Author - Jon A.Turigliatto

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FLASH BULLETIN – McMillin Albany LLC et al. v. Superior Court (2018) S229762
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$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed To Prove Supplier’s Negligence Or Breach Of Contract Caused A SB800 Violation
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Immigration Status No Longer Discoverable in Personal Injury Cases
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California Complex Civil Litigation Superior Court Panels
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Extra Extra
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Disclosure, Disclosure, Disclosure
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Contractor License Overview – With a Twist
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SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims
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Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims
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Contractors: CALGreen Energy Provisions Have Been Changed

FLASH BULLETIN – McMillin Albany LLC et al. v. Superior Court (2018) S229762

By: Richard H. Glucksman, Glenn T. Barger, Jon A. Turigliatto, David A. Napper
February 15, 2018

HOT OFF THE PRESS:

THE CALIFORNIA SUPREME COURT HAS RULED THAT THE RIGHT TO REPAIR ACT (SB800) IS THE EXCLUSIVE REMEDY FOR CONSTRUCTION DEFECT CLAIMS NOT INVOLVING PERSONAL INJURIES WHETHER OR NOT THE UNDERLYING DEFECTS GAVE RISE TO ANY PROPERTY DAMAGE in McMillin Albany LLC et al. v. Superior Court (2018) S229762.

The Construction Industry finally has its answer.  The California Supreme Court ruled that the Right to Repair Act (SB800) is the exclusive remedy for construction defect claims alleged to have resulted from economic loss, property damage, or both.  Our office has closely tracked the matter since its infancy.  The California Supreme Court’s holding resolves the split of authority presented by the Fifth Appellate District’s holding in McMillin Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132, which outright rejected the Fourth Appellate District’s holding in Liberty Mutual Insurance Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98.

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$24 Million Verdict Against Material Supplier Overturned Where Plaintiff Failed To Prove Supplier’s Negligence Or Breach Of Contract Caused A SB800 Violation

By: Jon A. Turigliatto and Chelsea L. Zwart
May 25, 2017

The Fourth District California Court of Appeal published its decision, Acqua Vista Homeowners Assoc. v. MWI, Inc. (2017) 7 Cal.App.5th 1129, holding that claims against a material supplier under SB800 (Civil Code §895, et. seq.) require proof that the SB800 violation was caused by the supplier’s negligence or breach of contract.

In this case, Acqua Vista Homeowners Association (“the HOA”) sued MWI, a supplier of Chinese pipe used in the construction of the Acqua Vista condominium development.  The HOA’s complaint asserted a single cause of action for violation of SB800 standards, and alleged that defective cast iron pipe was used throughout the building.  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.  The jury returned a special verdict against MWI, and the trial court entered a judgment against MWI in the amount of $23,955,796.28, reflecting the jury’s finding that MWI was 92% responsible for the HOA’s damages.

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Immigration Status No Longer Discoverable in Personal Injury Cases

By: Jon A. Turigliatto, Esq. and Chelsea L. Zwart, Esq.
December 9, 2016

NEW CALIFORNIA EVIDENCE CODE SECTION 351.2 PROHIBITS DISCOVERY AND ADMISSIBILITY OF A PERSON’S IMMIGRATION STATUS FOR PURPOSES OF LIMITING DAMAGE CLAIMS.

On January 1, 2017, AB 2159, which prohibits discovery related to a person’s immigration status in personal injury and wrongful death actions, will become effective, adding Section 351.2 to the California Evidence Code and overturning Rodriguez v. Kline (1986) 186 Cal.App.3d 1146.

Under Rodriguez v. Kline, an individual injured in the United States who is subject to deportation is not entitled to compensation based upon his or her projected earning capacity in the United States, but rather may only recovery damages for lost future income the individual would have earned in his or her country of origin. Later case law applied Rodriguez v. Kline to the recovery of medical costs, limiting recovery by an undocumented person to the amount the individual would have incurred for medical treatment in his or her country of origin.

Newly introduced Evidence Code Section 351.2 states:

(a) In a civil action for personal injury or wrongful death, evidence of a person’s immigration status shall not be admitted into evidence, nor shall discovery into a person’s immigration status be permitted.

