Kohler Co. v. Superior Court ( 2018 )

Filed 11/14/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
KOHLER CO., No. B288935
Petitioner, (Super. Ct. No. BC588369)
(John Shepard Wiley, Jr., Judge)
v.
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
JOANNA PARK-KIM et al.,
Real Parties in Interest.
ORIGINAL PROCEEDING; petition for writ of mandate. Petition
granted; writ issued.
Arnold & Porter Kaye Scholer, Eric Shapland, Ryan W. Light and John
C. Ulin for Petitioner.
Newmeyer & Dillion, Alan H. Packer, Jeffrey R. Brower and Joseph A.
Ferrentino for California Building Industry Association as Amicus Curiae on
behalf of Petitioner.
No appearance for Respondent.
Kasdan LippSmith Weber Turner, Kenneth S. Kasdan, Jaclyn L.
Anderson and Graham B. LippSmith for Real Parties in Interest.
In 2000, the California Supreme Court ruled in Aas v. Superior
Court (2000) 24 Cal. 4th 627 (Aas) that a homeowner could not recover
on a negligence claim for construction defects unless the homeowner
could show actual property damage or personal injury (as opposed to
purely economic loss, such as diminution in value of the home or the
cost to repair the defects). After Aas was decided, representatives from
the building industries, insurance companies, and homeowners came
together with members of the Legislature to devise a comprehensive
statutory scheme to govern construction defect litigation. That
statutory scheme, commonly known as the Right to Repair Act (the Act)
was enacted in 2002. (Stats. 2002, ch. 722, principally codified at Civ.
Code,1 §§ 895-945.5.) As recently explained by the Supreme Court,
“[t]he Act sets forth detailed statewide standards that the components
of a dwelling must satisfy. It also establishes a prelitigation dispute
resolution process that affords builders notice of alleged construction
defects and the opportunity to cure such defects, while granting
homeowners the right to sue for deficiencies even in the absence of
property damage or personal injury.” (McMillin Albany LLC v.
Superior Court (2018) 4 Cal.5th 241, 247 (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
1 Further undesignated statutory references are to the Civil Code.
2
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 directing the trial court to vacate
its order to the extent it denied in part Kohler’s anti-class certification
motion and to enter a new order granting the motion in its entirety.
BACKGROUND
Plaintiffs Joanna Park-Kim and Maria Cecilia Ramos are each
owners of a residential condominium dwelling in which “Rite-Temp
Pressure Balancing Valves” and “Mixer Caps” (which are contained in
“Rite-Temp Valve assemblies”) manufactured by Kohler were installed
during construction. In the third amended complaint, plaintiffs allege
that these valves and mixer caps, which are designed to regulate water
flow and temperature in household plumbing, do not operate as
intended due to their defective design and manufacturing, and “are
corroding, failing, and/or will inevitably fail,” which has caused or will
cause damage to other components of the household plumbing lines or
fixtures.
3
Plaintiffs brought the instant lawsuit on behalf of themselves and
all owners of residential dwellings in California in which these valves
and mixer caps were installed during original construction, alleging a
claim for violations of the Act, as well as claims for strict liability,
warranty claims, and other claims.2 It is estimated that Kohler sold
approximately 630,000 of the identified valves and mixer caps in
California during the relative time period.
After plaintiffs received numerous extensions of time, totaling 18
months, to file their motion for class certification, Kohler sought to
resolve the case by filing a motion for summary judgment or
adjudication on threshold legal issues. The trial court granted
summary adjudication as to all claims except plaintiff Ramos’ warranty
and negligence claims, both plaintiffs’ claims under the Act, and their
UCL claim. Kohler then filed a “motion re anti-class-certification,”
seeking a ruling that none of the remaining causes of action can be
certified as a class action.
On January 22, 2018, the trial court granted Kohler’s motion as to
the warranty, negligence, and UCL claims, but denied it as to the claim
under the Act. The court also certified its ruling for appellate review,
2 Plaintiffs’ non-Act claims, which are not at issue in this proceeding, are
for (1) strict liability/failure to warn; (2) strict liability/manufacturing defect;
(3) strict liability/design defect; (4) negligence; (5) breach of express warranty;
(6) breach of implied warranty of fitness; (7) breach of implied warranty of
merchantability; and (8) violations of Business and Professions Code section
17200 (the UCL claim). With regard to the claim asserted under the Act, the
class is limited to owners who purchased their dwellings on or after
December 14, 2005.
4
on the grounds that it presented a controlling question of law upon
which there were substantial grounds for differences of opinion, and
that appellate resolution of the question would greatly advance the
conclusion of the litigation. The court then stayed all proceedings
pending resolution of the instant petition.
Kohler filed the instant petition for writ of mandate, asking this
court to order the trial court to vacate its January 22, 2018 order to the
extent it denies Kohler’s anti-class-certification motion with respect to
the claim under the Act and to issue a new order granting the motion in
its entirety. We summarily denied the petition, and Kohler filed a
petition for review in the Supreme Court. The Supreme Court granted
review and transferred the matter back to this court with directions to
vacate our order denying mandate and to issue an order directing the
superior court to show cause why the relief sought should not be
granted.
