Court Opinion

ID: 9547350
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:46:11.747711+00
Date Added: 2024-06-11T15:17:38.251403
License: Public Domain

LUCAS, J., Concurring and Dissenting.
I concur in that portion of the majority opinion which holds that a landlord may be held liable for dangerous conditions of which he knew or should have known. However, I cannot join in imposing upon landlords strict liability for latent defects in any component of their property no matter who built or installed the defective item.
Taking an unprecedented leap, the majority imposes “an unusual and unjust burden on property owners . . . [T]he landlord [will] be faced with liability for every injury claim resulting from any untoward condition in every cranny of the building, whether it is reasonably foreseeable or not.” (Dwyer v. Skyline Apartments, Inc. (1973) 123 N.J.Super. 48 [301 A.2d 463, 467], affd. obiter dictum, 63 N.J. 577 [311 A.2d 1].) Any landlord, even one renting the family home for a year, will now be insurer for defects in any wire, screw, latch, cabinet door, pipe or other article on and in his premises at the time they are let despite the fact that he neither installed the item nor had any knowledge or reason to know of the defect. I believe, in conformance with the almost unanimous judgment of other jurisdictions considering this issue, that such imposition of liability is inappropriate. As one authority has remarked, “One problem in analyzing product liability law is our tendency to study rule changes in isolation and not to analyze their aggregate effect on liability costs or primary behavior.” (Epstein, Commentary (1983) 58 N.Y.U. L.Rev. 930, 931.) My colleagues here have taken just such an “isolated” viewpoint.
*480Justice Traynor, over 40 years ago in his classic concurrence, reasoned that “it should now be recognized that a manufacturer incurs an absolute liability when an article that he has placed on the market, knowing that it is to be used without inspection, proves to have a defect that causes injury to human beings.” (Escola v. Coca Cola Bottling Co. (1944) 24 Cal.2d 453, 461 [150 P.2d 436].) Thereafter, in Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 63 [27 Cal.Rptr. 697, 377 P.2d 897, 13 A.L.R.3d 1049], speaking for a unanimous court, Justice Traynor explained that “The purpose of such liability is to insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves." In other words, one who makes the product should be held responsible for its defects.
The next year, strict liability was extended to retailers. (Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256 [37 Cal.Rptr. 896, 391 P.2d 168].) The rationale articulated in support of this extension was that “Retailers like manufacturers are engaged in the business of distributing goods to the public. They are an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products. . . . Strict liability on the manufacturer and retailer alike affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship. ” (Id. at pp. 262-263, italics added.) We later held that lessors and bailors of personal property similarly might be held strictly liable, after stressing “the necessity for a continuous course of business as a condition to application of the rule . . . .” (Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 253-254 [85 Cal.Rptr. 178, 466 P.2d 722].) As I shall discuss, this requirement of a continuing relationship which avoids “injustice” to defendants is given no meaningful consideration in the majority approach.
The potential liability of producers of residences was addressed in Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224 [74 Cal.Rptr. 749], a case cited with approval in Price, supra, (2 Cal.3d at p. 251, fn. 6), for the proposition that manufacturers placing products on the market, including mass producers of homes, should be held strictly liable for defects in their products. The Kriegler court concluded that “there are no meaningful distinctions between Eichler’s mass production and sale of homes and the mass production and sale of automobiles and that the pertinent overriding policy considerations are the same.” (269 Cal.App.2d at p. 227; see Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 911-912 [176 Cal.Rptr. 886, 25 A.L.R.4th 336].) Kriegler's holding rested on the identification of Eichler as essentially a “man*481ufacturer of homes,” a situation undeniably very different from the one present here. IRM Corporation purchased an already “produced” and used property.
This distinction between a party actually selecting, installing, constructing and buying the defective product and a party who plays no such role and therefore has no connection with anyone up the ladder of distribution, was fundamentally adhered to by the Court of Appeal in two cases dealing with defects allegedly present in items found on or in leased premises. In Fakhoury v. Magner (1972) 25 Cal.App.3d 58 [101 Cal.Rptr. 473], the plaintiff was injured when a couch in a rented apartment collapsed. She sued her landlord in strict liability asserting latent defects in the furniture. The court concluded that the landlord could be held strictly liable “not as lessor of real property, but as lessor of the furniture.” (P. 63.) The requirement that property be placed in the stream of commerce was met because “a casual or isolated transaction will not bring the doctrine into play. [However, in] the case at hand, the landlord furnished two apartments in San Francisco and three in Sacramento at the same time with the same kind of couch purchased from the same seller.” (P. 64.) In the instant case, the shower door was a fixture and the defendant is being sued as lessor of property not as lessor of furniture. Moreover, the shower doors had not been purchased by defendant.
