Kohler Co. v. Superior Court of L. A. Cnty.

applies to original construction intended to be sold as an individual dwelling unit." (§ 896.) In other words, a homeowner alleging a construction defect in a residence may bring a claim only under the Act, with certain specified exceptions. (See McMillin , supra , 4 Cal.5th at p. 247, 227 Cal.Rptr.3d 191 , 408 P.3d 797 .)

One of those exceptions is found in section 896 itself, and is relevant to this case. Subdivision (g)(3)(E) of section 896 (hereafter, section 896(g)(3)(E) ) provides that "[t]his title does not apply in any action seeking recovery solely for a defect in a manufactured product located within or adjacent to a structure." (§ 896(g)(3)(E).) A "manufactured product" is defined as "a product that is completely manufactured offsite." (§ 896, subd. (g)(3)(C).) Thus, a homeowner alleging that a manufactured product-such as a plumbing fixture-installed in her home is defective may bring a claim under the Act only if the allegedly defective product caused a violation of one of the standards set forth in section 896; otherwise she must bring a common law claim outside of the Act against the manufacturer, and would be limited to the damages allowed under the common law.

Section 897 is a kind of catch-all provision that "provides a supplemental standard for any building components that section

Act. (§ 926.) However, before bringing a post-repair action, the claimant must request mediation if there was no previous mediation between the parties. (§ 928.) If the claimant does not satisfy the requirements of Chapter 4, the builder may bring a motion to stay any court action or other proceeding until the requirements are satisfied. (§ 930, subd. (b).)

b. Other Provisions of Chapter 4

In addition to the sections detailing the prelitigation procedures that must be followed, Chapter 4 also includes provisions addressing various issues, including (as relevant to this action) claims that combine causes of action not covered by the Act with those that are covered (§ 931) and parties subject to application of the Act (§ 936).

Section 931, which we discuss in more detail in part B.1. of this opinion, post , provides that when a claim of construction defects combines causes of action or damages that are not covered by the Act with claims of "unmet standards" (i.e., violations of one or more of the section 896 standards and/or section 897) under the Act, the claims of unmet standards must be administered in accordance with the Act. Section 936 provides, as relevant to this case, that all of the provisions of the other chapters of the Act apply to general contractors, subcontractors, material suppliers, individual product manufacturers, and design professionals to the extent that those people or entities caused, in whole or in part, a violation of one of the standards as the result of a negligent act or omission or a breach of contract.

3. Chapter 5

Chapter 5 sets forth the procedures for litigation under the Act. The chapter includes sections on the statute of limitation for such actions (§ 941), elements of a claim for violation of the Chapter 2 standards (§ 942 [to establish a claim, the homeowner need only demonstrate that the home does not meet the applicable standard; "[n]o further showing of causation or damages is required to meet the burden of proof"] ), and available affirmative defenses ( § 945.5 ).

The chapter also includes a section setting forth the exclusivity of, and exceptions to, the Act: "Except as provided in this title, no other cause of action for a claim covered by this title or for damages recoverable under Section 944 is allowed. In addition to the rights under this title, this title does not apply to any action by a claimant to enforce a contract or express contractual provision, or any action for fraud, personal injury, or violation of a statute." (§ 943, subd. (a).)

Finally, Chapter 5 includes a section setting forth the damages recoverable under the Act: "If a claim for damages is

homeowner is only entitled to damages for the reasonable value of repairing any violation of the standards set forth in this title, the reasonable cost of repairing any damages caused by the repair efforts, the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards, the reasonable cost of removing and replacing any improper repair by the builder, reasonable relocation and storage expenses, lost business income if the home was used as a principal place of a business licensed to be operated from the home, reasonable investigative costs for each established violation, and all other costs or fees recoverable by contract or statute." (§ 944.)

B. Class Actions Under the Act

With this statutory scheme in mind, we turn to the question presented in this case: May a claim for violation of certain standards under the Act caused by an alleged defect in plumbing fixtures be brought against the manufacturer of the fixtures in a class action? To answer this question, we start with an examination of section 931, the only provision of the Act that mentions class actions.

