McMillin Albany, LLC v Superior Court of Kern County Establishes Exclusivity of Right to Repair Act
In 2018 the California Supreme Court in McMillin Albany, LLC v Superior Court of Kern County, 4 Cal. 5th 241 (2018) settled a contentious split of authority regarding the exclusivity of the remedies and pre-litigation procedures of California’s Right to Repair Act (Civil Code § 895 et seq.) This decision brought uniformity to the application of the Right to Repair Act to residential construction defect claims. Prior to McMillin, the Courts of Appeal were divided on the question of whether the owner of a newly constructed residential unit was able to pursue common law negligence claims for construction defects without regard for the procedural strictures of the Right to Repair Act, or whether the provisions of the Right to Repair Act represent an exclusive remedy. McMillin declared that common law claims for construction defects were effectively preempted by the Right to Repair Act, and that the Act’s pre-litigation procedures were mandatory regardless of the theory of recovery pleaded. McMillin noted that certain statutory exceptions to the exclusivity of the Right to Repair Act might exist, however the Court did not define those exceptions.
State Farm General Ins. Co. v Oetiker Exempts Strict Products Liability from The Right to Repair Act
In December 2020, the California Court of Appeal in State Farm General Ins. v Oetiker 58 Cal.App.5th 940 (2020), provided guidance as to at least one such exception. In that matter, a subrogation claim was brought on behalf of a homeowner against the manufacturer of a plumbing component (an ear clamp) that was defectively manufactured, failed, and resulted in substantial water damage to the residential structure. The plaintiff alleged theories for negligence, strict liability, and breach of implied warranty, which were dismissed by the trial court as barred by the ten-year statute of repose of the Right to Repair Act. The Court of Appeal reversed the trial court’s decision as to the claims for strict products liability and breach of implied warranty only – upholding the dismissal of the plaintiff’s negligence claim. These claims, the Court reasoned, fall outside of the scope of the Right to Repair Act.
Related to product manufacturers, the Right to Repair Act will only preempt common law claims that are founded in negligence and breach of contract. Specifically, Civil Code section 936 expressly provides that the Right to Repair Act will only apply to product manufacturers: “to the extent that [they] caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract.” Relying on this language, the Court of Appeal found that the Right to Repair Act will not preclude common law claims against product manufacturers based upon strict liability and breach of implied warranty theories. Thus, for this narrow category of claims, the pre-litigation notice procedures and statutes of repose found in the Right to Repair Act will not apply.
Ultimately, the decision in Oetiker presents a limited exception to an otherwise comprehensive statutory structure for construction defect claims. The Supreme Court’s holding in McMillin will apply to the vast majority of construction claims related to new residential construction.
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