(b) This section does not affect the standards of relevance, admissibility, or discovery prescribed by Section 3339 of the Civil Code, Section 7285 of the Government Code, Section 24000 of the Health and Safety Code, and Section 1171.5 of the Labor Code.

Proponents of Section 351.2, which effectively invalidates Rodriguez v. Kline, assert that the rationale behind the new law is to ensure that personal injury and wrongful death victims are not penalized for their immigration status and to protect undocumented immigrants from being exploited.  The intent is to equalize compensation received by persons who work and live in California and thus should be entitled to equal treatment in the California court system, regardless of immigration status.

By prohibiting the discovery and admissibility of a plaintiff’s immigration status, the new code section will have a severe impact on defendants’ potential exposure for damages relating to lost income and medical expenses.  After January 1, 2017, an undocumented person’s loss of earnings claim will no longer be limited to wages earned in his or her country of origin, but will rather be based on the individual’s income in the United States, whether here legally or not.  The same will be true for medical expenses, which will be based on those actually incurred.

Historically, many undocumented plaintiffs did not pursue loss of earnings claims as defendants regularly pointed to immigration status as a way to significantly lower potential exposure for such claims. Given that earnings and medical costs are generally substantially higher in the United States than in countries from which people immigrate without documentation, the enactment of Evidence Code Section 351.2 will deliberately result in larger awards for loss of income and medical expenses to injured immigrants.

California Complex Civil Litigation Superior Court Panels

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
November 24, 2014
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The Complex Civil Litigation Program is relatively new as it has only existed in California since 2000. Complex divisions dedicate courtrooms solely for litigation of complex civil cases that require exceptional judicial management including construction defects, antitrust, securities, toxic torts, mass torts, and class actions. Complex civil courtrooms help the trial court operate in a more efficient, expeditious, and effective manner. A complex court reduces costs for litigants by streamlining motion practice and expeditiously resolving discovery disputes.

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Extra Extra

All Claims for Construction Defects in Residential Construction Sold on or after January 1, 2003 are Subject to Requirements and Procedures of the Right to Repair Act (SB 800)

McMillin Albany LLC v. Super Ct. 2015 F069370 (Cal.App. 5 Dist.)

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 8, 2015
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In a particularly dramatic and noteworthy fashion and breaking with the Fourth Appellate District and rejecting the holding in Liberty Mut. Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal.App.4th 98, the Fifth District Court of Appeal held that the California Legislature intended that all claims arising out of defects in new residential construction sold on or after January 1, 2003 are subject to the standards and requirements of the Right to Repair Act, commonly referred to as SB800, including specifically the requirement that notice be provided to the builder prior to filing a lawsuit.  Thus, SB 800 is the exclusive remedy for all defect claims arising out of new residential construction sold on or after January 1, 2003.

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Disclosure, Disclosure, Disclosure

A Brief Reflection Regarding the Trend Towards Heightened Disclosure Requirements in Real Property Transactions

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 1, 2015
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A brief reflection regarding the trend towards heightened disclosure requirements in real property transactions including the recent case of Wong v. Stoler (2015 WL 3862525), where the seller’s failure to disclose private sewer line resulted in rescission of the contract.

In a very recently published opinion in a real property disclosure case, the First District Court of Appeal in Wayson Wong v. Ira Stoler (2015 WL 3862525), held that the trial court declined to effectuate a rescission of the contract based on incorrect justifications and that its alternative remedy failed to provide the purchasers with the complete relief to which they were entitled.

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Contractor License Overview – With a Twist

By: Richard H. Glucksman, Jon A. Turigliatto, and David A. Napper
September 1, 2015
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The California Contractors State License Board provides licenses to contractors and regulates the state’s construction activity. The California Business and Profession (“B&P”) Code Section 7031 prohibits unlicensed contractors from bringing or maintaining an action to recover compensation in any court in the state of California. Section 7031 also addresses, amongst other issues, recovery from an unlicensed contractor and when proof of licensure is required in a civil suit. In order to recover in a civil action, a contractor must allege that he or she was a duly licensed contractor at all times during the performance of that act or contract, regardless of the merits of the cause of action brought by the person. Section 7031 protects consumers who enter into agreements with contractors and promotes the public policy of having licensed, competent, and honest builders. See Montgomery Sansome LP v. Rezai (2012) 204 Cal.App.4th 786. However as further examined by the recent case of Art Womack v. David Angus Lovell et al. (2015) WL 3658066, Section 7031 also protects the builders and contractors from cagey pleading practices by Plaintiff homeowners.

