Filed 1/26/17

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ACQUA VISTA HOMEOWNERS 

ASSOCIATION,

Plaintiff and Respondent,

v.

MWI, INC.,

Defendant and Appellant.

 D068406

 (Super. Ct. No. 37-2009-00104348-

 CU-CD-CTL)

APPEAL from a judgment and orders of the Superior Court of San Diego 

County, Ronald L. Styn, Judge. Reversed and remanded with directions.

Horvitz & Levy, H. Thomas Watson, Daniel J. Gonzalez; White, Oliver & 

Amundson, White, Amundson, Kish & Sweeney, Daniel M. White, Steven G. 

Amundson and Heather N. Catron for Defendant and Appellant.

Morris, Sullivan & Lemkul, Shawn D. Morris, Matthew J. Yarling; Peters & 

Freedman, David M. Peters and Kyle E. Lakin for Plaintiff and Respondent.
2

I.

INTRODUCTION

Civil Code section 8951 et seq. ("the Act") establishes a set of building 

standards pertaining to new residential construction and provides homeowners with a 

cause of action against, among others, material suppliers, for a violation of the 

standards (§§ 896, 936). We must determine whether the Act requires homeowners 

suing a material supplier under the Act to prove that the material supplier "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." (§ 936.) We conclude that the Act requires such 

proof.

Our conclusion is supported by the text, structure, and legislative history of the 

Act, as well as this court's prior interpretation of section 936 in Greystone Homes, Inc. 

v. Midtec, Inc. (2008) 168 Cal.App.4th 1194 (Greystone). In Greystone, this court 

stated that "a product manufacturer is liable [under section 936] only where its 

'negligent act or omission or a breach of contract' . . . caused a violation of the Act's 

standards." (Id. at p. 1216, quoting § 936, italics omitted.) Section 936 treats product 

manufacturers and material suppliers identically.2

 

1 Unless otherwise specified, all subsequent statutory references are to the Civil 

Code.

2 (See § 936 ["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 
3

In this case, Acqua Vista Homeowners Association ("the HOA") sued MWI, 

Inc. ("MWI"), a supplier of pipe used in the construction of the Acqua Vista 

condominium development. The operative third amended complaint contained a claim 

for a violation of the Act's standards in which the HOA alleged that "[d]efective cast 

iron pipe manufactured in China [was] used throughout the building." At a pretrial 

hearing, the HOA explained that it was not pursuing a claim premised on the doctrine 

of strict liability3 and that it was alleging a single cause of action against MWI for 

violations of the Act's standards.

During a jury trial, near the close of evidence, MWI filed a motion for a 

directed verdict on the ground that the HOA failed to present any evidence that MWI 

had caused a violation of the Act's standards as a result of MWI's negligence or breach 

of contract, as required. The trial court denied the motion, concluding that the HOA 

was not required to prove that any violations of the Act's standards were caused by 

MWI's negligence or breach of contract. In reaching this conclusion, the court relied 

on the final sentence of section 936, which states in relevant part, "[T]he negligence 

standard in this section does not apply to . . . material suppliers . . . with respect to 

 

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" (italics added)].)

3 The third amended complaint does not contain a cause of action separately 

styled as a cause of action for strict liability. However, the HOA had stated in its trial 

brief that it was pursuing a claim for strict liability and referred to allegations in its 

third amended complaint that it contended adequately alleged a strict liability claim.
4

claims for which strict liability would apply." (§ 936.)4 After the jury rendered a 

verdict against MWI, MWI filed a motion for judgment notwithstanding the verdict 

(JNOV) on the same ground as it had raised in its motion for directed verdict, which 

the trial court denied for the same reason it provided in denying the motion for a 

directed verdict.

On appeal, MWI claims that the trial court misinterpreted the Act and, as a 

result, erred in denying its motion for a directed verdict and motion for JNOV. We 

agree. The first sentence of section 936 contains an "explicit adoption of a negligence 

standard for claims" under the Act against material suppliers. (Greystone, supra, 168 

Cal.App.4th at p. 1216, fn. 14.) While the final sentence of section 936 is not a model 

of textual clarity, for the reasons explained below, standard techniques of statutory 

interpretation make clear that this sentence merely provides that the negligence 

standard applicable to claims brought against material suppliers under the Act does not 

apply to common law claims for strict liability against such suppliers. Since it is 

undisputed that the HOA's claim was brought under the Act, it was required to prove 

that MWI "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." (§ 936.) We also conclude that 

because there is no evidence in the record that MWI caused a violation of the Act's 

 

4 As with the first sentence of section 936, the final sentence of section 936 treats 

product manufacturers and material suppliers identically. (§ 936 ["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 which strict liability would apply" (italics 

added)].)
5

standards through its negligence or breach of contract, the court erred in denying 

MWI's motion for a directed verdict and motion for JNOV. Accordingly, we reverse 

the judgment and the trial court's order denying MWI's motion for JNOV and remand 

the matter to the trial court with directions to grant MWI's motion for a directed 

verdict and to enter judgment in favor of MWI.5

II.

FACTUAL AND PROCEDURAL BACKGROUND

A. The action

The HOA filed this construction defect action in December 2009. In September 

2013, the HOA filed the operative third amended complaint in which it named MWI, 

and others, as defendants.6 The third amended complaint alleged a cause of action 

styled as "Violation of SB800[7] Construction Standards, Civil Code § 896" against all 

defendants, including MWI. (Boldface & italics omitted.) The cause of action 

contained the following relevant allegation:

"The violations of SB800 standards by the defendants, and each 

of them, alleged herein include, but are not limited to, the 

following design, construction and/or manufacturing defects at 

 

5 In light of our disposition, we need not consider MWI's other arguments in 

support of reversal of the judgment and/or the court's order denying its motion for 

JNOV.

6 The complaint also named as defendants several entities that were responsible 

for building and developing the project. The HOA entered into a settlement with these 

entities before trial.

7 The Act was initially adopted in 2002 pursuant to Senate Bill No. 800 (Stats.

2002, ch. 722, § 3.) Thus, references to "SB800" in this opinion are references to the 

Act.
6

the project: Defective cast iron pipe manufactured in China and 

used throughout the building."

B. The trial

The trial court held a jury trial on the HOA's claims under the Act against MWI, 

and another iron pipe supplier, Standard Plumbing & Industrial Supply Co.

("Standard"). At trial, the HOA presented evidence that the pipes supplied by MWI 

contained manufacturing defects, that they leaked, and that the leaks had caused 

damage to various parts of the condominium development.

MWI moved for a directed verdict on the ground that the HOA had failed to 

present evidence that MWI caused a violation of the Act's standards as a result of 

MWI's negligence or breach of contract. In addition, MWI requested that the trial 

court instruct the jury that the HOA was required to present such evidence. The trial 

court denied MWI's motion for a directed verdict and MWI's jury instruction requests.

C. The jury's verdict

The jury rendered a special verdict that responded to four questions. The first 

question asked the jury, "Have the cast iron pipes supplied by the Defendants at Acqua 

Vista leaked?" The jury responded in the affirmative with respect to both MWI and 

Standard. The second question asked the jury, "Have the cast iron pipes supplied by 

either of the Defendants to Acqua Vista corroded so as to impeded the useful life of 

the plumbing/sewer system?"8 The jury again responded in the affirmative with 

 

8 The two questions tracked two of the Act's standards for residential 

construction (§ 896, subds. (a)(14), (15)). (See pt. III.B.2, post.)
7

respect to both defendants. The third question asked the jury, "If you answered yes as 

to either Defendant in questions 1 or 2, what is the total amount of Plaintiffs [sic] 

damages?" The jury found that the HOA had suffered $18,500,000 in damages "[f]or 

the reasonable cost of repairing any violations," $7,130,000 in damages "[f]or 

reasonable relocation and storage expenses," and $408,909 "[f]or reasonable 

investigative costs."9 Finally, the jury was asked, "For those Defendants that you 

answered 'Yes' to in Question 1 or Question 2, assuming 100%, what percentage of 

responsibility is attributable to each of the following for the damages to the Plaintiff 

identified in Question 3[?]" The jury responded that MWI was responsible for 92%, 

Standard, 8%, the "pipe installer," 0%, and the HOA, 0%.10

D. The judgment

The trial court entered a judgment against MWI in March 2015 in the amount of 

$23,955,796.28, reflecting MWI's 92 percent responsibility for the total damages 

suffered.11

E. Postjudgment motions

MWI moved for JNOV on several grounds, including that the HOA had failed 

to present evidence that MWI had caused a violation of the Act's standards as a result

 

9 The jury's verdict totaled $26,038,909 in damages.

10 As part of its defense, MWI presented evidence that some of the pipe had been 

improperly installed.

11 Prior to the entry of judgment, the HOA and Standard entered into a settlement. 

MWI is the only appellant.
8

of MWI's negligence or breach of contract. The trial court denied the HOA's motion 

for JNOV, reasoning in part:

"MWI argues that judgment should be entered in favor of MWI 

because Plaintiff failed to prove a prima facie case for liability 

under . . . § 896. Specifically, MWI argues Plaintiff's [sic] must 

prove negligence and causation and that Plaintiff failed to do so. 

As this court previously ruled, the last sentence of . . . § 936 

['[h]owever, 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'] removes 

any negligence/causation requirement in a . . . § 896 action 

against certain defendants, including MWI, a material supplier in 

this case. The court is not persuaded by MWI's reliance on 

Greystone[, supra,] 168 Cal.App.4th 1194 because the issue of 

the effect of the last sentence of . . . § 936 was not before the 

Court of Appeal in Greystone."