The role of strict liability in landlord-tenant relationships was further explored in Golden v. Conway (1976) 55 Cal.App.3d 948 [128 Cal.Rptr. 69]. The plaintiff sued the landlord in strict liability after suffering damages in a fire caused by a wall heater installed by a contractor at the landlord’s behest approximately one year before. The court permitted maintenance of the cause of action on the ground “that a lessor of real property who ... is engaged in the business of leasing apartments and appurtenant commercial premises, equips the premises with an appliance without knowing whether or not it is defective because of the manner in which it was manufactured or installed, and it proves to have defects which cause injury to persons or property when used in a normal manner, is strictly liable in tort.” (Pp. 961-962.) The installation of the heater assertedly created the dangerous condition, and the court was careful to distinguish the facts from those in Ruiz v. Minnesota Mining & Mfg. Co. (1971) 15 Cal.App.3d 462 [93 Cal.Rptr. 270]. In the latter case, the Golden court stressed, a product used on the premises was defective “and the property owner merely failed to take corrective action because he did not discover the defect” and therefore was not strictly liable. (55 Cal.App.3d at p. 963.) In our case, there is no allegation that the landlord was aware of the defect in the already present product.1
*482The treatment of cases involving used goods and their sale better highlights relevant concerns ignored by the majority. In Tauber-Arons Auctioneers Co. v. Superior Court (1980) 101 Cal.App.3d 268 [161 Cal.Rptr. 789], the Court of Appeal held that an auctioneer of used machinery who did not perform any maintenance or repair on the equipment, did not inspect it, and sold it “as is,” could not be held strictly liable for any defects in the items. The court stated that when considering the requirement that a potential defendant be a participant “in the manufacturing-marketing system” before he be held subject to strict liability, one significant factor is “the requirement that defendant have a participatory connection with the enterprise which ‘created consumer demand for and reliance upon’ the particular ‘injury-producing product’ [citation] not just products of the same classification.” (101 Cal.App.3d at p. 276; see also Brejcha v. Wilson Machinery, Inc. (1984) 160 Cal.App.3d 630, 639 [206 Cal.Rptr. 688].) The court further emphasized participation in the “initial distribution of the particular manufacturer’s products . . . .” (P. 277.) Because a used machinery dealer normally “has no continuing business relationship with the manufacturer in the course of which he can adjust the cost of protection from strict liability ... the rationale which underlies Vandermark simply is inapplicable to such a dealer. Moreover, the risk reduction which was sought in Vandermark on the assumption that ‘the retailer himself may play a substantial part in insuring that the product is safe or may be in a position to exert pressure on the manufacturer to that end’ (61 Cal.2d at p. 262) ... is simply unattainable because the ‘used-goods dealer is normally entirely outside the original chain of distribution of the product. . . . ’ (Tillman v. Vance Equipment Co. [(Ore. 1979) 596 P.2d 1299, 1304].)” (101 Cal.App.3d at p. 283, fn. omitted; see also Wilkinson v. Hicks (1981) 126 Cal.App.3d 515, 521 [179 Cal.Rptr. 5]; LaRosa v. Superior Court (1981) 122 Cal.App.3d 741, 753-754 [176 Cal.Rptr. 224].) Analogous considerations apply in the case of the “used property” lessor.