1. Section 931

Section 931 provides in full: "If a claim combines causes of action or damages not covered by this part, including, without limitation, personal injuries, class actions, other statutory remedies, or fraud-based claims, the claimed unmet standards shall be administered according to this part, although evidence of the property in its unrepaired condition may be introduced to support the respective elements of any such cause of action. As to any fraud-based claim, if the fact that the property has been repaired under this chapter is deemed admissible, the trier of fact shall be informed that the repair was not voluntarily accepted by the homeowner. As to any class action claims that address solely the incorporation of a defective component into a residence, the named and unnamed class members need not comply with this chapter."

There is no question that the language of this section is somewhat obtuse. Although its precise meaning has not been at issue in cases decided by the courts of this State up to this point, the Supreme Court and other courts generally have viewed the first sentence of section 931 to provide a (nonexclusive) list of exclusions from the Act. (See, e.g., McMillin , supra , 4 Cal.5th at pp. 252, 254, 227 Cal.Rptr.3d 191 , 408 P.3d 797 ; Gillotti v. Stewart (2017) 11 Cal.App.5th 875 , 890, 893, 217 Cal.Rptr.3d 860 .) That list of exclusions is provided in the context of explaining the application of the Act in a lawsuit that includes both claims under the Act alleging violations of the section 896 and/or section 897

standards and claims that are "not covered by"-i.e., excluded from-the Act. Section 931 explains that the prelitigation procedures must be followed with regard to the claims under the Act, but those procedures do not apply to claims that are outside of the Act, examples of which are listed.

One of the listed exclusions is "class actions." While this appears at first glance to be an unambiguous exclusion of class actions in the first sentence of section 931, ambiguity is introduced when the first sentence is read in conjunction with the last sentence: "As to any class action claims that address solely the incorporation of a defective component into a residence, the named and unnamed class members need not comply with this chapter [i.e., the prelitigation procedures]." This sentence seems to suggest that at least some class actions are allowed under the Act. So how do we reconcile these

We disagree with both parties' interpretations of section 931.

We disagree with plaintiffs' interpretation because it ignores the actual language used in the statute. ( Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257 , 274, 41 Cal.Rptr.2d 220 , 895 P.2d 56 [when interpreting a statute, the court cannot "insert what has been omitted, or ... omit what has been inserted," and "must give significance to every part of a statute to achieve the legislative purpose"].) While it is true that class actions are neither causes of action nor a form of damages, we observe that causes of action that are asserted in class actions often are referred to as "class action claims." And given the inconsistent and imprecise use of the terms "causes of action" and "claims" throughout the Act (see Acqua Vista Homeowners Assn. v. MWI, Inc. (2017) 7 Cal.App.5th 1129 , 1145, 213 Cal.Rptr.3d 323 ), it is not surprising that the language used in section 931 is imprecise. We do not believe that the use of this imprecise language demonstrates an intent to treat class actions differently than the other items on the list of exclusions in the first sentence of section 931 for purposes of interpreting the statutory language. (See Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709 , 715, 3 Cal.Rptr.3d 623 , 74 P.3d 726 ["Well-established rules of statutory construction require us to ascertain the intent of the enacting legislative body so that we may adopt the construction that best effectuates the purpose of the law"].)

construction of the residence and excludes those claims from the Act entirely (§ 896(g)(3)(E), italics added), while the last sentence of section 931 relieves claimants from the prelitigation requirements of Chapter 4 of the Act for class action claims based "solely [on] the incorporation of a defective component into a residence" (§ 931, italics added.) A "component" is not the same thing as a "manufactured product." The term "component" as used in the Act may include a "manufactured product," but it is not limited to manufactured products. Indeed, there are many kinds of components referenced in section 896. (See, e.g., § 896, subds. (a)(4) ["Roofs, roofing systems, chimney caps, and ventilation components"], (10) ["Stucco, exterior siding, exterior walls, ... and other exterior wall finishes and fixtures and the systems of those components and fixtures"], (b)(1) ["Foundations, load bearing components, and slabs"], (g)(9) ["Untreated steel fences and adjacent components"].) Similarly, section 900, which addresses limited warranties that must be provided to cover the fit and finish of certain "building components," sets forth a list of those components, which includes items that might be "manufactured products" as defined in section 896, subdivision (g)(3)(C), as well as items that clearly would not. (§ 900 [listing "cabinets, mirrors, flooring, interior and exterior walls, countertops, paint finishes, and trim"].) Thus, contrary to Kohler's assertion, the claims referred to in the last sentence of section 931 are not entirely the same as the claims referred to in section 896(g)(3)(E).