MWI also filed a motion for new trial on numerous grounds, including that the 

trial court had failed to instruct the injury on negligence and causation with respect to 

the HOA's claim under the Act and that the special verdict form had not required any 

findings on these issues. The trial court employed similar reasoning in denying MWI's 

motion for new trial as it had used in denying MWI's motion for JNOV.

F. The amended judgment and appeals

MWI filed an appeal from the judgment and the order denying the motion for 

JNOV. The trial court entered an amended judgment in the amount of $23,955,796.28 
9

against MWI in July 2015.12 MWI filed a second notice of appeal from the original 

and amended judgments and the order denying the motion for JNOV.13

III.

DISCUSSION

The trial court erred in denying MWI's motion

for a directed verdict and motion for JNOV

MWI claims that the trial court erred in denying its motions for a directed 

verdict and for JNOV because there is no evidence in the record that MWI "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" (§ 936), as is required in order for the HOA to state a 

claim against MWI for a violation of the Act's standards.

A. General principles of law governing a motion for a directed verdict and a motion 

for JNOV, and the applicable standard of review

" ' "[T]he power of the court to direct a verdict is absolutely the same as the 

power of the court to grant a nonsuit." [Citation.] "A motion for a directed verdict 'is 

 

12 The amendments related to issues not relevant to the issue addressed on appeal.

13 While this appeal was pending, the HOA filed a motion for sanctions for MWI's 

failure to timely procure the record. (See Cal. Rules of Court, rule 8.140.) In its 

motion, the HOA acknowledged that the superior court clerk had not sent MWI a 

notice of default, which would have triggered a 15-day period during which MWI 

could cure the default. (See Cal. Rules of Court, rule 8.140(a).) In its opposition, 

MWI demonstrated that it had cured the default within 15 days of the HOA's motion. 

Under these circumstances, California Rules of Court, rule 8.140(c) specifies that the 

motion for sanctions must be denied. (See Cal. Rules of Court, rule 8.140(c) ["If the 

superior court clerk fails to give a notice required by (a), a party may serve and file a 

motion for sanctions under (b) in the reviewing court, but the motion must be denied if 

the defaulting party cures the default within 15 days after the motion is served" (italics 

added)].) Accordingly, the HOA's motion for sanctions is denied.
10

in the nature of a demurrer to the evidence, and is governed by practically the same 

rules, and concedes as true the evidence on behalf of the adverse party, with all fair 

and reasonable inferences to be deduced therefrom.' " ' " (Baker v. American 

Horticulture Supply, Inc. (2010) 186 Cal.App.4th 1059, 1072.) " ' "A defendant is 

entitled to a nonsuit [or directed verdict] if the trial court determines that, as a matter 

of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his 

favor." ' " (Ibid.) A trial court must grant a motion for JNOV whenever a motion for a 

directed verdict for the aggrieved party should have been granted. (Code Civ. Proc., 

§ 629, subd. (a).)

In reviewing a trial court's ruling on a motion for a directed verdict, "the 

reviewing court must resolve every conflict in the testimony in favor of the plaintiff 

and at the same time indulge in every presumption and inference that could reasonably 

support the plaintiff's case." (County of Kern v. Sparks (2007) 149 Cal.App.4th 11, 

16.) Similarly, when reviewing an order on a motion for JNOV, "an appellate court 

will use the same standard the trial court uses in ruling on the motion, by determining 

whether it appears from the record, viewed most favorably to the party securing the 

verdict, that any substantial evidence supports the verdict. ' " 'If there is any 

substantial evidence, or reasonable inferences to be drawn therefrom in support of the 

verdict, the motion should be denied.' " ' " (Trujillo v. North County Transit Dist.

(1998) 63 Cal.App.4th 280, 284 (Trujillo).)

The proper interpretation of the Act and whether there is substantial evidence to 

support the HOA's claim under the Act, present questions of law that we review de 
11

novo. (See, e.g., Yohner v. California Dept. of Justice (2015) 237 Cal.App.4th 1, 7 

(Yohner) ["Yohner's claim raises an issue of statutory interpretation, and we therefore 

apply the de novo standard of review"]; Sweatman v. Department of Veterans Affairs

(2001) 25 Cal.4th 62, 68 [stating that where an appeal from the denial of a motion for 

JNOV raises a legal issue, an appellate court reviews the question de novo].)

B. Section 936 requires a homeowner suing a material supplier for violating a 

standard under the Act to prove that the material supplier "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"

1. Principles of statutory interpretation

In Yohner, supra, 237 Cal.App.4th at pages 7-8, this court restated the 

following well-established rules of statutory interpretation:

" ' "In construing any statute, '[w]ell-established rules of statutory 

construction require us to ascertain the intent of the enacting 

legislative body so that we may adopt the construction that best 

effectuates the purpose of the law.' [Citation.] 'We first examine 

the words themselves because the statutory language is generally 

the most reliable indicator of legislative intent. [Citation.] The 

words of the statute should be given their ordinary and usual 

meaning and should be construed in their statutory context.' 

[Citation.] If the statutory language is unambiguous, 'we presume 

the Legislature meant what it said, and the plain meaning of the 

statute governs.' [Citation.]" [Citation.]

" ' "If, however, the statutory language is ambiguous or 

reasonably susceptible to more than one interpretation, we will 

'examine the context in which the language appears, adopting the 

construction that best harmonizes the statute internally and with 

related statutes,' and we can ' " 'look to a variety of extrinsic aids, 

including the ostensible objects to be achieved, the evils to be 

remedied, the legislative history, public policy, contemporaneous 

administrative construction, and the statutory scheme of which the 

statute is a part.' " ' [Citation.]" [Citation.]
12

" ' " 'We must select the construction that comports most closely 

with the apparent intent of the Legislature, with a view to 

promoting rather than defeating the general purpose of the statute, 

and avoid an interpretation that would lead to absurd 

consequences.' " ' "

2. The Act

Section 896 provides a list of standards pertaining to residential construction, 

including that "[t]he lines and components of the plumbing system, sewer system, and 

utility systems shall not leak," (§ 896, subd. (a)(14)) and that "[p]lumbing lines, sewer 

lines, and utility lines shall not corrode so as to impede the useful life of the systems." 

(§ 896, subd. (a)(15)). Section 896 also specifies the manner by which certain entities 

involved in the construction process may be liable for failing to meet the standards. 

(§ 896.) Section 896 provides that a builder14 shall be liable for a violation of the 

 

14 The Act defines "builder" as follows:

"(a) For purposes of this title, except as provided in subdivision 

(b), 'builder' means any entity or individual, including, but not 

limited to a builder, developer, general contractor, contractor, or 

original seller, who, at the time of sale, was also in the business of 

selling residential units to the public for the property that is the 

subject of the homeowner's claim or was in the business of 

building, developing, or constructing residential units for public 

purchase for the property that is the subject of the homeowner's 

claim.

"(b) For the purposes of this title, 'builder' does not include any 

entity or individual whose involvement with a residential unit that 

is the subject of the homeowner's claim is limited to his or her 

capacity as general contractor or contractor and who is not a 

partner, member of, subsidiary of, or otherwise similarly affiliated 

with the builder. For purposes of this title, these nonaffiliated 

general contractors and nonaffiliated contractors shall be treated 
13

Act's standards, and states that other entities, including a material supplier, shall be 

liable for a violation of the standards to the extent specified in Chapter 4 of the Act. 

Section 896 provides in relevant part:

"In any action seeking recovery of damages arising 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 Section 910), a general 

contractor, subcontractor, material supplier,[15] individual 

product manufacturer, or design professional, shall, except as 

specifically set forth in this title, be liable for, and the 

claimant's[16] claims or causes of action shall be limited to 

violation of, the following standards, except as specifically set 

forth in this title." (§ 896, italics added.)

Chapter 4 of the Act, beginning with section 910, establishes a series of 

prelitigation procedures that a claimant must pursue prior to filing an action against 

"any party alleged to have contributed to a violation of the standards." (§ 910.) A 

provision in Chapter 4—section 936—also specifies the extent to which a nonbuilder 

entity may be liable for a violation of the Act's standards, stating:

"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 

 

the same as subcontractors, material suppliers, individual product 

manufacturers, and design professionals." (§ 911.)

15 Although "material supplier" is not defined in the Act, it is undisputed that 

MWI is a material supplier under the Act.

16 Claimant is defined in the Act as follows: " 'Claimant' or 'homeowner' includes 

the individual owners of single-family homes, individual unit owners of attached 

dwellings and, in the case of a common interest development, any association as 

defined in Section 4080." (§ 895, subd. (f).) It is undisputed that the HOA is a 

claimant under the Act.
14

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. All actions by a claimant or 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 this 

title modifies the law pertaining to joint and several liability for 

builders, general contractors, subcontractors, material suppliers, 

individual product manufacturer, and design professionals that 

contribute to any specific violation of this 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 

which strict liability would apply." (§ 936, italics added.)

