Burch v. Superior Court
223 Cal. App. 4th 1411
| Cal. Ct. App. | 2014Background
- Custom Home Builders and Premier Homes contracted for construction of a single-family residence; Warren and Sahar owned both entities.
- Burch bought the home from Premier Homes and alleged multiple construction defects and corporate alter-ego theory against the entities and individuals.
- Burch's third amended complaint asserted counts for negligence and breach of implied warranty among others; defendants moved for summary adjudication on those counts.
- Trial court granted summary adjudication for negligence and implied warranty, citing rights under the Right to Repair Act (Civil Code § 895 et seq.).
- Burch filed a petition for writ of mandate challenging those rulings; during proceedings, a fourth amended complaint added a tenth Right to Repair Act count.
- The appellate court ultimately held the Right to Repair Act is not exclusive and vacated the summary adjudication, reinstating negligence and implied warranty counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Right to Repair Act preclude common law claims? | Burch asserts Act is not exclusive for property damage claims. | Defendants rely on Act to bar negligence and implied warranty claims. | Act is not exclusive where property damage exists; common-law claims survive. |
| Did Custom Home Builders, Warren, and Sahar owe a duty of care to Burch? | Burch, as a prospective purchaser, should have a duty implied by Biakanja and Sabella. | No privity or duty absent contractual relationship. | Biakanja factors support a duty of care to prospective homeowners; summary adjudication on negligence is improper. |
| Can there be an implied warranty in favor of a third party beneficiary of a construction contract? | Burch is an intended beneficiary and can recover for implied warranty. | No privity means no implied warranty against non-parties. | Implied warranty can arise for third-party beneficiaries; summary adjudication on this count was improper. |
| Was there a triable issue whether Burch was an intended beneficiary of the contract between Premier Homes and Custom Home Builders? | Burch should be treated as an intended beneficiary. | No determination on intent to benefit Burch at summary adjudication. | Issue exists; trial court should resolve whether Burch is an intended beneficiary. |
Key Cases Cited
- Aas v. Superior Court, 24 Cal.4th 627 (Cal. 2000) (Aas limited tort recovery for construction defects to property damage or injury)
- Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC, 219 Cal.App.4th 98 (Cal. App. 2013) (Right to Repair Act not exclusive remedy for property-damage cases)
- Greystone Homes, Inc. v. Midtec, Inc., 168 Cal.App.4th 1194 (Cal. App. 2008) (act abrogation context for construction defects)
- Pollard v. Saxe & Yolles Dev. Co., 12 Cal.3d 374 (Cal. 1974) (implied warranty of quality and fitness for new construction)
- Sabella v. Wisler, 59 Cal.2d 21 (Cal. 1963) (duty to prospective homebuyers for negligent construction)
- Bily v. Arthur Young & Co., 3 Cal.4th 370 (Cal. 1992) (Biakanja factors define duty in lack of privity)
- Stewart v. Cox, 55 Cal.2d 857 (Cal. 1961) (subcontractor liable to homeowners for negligent construction)
- Gilbert Financial Corp. v. Steelform Contracting Co., 82 Cal.App.3d 65 (Cal. App. 1978) (intended beneficiary implied warranty exception to privity)
- Weseloh Family Ltd. Partnership v. K.L. Wesel Construction Co., Inc., 125 Cal.App.4th 152 (Cal. App. 2004) (distinguishes design engineers' duty; applies Biakanja factors)
- Biakanja v. Irving, 49 Cal.2d 647 (Cal. 1958) (establishes six-factor test for duty to intended beneficiaries)