Discounting other crucial and long-recognized justifications for imposition of strict liability, my colleagues focus primarily on the “risk-spreading” function of this form of liability. Essentially they ignore the fact that landlords of used property have no special position with regard to original manufacturers and sellers and thus have no influence to wield in order to improve product safety. Moreover, contrary to the majority’s implication, the landlord, while impliedly representing that the premises are habitable, *483is not representing to tenants that he has expertise and guarantees the perfection of every item forming the premises. Instead of considering what role landlords of used property realistically play with regard to that property, the majority concentrates narrowly on the advancement of “The paramount policy of the strict products liability rule [namely] the spreading throughout society of the cost of compensating otherwise defenseless victims of manufacturing defects.” (Ante, p. 466.) Next my colleagues observe that “landlords are essential to the rental business. They have more than a random or accidental role in the marketing enterprise [and] a continuing relationship to the property following the renting . ...” In addition, “it may be expected that along with numerous other factors the price of used rental housing will depend in part on the quality of the building and reflect the anticipated costs of protecting tenants, including repairs, replacement of defects and insurance,” and that rentals may be adjusted to cover such costs. (Ante, at p. 466.)2
One major difficulty with this approach is the concentration on the wrong “stream of commerce.” Unquestionably a landlord has more than an “accidental role” in the marketing of rental property. Except for those who on a one-time basis rent out a piece of property for a reasonably short term, every landlord of both multiple and single properties has a continuing role in the rental market. But those same landlords in all likelihood will have absolutely no direct or continuing relationships with the manufacturers and marketers of the particular defective products found on the premises. We are not discussing here those who build the property; we are discussing those who purchase already existing multiple residence properties. In fact, applying the majority’s analysis, those who decide to rent out the family home on a regular basis are also now strictly liable for defects in any item located therein. Under the majority’s formulation, where the relevant relationship is that of landlord to his property and tenants, any landlord is now strictly liable for defects of which he or she has no knowledge or reason to *484know and which appear in any part of the property no matter how esoteric the understanding necessary to comprehend the working of that part.3 Nothing in the majority’s approach is necessarily confined to landlords of multiple residences.
The weakness of the majority’s analysis of the relevant stream of commerce is revealed by consideration of its basis for concluding that “a continuing business relationship is not essential to imposition of strict liability.” It relies upon Ray v. Alad Corp. (1977) 19 Cal.3d 22 [136 Cal.Rptr. 574, 560 P.2d 3], for the proposition that unavailability of a manufacturer militates in favor of the imposition of liability on “persons engaged in the enterprise who can spread the cost of compensation.” (See ante, p. 466.) In Alad, we held that a corporation which had acquired all assets of the manufacturer of the defective product and which continued to run the business in a manner almost identical to its original form, could be held strictly liable for defects in a product manufactured by the predecessor corporation. “By taking over and continuing the established business of producing and distributing Alad ladders, Alad II became ‘an integral part of the overall producing and marketing enterprise that should bear the cost of injuries resulting from defective products’ (Vandermark v. Ford Motor Co., supra, 61 Cal.2d 256, 262).” (Ray v. Alad Corp., supra, 19 Cal.3d at p. 34.) Under those narrow circumstances, we held the successor could be held liable.
Similar complete unavailability of the manufacturer or others in the original chain of distribution simply is not at issue here. As the majority states in its recitation of facts, the plaintiff here settled with the builder and a door assembler and installer for a minimum of $150,000 and has actions pending against defendants in addition to the landlord. No legal unavailability of the kind occurring in Alad presented a problem for plaintiff’s recovery. Moreover, there is no reasonable suggestion that the relationship between the landlord here and any party participating in the original manufacture and distribution of the shower door can be analogized to the almost complete overlap of the corporate entities in Alad. It is illogical to conclude that the landlord here became part of the overall marketing scheme for the shower doors merely by purchasing property in which they had long since been installed.
*485Unlike retailers, lessors, bailors, wholesalers or others in the original chain of distribution of the product, the landlord owning used property cannot adjust the costs of protection up the chain. He may only do it, at best, down the chain of “distribution, ” namely by charging more to his tenants. Unlike the others mentioned above, such a “merchant” has no opportunity to enter into indemnification agreements with those more closely linked with the making of the product—he will have little idea if any when he buys the property as to the origin of items such as the wiring found in the walls, and without doubt even if he has such knowledge will have no bargaining power to enter into any agreements with such suppliers. Moreover, his responsibility extends to a myriad of products, unlike the situation faced by a retailer of a particular line of goods. Landlords henceforth are in a risky business. No matter how carefully they inspect, and no matter how impossible to discern the defect, they are now the last outpost of liability for countless unrelated products in which they have no particular expertise.4
Consideration of the inherent problems—and unfairness—in extending strict liability to landlords has led almost every other jurisdiction deciding this issue to decide that imposition of such liability is unwarranted. In 1973, a New Jersey appellate court so held in a decision affirmed by that state’s highest court. The opinion contained a cogent discussion of some of the reasons why use of this theory of recovery is inappropriate in this context:
“The underlying reasons for the enforcement of strict liability against the manufacturer, seller or lessor of products or the mass builder-vendor of homes do not apply to the ordinary landlord of a multiple family dwelling.