3. The text and structure of the Act supports the conclusion that a 

homeowner/claimant suing a material supplier for violating a standard 

under the Act must prove that the material supplier "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" (§ 936)

The first sentence of section 936, when read in context with section 896, clearly 

and unambiguously states that a homeowner/claimant (such as the HOA) suing a 

material supplier (such as MWI) for violating a standard under the Act must prove that 

the material supplier caused, in whole or in part, a violation of a standard as the result 

of a negligent act or omission or a breach of contract. (See § 936 [stating that 

provisions of the Act outside of Chapter 4, including section 896, apply to "material 

suppliers, . . . to the extent that the . . . material suppliers . . . caused, in whole or in 

part, a violation of a particular standard as the result of a negligent act or omission or a 
15

breach of contract"].) The HOA does not contend otherwise. Rather, the HOA 

acknowledges that "[a] negligence standard applies to non-builders, according to the 

first sentence [of section 936]." However, as discussed in part III.B.1.c, post, the HOA 

argues that, pursuant to the final sentence of section 936, the negligence standard in 

section 936 does not apply if a plaintiff's claim under the Act is one for which strict 

liability would have applied at common law. In that instance, the HOA argues that the 

standard of liability outlined in section 896 applies.17

Thus, unless the HOA is correct that the final sentence of section 936 qualifies 

the standard of liability expressly stated in the first sentence of section 936 in a manner 

applicable to this case, the HOA was required to prove that MWI "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." (§ 936.) Accordingly, we must consider the meaning of the 

final sentence of section 936.

a. The final sentence of section 936 is most reasonably interpreted as 

providing that the negligence standard adopted in section 936 does 

not apply to common law claims for strict liability

We acknowledge that the plain language of the final sentence in section 936, 

when read in isolation, is ambiguous. (See § 936 ["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 

 

17 For example, the HOA argues in a supplemental brief (see fn. 38, post), "The 

trial court correctly ruled . . . that, even if the first sentence of Section 936 imposed a 

negligence or breach of contract standard, the final sentence of Section 936 removed 

that requirement with respect to claims to which strict liability would apply."
16

claims for which strict liability would apply"].) Despite such textual ambiguity, for 

the reasons stated below, an application of the techniques of statutory interpretation 

demonstrates that the provision should be interpreted as providing that the negligence 

standard specified in the first sentence of section 936 does not apply to common law 

strict liability claims against the specified nonbuilder entities.

To begin with, interpreting the final sentence of section 936 as making clear 

that the negligence standard applicable to claims under the Act does not apply to 

common law claims is a plausible textual interpretation of the statute. Strict liability is 

a common law doctrine (see generally Jimenez v. Superior Court (2002) 29 Cal.4th 

473, 484 (Jimenez) [outlining the evolution of the doctrine]), and the sentence may 

reasonably be read as stating that the "negligence standard" contained in section 936 

does not apply if the common law doctrine of strict liability "would apply," (§ 936) 

because the claim being asserted is a common law claim. This reading is supported by 

the fact that there is no provision in the Act outlining a claim brought under the Act for 

which "strict liability would apply." (§ 936.) Moreover, such an interpretation of the 

sentence is supported textually by the reference to "claims," (§ 936) a term commonly 

used to refer to "causes of action." (See, e.g., Wallace v. County of Stanislaus (2016) 

245 Cal.App.4th 109, 122 [using the terms "causes of action" and "claims"

interchangeably].) As MWI argues in its brief, "the 'claims' described in the last 

sentence are synonymous with causes of action for strict products liability in tort."

Our interpretation of the final sentence of section 936 is also strongly supported 

by the similarity of that sentence to other provisions in the Act that clearly reflect the 
17

Legislature's intent to limit the Act's effect on the common law. The Act repeatedly 

refers to common law claims—often within the final sentence of a section as in section 

936—to state that the Act does not displace the common law in areas in which the Act 

does not apply. (See § 896 ["As to condominium conversions, this title does not apply 

to or does not supersede any other statutory or common law"]; § 941, subd. (e)

["Causes of action and damages to which this chapter does not apply are not limited by 

this section"]; § 945.5, subd. (h) ["As to any causes of action to which this statute does 

not apply, all applicable affirmative defenses are preserved"].) The final sentence of 

section 936 is most reasonably read as a similar such provision, i.e., one that makes 

clear that the common law is not affected by a particular statutory provision.18

Further, this interpretation is consistent with the basic structure of the statute. 

(See Yohner, supra, 237 Cal.App.4th at p. 8 [in interpreting an ambiguous statute 

courts may " ' " 'examine the context in which the language appears' " ' "].) Section 

896, a provision outside of Chapter 4 of the statute, clearly sets forth a standard of 

liability applicable to builders. Section 896 also states that nonbuilders will be liable

to the "extent set forth in Chapter 4." The first sentence of section 936, a provision in 

Chapter 4, sets forth a clear standard of liability applicable to a series of nonbuilder

 

18 In other words, rather than leaving the effect of the Act's adoption of a 

negligence standard for statutory claims on the common law to implication, the final 

sentence of section 936 is reasonably interpreted as the Legislature's expression of its 

intent on this subject. (See 2B Sutherland Statutory Construction, § 50:5 (7th ed.) 

["Where common law principles associated with a statute are not expressly affirmed or 

denied, the extent to which the common law is altered or changed is left to 

implication"].)
18

entities. Interpreting the final section of 936 as providing that the negligence standard 

applicable to statutory claims against nonbuilders under the Act does not apply to 

certain common law claims (i.e., those "claims for which strict liability would apply,"

§ 936), is entirely consistent with the statute's specification of a standard of liability for 

builders in section 896 (see § 896 ["In any action seeking recovery of damages arising 

out of, or related to [construction defects] . . . a builder . . . shall, except as specifically 

set forth in this title, be liable for, . . . [a] violation of[ ] the following standards"

(italics added)]) and nonbuilders in section 936. (See § 896 [stating that a nonbuilder 

is liable under the Act "to the extent set forth in Chapter 4 [in § 936]" (italics added)].) 

In contrast, the HOA's construction of the statute, which it acknowledges "places a 

supplier 'on par,' with a builder under [the Act]," is entirely inconsistent with such text 

and structure.

b. The HOA's criticisms of this interpretation of the Act are 

unpersuasive

The HOA contends that this interpretation of the Act, which MWI urged in the 

trial court, is flawed for several reasons. However, none of the HOA's contentions is 

persuasive. First, the HOA argues that the term "claim" in the final sentence is most 

reasonably read as "claim[ ] under SB800." While the HOA acknowledges that the 

term "claim" often "refers to a cause of action for damages," the HOA contends that 

the Act uses the term "claim" to refer to claims brought pursuant to the Act and the 

terms "action" or "causes of action," to refer to claims brought outside of the Act.

However, the Act is not as consistent as the HOA suggests with respect to its use of 
19

the terms "claim," "action," and "cause of action." For example, section 941 refers to 

an "action" when it is clear from context that the statute is referring to a claim brought 

pursuant to the Act. (See § 941, subd. (a) ["Except as specifically set forth in this title, 

no action may be brought to recover under this title" (italics added)].) In contrast, 

section 931 refers to "claim" and "claims" when it is clear that the statute is referring 

to a claims brought outside the Act. (See § 931 ["If a claim combines causes of action 

or damages not covered by this part, including, without limitation, personal injuries, 

class actions, other statutory remedies, or fraud-based claims," and referring to "any 

fraud-based claim," and "any class action claims" (italics added)].) Thus, the HOA's 

contention that we should interpret the term "claim" in section 936 to mean claim

brought pursuant to the Act is not supported by the manner in which the Act uses the 

terms "claim," "action," and "cause of action." We decline to adopt an interpretation 

of the statute that requires us to insert words into the statute under the guise of 

interpretation. (See, e.g., Kovacevic v. Avalon at Eagles' Crossing Homeowners Assn.

(2010) 189 Cal.App.4th 677, 685 [" ' "We may not insert words into a statute under the 

guise of interpretation [citation]" ' "].)

The HOA also maintains that interpreting "the last sentence of section 936 as 

referring to common law claims outside of [the Act] is . . . inconsistent with the rest of 

the . . . statute, in that no other provisions comment on the preservation of common law 

construction defect claims." (Italics added.) We disagree. As discussed above, the 

Act repeatedly refers to the preservation of common law construction defect claims. 

(See § 896 ["As to condominium conversions, this title does not apply to or does not 
20

supersede any other statutory or common law"]; § 931 ["If a claim combines causes of 

action or damages not covered by this part, including, without limitation, personal 

injuries, class actions, other statutory remedies, or fraud-based claims"]; § 941, subd. 

(e) ["Causes of action and damages to which this chapter does not apply are not 

limited by this section"]; § 945.5, subd. (h) ["As to any causes of action to which this 

statute does not apply, all applicable affirmative defenses are preserved"].) Indeed, 

even another provision within section 936 specifies that the Act does not displace the 

common law. (See § 936 ["All actions by a claimant or 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"].) 

Thus, far from providing an interpretation of the final sentence that is inconsistent with 

other provisions in the Act, our interpretation fosters the "apparent intent of the 

Legislature" (Yohner, supra, 237 Cal.App.4th at p. 8) with respect to the manner by 

which the Act relates to the common law.

Citing sections 896 and 943, the HOA also argues that "a construction of 

section 936 as referring to common law strict liability claims outside of [the Act] 

makes no sense because under the clear language of the statute, such construction 

defect claims do not exist outside of [the Act]." (Italics added.) We disagree, for the 

following reasons.

Section 896 provides in relevant part that a "claimant's claims or causes of 

action shall be limited to violation of . . . the following standards . . . except as 

specifically set forth in this title." (Italics added.) Section 943, subd. (a) provides, 
21

"[e]xcept as provided in this title, no other cause of action for a claim covered by this 

title or for damages recoverable under Section 944 is allowed." (Italics added.) The 

HOA notes that the California Supreme Court is currently considering whether, in 

light of sections 896 and 943, the Act provides the exclusive remedy for "construction 

defect claims that are actionable under [the Act]." (Italics added.) (See McMillin 

Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132, review granted Nov. 24, 

2015, S229762 (McMillin).) The HOA argues that in deciding McMillin, the Supreme 

Court is likely to disapprove Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC

(2013) 219 Cal.App.4th 98, 102 (Liberty Mutual), in which the Court of Appeal held 

that, notwithstanding sections 896 and 943, the Act "does not eliminate a property 

owner's common law rights and remedies, otherwise recognized by law, where . . . 

actual damage has occurred."19 (Liberty Mutual, at p. 101; but see Elliott Homes, Inc. 

v. Superior Court (2016) 6 Cal.App.5th 333, 345 (Elliott) [disagreeing with Liberty 

Mutual and stating, "The Act does not specifically except actions arising from actual 

damages"].)

