2013-00142658-CU-CD

Mark Berman vs. KB Home Sacramento Inc

Nature of Proceeding: Motion Enforcing Mandated Claim Requirements and Stay Proceedings

Filed By: Poza, Carlos K.

Defendants KB Home Sacramento, Inc. and KB North Bay, Inc.’s motion seeking: (1)

enforcement of statutorily mandated claim requirements, and (2) stay of all further
proceedings pending Plaintiffs’ compliance with the statute is ruled upon as follows.

This is a construction defect action. Plaintiffs’ second amended complaint (“SAC”)
includes causes of action for Strict Liability, Negligence, Breach of Contract, and
Breach of Express Warranty. Defendants move to compel Plaintiffs’ compliance with
the notice of claim and procedural pre-litigation requirements of California’s “Right to
Repair” statute (SB 800). The Court notes that Plaintiffs’ first amended complaint
included a cause of action for Violation of Building Standards as set forth in Cal. Civ.
Code §896. However, the SAC does not include the Cal. Civ. Code §896 cause of
action.

According to Defendants, they have never received Notice putting them on notice of
the homeowners’ investigation into potential violations as required by SB 800. Thus,
Defendants request the Court compel Plaintiffs to comply with the SB 800
requirements and stay the action pending compliance.

SB 800 was intended to address both builders’ concerns about the costs of
construction defect litigation, and homeowners’ concerns over recent legal decisions
prohibiting suit until actual damage was incurred. (Standard Pacific Corp. v. Superior
Court (2009) 176 Cal.App.4th 828, 832.) SB 800 sets forth a uniform set of
construction standards (Civil Code § 896), and permits claimants to “make a claim for
a violation of the standards” by alleging that the “home does not meet the applicable
standard.” (See Civil Code § 942.) Further, SB 800 provides builders with an absolute
right to investigate (Civil Code § 916(a), (c)), repair (Civil Code § 918), or compromise
(Civil Code § 929(a)) any claimed violation of SB 800’s standards. Claimants subject
to these provisions must comply with the pre-litigation procedures set forth therein, as
an absolute precondition to commencing litigation for a claimed violation of a building
standard. (See Civil Code § 910(a); Standard Pacific Corp. v. Superior Court (2009)
176 Cal.App. 4th 828.)

In opposition to the motion, Plaintiffs argue that recent case law does not preclude
common law claims for damages for construction defects that have caused property
damage. (Liberty Mutual Ins. Co. v. Brookfield Crystal Cove LLC (2013) 219 Cal App
4th 98 [the Right to Repair Act does not provide the exclusive remedy at where actual
damage has occurred (“Liberty Mutual”)]; Burch v. Superior Court (2014) 223
th
Cal.App.4 1411 (“Burch”).) Thus, according to Plaintiffs, because they now only
assert common law causes of action and the SAC no longer includes a cause of action
for violation of the performance standards set forth in SB 800, they are not required to
comply with SB 800.

In Liberty Mutual, the court held that an insurer’s complaint in subrogation, based on a
homeowner’s right to recover actual damages from the seller for relocation costs
during a repair, stated causes of action for strict liability, negligence, breach of
contract, breach of warranty, equitable estoppel, and declaratory relief. With respect
to the SB 800 prelitigation notice requirements, the court explained that in the case of
an actual catastrophic loss, such detailed timeframes would be unnecessary and
nonsensical because it would require a homeowner whose property was severely
damaged to await a solution during a lengthy process. (Id. 106.) The court explained
that such a result would effectively “extinguish the subrogation rights of all
homeowners insurers that promptly cover their insureds’ catastrophic losses.” (Id.
106.) The court stated “there is nothing in the Act or in its legislative history that shows

that the Legislature intended to eliminate those subrogation rights.” (Id.)

Here, there is no indication that Plaintiffs suffered a catastrophic loss like the
homeowner in Liberty Mutual who was required to move into a hotel for several
months while the home was repaired. There is also no indication that Plaintiffs’
insurers may have a subrogation claim against Defendants. Indeed, there is no
evidence that Plaintiffs’ insurers have paid any sums to Plaintiffs for any loss caused
by Defendants.

Moreover, Burch does not stand for the proposition that Plaintiffs need not comply with
SB 800. It simply held SB 800 does not provide the exclusive remedy for a homebuyer
seeking damages for construction defects that resulted in property damage. It is
axiomatic that cases are not authority for propositions not considered.” (Silverbrand v.
County of Los Angeles (2009) 46 Cal.4th 106, 127.)

Accordingly, Defendants’ motion to enforce the SB 800 claims requirement and to stay
the action pending Plaintiffs’ compliance with the statute is GRANTED.

The Court declines to formally rule on Plaintiffs’ objections to evidence as the Court
only relied upon admissible evidence.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.

The notice of motion does not provide notice of the Court’s tentative ruling system, as
required by Local Rule 1.06(A). Defendants’ counsel is directed to contact Plaintiffs’
counsel forthwith and advise counsel of Local Rule 1.06 and the Court’s tentative
ruling procedure. If Defendants’ counsel is unable to contact Plaintiffs’ counsel prior to
hearing, Defendants’ counsel shall be available at the hearing, in person or by
telephone, in the event opposing party appears without following the procedures set
forth in Local Rule 1.06(A).