“Such a landlord is not engaged in mass production whereby he places his product—the apartment—in a stream of commerce exposing it to a large number of consumers. He has not created the product with a defect which is preventable by greater care at the time of manufacture or assembly. He does not have the expertise to know and correct the condition so as to be saddled with responsibility for a defect regardless of negligence.
*486“An apartment involves several rooms with many facilities constructed by many artisans with differing types of expertise, and subject to constant use and deterioration from many causes. It is a commodity wholly unlike a product which is expected to leave the manufacturer’s hands in a safe condition with an implied representation upon which the consumer justifiably relies.
“The tenant may expect that at the time of the letting there are no hidden dangerous defects known to the landlord and of which the tenant has riot been warned. But he does not expect that all will be perfect in his apartment for all the years of his occupancy with the result that his landlord will be strictly liable for all consequences of any deficiency regardless of fault. He expects only that in the event anything goes wrong with the accommodations or the equipment therein, the landlord will repair it when he knows or should know of its existence; and that if injury results liability will attach.” (Dwyer v. Skyline Apartments, Inc., supra, 301 A.2d at p. 467.)
Several other courts have reached similar conclusions in reviewing analogous cases. As the Missouri Court of Appeals observed, “No case has been cited, nor has one been found, imposing strict liability upon the non-builder landlord for latent defects, rendering the premises unsafe or dangerous, absent some actual or constructive notice of the defects.” (Henderson v. W. C. Haas Rlty. Management, Inc. (Mo.App. 1977) 561 S.W.2d 382, 387.)5 Cases rejecting application of liability without knowledge have utilized various approaches. (See, e.g., Meyer v. Parkin (Minn.App. 1984) 350 N.W.2d 435, 438-439 [recent legislation did not eliminate requirement of scienter on part of landlord before he has duty to warn lessee of concealed defects]; George Washington University v. Weintraub (D.C.App. 1983)458 A.2d 43, 49 and fn. 9 [landlord exercising reasonable care may not be held liable for losses caused from defects of which he neither knew nor should have known]; Livingston v. Begay, supra, 652 P.2d 734 [lessor of motel room not strictly liable; theory not meant to apply to “unsafe design of a hotel room”]; Boudreau v. General Elec. Co. (1981) 2 Hawaii App. 10 [625 P.2d 384, 389-390, 34 A.L.R.4th 86] [strict liability requires lessor be engaged in business of supplying goods in which defect is claimed]; Segal v. Justice Court Mut. Housing Co-op (1980) 105 Misc.2d 453 [432 N.Y.S.2d 463, 467], affd. (1981) 108 Misc.2d 1074 [442 N.Y.S.2d 686] [no strict liability of landlords under public policy or legislation; they are not insurers of property]; Kidd v. Price (Ky.App. 1971) 461 S.W.2d 565, 567 [liability for latent defect depends on notice or knowledge thereof].)
*487I would hold that a subsequent purchaser of property who has not installed, altered or created the item or condition which is claimed to be defective, and who has no actual or constructive knowledge of any defect therein, should not be held strictly liable. If the landlord knows or should know of the defect, then he has a duty to take appropriate action to correct or warn of the problem. However, where the landlord has no continuing relationship with the chain of marketing leading back to the manufacturer of the defective product, and thus has no way of influencing the production or design of the product or of adjusting potential costs of the manufacturer’s enterprise or others in the business of marketing the item at issue, imposition of strict liability is inappropriate. The only rationales supporting such responsibility are ease of proof for the injured party and “distributing” the risk of damages to the landlord. The costs of such an extension of liability to those without expertise or continuing relationships for the multiple products and parts for which they may now bear responsibility will entail a significant shift in how our tort system has heretofore operated. It amounts, in effect, to insurance for tenants,6 because it does nothing to aid in the goals of deterrence or product safety.