Even assuming, strictly for the sake of argument, that the HOA is correct that 

the Act provides the exclusive remedy for construction defect claims that are

 

19 The Liberty Mutual court reasoned that the Act "was enacted to provide 

remedies where construction defects have negatively affected the economic value of a 

home, although no actual property damage or personal injuries have occurred." 

(Liberty Mutual, supra, 219 Cal.App.4th at p. 101, italics added.) Thus, according to 

the Liberty Mutual court, where "actual damage has occurred," the Act does "not 

eliminate a property owner's common law rights and remedies." (Ibid., italics added.)
22

actionable under the Act,20 that would not mean that "strict liability . . . construction 

defect claims do not exist outside of [the Act]." That is because, as demonstrated by 

the italicized portions of sections 896 and 943 in the previous paragraph, the Act

preserves, at a minimum, common law claims that are not actionable under the Act. 

Further, the Act expressly enumerates numerous claims related to construction defects 

that are not actionable under the Act. (See, e.g., § 931 [stating that cause of action for 

"personal injuries, class actions, other statutory remedies, or fraud-based claims," are 

"not covered" by the Act]; § 897 ["To the extent that a function or component of a 

structure is not addressed by these standards, it shall be actionable if it causes 

damage"]; accord Elliot, supra, 6 Cal.App.5th at p. 340 [noting that certain "claims 

[are] excepted from the Act," and citing §§ 896, 943, and 931].) In addition, there are 

no provisions in the Act that expressly preclude common law claims premised on the 

doctrine of strict liability.

In light of these provisions, it is clear that construction defect claims exist 

outside of the Act. For example, it is clear that the Act does not preclude common law 

strict liability construction defect claims based on products that cause personal injury. 

(§ 931.) It is also clear that the Act does not preclude common law strict liability 

construction defect claims based on products that are not addressed by the Act's 

standards, but that cause damage. (§ 897.)21 Accordingly, we reject the HOA's 

 

20 We emphasize that we express no opinion on the issue.

21 The Department of Housing and Community Development's enrolled bill report 

for SB800, which recommended that the Governor sign SB800, is fully consistent with 
23

contention that interpreting the last sentence of section 936 as referring to common 

law claims "makes no sense" given the Act's purported preclusion of all common law 

strict liability construction defect claims.

c. The HOA's interpretation of the final sentence of 936 is not 

supported by the text or structure of the Act

The HOA argues that in interpreting the last sentence of section 936, this court 

need not "look past the plain language of section 936," and offers the following 

interpretation of section 936:

"A negligence standard applies to non-builders, according to the 

first sentence; however[,] that negligence standard does not apply 

to nonbuilders 'with respect to claims for which strict liability 

would apply,' [§ 936] according to the last sentence. The 

sentence simply means what it says. If the claim is one to which 

strict liability would apply at common law − e.g. a claim based on 

supplying a defective product − then the negligence standard does 

not apply to that claim under [the Act]."

We are not persuaded by the HOA's "plain language" argument. To begin with, 

the plain language of the last sentence of section 936 states only that the "negligence 

standard in this section does not apply." (Italics added.) The last sentence does not 

state that the causation or breach of contract provisions in the first sentence of section 

936 do not apply. Thus, if the HOA's argument that the final sentence of section 936 

 

the plain language of the statute with respect to this issue. (Department of Housing 

and Community Development, Enrolled Bill Rep. on Sen. Bill No. 800 (2001-2002 

Reg. Sess.) Aug. 13, 2002, p. 5.) [stating that SB800 "[p]rovide[s] that any defect not 

listed in this bill shall be actionable in tort only if it causes actual property or bodily 

damage" (italics added)].) We may rely on this report in interpreting the statute. (See 

Elsner v. Uveges (2004) 34 Cal.4th 915, 934, fn. 19 [the California Supreme Court has 

"routinely found enrolled bill reports, prepared by a responsible agency 

contemporaneous with passage and before signing, instructive on matters of legislative 

intent"].)
24

qualifies the standard of liability to be applied to claims brought against nonbuilders 

pursuant to the Act were correct, applying the plain language of the final sentence of 

section 936 would not, as the HOA suggests, mean that a material supplier's liability 

would be " 'on par' " with a builder's liability under section 896.

Rather, since the last sentence of section 936 states that the "negligence 

standard in this section does not apply," (§ 936, italics added) a homeowner would be 

required to establish that a nonbuilder caused a violation of a standard as a result of a 

breach of contract. That is because, if the term "negligence standard" of section 936 

were removed from the statute, the plain language of the first sentence of section 936 

would read, "Each and every provision of the other chapters of this title apply to 

[nonbuilders] to the extent that the [nonbuilders] caused, in whole or in part, a 

violation of a particular standard as the result of . . . a breach of contract."22

We can conceive of no public policy reason why the Legislature would have 

intended that the statute be interpreted in such a fashion. More specifically, it would 

be absurd to think that the Legislature intended that claims that would have been strict 

liability tort claims at common law be actionable under the Act only if caused by a 

breach of contract.23 Thus, we are unpersuaded by the HOA's argument that the 

"plain language" of the final sentence of section 936 demonstrates that the final 

 

22 The HOA recognized as much in its brief opposing MWI's motion for JNOV in 

the trial court, arguing, "It may be noted that the last sentence of . . . [section] 936 only 

states that the 'negligence standard in this section does not apply.' It does not refer to 

the alternative breach of contract requirement."

23 In the trial court, the HOA acknowledged that it would be " 'absurd' " to 

interpret the statute in such a fashion.
25

sentence of section 936 qualifies the standard of liability outlined in the first. (See 

John v. Superior Court (2016) 63 Cal.4th 91, 96 [statutes are to be interpreted so as to 

avoid absurd results].)

In the trial court, the HOA argued that the phrase " 'negligence standard in this 

section' " (italics added) in the last sentence of section 936 "is referring to the entire 

additional negligence/breach of contract requirement, discussed in the first sentence."

(Italics added.) The HOA does not offer this argument, which is entirely inconsistent 

with the plain language of section 936, on appeal. Given that the text of the final 

sentence of section 936 does not refer to a "breach of contract," (§ 936) the statute's 

text does not support the conclusion that the Legislature intended that the statute 

remove the entire "negligence/breach of contract requirement" contained in the first 

sentence for claims brought under the Act against nonbuilders. Nor does the text of 

the Act evince the Legislature's intent to "place[ ] a [material] supplier 'on par' with a 

builder," since a builder's liability is specified under section 896. Instead, section 896 

states that a nonbuilder is liable under the Act "to the extent set forth in Chapter 4,"

(§ 896) and there is no provision outside of the first sentence in section 936 in Chapter 

4 that outlines the standard of liability applicable to claims against nonbuilders under 

the Act.

In addition, to interpret the statute in the manner that the HOA suggests would 

mean that the standard of liability for a claim brought pursuant to the Act would be 

determined by the standard of liability that would have applied if the claim had been 

brought at common law. Or, as the HOA argues in its brief, "[The Legislature] wrote 
26

that the negligence standard does not apply to 'claims for which strict liability would 

apply' − meaning SB800 claims to which strict liability 'would apply' outside of 

SB800." (Quoting § 936, first emphasis added in the HOA's brief.) The HOA presents 

no argument as to why the Legislature would have wanted the standard for statutory 

liability under the Act to turn on the conceptually difficult question of how a claim 

might be characterized if brought at common law.

For example, the HOA asserts in its brief that all common law claims based on 

a defendant's supply of a defective product are based on strict liability.24 However, 

that is not the case. A claim based on a defective product may be brought at common 

law under either a negligence theory or a strict liability theory. (See, e.g., Johnson v. 

United States Steel Corp. (2015) 240 Cal.App.4th 22, 30-31 [" ' "Products liability is 

the name currently given to the area of the law involving the liability of those who 

supply goods or products for the use of others to purchasers, users, and bystanders for 

losses of various kinds resulting from so-called defects in those products." '

[Citations.] One may seek recovery in a products liability case on theories of both 

negligence and strict liability" (italics added)]; Brady v. Calsol, Inc. (2015) 241 

Cal.App.4th 1212, 1218 ["A products liability case may rest on either a theory of strict 

liability or negligence. . . . In asserting a claim for negligence, the plaintiff must prove 

the defect in the product was due to the defendant's negligence"].) Thus, determining 

whether a claim brought under the Act would have been one for which strict liability

 

24 The HOA argues, "If the claim is one to which strict liability would apply at 

common law − e.g. a claim based on supplying a defective product."
27

would have applied if the claim had been brought at common law, would not be as 

simple as determining whether the claim was "based on supplying a defective 

product," as the HOA suggests.

In addition, while the HOA argues that the Act should be interpreted to provide 

that a claim pursuant to the Act against a material supplier premised on a defective 

product should be governed by the same standard of liability as applies to a builder 

under section 896, a common law claim for strict products liability has elements not 

present in a statutory claim under section 896, namely, a defective product and 

resulting damage other than economic loss.25 (See Jimenez, supra, 29 Cal.4th at 

p. 484.) The HOA fails to explain why the Legislature would have wanted to subject 

material suppliers to statutory liability without requiring proof of these elements 

merely because a plaintiff could allege a common law strict liability claim against the 

supplier. Moreover, this case shows the difficulties of applying such an interpretation 

of the Act in determining the standard of proof to be applied at trial to a party's claims. 

As noted in part I, ante, the HOA abandoned its strict liability claim on the eve of trial. 