Second, Kohler's interpretation of the last sentence of section 931 would render that sentence superfluous. Since the Act does not apply at all to claims based solely on a defect in a manufactured product, there is no reason for the Legislature to specify that Chapter 4 of the Act does not apply to those excluded claims if they are brought as class actions.

What, then, are we to make of the last sentence of section 931? Plaintiffs contend that this sentence specifies that class actions are allowed and waives the prelitigation procedures for those claims. But once again, plaintiffs' interpretation ignores the statutory language. We agree that the language of the last sentence could, when read in isolation, be interpreted to mean

limited exception to the exclusion of class actions-for "claims that address solely the incorporation of a defective component into a residence" (§ 931)-and waives the prelitigation procedures for those class action claims. (See California Mfrs. Assn. v. Public Utilities Com. (1979) 24 Cal.3d 836 , 844, 157 Cal.Rptr. 676 , 598 P.2d 836 ["Interpretive constructions which render some words surplusage, defy common sense, or lead to mischief or absurdity, are to be avoided"].)

2. Legislative History and Purpose of the Act

The legislative history and purpose of the Act as a whole support our conclusion that the class action device may not be used to prosecute claims under the Act, with one very narrow exception.

When enacting the Act, the Legislature declared that "[t]he prompt and fair resolution of construction defect claims is in the interest of consumers, homeowners, and the builders of homes, and is vital to the state's continuing growth and vitality. However, under current procedures and standards, homeowners and builders alike are not afforded the opportunity for quick and fair resolution of claims. Both need clear standards and mechanisms for the prompt resolution of claims. [¶] ... It is the intent of the Legislature that this act improve the procedures for the administration of civil justice, including standards and procedures for early disposition of construction defects." (Stats. 2002, ch. 722, § 1, p. 4247.)

In its analysis of Senate Bill No. 800, which created the Act, the Senate Judiciary Committee observed that "[t]he bill seeks to respond to concerns expressed by a number of parties. The bill responds to concerns from homeowners and the Consumer Attorneys of California over the consequences of Aas [, supra ,] 24 Cal.4th 627 [ 101 Cal.Rptr.2d 718 , 12 P.3d 1125 ], which held that defects must cause actual damage or personal injury prior to being actionable in tort. The bill also responds to concerns expressed by builders, subcontractors, and insurers over the costs of construction defect litigation [and its] impact on housing costs in the state." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, pp. 3-4.)

The Senate Judiciary Committee analysis explained how the bill's establishment of standards and imposition of liability for violations of those standards would simplify the resolution of disputes over many construction defects. (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as amended Aug. 28, 2002, p. 4.) The analysis also explained the impact of the bill on builders and their affiliates: "The bill establishes a mandatory process prior to the filing of a construction defect action. The

major component of this process is the builder's absolute right to attempt a repair prior to a homeowner

and different order granting the motion in its entirety. Kohler shall recover its costs with regard to this writ proceeding.

We concur:

MANELLA, P. J.

COLLINS, J.

McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241 , 247, 227 Cal.Rptr.3d 191 , 408 P.3d 797 ( McMillin ).)

In the present case, we are asked to determine whether homeowners may bring a class action asserting a claim under the Act against the manufacturer of an allegedly defective plumbing fixture used in the construction of class members' homes. Based on our examination of the structure and language of the Act, as well as the legislative history, we conclude that class actions are not allowed under the Act except in one limited context: to assert claims that address solely the incorporation into a residence of a defective component, unless that component is a product that is completely manufactured offsite.

