Avner v. Longridge Estates

By a document entitled Order of Dismissal after Sustaining of Demurrer without Leave to Amend and Order Permitting Limited Amendment, the dismissal of plaintiffs’ first six causes of action was ordered. (Code Civ. Proc., § 581, subd. 3.) Amendment of the complaint as to the seventh and eighth causes of action directed against defendant Warren Company, who is not a party to this appeal, was permitted. The appeal is being taken from the judgment of dismissal in favor of defendants.

The complaint as to which the demurrers were sustained and which is before us for consideration is captioned “Amendment to First Amended Complaint.” It restates the first five causes of action of the first amended complaint and adds thereto three additional causes of action. Since the apparent intent was to supersede entirely the first amended complaint, it properly should have been captioned “Second Amended Complaint. ’ ’

Facts Alleged

Sometime prior to 1960, defendant Longridge Estates (Longridge) owned hillside property in the Santa Monica Mountains, Los Angeles County, and developed it into a tract of residential lots. Defendants D. S. Hamner (Plamner) and Donald R. Warren Company (Warren) did the general engineering and soils engineering, respectively, for the tract. In 1960, plaintiffs’ predecessor in interest purchased a lot in the tract and built a house thereon. Plaintiffs purchased the house and lot on June 15,1960.

In February 1962, a portion of the rear slope of the lot

In November 1965, the rear slope of the lot failed in a different location from the 1962 failure. The damages resulting from this second slope failure are the subject of plaintiffs’ first, third and fifth causes of action on the theories of strict liability, negligence and building code violations, respectively.

Also, in November 1965, the lot pad settled, allegedly due to the decomposition of organic matter and insufficient compaction at the time of the lot preparation. The damages resulting from the settling of the pad are made the subject of the second, fourth and sixth causes of action, on the theories of strict liability, negligence and building code violations, respectively.

Plaintiffs filed their complaint against defendants on July 1, 1966. The first six causes of action are against defendant Longridge; the third through sixth against defendant Hamner; the seventh and eighth against defendant Warren. The demurrers to the first six causes of action were sustained without leave to amend on the ground that they were barred by the three-year period of limitations of section 338, subdivision 2, Code of Civil Procedure, and as to the first and second causes of action on the additional ground that “there is no doctrine of strict liability as to the manufacture of residential lots.” Plaintiffs appeal from the judgment of dismissal entered thereafter.

Strict Liability

Plaintiffs rely on Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224 , 227 [ 74 Cal.Rptr. 749 ] (hearing denied), holding that the doctrine of strict liability may be applied in a suit by a homeowner based on defective construction against one engaged in the mass production and sale of tract homes. In Kriegler, defendant had constructed over 4,000 homes in which steel tubing radiant heating systems had been installed in the concrete floor slab. Kriegler’s predecessor bought one of the homes in 1952, and plaintiff purchased it in 1957. In 1959 due to corrosion, the steel tubing failed, causing

“We think, in terms of today's society, there are no meaningful distinctions between Eichler’s mass production and sale of homes and the mass production and sale of automobiles and that the pertinent overriding policy considerations are the same. Law, as an instrument of justice, has infinite capacity for growth to meet changing needs and mores. Nowhere is this better illustrated than in the recent developments in the field of products liability. The law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping legal principles abreast of the times. Ancient distinctions that make no sense in today’s society and that tend to discredit the law should be readily rejected as they were step by step in Greenman [v. Yuba Power Products, Inc., 59 Cal.2d 57 ( 27 Cal.Rptr. 697 , 377 P.2d 897 , 13 A.L.R.3d 1049 ) ] and Vandermark [v. Ford Motor Co., 61 Cal.2d 256 ( 37 Cal.Rptr. 896 , 391 P.2d 168 )].”

The Court of Appeal relied on Schipper v. Levitt & Sons, Inc., 44 N. J. 70 [ 207 A.2d 314 ], wherein the purchaser of a mass-produced home sued the builder-vendor for injuries suffered as a result of a defective hot water system, and noted that it was “a defect as latent as the incorrect positioning of the pipes in the instant case.” (P. 228.) In holding that the doctrine of strict liability was applicable, the New Jersey Supreme Court said: “When a vendee buys a development house from an advertised model, as in a Levitt or in a comparable project, he clearly relies on the skill of the developer and on its implied representation that the house will be erected in reasonably workmanlike manner and will be reasonably fit for habitation. He has no architect or other professional adviser of his own, he has no real competency to inspect on his own, his actual examination is, in the nature of things, largely superficial, and his opportunity for obtaining meaningful protective changes in the conveyancing documents prepared by the builder vendor is negligible. If there is improper construction such as a defective heating system or a defective ceiling, stairway and the like, the well-being of the vendee and others is seriously endangered and serious injury is foreseeable. The public interest dictates that if such injury does

“Buyers of mass produced development homes are not on an equal footing with the builder vendors and are no more able to protect themselves in the deed than are automobile purchasers in a position to protect themselves in the bill of sale.” (Pp. 325-326.)