Under these circumstances, it is far from clear that the HOA's statutory claim under 

the Act can be fairly characterized as being a claim "for which strict liability would 

 

25 "Damages available under strict products liability do not include economic loss, 

which includes ' " 'damages for inadequate value, costs of repair and replacement of 

the defective product or consequent loss of profits—without any claim of personal 

injury or damages to other property.' " ' " (Jimenez, supra, 29 Cal.4th at p. 482.) The 

unavailability of such damages is commonly referred to as the "economic loss rule." 

(See Greystone, supra, 168 Cal.App.4th at p. 1202.)
28

apply" (§ 936) at common law, even assuming that we agreed with the HOA's

interpretation of the statute.

d. The legislative history

The Act's legislative history fully supports our interpretation of the Act. 

Section 936 was initially adopted as part of the original enactment of the Act through 

Senate Bill No. 800 in 2002. The first sentence of section 936 in the original 

enactment is identical in all material respects to the current version of the statute. (See 

Stats. 2002, ch. 722, § 3 ["Each and every provision of the other chapters of this title 

apply to subcontractors, material suppliers, individual product manufacturers, and 

design professionals to the extent that the 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"].) However, as initially adopted in 2002, the final sentence of section 936 

stated, "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, italics added.)

Although, as both MWI and the HOA agree, the plain language of the final 

sentence of section 936 as originally adopted could be read, as the HOA states, to 

"completely exempt[ ] nonbuilders [such as material suppliers] from section 936 . . . 
29

whenever strict liability would apply,"26 the legislative history of Senate Bill No. 800 

supports the conclusion that the Legislature intended for the standard of liability 

specified in the first sentence of section 936 to apply to claims brought pursuant to the 

Act against nonbuilders such as material suppliers. (See, e.g., Sen. Com. on Judiciary, 

Rep. on Sen. Bill No. 800, (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 4 

["the standards are intended to apply to . . . material suppliers . . . to the extent that 

they cause, in whole or in part, a violation of a particular standard as a result of their 

negligent acts or omissions, or breach of contract"].) In contrast, we have located 

nothing in the legislative history that would support the conclusion that the Legislature 

intended to entirely exempt material suppliers, or any other nonbuilders, from statutory 

liability under section 936 whenever "strict liability would apply." (§ 936.) Such an 

exemption would have been extremely significant because it would have had the effect 

of exempting nonbuilder entities from any liability to claimants under the Act 

whenever "strict liability would apply," because there were (and are) no other

provisions in the Act defining the liability of such entities. The absence of any 

mention of such an exemption suggests that the Legislature did not intend for the final 

sentence to exempt nonbuilders from liability under section 936 whenever "strict 

liability would apply." (§ 936.)

 

26 Discussing the final sentence of the initial version of section 936, MWI argues, 

"Read literally, this language effectively excluded a whole class of nonbuilders from 

potential liability under SB 800, i.e., those like MWI that were subject to the usual 

rules of strict liability in tort for distributing products that were defective in design or 

manufacture."
30

In 2003, the Legislature amended the final sentence of section 936 to its present 

form. (Stats. 2003, ch. 762, § 5, p. 5732.) The statute amended the last sentence of 

section 936 in relevant part as follows, "However, the negligence standard in this 

section does not apply to any . . . material supplier to with respect to claims for which 

strict liability would apply." (Stats. 2003, ch. 762, § 5, p. 5732 [showing additions to 

the statute in italics and deletions in strikethrough, italics added].) Numerous

legislative committee reports support the conclusion that the Legislature viewed the 

2003 amendments to the Act as "technical cleanup" of the original statute adopting the 

Act the previous year. (Sen. Rules Com., Off of Sen. Floor Analyses, 3d reading 

analysis of Assem. Bill No. 903 (2003-2004 Reg. Sess.) as amended Sep. 4, 2003, 

p. 2.)

The HOA argues that "the [L]egislature's 2003 amendment of Section 936 to 

clarify removing [sic] the negligence standard for manufacturers and suppliers (and 

any strictly liable defendant) may well have been a response to Jimenez[, supra, 29 

Cal.4th at 473]." In Jimenez, the California Supreme Court concluded that, under the 

common law, product manufacturers may be held strictly liable in tort for construction 

defects that cause physical damage to other parts of a house. (Jimenez, supra, 29 

Cal.4th at p. 476.)27 Stated differently, the HOA argues that the Legislature "may"

have been motivated by the Jimenez decision to amend section 936 so as to "place[ ] a 

 

27 Jimenez, which involved windows in housing developments completed prior to 

the Act's adoption, did not involve a claim under the Act. (See Jimenez, supra, 29 

Cal.4th at p. 483, fn. 2 [citing the Act and noting that the Legislature has "established a 

limited new cause of action for certain specified housing defects"].)
31

[material] supplier 'on par' with a builder," under the Act. The HOA's argument is 

unpersuasive.

To begin with, the HOA fails to explain why the Legislature would intend to 

make material suppliers liable under the Act for a violation of the Act's standards 

irrespective of whether they supplied a defective product that resulted in damage other 

than economic loss merely because the Jimenez court concluded that a manufacturer 

may be liable where these elements are proven through a common law claim (Jimenez, 

supra, 29 Cal.4th at p. 476). The HOA's interpretation of the amendments is also 

directly contrary to our discussion of the Act and Jimenez in Greystone. (See 

Greystone, supra, 168 Cal.App.4th at p. 1216, fn. 14 ["The Legislature's decision not

to apply a strict liability standard[28] to product manufacturers is consistent with the 

holdings [of two cases disapproved in Jimenez]. The common law has expanded the 

liability of product manufacturers in this regard, albeit subject to the economic loss 

rule, beyond that provided in section 936" (italics added)].)

Moreover, there is nothing in the legislative history of the 2003 amendments 

that would support the HOA's speculation that the Legislature intended such a 

 

28 As MWI points out in its brief, to avoid confusion with the common law of 

strict liability, it may have been preferable for the Greystone court to have stated that, 

in section 936, the Legislature decided not to apply to product manufacturers the form 

of " 'absolute' " statutory liability that the Legislature specified in section 896 as 

applicable to claims against builders. However, the point that the Greystone court was 

making is clear—the Legislature adopted a fault based standard of liability for product 

manufacturers under the Act, notwithstanding that the common law provided for the 

liability of product manufacturers without fault, albeit subject to the limitations of the 

economic loss rule. (See Greystone, supra, 168 Cal.App.4th at p. 1216, fn.14.)
32

significant substantive change in the Act by way of the 2003 amendments. Such a 

change would have been entirely incompatible with the Legislature's characterization 

of the amendments as constituting a "technical cleanup." (Sen. Rules Com., Off of 

Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 903 (2003-2004 Reg. 

Sess.) as amended Sep. 4, 2003, p. 2.)

Further, the sponsor of Assembly Bill No. 903, Assembly member Darrell S. 

Steinberg, sent a letter to Governor Gray Davis urging the signing of the bill, in which 

he described the legislation as a "non-controversial bill" that made "various technical 

changes," including "[c]larify[ing] that SB 800 did not change the law regarding . . . 

strict liability." (Italics added.) (Assembly member Darrell S. Steinberg, letter to 

Governor Gray Davis, Sept. 16, 2003.)29 The Steinberg letter is entirely consistent 

with our interpretation of the final sentence of 936 as evincing the Legislature's intent 

that the negligence standard specified in the first sentence of section 936 does not 

apply to common law strict liability claims against material suppliers. Thus, we reject 

the HOA's suggestion that the Legislature amended the Act in 2003 with the intention 

of "plac[ing] a [material] supplier 'on par' with a builder."

 

29 The letter also states, "The provisions of AB 903 were suggested by building 

industry representatives, the consumer attorneys, legislative counsel, and Assembly 

and Senate staff familiar with SB 800. All of the changes are non-controversial, 

consensus changes." (Assembly member Darrell S. Steinberg, letter to Governor Gray 

Davis, Sept. 16, 2003.) The letter may be considered in ascertaining legislative intent 

since it reflects " 'a reiteration of legislative discussion and events leading to adoption 

of proposed amendments rather than merely an expression of personal opinion.' " 

(Martin v. Szeto (2004) 32 Cal.4th 445, 450-451.)
33

e. Greystone

In light of the text, structure, and legislative history of the Act discussed above, 

we adhere to our conclusion in Greystone that a nonbuilder entity is liable under the 

Act "only where its 'negligent act or omission or a breach of contract' . . . caused a 

violation of the Act's standards." (Greystone, supra, 168 Cal.App.4th at p. 1216, 

italics omitted.) In Greystone, in reversing a summary judgment in favor of a product 

manufacturer, this court considered, among other issues, whether the common law 

economic loss rule30 precluded a builder from seeking equitable indemnification 

under the Act from a jointly liable product manufacturer for the cost of repairing 

damage caused by the manufacturer's violation of the Act's standards. (Id. at pp. 1213-

1220.) We explained that in determining this issue, we first were required to address 

whether the economic loss rule would preclude a homeowner from collecting such 

damages in an action against the product manufacturer, since the builder's ability to 

pursue an indemnity action against the manufacturer was contingent on the 

manufacturer and the builder sharing a joint legal obligation to the homeowners. (Id.

at p. 1213.) After citing sections 896 and 936, we concluded, "a homeowner may 

recover economic losses from a product manufacturer[31] for a violation of the Act's 

standards that is caused by the manufacturer's negligence or breach of contract." 

(Greystone, at pp. 1213-1214, italics added.)

