Brisbane Lodging, L.P. v. Webcor Builders, Inc.
216 Cal. App. 4th 1249
| Cal. Ct. App. | 2013Background
- Brisbane Lodging, L.P. sued Webcor for latent construction defects under a design-build contract for the Sierra Pointe Radisson hotel.
- The contract used the AIA A201 form and included Article 13.7.1.1, which accrued claims at substantial completion, waiving the delayed discovery rule.
- Radisson was substantially completed on July 31, 2000.
- Latent defects surfaced when a kitchen sewer line issue appeared in 2005, later attributed to the plumbing contractor Therma; Therma repaired in July 2005.
- Webcor sought summary judgment, arguing Brisbane’s claims were time-barred under the accrual date; Brisbane argued the waiver violated public policy and the delayed discovery rule.
- The trial court agreed that Article 13.7.1.1 abrogated the delayed discovery rule and granted summary judgment for Webcor; the appellate court affirmed in part the published holding.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article 13.7.1.1 validly abrogates the delayed discovery rule. | Brisbane contends the waiver violates public policy and the discovery rule. | Webcor argues the clause is clear, valid, and freely entered into by sophisticated parties. | Yes; Article 13.7.1.1 is valid and enforceable. |
| Whether public policy prevents waiving the delayed discovery rule in a commercial contract between sophisticated parties. | Public policy protects the delayed discovery rule; waiver should be void. | Parties may contract to alter accrual dates; public policy favors freedom to contract. | No; public policy does not void the waiver for sophisticated parties. |
| Whether Moreno controls and renders Article 13.7.1.1 void. | Moreno rejects waivers of the delayed discovery rule. | Moreno is distinguishable; parties here are sophisticated; not controlling. | Moreno is distinguishable; Article 13.7.1.1 remains enforceable. |
| Whether there is an irreconcilable conflict between Article 13.7.1.1 and Article 3.18 or other contract provisions. | Brisbane argues a direct conflict invalidates the accrual waiver. | Article 13.7.1.1 and Article 3.18 govern different subjects and can harmonize. | No irreconcilable conflict; provisions operate in different contexts. |
| Whether post-completion conduct by Webcor amount to waiver or to a new claim.” | Webcor’s 2005–2007 site activity could indicate waiver or new liability. | No waiver; conduct did not evidence intent to waive; no new claim arises. | No waiver inferred; post-completion conduct does not create a new claim. |
Key Cases Cited
- Leaf v. City of San Mateo, 104 Cal.App.3d 398 (Cal. App. Dist. 2nd Div. 1980) (discovery rule applicability and accrual timing concepts)
- Lantzy v. Centex Homes, 31 Cal.4th 363 (Cal. 2003) (latent defects, accrual and discovery timing in construction)
- Regents of University of California v. Hartford Accident & Indem. Co., 21 Cal.3d 624 (Cal. 1978) (two-step limitation with latent defects context)
- Moreno v. Sanchez, 106 Cal.App.4th 1415 (Cal. App. 2003) ( MorenO: broad discussion of discovery rule in home inspections; distinguishable)
- Hambrecht & Quist Venture Partners v. American Medical Internat., Inc., 38 Cal.App.4th 1532 (Cal. App. 1995) (public policy and contract waiver of limitations)
- Winet v. Price, 4 Cal.App.4th 1159 (Cal. App. 1992) (public policy and contract waiver context)
- Salehi v. Surfside III Condominium Owners Assn., 200 Cal.App.4th 1146 (Cal. App. 2011) (waiver of unknown claims context)