigation right to repair, and go straightto litigation. This would be detrimental to LBA’s membersand the public alike. An interpretation of the Right to Repair Law that allows consumerattorneys to bypass the mandatory Right to Repair at their whim underminesthe purposes of the Actitself. IV. THE LEGISLATURE’S STATED GOAL OF THE RIGHT TO REPAIR ACT WAS TO AMEND THE COMMON LAW AND REDUCE LITIGATION Thelegislative history of the Right to Repair Act' makes abundantly clear the purpose of the Act wasto reducelitigation and changethe common law: The Legislature finds and declares, as follows: (a) The California system for the administration of civil justice is one of the fairest in the world, but certain procedures and standards should be amendedto ensure fairnessto all parties. (b) The prompt andfair resolution of construction defect claimsis in the interest of consumers, homeowners, and the builders of homes,andis vital to the state’s continuing ' On June 15, 2016, McMillin Albany, LLC requested this Court take judicial notice ofthe legislative history of SB 800. growth andvitality. However, under current procedures and standards, homeowners and builders alike are not afforded the opportunity for quick andfair resolution ofclaims. Both need clear standards and mechanismsfor the promptresolution of claims. (c) It is the intent ofthe Legislature that this act improve the proceduresfor administration ofciviljustice, including standards and proceduresfor early disposition of construction defects. (Section 1 of Stats. 2002, c. 722 (S.B.800), emphasis added.) The “current procedures and standards”the Legislature intended to amend were unquestionably commonlaw construction defect claims. As such, the Act’s stated purpose was to change, not supplement, the common law — a goal not secured if homeownersretained all commonlaw construction defect claims. This legislative intent has been consistently reaffirmed, along with the Legislature’s goal of reducinglitigation. The Assembly Committee’s report on the penultimate version of the bill frames the “key issue” as “should construction defects be governed by specific standards and builders be given an opportunity to repair alleged violations before a homeowner may file a civil action in order to promote safe and affordable housing?” (Assem. Com.on Judiciary, Rep. on SB 800 as amended Aug. 26, 2002,p. 1.) The samereport states: “As manyprior bill analyses on this subject have noted, the problem of construction defects and associatedlitigation have vexed the Legislature for a numberof years, with substantial consequences for the development of safe and affordable housing. This bill reflects extensive and serious negotiations between builder groups, insurers and the Consumer Attorneys ofCalifornia, with the substantial assistance ofkey legislative leaders over the past year, leading to consensus on ways to resolve these issues.” (Assem. Com.on Judiciary, Rep. on SB 800 as amended Aug.26, 2002,p. 2, emphasis added.) “The bill establishes a mandatory processprior to the filing of a construction defect action. The major componentofthis processis the builder’s absolute right to attempt a repair prior to a homeownerfiling an action in court. Builders, insurers, and other business groups are hopeful that this right to repair will reduce litigation.” (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 5.) In 2013, the Legislature again confirmed that a builder has the absolute right to repair, stating that: Current law requires a homeownerto follow a mandatory procedure (pursuantto [the Right to Repair Act]) priorto filing a construction defect lawsuit that includes a builder’s absolute right to repair prior to a homeownerfiling a lawsuit with the hopesthat this will reduce litigation. (Sen. Com.on Judiciary, Rep. on SB 652 as amended April 30, 2013, p. 2.) The Legislature has maintained a consistent and clear position regarding the Act for more than a decade. Van Tassel’s argument requires the Court to eviscerate the Right to Repair Act’s purpose. /// /// //1 /// /// /// V. THE EXPRESS LANGUAGE OF THE RIGHT TO REPAIR ACT PRECLUDES COMMON LAW CLAIMS FOR CONSTRUCTION DEFECTS The Right to Repair Act’s comprehensive nature is confirmed by the express language of the Act. Where the Legislature intendedto retain commonlaw claims or other causes of action in the Right to Repair Act, it expressly set forth those exceptions to the Act’s scope. Van Tassel’s argumentthat the Legislature intended to retain commonlaw claims not expressly carved out of the Act’s scope is contradicted by the other express exemptions from the Act. The Legislature knew how to retain common law construction defect claims — asit did for condominium conversions — but chose not to retain common law construction defect claims for non- condominium conversions. In any action seeking recovery ofdamagesarising outof, or related to deficiencies in .. . residential.construction .. . the claimant’s claims or causes ofaction shall be limited to a violation