 

30 See footnote 25 for a definition of the economic loss rule.

31 As noted previously (see pt. I, ante), product manufacturers and material 

suppliers are treated identically with respect to this issue under the Act.
34

The Greystone court also rejected the manufacturer's argument that section 

936's reference to the preservation of "common law . . . defenses," (italics added)

permitted the manufacturer to defeat the builder's claim by assertion of the economic 

loss doctrine.32 (Greystone, supra, 168 Cal.App.4th at pp. 1214-1215.) In rejecting 

this argument, we stated:

"A more reasonable interpretation of section 936 [i.e., one that 

excluded the economic loss doctrine as a defense that could be 

asserted in an action premised on section 936] follows from the 

fact that, while under sections 896 and 942 a builder is strictly 

liable[33] for any violation of the Act's standards, pursuant to the 

first sentence of section 936, a product manufacturer is liable 

only where its 'negligent act or omission or a breach of 

contract' . . . , caused a violation of the Act's standards. The 

reference to 'common law and contractual defenses,' in the second 

sentence of section 936 parallels the scope of duty articulated in 

the first sentence of the section. Thus, for example, in a suit 

premised on a manufacturer's negligent act or omission, the 

manufacturer may assert traditional common law defenses to 

negligence actions, such as comparative negligence and primary 

assumption of risk, to the extent that such defenses are 'applicable'

(§ 936) to the plaintiff's claim." (Greystone, supra, at p. 1216, 

italics altered, footnotes omitted.)

We also relied on the "Act's explicit adoption of a negligence standard for 

claims against product manufacturers," (Greystone, supra, 168 Cal.App.4th at p. 1216, 

 

32 The Greystone court noted that the product manufacturer was relying on the 

second sentence of section 936, which states in relevant part, " 'In addition to the 

affirmative defenses set forth in Section 945.5, a[n] . . . individual product 

manufacturer . . . may also offer common law and contractual defenses as applicable to 

any claimed violation of a standard.' " (Greystone, supra, 168 Cal.App.4th at p. 1215, 

italics omitted, quoting § 936.)

33 As discussed in footnote 28, to avoid confusion with the common law of strict 

liability, it may be preferable to refer to a builder's statutory liability under the Act as a 

form of " 'absolute' " liability rather than stating that a builder is "strictly liable" for a 

violation of the Act's standards. (Greystone, supra, 168 Cal.App.4th at p. 1216.)
35

fn. 14) in rejecting the manufacturer's argument that concluding that the economic loss 

rule did not bar the builder's indemnity claim "would 'expand the law of strict product 

liability beyond tolerable limits.' " (Ibid.) Ultimately, "[w]e conclude[d] that the . . . 

Act abrogates the economic loss rule in actions brought by homeowners against 

individual product manufacturers for a violation of the Act's standards based upon the 

manufacturer's negligence or breach of contract." (Id. at p. 1217, italics added.)

Despite the fact that the Greystone court, on no fewer than four occasions, 

articulated the standard of liability to be applied to a claim against a nonbuilder 

brought under the Act (i.e., one premised on a negligence or a breach of contract) 

(Greystone, supra, 168 Cal.App.4th at pp. 1213-1214, 1216, 1216, fn. 14, 1217),34 the 

HOA contends that Greystone is "not authoritative or even applicable here." In 

support of this contention, the HOA argues that "Greystone was a[n] equitable 

indemnity action by a developer[35] against its supplier, not a claim by an SB800 

'claimant'." This argument is entirely unpersuasive because, as the Greystone court 

explained, whether the builder could assert an indemnity action against the nonbuilder 

turned in the first instance on whether a homeowner/claimant36 could state such a 

 

34 On one of these occasions, the Greystone court referred to the standard as a 

"negligence standard" (Greystone, supra, 168 Cal.App.4th at p. 1216, fn. 14) rather 

than one premised on negligence or breach of contract because the court was 

contrasting the tort doctrines of strict liability and negligence. (Ibid.)

35 The plaintiff in Greystone was described as a "builder" (Greystone, supra, 168 

Cal.App.4th at p. 1207), rather than a developer.

36 As noted previously (see fn. 16, ante), the Act uses the term "claimant" and 

"homeowner" interchangeably. (§ 895, subd. (f).)
36

claim (Greystone, at p. 1213), and the Greystone court expressly described the 

standard of liability applicable to a claim by a "homeowner." (Ibid., italics added.)

The HOA also contends that "Greystone's comment on the negligence standard 

in section 936 is dictum, and was not integral to the decision." "Statements by 

appellate courts 'responsive to the issues raised on appeal and . . . intended to guide the 

parties and the trial court in resolving the matter following . . . remand' are not dicta."

(Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1158-1559 (SonicCalabasas).) Our statements in Greystone on this issue were clearly responsive to the 

issues presented on appeal,37 and were intended to guide the proceedings on remand 

in light of our reversal of a summary judgment. The statements were not dicta. (See 

Sonic-Calabasas, at pp. 1158-1159.)

Finally, while the Greystone court quoted the entirety of section 936, including 

the final sentence on which the HOA bases its argument (Greystone, supra, 168 

Cal.App.4th at pp. 1211-1212.), the HOA is correct to note that the Greystone court 

did not discuss the final sentence of section 936. However, for the reasons stated 

above, an analysis of the final sentence, together with the remaining provisions of the 

Act, reinforces the correctness of our conclusion in Greystone that a nonbuilder entity 

is liable under the Act "only where its 'negligent act or omission or a breach of 

 

37 The HOA acknowledges as much, noting that the Greystone court discussed the 

standard of liability applicable to nonbuilders under the Act in response to an 

argument raised by the product manufacturer.
37

contract' . . . caused a violation of the Act's standards." (Greystone, at p. 1216, quoting 

§ 936, italics omitted.)

C. There is no evidence in the record that MWI caused, in whole or in part, a 

violation of a standard in the Act as the result of its negligent act or omission or a 

breach of contract

In light of our interpretation of the Act provided in part III.B, ante, we must 

consider whether there is sufficient evidence in the record to support a verdict that 

MWI caused, in whole or in part, a violation of a standard in the Act as the result of its 

negligent act or omission or a breach of contract. (See pt. III.A, ante [outlining 

standard of review applicable to the review of order denying motion for a directed 

verdict and order denying motion for JNOV].)

We begin by observing that, until this court's request for supplemental briefing 

on this issue,38 it appeared to be undisputed that the record lacked such evidence. 

MWI repeatedly argued in the trial court that the Act required that the HOA prove that 

MWI caused, in whole or in part, a violation of a standard in the Act as the result of its 

negligent act or omission or a breach of contract. MWI raised this argument in a jury 

instruction conference, in its motion for a directed verdict, and in its motion for JNOV.

In responding to MWI's contentions, the HOA never argued in the trial court that it 

had presented sufficient evidence under this interpretation of the Act. Instead, the 

 

38 Our request for supplemental briefing stated in relevant part, "If this court were 

to agree with [MWI] that [section 936] requires [the HOA] to have established that 

MWI's 'negligent act' 'caused, in whole or in part, a violation of a particular standard'

(§ 936) in order to prevail on the first cause of action in its third amended complaint 

styled 'Violation of SB800 Construction Standards, Civil Code § 896,' what is the 

proper disposition of this appeal?"
38

HOA argued only that the Act did not require it to present such evidence.39 The jury 

was not instructed that the HOA was required to prove that MWI's negligence or 

breach of contract caused a violation of the Act's standards and the jury did not render 

any findings on these issues.

At the hearing on the motion for JNOV, MWI's counsel argued that in 

Greystone, this court outlined the applicable standard of proof and that the HOA's 

"proof failed." MWI's counsel stated that there was thus no reason to revisit MWI's 

statutory interpretation argument with respect to its new trial motion. The trial court 

responded, "If you're right, the JNOV is granted and you never get to the new trial. I 

agree with that."

In its opening brief in this court, after presenting its statutory interpretation 

argument, MWI argued that the trial court erred in denying its motion for a directed 

verdict and motion for JNOV due to the HOA's failure of proof. In its respondent's 

brief, the HOA offered only the statutory interpretation argument that we have rejected 

in part III.B, ante, and presented no argument that the record contained the evidence of 

a negligent act or omission or breach of contract by MWI that MWI argued is required.

 

39 The HOA did not file an opposition to MWI's motion for a directed verdict and 

the trial court denied the motion without the HOA's counsel presenting oral argument.
39

However, in its supplemental brief, the HOA contends that the record does

contain sufficient evidence to support the verdict. We consider each of the HOA's 

arguments pertaining to this issue.40

The HOA argues that "the record . . . supports a strong inference of a 'negligent 

act or omission' by MWI."

" ' "Negligence is either the omission of a person to do something which an 

ordinarily prudent person would have done under given circumstances or the doing of 

something which an ordinarily prudent person would not have done under such 

circumstances. It is not absolute or to be measured in all cases in accordance with 

some precise standard but always relates to some circumstance of time, place and 

person." ' " (Minnegren v. Nozar (2016) 4 Cal.App.5th 500, 507, boldface omitted.) 

Or, stated similarly, " 'Negligence is the failure to use reasonable care to prevent harm 

to oneself or to others. [¶] A person can be negligent by acting or by failing to act. A 

person is negligent if he or she does something that a reasonably careful person would 

not do in the same situation or fails to do something that a reasonably careful person 

would do in the same situation.' " (Ibid., quoting CACI No. 401.)

