Irvine Partners Ed Schmitt and Ryan Antes recently obtained a final judgment and award of costs following a summary judgment motion on a case for a major residential developer.
Initially, the Developer successfully demurred to a complaint for construction defect based on failure to allege compliance with SB 800. Plaintiffs amended to allege the “emergency exception” to mandatory compliance under McMillan Albany, LLC v. Superior Court. The court denied a subsequent motion to dismiss, holding that plaintiffs had alleged facts sufficient to overcome arguments of non-compliance at the pleading stage.
The alleged emergency was a rain driven flood which jumped the curb and put plaintiffs’ down slope rental home under four feet of water, resulting in claimed remediation damage of $193,000 and loss of rent. Plaintiffs waited until the home was repaired to notify their builder that they demanded arbitration pursuant to their purchase contract. The defense responded that the contract require SB 800 compliance prior to arbitration. Plaintiffs then sold the home and sued in LA Superior Court for repair costs and loss of use while on notice of the claims deficiency.
The deposition testimony of plaintiffs established that that there was no 18 month emergency that reasonably prevented them from providing proper notice to the Developer. A precautionary date for a motion for summary judgment was reserved by the defense following the denial of the motion to dismiss and prior to significant discovery, in light of the backlog in LA superior court that frequently results in dispositive motions being set after the trial date.
On summary judgment, the defense successfully argued that while the McMillan case’s contemplation of a potential emergency exception could conceivably apply to circumstances while the house was inundated with the flood waters, Plaintiffs took 18 months to make the repairs and never notified the Developer before completing repairs. Since they never complied with SB 800 before they sold the home and filed suit, the mandatory compliance was rendered an impossibility by their own conduct. The court found that plaintiffs did not comply with SB 800 and conceded that the doctrine of laches was applicable to these facts. The defense made a Statutory Offer to Compromise (California Code of Civil Procedure section 998) offer before bringing the MSJ, which added expert fees to the cost bill.