Because the claim in this case involves allegedly defective products that were completely manufactured offsite, we hold that the claim alleged under the Act cannot be litigated as a class action. Accordingly, we grant the writ petition filed by defendant Kohler Co. (Kohler), and issue a writ of mandate

on the grounds that it presented a controlling question of law upon which there were

the procedures set forth in section 918. (§ 919.)

The various sections of Chapter 4 set time limits for all of the acknowledgements, notices, offers, and repairs set forth in the chapter. If the builder fails to strictly and timely comply with the requirements, the claimant is released from the requirements of the chapter and may proceed with the filing of an action. (§§ 915; 916, subd. (c); 920; 925.)

If the procedures set forth in Chapter 4 do not resolve the dispute between the parties, the claimant may file an action to enforce the other chapters of the Act. (§ 914, subd. (a).) If the builder has elected to repair the alleged violation of the standards, the claimant may, at the completion of the repair, file an action for violation of the applicable standards or for a claim of inadequate repair, or both, seeking all applicable damages available under the

made under this title, the

Moreover, plaintiffs' interpretation of the first sentence makes no sense. Had the Legislature intended the interpretation plaintiffs give the sentence, logically it would have placed "class actions" at the end of the items on the list of exclusions, rather than in the middle of the list, with language qualifying that "class actions" means only those actions asserting the previous items listed. And in any event, there would be no reason for the Legislature to specify that the Act does not cover class actions that assert claims that are not covered by the Act. If the claims themselves are not covered by the Act, any procedural devices normally available outside of the Act, such as class actions, necessarily are available with regard to those claims.

Kohler's interpretation of the first sentence of section 931-i.e., that it excludes all class actions-also makes little sense because it conflicts with the last sentence of the statute. Although Kohler tries to reconcile the apparent conflict by arguing that the last sentence refers only to claims that are excluded from the Act under section 896(g)(3)(E), its interpretation of that sentence is flawed for two reasons.

First, Kohler's interpretation ignores the critical difference between the language of the two statutes. The section 896(g)(3)(E) exclusion applies to claims "solely for a defect in a manufactured product " used in the

that class actions generally are allowed for claims under the Act. But the waiver of the prelitigation procedures provision cannot be interpreted to apply to all class actions because its plain language states that it applies only as to a specific category of class action claims: those "that address solely the incorporation of a defective component into a residence." (§ 931.) It is illogical to conclude that the Legislature intended the last sentence to excise the exclusion of class actions contained in the first sentence of the statute, and also intended to waive the prelitigation procedures for some class action claims (those that address solely the incorporation of a defective component into a residence), but not all class action claims. Instead, the more logical interpretation is that the last sentence, although inartfully written, carves out a

Second, even if plaintiffs' claim could be deemed to address solely the incorporation of a defective component into their homes, that claim could not be brought under the Act because the allegedly defective component is a manufactured product, and such claims are expressly excluded. (See § 896, subd. (g)(3)(E) ["This title does not apply in any action seeking recovery solely for a defect in a manufactured product located within or adjacent to a structure"].) For this reason, we conclude that despite the class action exception in the last sentence of section 931 relating to actions solely for defective components, that exception must be interpreted to include its own exclusion for claims that seek to recover solely for the incorporation of a defective manufactured product-i.e., "a product that is completely manufactured offsite" (§ 896, subd. (g)(3)(C) ). (See Moyer v. Workmen's Comp. Appeals Bd. (1973) 10 Cal.3d 222 , 230, 110 Cal.Rptr. 144 , 514 P.2d 1224 ["the various parts of a statutory enactment must be harmonized by considering the particular clause or section in the context of the statutory framework as a whole"].)

In short, we hold that the Act does not permit class action claims except when those claims address solely the incorporation into the home of a defective component other than a product that is completely manufactured offsite. Therefore, the trial court erred by denying Kohler's anti-class certification motion with respect to the cause of action under the Act.

DISPOSITION

Let a peremptory writ of mandate issue directing respondent Superior Court for Los Angeles County to vacate its January 22, 2018 order to the extent it denied Kohler's anti-class certification motion and to issue a new