Eden v. Van Tine

alleges that at the time of sale, plaintiffs inquired of sellers and their brokers whether any defects existed in the stability of the property and the residence. In response they were told that the real property was stable and that the residence was structurally sound, and that the only defect in the property was a minor crack in the patio which occurred in 1966, which had not changed. Plaintiffs believed and relied on said representations and were induced thereby to purchase the real property.

On or about December 1, 1972, after the purchase had been completed and plaintiffs had taken possession of the premises, they discovered that a substantial section of a patio wall had failed and toppled down a slope, a fact which sellers and brokers had concealed from them. (Plaintiffs alleged this was not seen prior to purchase because of a dense hedge growth.) Upon discovery, plaintiffs employed engineers and geologists who discovered that the land was in fact unstable, and that the residence suffered substantial structural distress requiring considerable reconstruction of the property.

The second cause of action is against respondents Van Tine and Maro, seeking damages against these defendants predicated upon theories of negligence and strict liability in the development and construction of subject property.^[1] Van Tine was a coowner-builder. The notice, of completion was signed by Van Tine and Moore-Griffin Co., owners in fee title of the subject real property, and recorded on February 5, 1963. On October 14, 1963, a grant deed was recorded that, was executed by Van Tine and Moore-Griffin Co., a partnership, conveying title to sellers Paul and Esther Suskin.

Maro was engaged by Van Tine in 1962 as the soil engineer to perform tests and to supervise and control the compaction of fill on the subject property. In June of 1962, Maro performed these services and prepared and submitted a compaction report and certification.

Van Tine cross-complained for indemnity against Maro and others. Van Tine’s cross-complaint was dismissed because of the dismissal of plaintiffs’ cause of action against Van Tine.

In substance, the minute order of the trial court held that plaintiffs’ cause of action was barred by section 337.15, subdivision (a), of the Code

of Civil Procedure because the residence was habitable (substantially completed) when the notice of completion was recorded on February 5, 1963, and the complaint was filed more than 10 years after that date.^[2] The trial court also found that the defects were patent rather than latent; therefore, the cause of action was barred by section 337.1 of the Code of Civil Procedure.^[3]

Issues

Plaintiffs identify the issues as follows:

Section 337.15 of the Code of Civil Procedure is inapplicable for the following reasons: (1) the meaning of “substantial completion” in the section refers to date of sale to the first consumer or initial occupancy. That this first occurred on October 14, 1963, when Van Tine and Moore-Griffin Co. conveyed title to the Suskins; therefore, the action was commenced within the 10-year period. (2) The statute is so vague as to be unconstitutional. (3) The statute cannot be applied retroactively.

Disposition

(1) Under section 337.15, the 10-year statute of limitation period commences when the construction or improvement is substantially completed. Plaintiffs argue that the legislative history of the section discloses that the Legislature meant the phrase “substantially completed” to mean the time of sale or delivery of the “product” (the house) to the buyers. We disagree with plaintiffs that the legislative histoiy of the bill

justifies this interpretation of the phrase.^[4] If the Legislature had wanted to give the phrase a more restricted definition, it would have been very easy for it to have stated in section 337.15 that the 10-year period began on the first sale or delivery of the product, or words of like import. Refusal to incorporate appropriate language, after consideration of this issue (which is the most that the histoiy of the bill suggests), strongly implies a rejection of the meaning suggested by plain tiff's. Furthermore, a definition of the phrase was unnecessary. Section 337.15 deals with real property works of improvement within the meaning of section 3082 et seq. of the Civil Code.^[5] Section 3086, in pertinent part, provides: “ ‘Completion’ means, in the case of any work of improvement other than a public work, actual completion of the work of improvement. Any of the following shall be deemed equivalent to a completion:

“(a) The occupation or use of a work of improvement by the owner, or his agent, accompanied by cessation of labor thereon.

“(b) The acceptance by the owner, or his agent of the work of improvement. . . .” (Italics added.) The section has specifically made “occupation” or “acceptance” an alternative to “actual completion.” The definition of “substantial performance” is certainly compatible with these two alternatives.