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SB 652: Homeowners Required To Notify Potential Buyers Of Construction Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Beginning July 1, 2014, SB 652 amends the Transfer Disclosure Statement required under Civil Code §1102.6 for residential property, to ask sellers about the following type of specified claims “threatening or affecting” the property:

  1. Claims for damages by the seller pursuant to Civil Code § 910 or 914.
  2. Claims for breach of warranty pursuant to Civil Code §900.
  3. Claims for breach of an enhanced protection agreement pursuant to Civil Code §903.
  4. Claims alleging defect or deficiency in the property or common area improvements pursuant to Civil Code §910 or 914.

Newly enacted SB 652 requires the seller of residential property to disclose to potential purchasers all specified claims of damages related to construction defects, including all pre-litigation claims presented to the builder and the status of those claims.

Existing law, pursuant to SB 800, requires a homeowner to follow a mandatory procedure prior to filing a construction defect lawsuit. The process requires the homeowner to submit the claim to the builder, and then gives the builder a right to repair the defects. If the builder fails to make repairs, or the repairs are not adequate, the homeowner may proceed with the filing of a lawsuit. While existing law also requires that a seller of residential property disclose at the time of transfer anything that materially affects the value of the property, there is no requirement that a homeowner notify a potential buyer of a construction defect within the home.

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Colorado Update: Proposed Legislation Regarding HOA Condominium Defect Claims

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

DISCUSSION

As part of our on-going mission to monitor and track legislatures, legal decisions and developments throughout the United States that impact our clients, we share the following brief discussion of potential tort reform legislation presented in Colorado regarding construction claims by Homeowner Associations for condominiums.

Lawmakers in Colorado formally introduced SB 220, a proposed measure requiring:

  1. Condo owners to submit to alternative-dispute resolution, such as mediation or arbitration, for any construction defect claim that occurred when the homeowner association required alternative-dispute resolution, even if the requirement no longer exists at the time the claim is brought;

  2. Notice be given prior to the purchase and sale of a condominium that the homeowner association’s may require binding arbitration of certain disputes; and

  3. The association’s board to obtain the written consent of a majority of the condo owners before a construction defect lawsuit is filed on behalf of the homeowner association (emphasis added).

Currently, in Colorado, homeowner association boards are only required to obtain two condominium owners’ consent to file a construction defect lawsuit against a developer. SB 220 would real significantly increased this requirement by requiring that the association board must obtain the written consent of a majority of the condominium owners before filing a construction defect lawsuit. This helpful requirement would have had the practical impact of reducing the number of lawsuits filed and decrease the threat of frivolous lawsuits against developers. Furthermore, it would require more construction defect claims to be resolved out of court, further discouraging homeowner associations from bringing meritless claims against developers.

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Contractors: CALGreen Energy Provisions Have Been Changed

California Contractor Operations Affected by CALGreen Energy Provisions

By: Richard H. Glucksman and Jon A. Turigliatto
February 5, 2015

Energy provisions effective July 1, 2014, instead of January 1, 2014

There have been changes to California contractors whose operations are affected by residential and non-residential energy regulations or CALGreen energy provisions. Contractors are being alerted to the change in the effective date to the 2013 California Energy Code, 2013 California Administrative Code – Chapter 10, and certain energy provisions in the 2013 California Green Building Code (CALGreen).

The original effective date of January 1, 2014, for specific sections of the 2013 triennial edition of the California Building Standards Code, Title 24, has been changed to July 1, 2014.

The California Energy Commission (CEC) experienced unanticipated delays necessitating the CEC energy related provisions. The California Building Standards Commission (CBSC) approved the CEC action and issued Information Bulletin 13-07 on December 18, 2013, announcing the delayed effective date.

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