of . . . the following standards, except as specifically set forth in this title. (Civ. Code, § 896, emphasis added.) To the extent that a function or componentofa structure is not addressed by these standards,it shall be actionable if it causes damage. (Civ. Code, § 897.) -10- Except as providedin this title, no other cause ofaction for a claim covered by this title orfor damages recoverable under Section 944 is allowed. (Civ. Code, § 943, subd. (a), emphasis added.) In addition to the rights underthistitle, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action forfraud, personalinjury, or violation ofa statute. (Civ. Code, § 943, subd. (a), emphasis added.) This title applies to original construction intended to be sold as an individual dwelling unit. As to condominium conversions,this title does not apply to or does not supersede any other statutory or common law. (Civ. Code, § 896, emphasis added.) Thescope ofthe Actis clearly articulated within Sections 896, 897, and 943. Van Tassel’s briefing misinterprets Section 897, the “catch-all” provision of the Act, by arguing that Section 897 demonstrates that commonlaw claims were retained by the Right to Repair Act. Contrary to Van Tassel’s argument, Section 897 is not an exception or carve-out to the Act. Instead, Section 897 is part of the functionality standards of the Act. (See Baeza v. Superior Court (2011) 201 Cal.App.4th 1214, 1223 [135 Cal.Rptr.3d 557]; Anders v. Superior Court (2011) 192 Cal.App.4th 579, 585 [121 Cal.Rptr.3d 465]; Darling v. Superior Court (2012) 211 Cal.App.4th 69, 75 [149 Cal.Rptr.3d 331]; KB Home Greater Los Angeles, Inc. v. Superior Court (2014) 223 Cal.App.4th 1471 [168 Cal.Rptr.3d 142]; McCaffrey Group, Inc. v. Superior Court (2014) 224 CalApp.4th 1330 [169 Cal.Rptr.3d 766 ].) -ll- This is further confirmed in Section 910, which providesthat a homeowner must comply with the Right to Repair Act’s prelitigation procedures for purported violations of Section 897: Prior to filing an action against any party alleged to have contributed to a violation of the standards set forth in Chapter 2 (commencing with Section 896), the claimantshall initiate the following prelitigation procedures: (Civ. Code, § 910.) The prelitigation procedures of the Act are not limited to violation of Section 896. Instead, they encompass both Sections 896 and 897, thereby rendering Section 897 claims for damagewithin the Act’s scope. VI. THE PROPER CONSTRUCTION OF THE RIGHT TO REPAIR ACT IS CRITICAL TO FUTURE RESIDENTIAL DEVELOPMENTIN CALIFORNIA It is estimated that more than half a million residences are subject to the Right to Repair Act today. The importance to “consumers, homeowners, and the builders of homes”(Stats, 2002, ch. 722, § 1, subd. (b)) is paramount. For more than ten years, it has been clear to homeowners, builders, subcontractors, insurers and the courts that California homebuilders possess a prelitigation “Right to Repair” any claimed defects in residential construction first sold on or after January 1, 2003. Prior to the erroneous Liberty Mutual and Burch decisions, California trial courts unanimously recognized that the Right to Repair Act is the exclusive remedy for construction defects. Superior Court judges in San Diego County (Judges -{2- Vargas (Ret.), Prager, and Styn), Fresno County (Judge Donald Black), San Bernardino County (Judge Donna Garza), Orange County (Judge Gregory Munoz), Riverside County (Judge John Evans), Tulare County (Judge Melinda Reed) and Contra Costa County (Judge Thomas Maddock), to nameonly a few,all held that commonlaw claimsfor negligence are barred by the Right to Repair Act and that builders who comply with the Act’s requirementshavea statutory right to repair.? These judges, who were immersed in construction defect lawsuits, cameto the correct result. They each recognized that the comprehensive nature of the Right to Repair Act governed construction defect litigation and, by its express language,is the exclusive remedy for construction defect claims, subject only to its defined exceptions. As aresult of Liberty Mutual and Burch,trial courts began issuing conflicting rulings when trying to reconcile appellate decisions that expressly contradict statutory language. Theresult is uncertainty and increasedcosts for all parties — the opposite of what the Legislature intended. Regardless of whether a construction defect action claims property damage, attorneysare trying to bypass the Act’s notice andright to repair requirements. The uncertainty surrounding the scope of the Act has ruined the Right to Repair Act and, if the Fifth Appellate District’s opinion is not confirmed, homeowners, builders, courts and, ultimately, the California economy,will all suffer. * The case numbersfor these decisionsare as follows: San Diego County case nos. 37-2009-00087185, 37-201 1-00092085, 37-2010-00102810; Fresno County case no. 11CECG03487; San Bernardino County case no. CIVDS1107168; Orange County case no. 30-2011-00498089; Riverside County