As noted by the New Jersey Supreme Court in Schipper and our Court of Appeal in Kriegler, “ [T]he imposition of strict liability principles on builders and developers would not make them insurers of the safety of all who thereafter came on the premises. In determining whether the house was defective, the test would be one of reasonableness rather than perfection.” (Kriegler v. Eichler Homes, Inc., 228.)

The Court of Appeal concluded its opinion in Kriegler by stating on pages 228-229: “As it cannot be disputed that Kriegler here relied on the skill of Eichler in producing a home with a heating system that was reasonably fit for its intended purpose, the trial court properly concluded that Eichler was liable to Kriegler on the basis of strict liability, and the judgment in favor of Kriegler must be affirmed on that ground alone.”

In attempting to distinguish Kriegler from the instant case, defendants correctly point out that Kriegler related to defects in equipment installed in a house manufactured by defendant therein, that it did not concern alleged defects in the soil of real property sold by defendant, and argue that the comparison of the mass production of houses and the mass production of automobiles is sound but that no such comparison is possible with respect to the underlying soil. Defendants further state that although a land developer may grade property, cut from the soil and fill depressions, he does not alter the basic characteristics of the soil and must contend with the various natural and latent conditions which may be existent in the soil and its subsurface, and that neither the builder of houses nor the manufacturer of an automobile has such considerations.

We question the soundness of the preceding assertion. It is common knowledge that with modern grading and trucking equipment, earth is moved considerable distances for filling purposes, that it is not improbable for the imported soil to

Defendants rely on Beck v. Bel Air Properties, Inc. (1955) 134 Cal.App.2d 834 [ 286 P.2d 503 ] (hearing denied), and Conolley v. Bull (1968) 258 Cal.App.2d 183 [ 65 Cal.Rptr. 689 ] (hearing denied). In Beck, plaintiffs purchased a hillside lot in a tract developed by defendants and built a residence thereon. Plaintiffs alleged that two fills were negligently constructed on the hillside to the rear and above their lot in that large quantities of soil and rock were cut from the top of the slope, were pushed over the summit above their lot, were left there unsupported, and that heavy rains caused the loose soil and rocks to flow over plaintiffs’ property. Among other causes of action, plaintiffs alleged absolute liability. After discussing Green v. General Petroleum Corp., 205 Cal. 328 [ 270 P. 952 , 60 A.L.R. 475 ], and other cases dealing with ultrahazardous activities wherein the doctrine of absolute liability had been imposed, the court asked itself and answered the following question at page 842:

1 ‘ Should earth moving operations incident to subdividing and grading hills and slopes into building sites be grouped with escaping gas, oil drilling and dynamiting? Or, is it an activity that ordinarily can be safely carried on, if reasonable care is used?

‘1 This court is inclined to the latter view. ( i

“ [T]he creation, construction and maintenance of hillside fills is a matter of common usage. Cutting, leveling and filling are the inevitable, constant and ordinary methods pursued in the development of hillside areas.

“It follows that the instant activity is not so obviously and plainly ultrahazardous as to impose liability regardless of the care used. ’ ’

In Conolley v. Bull, supra (1968) 258 Cal.App.2d 183 (hearing denied), defendant build a house on a hillside lot. During construction he was advised that the underground movement of subsurface water created a spring in the area that caused slides to occur, and that he should engage a commercial soil testing laboratory to recommend a feasible drain

In closing, the court in Conolley v. Bull, supra (1968) 258 Cal.App.2d 183 , stated at pages 196-197: “the laws governing sales of real property, like those regulating landlord and tenant relationships, have developed along different lines from those laws governing sales of commercial goods. Thus, the Uniform Commercial Code does not treat the subject of express and implied warranities in contracts for the purchase of real property or in grant deeds. The property cases which have developed the relevant governing principles for this area of the law state no doctrine of strict liability in tort for sales of defective real estate. In view of the fact that sales of real estate normally take considerable time to transact, thus affording prospective purchasers ample time to assure themselves of the condition of the property, and in view of the distinctions pointed out in Halliday, we hold that the strict liability in tort doctrine of Greenman has no application to this case. ’ ’

It is significant that in Conolley recovery in negligence was affirmed; its discussion of strict liability was dictum. In Sabella v. Wisler, 59 Cal.2d 21 [ 27 Cal.Rptr. 689 , 377 P.2d 889 ], cited in Conolley, wherein a house had been constructed on loose fill, the defendant builder’s liability was predicated solely upon negligence; strict liability was neither pleaded nor discussed by the court in its opinion.

