New Hurdles for California Construction Defect Claims

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By Bruce Kaufman

California homeowners may have a tougher time wringing damages from builders for alleged construction defects.

The California Supreme Court ruled Jan. 18 that a 2002 litigation overhaul law, the Right to Repair Act, provides the exclusive remedy for most property damage claims over construction defects.

The 2002 law does not affect suits for personal injury, breach of contract, or fraud. But it displaces traditional legal remedies for most claims over economic losses against home builders stemming from construction flaws, the top court said.

It also provides new rules for recovering damages, the court said.

The decision is a blow to homeowners Carl and Sandra Van Tassel who sued general contractor McMillin Albany LLC in 2013. They alleged extensive construction defects in their new home caused extensive property damage and a loss in home value.

The family must comply with the law’s pre-litigation procedures before their suit may proceed through the courts, the court said.

The procedures include a dispute resolution process that provides builders with notice of alleged construction defects and the opportunity to remedy the defects before the suit can advance.

As the plaintiffs failed to follow the law’s procedures, the court ordered the suit be held in abeyance to allow the parties to follow the process contemplated by the law.

The family’s attorneys include Milstein Adelman Jackson Fairchild & Wade. The defendant’s attorneys include Borton Petrini.

The case is McMillan Albany LLC v. Superior Court of Kern County , 2018 BL 16454, Cal., No. S. 229762, 1/18/18 .

To contact the reporter on this story: Bruce Kaufman in Washington at bkaufman@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com

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