case no. INC10006723; Tulare County case no. VCU243697; and Contra Costa case no. C0802409. -13- Vil. CONCLUSION A builder has an absolute right to repair alleged construction defects prior to a homeownerinitiating litigation. Both the Legislature and case law are clear on the issue. To hold otherwise — as Van Tassel argues — would eviscerate the scope, purpose, and intent of the Act. Therefore, LBA respectfully requests that the Court confirm the Court of Appeal Fifth Appellate District’s opinion and find that the Right to Repair Act is the exclusive remedy for construction defects in California, subject only toits enumerated exceptions. Dated: July 15, 2016 Respectfully submitted, NEWMEYER & DILLION LLP By: — . Racker J. Nathan Owens Jeffrey R. Brower Attorneys for Applicant Leading Builders of America -14- CERTIFICATE OF WORD COUNT (Cal. Rules of Court, Rule 8.520(c).) The text of this brief consists of 4,575 words as counted by the Microsoft Word version 2010 word processor program used to generate the brief. Dated: July 15, 2016 6224021.1 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF CONTRA COSTA At the time of service, I was over 18 years of age and nota party to this action. 1am employed in the County of Contra Costa, State of California. My business address is 1333 N. California Blvd., Suite 600, Walnut Creek, California 94596. On July 15, 2016, I served true copies of the following document(s) described as APPLICATION TO FILE AMICUS CURIAE BRIEF AND AMICUS CURIAE BRIEF IN SUPPORT OF McMILLIN ALBANY, LLC AND McMILLIN PARK AVENUE,LLContheinterested parties in this action as follows: SEE ATTACHED SERVICE LIST BY MAIL: I enclosed the document(s) in a sealed envelope or package addressedto the personsat the addresseslisted in the Service List and placed the envelope for collection and mailing, following our ordinary businesspractices. I am readily familiar with Newmeyer & Dillion’s practice for collecting and processing correspondence for mailing. On the same daythat the correspondenceis 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 laws of the State of California that the foregoingis true and correct. Executed on July 15, 2016, at Walnut Creek, California. Lhe L. for! 6223795. 1 SERVICE LIST McMillan Albany v. Superior Court ofKern County (Van Tassel) Fifth District Case No.: F069370 * Supreme Court Case No. 5229762 Individual / Counsel Served Party Represented Calvin R. Stead, Esq. Andrew M. Morgan,Esq. BORTON PETRINI, LLP 5060 California Avenue, Suite 700 Bakersfield, California 93309 Telephone: (661) 322-3051 Facsimile: (661) 322-4628 cstead@bortonpetrini.com amorgan(@bortonpetrini.corn Petitioners McMillin Albany, LLC and McMillin Park Avenue, LLC Mark A. Milstein, Esq. Fred M. Adelman, Esq. MayoL. Makaczyk, Esq.* MILSTEIN, ADELMAN, JACKSON, FAIRCHILD & WADE, LLP 10250 Constellation Boulevard, 14th Floor Los Angeles, California 90067 Telephone: (310) 396-9600 Facsimile: (310) 396-9635 mmilstein@milsteinadelman.com fadelman(@milsteinadelman.com mmakaczyk@milsteinadelman.com Plaintiffs and Real Parties in Interest, Carl Van Tassel and Sandra Van Tassell Robert V. Closson, Esq.HIRSCH CLOSSON, APLC591 Camino de la Reina, Suite 909San Diego, California 92108Telephone: (619) 233-7006Facsimile: (619) 233-7009bclosson@hirschclosson.com Objectors to Request forDepublicationCalifornia Professional Association ofSpecialty Contractors 6223795.1 Kathleen F. Carpenter, Esq. DONAHUEFITZGERALD LLP 1646 N. California Boulevard, Suite 250 Walnut Creek, California 94596 Telephone: (925) 746-7770 Facsimile: (925) 746-7776 kcarpenter(@donahue.com Objectors to Request for Depublication California Building Industry Association Donald W.Fisher, Esq. ULICH GANION BALMUTH FISHER & FELD LLP 4041 MacArthur Boulevard, Suite 300 Newport Beach, California 92660 Telephone: (949) 250-9797 Facsimile: (949) 250-9777 dfisher@ulichlaw.com Amicus Curiae, Ulich Ganion Balmuth Fisher and Field, LLP H. Thomas Watson Daniel J. Gonzalez HORVITZ & LEVY LLP 15760 Ventura Blvd., 18" Floor Encino, California 91436-3000 hwatson@horvitzlevy.com dgonzalez(@horvitzlevy.com Amicus Curiae MWI,Inc. Anne L. Rauch EPSTEN GRINNELL & HOWELL 10200 Willow Creek Rd, Suite 100 San Diego, California 92131 Telephone: (858) 527-0111 Facsimile: (858) 527-1531 arauch@epsten.com Amicus Curiae Consumer Attorneys of California Tyler Berding BERDING & WEIL 2175 N California Blvd, Suite 500 Walnut Creek, California 94596 Telephone: (925) 838-2090 Facsimile: (925) 820-5592 tpb@berding-weil.com Co-Counsel Amicus Curiae Consumer Attorneys of California 6223795.1 Hon. David R. Lampe Kern County Superior Court Superior Courts Building, Dept. 11 1415 Truxtun Avenue Bakersfield, California 93301-4172 Case No. S-1500-CV-279141 California Court of Appeal Fifth Appellate District 2424 Ventura Street Fresno, California 93721 Telephone: (559) 445-5491 Case No. F069370 Electronic Service Copy via Court’s Electronic Filing System (EFS) operated by ImageSoft TrueFiling (TrueFiling) 6223795.1