We note, however, that in neither ease was the doctrine of strict liability in tort pleaded or discussed. The argument is answered by our Supreme Court in Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57 , 63 [ 27 Cal.Rptr. 697 , 377 P.2d 897 , 13 A.L.R.3d 1049 ]: “. . . the refusal to permit the manufacturer to define the scope of its own responsibility for defective products [citations] make clear that the liability is not one governed by the law of contract warranties but by the law of strict liability in tort. ’ ’

The question of the liability of a manufacturer of a lot to the ultimate occupier thereof for damages suffered by the latter as the result of latent defects in the manufacturing process appears to be one of first impression. Although factually the question could have been presented in Beck v. Bel Air Properties, Inc., supra, (1955) 134 Cal.App.2d 834 , the issue was not raised. Beck was disposed of by a determination that absolute liability should not attach because the developer of a lot is not engaged in an ultra-hazardous activity.

The doctrine of strict liability was developed after Beck. (See history of its evolvement, Greenman v. Yuba Power Products, Inc., supra, (1963) 59 Cal.2d 57 , 62.) The dictum in Conolley v. Bull, supra (1968) 258 Cal.App.2d 183 , 196. was based on the reasoning of the court, quoted above, in Holliday v. Greene (1966) 244 Cal.App.2d 482 , 486-487 [ 53 Cal.Rptr. 267 ], as to three important distinctions between products liability and construction cases. We question their soundness as

Statute of Limitations

Plaintiffs do not seek any relief in this action in connection with the 1962 slope failure. They concede an action based thereon would be barred by the three-year period of limitations. (Code Civ. Proc., § 338, subd. 2.) They allege that the causes of action that arose from the 1965 incidents were separate and distinct from those which accrued in 1962; that they could not have been anticipated prior to November 1965, by a reasonable person in the exercise of due diligence, and that since they filed their complaint on July 1, 1966, they are within the three-year period of limitations. Defendants contend that the pleadings affirmatively admit that plaintiffs had knowledge of the alleged defects in 1962; that all causes of action accrued in 1962, and that the three-year period of limitations is a bar to their action filed in 1966.

Recently our court had before it for consideration the case of Oakes v. McCarthy Co., 267 Cal.App.2d 231 [ 73 Cal.Rptr. 127 ], a suit by a homeowner against the subdividerbuilder of a tract of homes. The lot, like others in the tract, had been manufactured by cutting, filling and grading. Plaintiffs purchased the lot in January 1956, and moved into the house upon its completion in September, 1956. When they took possession, they noticed a hairline crack in the patio cement; by May 1958, it was a quarter-inch in width. In September 1956, they also noticed a hairline crack in the stucco. In January 1957, they noticed settling in the yard which caused drainage erosion on a bank. In February 1957, they observed that doors in the house were binding. Other

We hold that the allegations of plaintiffs’ complaint bring the plaintiffs within the exception noted; that if plaintiffs can prove there were two new causes of action arising in 1965, their action is not barred by section 338, subdivision 2, Code of Civil Procedure; that if only a single cause existed, the one arising in 1962, as contended by defendants, then the action is barred. It is a question of fact for determination at trial, not on demurrer.

Defendants contend that plaintiffs had imputed knowledge from their agent, defendant Warren, that the entire lot and slope were defective in 1962. Prom the facts pleaded it would appear that Warren was an independent contractor. However, the existence of an agency is a question of fact, and one to be determined at trial. (Brokaw v. Black-Foxe Military Institute, 37 Cal.2d 274 , 278 [ 231 P.2d 816 ]; Housewright v. Pacific Far Fast Line, Inc., 229 Cal.App.2d 259 , 265 [ 40 Cal. Rptr. 208 ].)

On appeal defendant Hamner contends that the action against him is one for negligence in the performance of personal services, similar to that of attorney malpractice; that the action accrued at the date of the alleged malpractice, not when the damage was discovered (Shelly v. Hansen, 244 Cal.App.2d 210 [ 53 Cal.Rptr. 20 ]; Griffith v. Zavlaris, 215 Cal. App.2d 826 [ 30 Cal.Rptr. 517 ]), and is therefore barred by the two-year period of limitations of section 339. subdivision 1, Code of Civil Procedure. The two-year limitation period is applicable only if the trier of fact determines that Hamner’s undertaking was one solely of giving professional advice and opinions. (Oakes v. McCarthy Co., supra, 267 Cal.App.2d

In concluding our comments we emphasize that we have liberally construed the allegations of the complaint in the light most favorable to plaintiffs. In stating the facts herein, we have stated facts which have not yet been proved and may never be. Demurrer rulings “are untrustworthy source materials for fact finders.’’ (Garlock v. Cole, 199 Cal.App.2d 11 , 17 [ 18 Cal.Rptr. 393 ].) Our holding may be summarized briefly by stating that under the allegations of the complaint, questions of fact are raised that must be determined by trial, not by demurrer.

Judgment of dismissal is reversed; the trial court is instructed to overrule the general demurrers to the first six causes of action and to grant defendants a reasonable time within which to plead to the amended complaint.

Ford, P. J., and Cobey, J., concurred.

A petition for a rehearing was denied May 26, 1969, and the petition of respondent Longridge Estates for a hearing by the Supreme Court was denied July 2, 1969.