McMillin Albany LLC v. Superior Court of Kern Cnty., 227 Cal. Rptr. 3d 191

Background

Homeowners (Van Tassels) bought new homes from McMillin after Jan 2003 and sued alleging widespread construction defects causing economic loss and property damage.
Complaint initially included a statutory claim under Civil Code §896 (Right to Repair Act) but plaintiffs voluntarily dismissed that statutory claim and kept common-law negligence and strict liability claims.
McMillin sought a stay pending mandatory prelitigation notice-and-cure procedures established by the Right to Repair Act (Civ. Code §§895–945.5); trial court denied the stay citing binding Court of Appeal authority.
The Court of Appeal granted relief to McMillin, holding the Act’s standards and prelitigation procedures apply to actions alleging property damage from construction defects even when pleaded as common-law claims.
The Supreme Court granted review to decide whether the Act merely created a statutory remedy for economic loss (abrogating Aas) or whether it more broadly displaced common-law recovery for property damage and requires exhaustion of the Act’s prelitigation procedures.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Right to Repair Act applies to suits alleging property damage from construction defects	Van Tassel: Act only supplies a statutory remedy for purely economic loss (abrogating Aas) and does not displace common-law claims for property damage	McMillin: Legislature intended the Act to govern all construction-defect damage claims (economic and property), making its standards and procedures controlling	Held: The Act displaces common-law negligence/strict liability for property damage claims arising from covered residential construction; such claims are subject to the Act’s standards and prelitigation process
Whether the Act’s prelitigation notice-and-cure procedures apply when the complaint does not assert a statutory claim under the Act	Van Tassel: By dismissing the §896 claim, plaintiffs are not bound to the Act’s prelitigation procedures for their common-law property-damage claims	McMillin: Section 896 applies to “any action seeking recovery of damages arising out of” covered construction defects, so pleading form does not avoid the Act’s procedures	Held: Pleading form does not avoid the Act—if the complaint alleges defects that violate the Act’s standards ( §§896–897 ), the prelitigation procedures apply regardless of the legal theory pleaded
Whether the Act’s timelines and procedures are impractical for emergency or rapidly escalating property damage	Van Tassel: The detailed timelines cannot sensibly apply to emergency repairs, so Act was not meant to cover property-damage cases	McMillin: Emergency scenarios do not negate the Act’s applicability; reasonableness and mitigation doctrines can accommodate exigent circumstances	Held: Act can be applied in nonemergency and many emergency contexts; mitigation and reasonableness doctrines (and builder liability for untimely response) address exigencies; the court need not decide every emergency-scenario nuance here

Key Cases Cited

Aas v. Superior Court, 24 Cal.4th 627 (2000) (held economic-loss rule bars negligence recovery for construction defects absent property damage or personal injury)
Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC, 219 Cal.App.4th 98 (2013) (Court of Appeal held Act did not displace common-law remedies for property-damage cases; disapproved here)
Burch v. Superior Court, 223 Cal.App.4th 1411 (2014) (followed Liberty Mutual; disapproved here)
KB Home Greater Los Angeles, Inc. v. Superior Court, 223 Cal.App.4th 1471 (2014) (addressed interplay of notice requirements and builder liability for consequential damages under the Act)
Seely v. White Motor Co., 63 Cal.2d 9 (1965) (discusses preserving boundary between contract and tort and limits on tort recovery)
Martinez v. Combs, 49 Cal.4th 35 (2010) (explains how legislative intent and statutory context can implicitly abrogate common-law rules)