 

40 The HOA presented these arguments in their most complete form in arguing 

that any error committed by the trial court on this issue was harmless. The HOA then 

incorporated those arguments in addressing whether there is "evidence in the record 

that the SB800 violations were caused by 'a negligent act or omission or breach of 

contract' by MWI." Accordingly, in order to fully address the HOA's contentions, we 

consider the arguments presented by the HOA in that section of its supplemental brief 

entitled, "Any Trial Court Error in Not Requiring a 'Negligent Act' Under Section 936 

Was A Harmless Error." (Boldface & underscore omitted.)
40

The HOA offers two arguments in support of its contention that the record 

contains evidence of MWI's negligent acts or omissions sufficient to support the 

verdict. First, the HOA cites evidence supporting a finding that the pipes supplied by 

MWI leaked and that the pipes contained "manufacturing . . . defects."41 The HOA 

maintains that "[d]rain pipes do not leak their contents into the walls of a structure 

within a few years of construction in the absence of negligence." Even assuming that 

the record would support a finding that the manufacturer of the pipes was negligent, 

the question we must determine is whether there is evidence that MWI, a supplier of 

the pipes, was negligent. On this question, the HOA does not identify any evidence 

that MWI failed to supply the type of pipe that was ordered, acted unreasonably in 

failing to detect any manufacturing defects present in the pipe, or damaged the pipe in 

transporting it. In sum, the HOA makes no persuasive argument that the record 

contains evidence that MWI's negligence as a supplier was responsible for the 

 

41 After we issued our request for supplemental briefing, the HOA filed a motion 

to augment the record with exhibits offered in evidence at trial consisting of 

photographs of the pipes. (See Cal. Rules of Court, rule 8.155.) In the alternative, the 

HOA requested that this court grant permission to allow a late transmission of exhibits 

to this court on the ground that the exhibits became relevant upon our request for 

supplemental briefing. (See Cal. Rules of Court, rule 8.224(d).)

Since the exhibits were offered in evidence at trial, they are already part of the 

record on appeal, and there is no need to augment the record to include them. (Cal. 

Rules of Court, rule 8.124(b)(4) ["All exhibits admitted in evidence, refused, or lodged 

are deemed part of the record, whether or not the appendix contains copies of them"].) 

However, we grant the HOA's request for a late transmittal of exhibits in light of our 

supplemental briefing request. Accordingly, we deny the HOA's request that we 

augment the record with pages 1 through 21 attached to its motion to augment, but 

grant the HOA's alternative request for transmittal of the exhibits to this court.
41

"manufacturing . . . defects" that the HOA refers to in its supplemental brief.42 

(Italics added.)

The only other evidence43 in the record that the HOA cites in support of its 

contention that MWI was negligent is the testimony of John Morally, MWI's founder. 

The HOA notes that Morally testified that in 1998 or 1999, he traveled to China and 

went to a foundry where the type of pipe used in the project (Wanze pipe) was 

manufactured, and that in 2002, MWI began importing Wanze pipe into the United 

States. This testimony clearly is not sufficient to support a finding that MWI "caused, 

in whole or in part, a violation of a particular standard as the result of a negligent act 

or omission." (§ 936.) Accordingly, we reject the HOA's contention that there is 

sufficient evidence in the record to support a verdict that MWI caused, in whole or in 

part, a violation of a standard in the Act as the result of its negligence.

 

42 Noting that the jury did not ascribe any responsibility to the pipe installer or to 

the HOA for the HOA's damages, the HOA contends that "[t]he jury's fault findings 

establish that no party other than MWI can have responsibility for that negligence, 

satisfying any negligence requirement under Section 936." We disagree that the jury's 

findings constitute evidence of MWI's negligence as a supplier of the pipes, 

particularly since the manufacturer of the pipes was not a defendant in the case.

43 The HOA also cites MWI's counsel's statements to the court, outside the 

presence of the jury, concerning MWI's efforts in obtaining the necessary certification 

to sell the type of pipe used in the project in the United States. Such statements clearly 

do not constitute evidence that may be relied upon to support the verdict. (See In re 

Zeth S. (2003) 31 Cal.4th 396, 414, fn. 11 ["It is axiomatic that the unsworn statements 

of counsel are not evidence"].) We also grant MWI's motion to augment the record 

with the HOA's motion in limine to exclude evidence of MWI's certification efforts 

and MWI's opposition to such motion. The trial court granted the HOA's motion and 

thus, the jury did not hear the evidence. Under these circumstances, the HOA's 

attempted reliance on MWI's counsel's statements to support the verdict is clearly 

unfair, since it was the HOA that successfully precluded the jury from considering this 

evidence.
42

The HOA also contends that "[t]he record supports [a finding] that the SB800 

violation was caused, at least in part, by MWI's breach of a contract – namely its 

express and implied warranties." With respect to the HOA's implied warranty theory,

the HOA contends that MWI breached the implied warranty of fitness under California 

Commercial Code section 2314, subdivision (2)(c). The HOA never presented this 

theory of liability in the trial court or in its initial briefing on appeal. "[N]ew theories 

of liability, may not be asserted for the first time on appeal." (Bardis v. Oates (2004) 

119 Cal.App.4th 1, 13-14, fn. 6.) Further, in its supplemental brief, the HOA fails to 

outline the elements of such a claim or to demonstrate how the evidence presented at 

trial was sufficient to prove each element. (See CACI No. 1231 ["Implied Warranty of 

Merchantability - Essential Factual Elements," listing six elements, including that the 

goods "w[ere] not fit for the ordinary purposes for which such goods are used"].) 

Under these circumstances, we conclude that the HOA has not demonstrated that the 

record contains sufficient evidence to support the judgment on a theory that was never 

presented in the trial court. (See Brandwein v. Butler (2013) 218 Cal.App.4th 1485, 

1519 [" 'Bait and switch on appeal not only subjects the parties to avoidable expense, 

but also wreaks havoc on a judicial system too burdened to retry cases on theories that 

could have been raised earlier' "]; 14859 Moorpark Homeowner's Assn. v. VRT Corp.

(1998) 63 Cal.App.4th 1396, 1403 [applying theory of case doctrine to preclude 

respondent from asserting theory raised "[f]or the first time on appeal and in a cursory 

fashion"].)
43

The HOA's express warranty theory fails for an even more fundamental reason. 

The HOA bases its express warranty argument on a warranty that MWI purportedly 

gave to Sherwood Mechanical, MWI's customer for the pipes used in the project. The 

HOA filed a motion in this court to augment the record with the warranty. (See Cal. 

Rules of Court, rule 8.155 [stating that a "reviewing court may order the record 

augmented to include," (id. at (a)(1)), "[a]ny document filed or lodged in the case in 

superior court," (id. at (a)(1)(A))].) However, as the HOA concedes in a declaration 

offered by its counsel in support of its motion, the warranty was "not admitted into 

evidence." (Italics added.) Thus, even assuming that the warranty was "lodged with 

the court for trial," (italics added) as the HOA's counsel represents in his 

declaration,44 because the warranty was concededly "not admitted into evidence,"

(italics added) it clearly does not constitute "substantial evidence," upon which the 

verdict may be supported. (Trujillo, supra, 63 Cal.App.4th at p. 284.)45

 

44 Aside from counsel's declaration, the HOA does not cite to anything in the 

record demonstrating that this exhibit was ever even lodged with the trial court.

45 Assuming that the warranty was lodged as an exhibit in the trial court, it is 

deemed part of the record (See Cal. Rules of Court, rule 8.124(b)(4)) and 

augmentation is unnecessary. However, as discussed in the text, even assuming that 

the warranty is in the record, it is clear that because the warranty was not offered in 

evidence, it may not be relied upon to support the verdict. Accordingly, we deny the 

HOA's motion to augment insofar as it seeks to augment the record with the warranty.

In light of our conclusion that the warranty may not be used to support the 

verdict, we also deny the HOA's request to augment the record with an excerpt of 

Morally's deposition, which was not offered as evidence at trial nor lodged in the trial 

court, which the HOA seeks to offer "as foundation for the written warranty having 

been issued to the plumbing installer at the subject Acqua Vista project."

We also deny the HOA's requests that we augment the record with a "premarked trial exhibit . . . an [i]nvoice," and a "[p]urchase [o]rder . . . which was 
44

Accordingly, we reject the HOA's contention that the record contains evidence 

to support the verdict on the ground that MWI breached an express or implied 

warranty.46

Finally, the HOA argues that it presented sufficient evidence to establish MWI's 

liability under a "common law strict products liability standard." (Formatting 

omitted.) Even assuming, strictly for the sake of argument, that this is so 

(notwithstanding that the HOA indicated on the eve of trial that it was not pursuing a 

common law strict liability claim),47 we need not decide whether the HOA presented 

evidence sufficient to demonstrate the elements of a common law claim premised on 

 

admitted into evidence," in order to show the date of delivery of the pipe for purposes 

of determining the applicability of the warranty. Neither document has any relevance 

to the issues on appeal, given that the warranty was not offered in evidence. Further, 

the HOA fails to demonstrate that the invoice was ever lodged in the trial court and 

that it is therefore a proper subject for augmentation (Cal. Rules of Court, rule 8.155), 

and the purchase order is already part of record since, according to the HOA, it was 

admitted in evidence (Cal. Rules of Court, rule 8.124(b)(4)). Thus, we deny the 

HOA's request to augment the record with pages 22 through 37 of the documents 

attached to its motion to augment.

46 In its opposition to the HOA's motion to augment, MWI raises a series of 

"questions of statutory interpretation," that it contends this court would have to address 

before concluding that a warranty constitutes sufficient evidence to support the verdict. 

Among these questions are the "HOA's standing to assert a warranty violation for the 

purpose of . . . section 936," since MWI allegedly gave the warranty to Sherwood 

Mechanical, and not to the HOA. In light of our conclusion in the text, we need not 

address these issues.

