Source: https://www.lovettlawusa.com/real-estate-construction-law/architects-and-engineers/construction-defect/
Timestamp: 2019-04-18 10:16:46+00:00

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If you are a contractor, subcontractor, architect, or engineer who is facing a recently filed construction defect claim, it is in your best interests to seek the help of a lawyer with a reputation for representing construction professionals.
The following is a basic overview of construction defects.
Strict liability is responsibility regardless of negligence or fault. The manufacturer or supplier of a component part installed in a mass-produced home may be held strictly liable when a defect in the component causes damages to other parts of the structure.
Under Commercial Codes, sections 2106, 2314, and 2315, where the primary objective of a transaction is to obtain services, the doctrines of implied warranty and strict liability do not apply. Notice of breach of warranty must be given within a reasonable time. In addition, even if services could be the subject of implied warranties, contractual privity between the plaintiff and defendant is required for actions based on the implied warranty of merchantability or fitness.
A defendant does not have a legal duty to a plaintiff in the absence of privity of contract unless plaintiff can show a special relationship between plaintiff and defendant. This is a question of law to be resolved by the court.
In Weseloh Family Limited Partnership v. K. L. Wessel Construction Co., 125 Cal. App.4th 52 (2004), property owners sued design engineers for negligence. The design engineer was hired by the contractor's subcontractor. The engineers did not supervise the actual work on the retaining wall and they did not have the right to control the construction of the wall.
In Aas v. Superior Court, 24 Cal. App.4th 627 (2000), the California Supreme Court held that a plaintiff in a construction defect case may not maintain a cause of action sounding in negligence unless property damage has occurred as a result of the negligence.
Residential construction contracts and amendments that indicate a general contractor or subcontractor is to be held harmless for construction defects, injury or negligence are legally unenforceable as of January 1, 2008. California Civil Code Section 2782.
Indemnity is a mechanism to shift responsibility to those responsible for a victim's personal injury or property damage to another responsible party. Most construction contracts have an express indemnity provision. Implied equitable indemnity or comparative indemnity is a method of apportioning liability among those responsible parties. There is no right of comparative indemnity if either the indemnitee or the indemnitor is determined to have no liability to the victim of the civil wrong, which is referred to as a tort. Allis-Chalmers v. Superior Court (1985) 168 Cal.App.3d 1155, 1157.
The scope of a contract controls the scope of indemnity. As with insurance contracts, the duty to defend is broader than the duty to indemnify. To the extent that an indemnity provision in a subcontract includes a duty to defend, that duty attaches upon suit absent contractual language to the contrary, and it applies even in the absence of negligence by the indemnitor. Crawford v. Weather Shield Mfg. Inc. (2008) 44 Cal.4th 541.
To determine what an indemnity agreement covers, one must look primarily to contractual interpretation, and it is the intent of the parties as expressed in the agreement that should control. Maryland Casualty Co. v. Bailey & Sons, Inc., (1995) 35 Cal. App.4th 856.
In Ratcliff v. Vanir, 49 Cal. App.4th 595 (2001), a school district hired an architect and a construction manager, then sued them both for cost overruns. The architect's cross-complaint against the construction manager was dismissed, since there was no contractual privity and the architect failed to show that the construction manager owed it a duty of care.
In BFGC Architects Planners, Inc. v. Forcum-Mackey Construction, Inc. (2004), 119 Cal.App.4th 848, 852-853, the court held that if the only duties allegedly violated by the indemnitor are contractual duties owed to the tort victim, and if the indemnitor had no contractual relationship with the tortfeasor and there is no basis for holding the indemnitor liable in tort, the indemnitor cannot be liable for comparative indemnity to the tortfeasor. Similarly, implied contractual indemnity is based on the premise that a contractual obligation to perform carries with it an implied agreement to indemnity and to discharge foreseeable damages resulting from negligent performance. Bear Creek Planning Commission v. Title Insurance & Trust Co. (1985) 164 Cal.App.3d 1227, 1237.
In Weseloh Family Limited Partnership v. K. L. Wessel Construction Co., 125 Cal. App.4th 52 (2004), the court dismissed the general contractor's indemnity claim against the design engineer since there was no privity of contract or duty (see discussion above).
For tort claims, the Economic Loss Doctrine provides that no recovery is allowed for economic loss alone, such as the cost of repairing a defective produce or compensation for its diminished value, without actual manifested property damages to property other than the product itself. Economic loss consists of 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" Robinson Helicopter Company, Inc. v. Dana Corporation (2004) 34 Cal.4th 979, 988. In Aas v. Superior Court (2000) 24 Cal.4th 627, 640, the California Supreme Court applied the economic loss rule to negligence actions. Plaintiffs may recover in tort for physical injury to person or property, but not for purely economic losses that may be recovered in a contract action. Seely v. White Motor Company (1965) 63 Cal.2d 918.
Stearman v. Centex Homes (2000) 78 Cal. App.4th 611, permits the recovery of experts' investigative costs (as opposed to litigation costs) as an element of damages in a construction defect case.
California Civil Code Section 895, et seq. sets forth the new requirements for actions for construction defects. California Civil Code Sections 911 and 938 provide that the new law applies to the sale of new residential units originally sold after January 1, 2003.
California Civil Code Section 896 sets forth detailed building standards. Nine of the standards appear to require property damage before a violation occurs. These include excessive condensation through windows or exterior siding into the structure, foundations that allow water to enter the structure, and ceramic tile that allows water into walls or floors.
If the builder has liability insurance, it can request an inspection of the claimed defects and perform destructive testing. It can then make an offer to repair with a demand for mediation.
In order for these to apply, the builder must maintain an agent for service with the Secretary of State or include the agent's name and address with the original sales documentation, have recorded on title a notice of the existence of the prelitigation procedure and include that notice in original sales documentation, include a copy of the right to repair act with the original sales documentation, and have each of these items initialed and acknowledged by the homeowner and builder's representative. In addition, the seller must instruct the buyer to provide these documents to any subsequent purchaser. California Civil Code Section 912.
Need Help With a Construction Defect Claim? Contact Us for a Free Telephonic Consultation.
As your representative, we will investigate the defective construction claims to see if they can be substantiated. Wherever possible, we will go to arbitration or mediation to achieve a reasonable settlement in a timely and cost-effective manner. If necessary, however, we will aggressively argue your case in front of a judge or jury.
The Law Office of Steven R. Lovett has the reputation for efficiency, experience and ethics that has gained the trust of construction professionals throughout Southern California. Contact a Los Angeles construction attorney by e-mail or call us for a free telephonic consultation.
- Rafi Sharon, Globe Remodeling Inc.
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