By Glen C. Hansen

Civil Code section 895 et seq. (i.e., the “Fix-it Law”) establishes procedures and requirements with respect to construction defect cases involving homes and homeowners.  Section 910 sets out “prelitigation procedures” to be followed by plaintiffs before a suit can be filed, procedures that can be summarized as “notice and opportunity to repair.”  Section 912 in turn sets out certain requirements for builders with respect to documentation and information to be provided to homeowners.  As a sanction, or incentive to comply, section 912 also provides, in subdivision (i), that “any builder who fails to comply with any of these requirements within the specified time is not entitled to the protection of this chapter, and the homeowner is released from the requirements of this chapter and may proceed with the filing of an action, in which case the remaining chapters of this part shall continue to apply to the action.”  In Standard Pacific Corp. v. Superior Court of San Bernardino County (August 14, 2009) 176 Cal.App.4th 828, the Court of Appeal of California, Fourth Appellate District, addressed the issues of whether a plaintiff homeowner who does not follow the procedures set out in section 910 must first establish the builder’s noncompliance with section 912, or whether the plaintiff is free to file suit and need not step back to perform the “notice and opportunity to repair” position until the builder affirmatively establishes that it has complied with its own obligations. The Court of Appeal held that the burden was upon the plaintiff homeowner to either comply with section 910 or to establish that the plaintiff did not have to follow those procedures.

In Standard Pacific, plaintiff homeowners filed an action that alleged causes of action based on problems relating to the construction of homes located within a development undertaken by defendant builder.  The complaint did not allege that homeowners had complied with the Fix-it Law by giving builder an opportunity to repair the claimed defects. Builder brought a motion under Civil Code section 930, subdivision (b), to stay proceedings until homeowners complied with their obligations. Homeowners responded with the argument that because builder had not complied with section 912, they did not have to follow the “prelitigation procedures.”  This assertion was not supported by any factual showing that the builder had, in fact, breached any of its obligations; implicitly it was the position of homeowners that the builder had to affirmatively establish its compliance. The trial court accepted the homeowners’ argument, denied the motion and awarded $1,000 in sanctions. Builder petitioned the Court of Appeal for a peremptory writ of mandate. The Court of Appeal issued the writ and directed the superior court to vacate the order denying the builder’s motion and to vacate the sanctions order.

On appeal, the homeowners argued that a builder may ‘opt-in’ or ‘elect’ to be covered by the prelitigation procedure by complying with the notice and documentation provisions. The Court of Appeal disagreed, noting that the provisions are mandatory. The Court explained that the homeowner’s obligation to follow the prelitigation procedure is the norm under the Fix-it Law.  The Court applied the general rule that a party seeking to rely on an exception to a general rule has the burden of proving the exception. In light of that rule, the Court held: “[I]f a homeowner files suit without having followed the prelitigation procedures, it is incumbent upon the homeowner to factually establish that he has been released from this obligation due to the builder’s failure to comply with section 912.” The Court directed the trial court to rehear the builder’s motion to stay, giving the homeowners the opportunity to explain in what manner, at what time, or with respect to which of the notice and documentation duties builder had failed to comply. On remand, the motion was to be granted by the trial court unless homeowners presented sufficient evidence to carry their burden of showing builder’s noncompliance with section 912.

Glen C. Hansen is a senior associate at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.