Case Name:   Edgar Yip, et al. vs. KB Home South Bay, Inc.

Case No.:       1-13-CV-250959

 

This is a construction defect action by the owners of sixteen single family homes in Milpitas, California.[1]  In the operative First Amended Complaint (“FAC”), Plaintiffs sue the developer and/or general contractor defendant KB Home South Bay, Inc. (“KB”),[2] and Doe defendants 1-100 (“Developer Defendants”), 101-200 (“Design Defendants”), 201-400 (“Contractor Defendants”), and 401-1,000 (“other persons and entities involved in the planning, design, construction, maintenance, repairs, and sale of the PROPERTY”) for: (1) strict products liability (against Developer Defendants); (2) strict products liability (against “Contractor Component Product Manufacturer Defendants”); (3) violation of building standards as set forth in California Civil Code section 896 (against all defendants); (4) breach of implied warranty of merchantability (against Developer Defendants); (5) breach of contract (against Developer Defendants); (6) negligence (against all defendants); (7) breach of express warranty (against Developer Defendants); and (8) violation of state/negligence per se (against all defendants).

 

The first, second, third and sixth causes of action are brought “Only as to Plaintiffs Not Subject to California Civil Code § 896”.  The fourth, fifth, and seventh causes of action are brought by “Original Purchaser Plaintiffs”.

 

On May 16, 2014, the Court granted in part KB’s motion to stay pending Plaintiffs’ compliance with the pre-litigation procedures of the Right to Repair Act, California Civil Code section 895 et seq. (hereinafter the “Act” or “SB 800”).  The motion was granted as to all but the fifth and seventh causes of action.  On June 26, 2014, the parties filed a joint case management statement indicating that after the motion to stay was partially granted, on or about May 23 and June 3, 2014, Plaintiffs served their SB800 notices, KB acknowledged both notices, and inspections were scheduled to begin on July 9, 2014.

 

KB now demurs to the FAC on the grounds of uncertainty and failure to state sufficient facts to constitute a cause of action.

 

Judicial Notice

 

KB requests judicial notice of sixteen grant deeds of the properties involved in this action.  The Court may take judicial notice of recorded deeds and the legal effect thereof.  (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1367, fn. 8 [recorded deeds and similar instruments are subject to judicial notice under Evidence Code section 452, subdivisions (c) and/or (h)]; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117 [judicial notice of a recorded deed, or similar document, and legal effect thereof].)  The request is GRANTED.

 

Parties’ Arguments

 

KB argues the FAC is uncertain because Plaintiffs allege that only some of the homes in this action are subject to SB 800, but Plaintiffs fail to delineate between the SB 800 homes and the non-SB 800 homes.  KB argues the fourth, fifth and seventh causes of action are uncertain because they are brought only on behalf of the “Original Purchaser Plaintiffs” but Plaintiffs fail to delineate between the original and subsequent purchasers.  KB argues that these failures frustrate its ability to defend itself because the applicability of SB 800 turns on the dates that KB executed the purchase agreements,[3] and based upon the dates of transfer set forth in the judicially-noticed grant deeds, it is likely that all of the homes in this action are subject to SB 800.

 

KB further argues the fourth, fifth and seventh causes of action fail because they arise out of purported construction defects for which SB 800 provides the exclusive remedy.  KB anticipates Plaintiffs’ reliance on Liberty Mutual Ins. Co. v. Brookfield Crystal Cove, LLC (2013) 219 Cal.App.4th 98 and argues the case is factually inapposite because it involves a subrogation claim for relocation expenses incurred during builder repairs.  KB argues the broader language of Liberty Mutual is inconsistent with both the statutory language of SB 800 and prior decisions interpreting it.

 

KB argues the fifth and seventh causes of action fail for the additional reason that Plaintiffs failed to attach written copies of the alleged contracts or pled the substance of their relevant terms.

 

Finally, KB argues the eighth cause of action for negligence per se fails because it is not a separate cause of action, but an evidentiary presumption relevant to Plaintiffs’ negligence claim.

 

In opposition, Plaintiffs concede that all of the homes in this action were originally sold on or after January 1, 2003 and are therefore subject to SB 800.  Plaintiffs further concede that the phrase “only as to Plaintiffs not subject to California Civil Code section 896” was erroneously inserted in the FAC and should be stricken, which would eliminate any uncertainty regarding the applicability of SB 800 to the homes in this action.  Plaintiffs argue the first, second, fourth, fifth, sixth, seventh and eighth causes of action for common law claims are permissible under Liberty Mutual and Burch v. Superior Court (2014) 223 Cal.App.4th 1411, which hold that SB 800 does not provide the exclusive remedy for construction defect claims.

 

Discussion

 

As requested by KB in its reply brief, the demurrer is partially HELD IN ABEYANCE to the extent it challenges the stayed causes of action.[4]  The demurrer will be held in abeyance until such time as the stay is lifted.

 

The two causes of action that were not stayed were the fifth and seventh causes of action.

The fifth cause of action is for breach of contract.  The seventh cause of action for breach of express warranty is also based in contract.  (See Windham at Carmel Mountain Ranch Assn. v. Superior Court (2003) 109 Cal.App.4th 1162, 1168 [“warranty is a contractual term concerning some aspect of the sale, such as title to the goods, or their quality or quantity”].)  For purposes of pleading, a written contract may be pled according to its legal effect, rather than in haec verba.  (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal. 4th 189, 198-199.)  Here in the fifth cause of action, Plaintiffs allege that they “entered into written sales contracts with DEVELOPER DEFENDNANTS pursuant to which DEVELOPER DEFENDANTS, in exchange for payment of certain sums, agreed to provide original purchase Plaintiffs with quality residences which were constructed in a workmanlike manner.”[5]  In the seventh cause of action, Plaintiffs allege that “Developer defendants express warranted through the Real Estate Purchase Contracts, and other documents that the subject properties were designed, constructed, developed, inspected, and manufactured, in accordance with all the applicable Federal, State and municipal law, ordinances, rules and regulations and that the subject properties were structurally sound, free of all material defects and designed and contracted for the intended purposes.  Defendants further warranted that the homes and soils constructed thereon were in good working order and condition with no deficiencies therein.”[6]  These allegations are sufficient to plead the legal effect of the written contracts and contractual warranties.

 

KB also argues the fifth and seventh causes of action are uncertain because the FAC does not delineate which Plaintiffs are original purchasers and which are subsequent purchasers.  “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. [Citation.]”  (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.)  Although KB’s point is well-taken that the FAC’s reference to “Original Purchaser Plaintiffs” creates some confusion about possible subsequent purchasers and the original purchase dates for their properties, Plaintiffs clarify in their opposition brief that all of the homes in this action are subject to SB 800.[7]

 

For these reasons, the demurrer to the fifth and seventh causes of action is OVERRULED.