I would affirm the trial court’s decision to the extent that it granted summary judgment to defendant on the cause of action sounding in strict liability, while joining in the majority’s reversal as to the negligence cause of action.
Mosk, J., concurred.

The Golden court did not discuss whether the transaction at issue there was an isolated *482one and therefore not normally the subject of an action in strict liability. The relevant continuing relationship usually is the one between the party sought to be held strictly liable and those up the chain of distribution to the manufacturer. Neither the relationship of the landlord to the marketing chain, nor between landlord and tenant was considered for this purpose, and I therefore consider Golden to be of limited assistance in evaluating the underlying policy problems.

One Court of Appeal recently undertook an extensive review of strict liability in the context of sellers of used machinery which “they neither inspected, repaired nor modified.” (LaRosa v. Superior Court, supra, 122 Cal.App.3d 741, 743.) It reviewed five “policy predicates” for strict liability described in Note, Sales of Defective Used Products: Should Strict Liability Apply? (1979) 52 So.Cal.L.Rev. 805, namely, (1) enterprise liability (forcing the enterprise to bear costs of injuries caused by its defective products); (2) deterrence; (3) risk distribution; (4) practicality (problems of proof made easier by application of strict liability) and (5) implied representations of safety because product is present on the market. (122 Cal.App.3d at pp. 756-760.) The Court of Appeal found that as to the risk-distribution rationale, so heavily relied upon here by the majority, “the very pervasiveness of the . . . rationale suggests that it is probably insufficient, by itself, to justify strict liability.” (122 Cal.App.3d at p. 759.) As to diminishing problems of proof, the court observed “ease of recovery is not really a rationale for strict liability; more precisely it describes the effect strict liability was expected to have. Obviously if ease of recovery were a pervasive rationale for strict liability then strict liability would be the universal rule. ” (Id. at p. 760.) These conclusions have validity in our context as well.

This sharply contrasts with the general view that “Only a seller who can be regarded as a merchant or as one engaged in the business of supplying goods of the kind involved in the case is subject to strict liability . . . .” (Prosser & Keeton on the Law of Torts (5th ed. 1984) Products Liability, § 100 at p. 705.) We conformed to this viewpoint in Price where the court concluded “that for the doctrine of strict liability in tort to apply to a lessor of personalty, the lessor should be found to be in the business of leasing, in the same general sense as the seller of personalty is found to be in the business of manufacturing or retailing. ” (2 Cal.3d at p. 254.) The majority makes landlords “merchants” of anything contained in or on their property, no matter what the expertise or familiarity entailed, or the actual role of the landlord with regard to the particular product at issue.

One court summed up the difference between extending strict liability to lessors of commercial products and to motel owners in a manner which has general application in our context as well: “A major consideration in holding lessors of commercial products strictly liable was that such lessors possessed expert knowledge of the characteristics of the equipment or machines they leased. [Citations.] Another consideration is that such lessors, like retailers, deal continually with their suppliers, giving them an enduring relationship which permits them to seek contribution and indemnification. These considerations do not apply when a motel operator makes a one-time purchase of furnishings and fixtures about which he has no special expertise. Therefore, we hold that a motel operator is not strictly liable for defects in the fixtures and furnishings of the rooms he held out to the public. ” (Livingston v. Begay (1982) 98 N.M. 712 [652 P.2d 734, 738-739].)

The one apparent exception is in Louisiana where pursuant to statute a landlord may be held liable for defects in the absence of actual knowledge of the defective condition of his property. (See Parrv. Head (La.App. 1983) 442 So.2d 1234, 1235; Buxton v. Allstate Ins. Co. (La.App. 1983) 434 So.2d 605, 607-608.)

The majority never considers the economic effect of its holding. The only logical result is that the price of rental housing will increase because of the increased cost of insurance, assuming insurance can be obtained for this purpose. Even if landlords can sue participants in the original line of manufacture and marketing, the litigation costs involved will likely also have an effect on the price of rental housing. Arguably, instead of risk distribution, the majority’s conclusion will result in a general increased cost attributable to the risks involved without a concurrent benefit. Someone will have to pay for the additional litigation today’s decision is likely to create.