“ ‘Excepting when clearly otherwise intended or indicated, words in a statute should be given their ordinary meaning and receive a sensible construction in accord with the commonly understood meaning thereof.’ ” (Gawzner Corp. v. Minier, 46 Cal.App.3d 777 , 783 [ 120 Cal.Rptr. 344 , 80 A.L.R.3d 726 ], citing County of Los Angeles v. Frisbie, 19 Cal.2d 634 , 642 [ 122 P.2d 526 ].) (Italics added.) “Legislative enactments are to be construed in accordance with the ordinary meaning of the language used, if the words are not ambiguous and do not lead to an absurdity” (Centinela Valley Secondary Teachers Assn. v. Centinela Valley Union

High Sch. Dist., 37 Cal.App.3d 35 , 42-43 [ 112 Cal.Rptr. 27 ]), and in construing such language the courts may not insert any omitted provision. (See Code Civ. Proc., § 1858.) We are satisfied that the phrase “substantial completion” refers to a point in time that is easily ascertainable. It is possible that on some occasions the date of “substantial completion” will coincide with first delivery or first occupancy of the improvement (as urged by plaintiffs), but for the reasons stated, an earlier date is not precluded.

No evidence was produced by plaintiffs that the “Notice of Completion” was improperly recorded prior to substantial completion of the residence.^[6] We therefore conclude there was “completion” of the improvement within Civil Code section 3086 and “substantial completion” under Code of Civil Procedure section 337.15, and the ten-year period commenced no later than February 5, 1963 (the recording date of the “Notice of Completion”).

(2) Plaintiffs claim section 337.15 is unconstitutional because (a) there has been no prior judicial construction of its meaning; (b) it is vague and uncertain because the Legislature failed to define “substantial completion” which lacks a common law or industry-wide meaning; and (c) it is vague and uncertain because subdivision (e) is not “crystal clear.” Arguments (a) and (b) are meritless. Our opinion supra, answers these contentions.

The third argument ((c) above) requires a response. Code of Civil Procedure section 337.15, subdivision (e) provides as follows: “The limitation prescribed by this section shall not be asserted by way of defense by any person in actual possession or the control, as owner, tenant ór otherwise, of such an improvement, at the time any deficiency in such improvement constitutes the proximate cause for which it is proposed to bring an action.” (Italics added.)

The language is clear and unambiguous. This section prevents the person in possession or control of the premises at the time a deficiency occurs to escape liability by claiming it was caused by a latent

concerning retroactivity of such a statute was outlined in Rosefteld Packing Co. v. Superior Court, 4 Cal.2d 120 [ 47 P.2d 716 ], where the court said (p. 122): . . it has been specifically held that the legislature may shorten or extend the period of the statute of limitations, or similar time statutes relating to procedures, and that the changed period may be made applicable to pending proceedings.... If the statute operates immediately to cut off the existing remedy, or within so short a time as to give the party no reasonable opportunity to exercise his remedy, then the retroactive application of it is unconstitutional as to such party. [Citation.]” As to what is a “reasonable opportunity to exercise his remedy,” the Rosefield court decided that this is a question of law when it said on page 124: “Whether there was reasonable time in these cases is not a matter committed to the discretion of the trial court. The question is one of constitutionality of the statute which in terms applies to the pending case; and if it appears that there was a reasonable time for exercise of the remedy before the statutory bar became fixed, the lower court cannot consider individual hardship or other circumstances, but must give effect to the express provisions of the law. On this point the case of Shoemaker v. Superior Court, supra, must be disapproved.”

In our present case, the date of “substantial completion” was February 5, 1963. On December 1, 1972, plaintiffs allege, they discovered a section of the original wall had failed and toppled down a slope, a fact concealed from them by the sellers (allegedly, heavy hedge growth prevented plaintiffs on inspection from seeing it).^[7] On this date, only two months and five days remained of the ten-year period prescribed by section 337.15. If the defect was truly latent, the fallen wall would not necessarily give notice to plaintiffs that it was a soil engineering problem. It would be notice to them that they should act quickly to discover its proximate cause. It then follows that a reasonable period of time must be allowed for this purpose. Plaintiffs hired engineers and geologists who reported the homesite was negligently graded, cut, and filled. We cannot discern from the complaint when plaintiffs first received this report, however, it would probably be at a time veiy close to the end of the ten-year period or shortly thereafter because the complaint was filed on May 11, 1973, approximately five months after discovery of the collapsed wall. Plaintiffs, under prior law, had no less than three years after notice of the latent defect to commence their cause of action. Section 337.15 reduced their period to file their cause of action to a reasonable time after

cause of action), but absolve Eden and Van Tine under section 337.15. In any event, the problems involved are factual and must be resolved by a court or juiy.^[8]

In view of the fact that we are remanding the action for trial, the dismissal of Van Tine’s cross-complaint against Maro must be reversed and the cross-complaint reinstated.

The judgments of dismissal of plaintiffs’ cause of action against Van Tine and Maro, and the judgment of dismissal of Van Tine’s cross-complaint against Maro, are all reversed.

Stephens, Acting P. J., and Ashby, J., concurred.