47 During a pretrial hearing, the court stated, "So there are two causes of action 

that are being pursued: SB 800 [i.e. one under the Act] and strict liability?" The 

HOA's counsel responded, "Actually, Your Honor, we've discussed it, and I think 

we're prepared to forego the strict liability and just pursue the case under [section] 

896[, subdivision] (a)(14) and (15)." The HOA's counsel then clarified that, in light of 

the HOA's decision not to pursue a cause of action premised on the doctrine of strict 

liability, the court would not be required to address various legal issues that arise 

during the litigation of such a claim.
45

the doctrine of strict liability. It is axiomatic that "[t]he doctrine of strict liability 

imposes legal responsibility, without proof of negligence." (Carlin v. Superior Court

(1996) 13 Cal.4th 1104, 1149, italics added.) Thus, even assuming that the HOA were 

correct that it presented evidence that would "support the verdict and judgment under a 

common law strict product liability theory,"48 such evidence would not support the 

verdict and judgment in this case,49 since we have concluded that the Act required the 

HOA to prove that MWI "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." (§ 936, 

italics added.)

Accordingly, we conclude that there is not sufficient evidence in the record to 

support a finding that MWI caused, in whole or in part, a violation of a standard in the 

Act as the result of its negligent act or omission or a breach of contract.50

 

48 We emphasize that we express no opinion on whether the evidence in the 

record would be sufficient to support a verdict on a common law claim premised on 

the doctrine of strict liability.

49 As outlined in footnote 47, ante, the record is clear that the only claim that the 

HOA brought was a claim under the Act and the HOA indicated that it was not 

pursuing a common law strict liability claim. Since MWI did not defend against a 

common law claim premised on the doctrine of strict liability, the jury was not 

instructed on such a claim, and the jury did not render any findings on such a claim, 

we reject the HOA's argument that "[a]ny trial court error is . . . harmless because 

MWI's liability could have been established applying a strict products liability theory 

to the same . . . facts." (Italics added.)

50 In light of our conclusion that there is no evidence in the record that MWI 

caused, in whole or in part, a violation of a standard in the Act as the result of its 

negligent act or omission or a breach of contract, we necessarily reject the HOA's 

argument raised in its supplemental letter brief that any error committed by the trial 

court in failing to instruct the jury on this issue was harmless.
46

D. The judgment must be reversed and the matter remanded to the trial court with 

directions to grant MWI's' motion for a directed verdict and to enter judgment in 

favor of MWI

In Frank v. County of Los Angeles (2007) 149 Cal.App.4th 805 (Frank), the 

court discussed the proper disposition for an appellate court to direct in case in which a 

reversal is "based on insufficiency of the evidence." (Id. at p. 833.) The Frank court 

stated:

" ' "When the plaintiff has had full and fair opportunity to present 

the case, and the evidence is insufficient as a matter of law to 

support plaintiff's cause of action, a judgment for defendant is 

required and no new trial is ordinarily allowed, save for newly 

discovered evidence. . . . Certainly, where the plaintiff's evidence 

is insufficient as a matter of law to support a judgment for 

plaintiff, a reversal with directions to enter judgment for the 

defendant is proper. . . . [¶] . . . [A] reversal of a judgment for the 

plaintiff based on insufficiency of the evidence should place the 

parties, at most, in the position they were in after all the evidence 

was in and both sides had rested." ' " (Id. at. pp. 833-834; accord 

Code Civ. Proc., § 629, subd. (c) ["If the motion for judgment 

notwithstanding the verdict is denied . . . the appellate court shall, 

if it appears that the motion for judgment notwithstanding the 

verdict should have been granted, order judgment to be so entered 

on appeal from the judgment or from the order denying the 

motion for judgment notwithstanding the verdict"].)

In its supplemental brief, the HOA suggests that it did not have a "full and fair 

opportunity" to present its case. (Frank, supra, 149 Cal.App.4th at p. 833.) The HOA 

argues, "Here, the issue of 'a negligent act or omission or breach of contract, by MWI

was not presented to the jury, and [the HOA] had no reason or opportunity to present 

such evidence because it was not relevant to the SB800 statute as it was being

construed by the trial court." This argument might have had some force if the trial 

court had issued a ruling prior to the trial that obviated the need for the HOA to 
47

present evidence of an element of its claim. However, that is not the case. The HOA 

points to no ruling by the trial court nor to any argument by MWI upon which it relied 

in failing to present sufficient evidence to prove its claim.

On the contrary, the HOA was placed "on notice of the potential importance of 

such evidence through the motions of defendants," (Cassista v. Community Foods, Inc.

(1993) 5 Cal.4th 1050, 1066), including a motion for a directed verdict that MWI filed 

near the end of the trial.51 In filing a motion for directed verdict in the trial court on 

the ground of insufficiency of the evidence, MWI afforded the HOA the opportunity to 

attempt "to introduce whatever further and additional evidence [it] may have at hand to 

overcome the grounds of the motion." (Estate of Easton (1931) 118 Cal.App. 659, 

662.)52 Notwithstanding such notice, the HOA never requested the opportunity to 

 

51 The HOA was put on notice of the potential insufficiency of its evidence by 

way of a jury instruction conference, MWI's motion for a directed verdict, and MWI's 

supplemental briefing on the issue. On each occasion, MWI contended that the HOA 

had failed to present evidence that MWI's negligence or breach of contract had caused 

a violation of the Act's standards, as required.

52 In 1963, Code of Civil Procedure section 629 was amended to eliminate the 

requirement that a party file a motion for a directed verdict as a prerequisite to 

obtaining an order granting JNOV. (Compare Stats. 1963, ch. 205, § 1, p. 944 

[directing the court to grant JNOV "whenever a motion for a directed verdict for the 

aggrieved party should have been granted had a previous motion been made"] with 

Stats. 1961, ch. 604, § 1, p. 1752 [directing the court to grant JNOV "[w]hen a motion 

for a directed verdict, which should have been granted, has been denied"]; see 

7 Witkin, Cal. Procedure (5th ed. 2008) Trial, § 438 [describing change].)

Thus, MWI provided the HOA with more notice of the insufficiency of its 

evidence than was statutorily required in order for it to obtain a judgment in its favor 

on the ground of such insufficiency.
48

present additional evidence to meet the claimed insufficiency.53 Under these 

circumstances, fairness does not require that the HOA be given a second chance to 

prove its claim. (See Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 

Cal.App.4th 116, 153 [concluding that party had "full and fair opportunity" to present 

evidence in support of its claims and noting that "defendants brought several 

potentially dispositive motions challenging the sufficiency of the evidence," and that 

defendants moved for "judgment notwithstanding the verdict on the basis that the 

evidence was insufficient"].)

Simons, supra, 213 Cal.App.4th 1035, on which the HOA relies for the 

proposition that the power to grant a directed verdict "presupposes the directed verdict 

is sought on an issue that was presented at trial and on which the opposing party had 

an opportunity to present evidence," is clearly distinguishable. (Id. at p. 1051.) In 

Simons, the trial court granted a plaintiff's motion for JNOV on an issue that was "not 

alleged in plaintiff's complaint," was "not . . . litigated at trial," (id. at p. 1038) and on 

which the defendant contended it would have presented evidence if the issue had been

raised at trial. (Id. at p. 1043.) In this case, we conclude that the trial court erred in 

denying a defendant's motion for a directed verdict and motion for JNOV because the 

plaintiff failed to present evidence sufficient to prove the claim alleged in its 

complaint.

 

53 A trial court has discretion to permit a party opposing a motion for directed 

verdict the opportunity "to reopen for further evidence upon showing of good cause." 

(Simons v. Ware (2013) 213 Cal.App.4th 1035, 1051 (Simons).)
49

Simons does not constitute authority that a court may not grant a directed 

verdict where a plaintiff fails to carry its burden of proof on an element of its claim. 

On the contrary, that is the very purpose of a motion for a directed verdict and motion 

for JNOV. (Cooper v. Takeda Pharmaceuticals America, Inc. (2015) 239 Cal.App.4th 

555, 572 [" 'Typically, if a defendant believes that the plaintiff has not presented 

substantial evidence to establish a cause of action, the defendant may move for a 

nonsuit if the case has not yet been submitted to the jury, a directed verdict if the case 

is about to be submitted, or a [JNOV] following an unfavorable jury verdict. . . . The 

function of these motions is to prevent the moving defendant from the necessity of 

undergoing any further exposure to legal liability when there is insufficient evidence 

for an adverse verdict' "].)

Finally, the HOA argues that the trial court's order denying the JNOV should be 

affirmed "given the lack of precedent construing Section 936." We disagree. The 

statute expressly states the standard of proof that we hold the Act requires and the sole 

relevant precedent interpreting section 936 stated "a product manufacturer is liable 

only where its 'negligent act or omission or a breach of contract' . . . caused a violation 

of the Act's standards." (Greystone, supra, 168 Cal.App.4th at p. 1216, quoting § 936, 

italics omitted.) In any event, to the extent that there was uncertainty in the law, the 

HOA had a "full and fair opportunity" to present evidence of a negligent act or 

omission or breach of contract by MWI, in case the HOA's interpretation of the statute 

was later deemed incorrect. (Frank, supra, 149 Cal.App.4th at p. 833.) No more is 
50

required. MWI should not be required to undergo the burden of a second trial because 

the HOA interpreted the statute in a manner that proved erroneous.

Accordingly, we conclude that MWI is entitled to judgment because the HOA 

did not present sufficient evidence to establish MWI's liability under the Act.

IV.

DISPOSITION

The amended judgment and the trial court's order denying MWI's motion for 

JNOV are reversed. The matter is remanded to the trial court with directions to grant 

MWI's motion for a directed verdict, to enter judgment in favor of MWI, and to 

conduct any other necessary ancillary proceedings. MWI is entitled to costs on appeal.

AARON, J.

WE CONCUR:

HUFFMAN, Acting P. J.

NARES, J.