Lantzy v. Centex Homes

107 Cal. Rptr. 2d 795, 89 Cal. App. 4th 1059
CourtCalifornia Court of Appeal
DecidedAugust 22, 2001
DocketA091838
StatusPublished
Cited by1 cases

This text of 107 Cal. Rptr. 2d 795 (Lantzy v. Centex Homes) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lantzy v. Centex Homes, 107 Cal. Rptr. 2d 795, 89 Cal. App. 4th 1059 (Cal. Ct. App. 2001).

Opinion

107 Cal.Rptr.2d 795 (2001)
89 Cal.App.4th 1059

Henry V. LANTZY et al., Plaintiffs and Appellants,
v.
CENTEX HOMES et al., Defendants and Respondents.

No. A091838.

Court of Appeal, First District, Division Five.

June 8, 2001.
Review Granted August 22, 2001.

*796 Dawn R. Brennan, San Diego, Alan R. Johnston, San Francisco, Duke Gerstel Shearer, for plaintiffs and appellants.

Kenneth M. Miller, San Diego, Kathleen M. DeLaney, Walnut Creek, Morgan, Miller & Blair, for defendants and respondents.

JONES, P.J.

In this case, we will hold that the 10-year statute of limitations set forth in Code of Civil Procedure[1] section 337.15, for actions to recover damages for latent construction defects, is subject to equitable tolling during periods of repair. In reaching this conclusion, we will agree with holdings in Cascade Gardens Homeowners Assn. v. McKellar & Associates (1987) 194 Cal.App.3d 1252, 240 Cal.Rptr. 113 (Cascade Gardens), and Grange Debris Box & Wrecking Co. v. Superior Court (1993) 16 Cal.App.4th 1349, 20 Cal.Rptr.2d 515, and *797 disagree with the contrary holding in FNB Mortgage Corp. v. Pacific General Group (1999) 76 Cal.App.4th 1116, 90 Cal.Rptr.2d 841 (FNB Mortgage).

I. FACTUAL AND PROCEDURAL BACKGROUND

Centex Homes developed and constructed 450 single family homes in the Eagles Ridge subdivision in Antioch. The development was substantially completed in November 1988.

Appellants in this action are a group of persons who own homes in the Eagles Ridge subdivision. In August 1999, appellants filed a complaint against Centex Homes and various related entities (collectively Centex), alleging that their homes contained defective windows and window systems. The complaint was framed as a class action. It sought damages under three theories: breach of implied warranty, strict liability, and negligence.

Centex filed a demurrer, arguing it was entitled to prevail, as a matter of law, because the complaint was untimely under the 10-year statute of limitations set forth in section 337.15. Appellants opposed the demurrer noting they had alleged in their complaint that Centex had tried to repair the defective conditions. Appellants argued the statute of limitations was tolled during the period of repair. Alternately, appellants argued Centex was equitably estopped to assert the statute of limitations as a defense because Centex had repeatedly promised to repair the defective conditions and thus caused appellants to delay filing suit.

The trial court ruled the 10-year statute of limitations set forth in section 337.15 was not subject to equitable tolling during periods of repair, and sustained the demurrer without leave to amend. This appeal followed.

II. DISCUSSION

A. Equitable Tolling

Appellants contend the trial court erred when it sustained the demurrer to their complaint. We agree.

Section 337.15 sets forth a 10-year statute of limitations for actions seeking damages based on latent construction defects.[2] The statute, on its face, would appear to bar appellants' suit.

Statutes of limitations will not, however, be applied inflexibly where principles of equity and justice favor the application of equitable tolling, and where suspension of the running of a statute does not frustrate its primary purpose—to prevent surprise through the revival of stale claims. (Elkins v. Derby (1974) 12 Cal.3d 410, 417-418, 115 Cal.Rptr. 641, 525 P.2d 81. See also Kleinecke v. Montecito Water Dist. (1983) 147 Cal.App.3d 240, 247, 195 Cal.Rptr. 58.) In appropriate circumstances, compliance with a statute of limitations will be excused by imposition of an estoppel (Battuello v. Battuello (1998) 64 Cal.App.4th 842, 847-848, 75 Cal.Rptr.2d 548), or a statute will be tolled for sound reasons of public policy. (Elkins v. Derby, *798 supra, 12 Cal.3d at pp. 417-420, 115 Cal. Rptr. 641, 525 P.2d 81.)

Application of this principle in the context of construction litigation is noted in Witkin's treatise on California Procedure. "In cases involving construction defects, defective products, and other breaches of warranty, the statute of limitations is tolled during each period the defendant attempts to repair the defect." (3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 684, p. 871.) As our Supreme Court explained in a related context, "The statute of limitations is tolled where one who has breached a warranty claims that the defect can be repaired and attempts to make repairs." (Aced v. Hobbs-Sesack Plumbing Co. (1961) 55 Cal.2d 573, 585, 12 Cal. Rptr. 257, 360 P.2d 897; see also Mack v. Hugh W. Comstock Associates (1964) 225 Cal.App.2d 583, 589-590, 37 Cal.Rptr. 466, Southern Cal. Enterprises v. D.N. & E. Walter & Co. (1947) 78 Cal.App.2d 750, 755,178 P.2d 785.)

In Cascade Gardens, supra, 194 Cal. App.3d 1252, 240 Cal.Rptr. 113, the court extended these principles to section 337.15. There, a condominium homeowners' association filed suit against a developer for damages caused by roof leaks. The record indicated the developer had been notified of the leaks, and that it had tried to repair them. The developer filed a motion for summary judgment arguing it was entitled to prevail because the suit was not filed within 10 years as was required by section 337.15. The trial court agreed and granted the motion. The homeowners' association appealed, and the appellate court reversed. The court framed the dispositive issue as being "whether the statute of limitations set forth by section 337.15 was tolled or suspended during [the] `period of repair.'" (Id. at p. 1256, 240 Cal.Rptr. 113.) The court's holding was unequivocal. "Clear authority establishes that repairs, such as those undertaken by [the developer], toll statutes of limitations as a matter of law." (Ibid., citations omitted.)

Subsequently, the court in Grange Debris Box & Wrecking Co. v. Superior Court, supra, 16 Cal.App.4th 1349, 20 Cal. Rptr.2d 515, reached the same conclusion, albeit in a summary fashion. There, the court acknowledged that the statute of limitations set forth in section 337.15 is tolled during periods of repair. (Id. at p. 1360, 20 Cal.Rptr.2d 515.)

We reach the same conclusion here. While appellants did not file their complaint within 10 years of the date on which their homes were substantially completed, they alleged in their complaint that Centex had tried to repair the defective conditions. Appellants did not state expressly the amount of time involved. However the absence of this factual allegation is of no moment. The parties frame the issue as a question of law: does section 337.15 impose an absolute limit on actions or is it tolled during periods of repair? Respondents make no contention that appellants' complaint fails to allege substantial repairs sufficient to toll the statute. We agree with Cascade Gardens and Grange Debris Box and hold that section 337.15 is tolled during periods of repair. The court erred when it sustained Centex's demurrer.

Centex contends the trial court's ruling should be affirmed under the recent decision in FNB Mortgage, supra,

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