California Supreme Court Set to Hear Oral Argument in Noteworthy Construction Defect Case

November 6, 2017

On November 7, 2017, the California Supreme Court will hear oral argument in McMillin Albany, LLC  v. Superior Court (2015) 239 Cal.App.4th 1132 (McMillin).  The Supreme Court’s ruling in this construction defect case is expected to resolve the split of authority in California’s Appellate Courts on the issue of whether a plaintiff can avoid compliance with the statutory nonadversarial prelitigation procedures in the Right to Repair Act (the "Act", also known as SB 800) by pleading only common law causes of action rather than violations of the Act for residential construction sold on or after January 1, 2003.
 
In McMillin, the Court of Appeal for the Fifth Appellate District held that when a plaintiff alleges construction defects that fall within the scope of the Act, the plaintiff must comply with the Act's prelitigation procedures even if the plaintiff does not allege violations of the Act in the lawsuit.  The statutory prelitigation procedures afford the defendant developer, general contractor and subcontractors an opportunity to repair the alleged deficiencies before the plaintiff may file a lawsuit.  The Court reasoned that the Act would not constitute the groundbreaking reform for construction defect litigation that it purported to be if a plaintiff could still sue for damages under any common law tort theory once property damage occurred, without being subject to the mandatory statutory prelitigation procedures in the Act.  In doing so, the Fifth Appellate District expressly disagreed with the decision of the Court of Appeal for the Fourth Appellate District in Liberty Mutual Insurance  Co.  v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98 (Liberty Mutual).  
 
In Liberty Mutual, by contrast, the Court of Appeal for the Fourth Appellate District held that in construction defect cases where there is an allegation of actual physical damage, the Act and its mandatory prelitigation procedures do not apply and a plaintiff is free to assert common law tort causes of action such as negligence and strict liability.
 
The docket is available here: California Judicial Branch.  Jackson Tidus is monitoring developments in the case and will provide updates as they become available.  Please contact Edward Galloway or Shannon Mandich for additional information.

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