We issued the order to show cause as directed by the Supreme
Court, and have received a return to the petition from plaintiffs and a
traverse from Kohler.3 In the return, plaintiffs demurred to the petition
on the ground that the petition fails to state a justiciable basis for
granting a writ of mandate and/or prohibition. But, as Kohler observes
in its traverse, the Supreme Court has concluded otherwise and
directed us to issue an order to show cause and consider the issue
3 We also received an application from California Building Industry
Association to file an amicus curiae brief. We have granted that request and
have considered the amicus brief, as well as plaintiffs’ response to that brief.
5
Kohler presents. The Supreme Court’s order constitutes a
determination that writ review is proper. (Borg-Warner Protective
Services Corp. v. Superior Court (1999) 75 Cal. App. 4th 1203, 1206-
1207.) Therefore, we overrule plaintiffs’ demurrer and address Kohler’s
petition.
DISCUSSION
In McMillin, the California Supreme Court was asked to
determine whether the Act “was designed only to abrogate Aas [and]
supplant[] common law remedies with a statutory claim for purely
economic loss,” or whether it was intended “to go further and supplant
the common law with new rules governing the method of recovery in
actions alleging property damage.” (McMillin, supra, 4 Cal.5th at p.
247.) In reaching its conclusion that the Legislature intended the
broader displacement, and “made the Act the virtually exclusive remedy
not just for economic loss but also for property damage arising from
construction defects” (ibid.), the Court analyzed the text, purpose, and
legislative history of the Act. We conduct a similar analysis to resolve
the issue before us: whether the Act permits homeowners to bring a
class action against the manufacturer of a plumbing fixture that was
installed in the construction of their homes, alleging that the product
was defective and resulted in violations of the standards set forth in the
Act.
6
A. Overview of the Act
Because of the complexity of the Act and the interplay between
many of the statutory provisions, we begin with an overview of the
statutory scheme. As the Supreme Court observed, “the Act . . .
‘comprehensively revises the law applicable to construction defect
litigation for individual residential units’ within its coverage.”4
(McMillin, supra, 4 Cal.5th at p. 250.) The Court explained that “[t]he
Act added title 7 to division 2, part 2 of the Civil Code. (§§ 895-945.5.)
That title consists of five chapters. Chapter 1 establishes definitions
applicable to the entire title. (§ 895.) Chapter 2 defines standards for
building construction. (§§ 896-897.) Chapter 3 governs various builder
obligations, including the warranties a builder must [or may] provide.
(§§ 900-907.) Chapter 4 creates a prelitigation dispute resolution
process. (§§ 910-938.) Chapter 5 describes the procedures for lawsuits
under the Act. (§§ 941-945.5.)” (McMillin, supra, 4 Cal.5th at p. 250.)
For purposes of the case before us, our focus is on chapters 2, 4, and 5,
particularly as they relate to claims made against the manufacturer of a
product used in the construction of a residential unit, rather than
against the builder of that unit.
4 The Act applies “only to new residential units where the purchase
agreement with the buyer was signed by the seller on or after January 1,
2003.” (§ 938.)
7
1. Chapter 2
Chapter 2 contains two sections, sections 896 and 897. Section
896 provides a detailed and comprehensive set of standards for
residential construction, addressing water, structural, soil, fire
protection, plumbing and sewer, and electrical systems issues, and
issues regarding other areas of construction; it also provides various
time periods within which an action must be brought, depending upon
the standard alleged to have been violated.
Section 896 begins with a preamble that states in relevant part:
“In any action seeking recovery of damages arising out of, or related to
deficiencies in, the residential construction, . . . a builder, and to the
extent set forth in Chapter 4 (commencing with Section 910), a general
contractor, subcontractor, material supplier, individual product
manufacturer, or design professional, shall, except as specifically set
forth in this title, be liable for, and the claimant’s[5] claims or causes of
action shall be limited to violation of, the following standards, except as
specifically set forth in this title. This title 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.)
5 A “claimant” is defined as “the individual owners of single-family
homes, individual unit owners of attached dwellings and, in the case of a
common interest development, any association as defined in Section 4080
[e.g., a homeowner’s association].” (§ 895, subd. (f).)
8
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 896
may have overlooked.” (McMillin, supra, 4 Cal.5th at p. 253.) It
provides: “The standards set forth in this chapter [i.e., in section 896]
are intended to address every function or component of a structure. To
the extent that a function or component of a structure is not addressed
by these standards, it shall be actionable if it causes damage.” (§ 897.)
The key difference between section 897 and 896 (other than the
specification of standards) is that a claim brought under section 896
need only allege a violation of one or more of the specified standards
(see § 942, discussed in Section A.3., post), while a claim under section
9
897 must allege both a defective function or component of the home and
damage caused by that defect.6
2. Chapter 4
a. Prelitigation Procedures
Chapter 4 sets out a detailed set of procedures that must be
followed before a claimant may file litigation asserting claims under the
Act. It begins with section 910, which provides, in relevant part: “Prior
to filing an action against any party alleged to have contributed to a
violation of the standards set forth in Chapter 2 (commencing with
Section 896), the claimant shall initiate the following prelitigation
procedures: [¶] (a) The claimant or his or her legal representative
shall provide written notice via certified mail, overnight mail, or
personal delivery to the builder, in the manner prescribed in this
section, of the claimant’s claim that the construction of his or her
residence violates any of the standards set forth in Chapter 2
(commencing with Section 896).” (Italics added.)
The builder must acknowledge receipt of the notice (§ 913), and
may elect to inspect the claimed violation of the standards and conduct
testing7 (§ 916, subd. (a)). If the builder intends to hold a subcontractor,
6 We note that, as the Supreme Court observed in McMillin, some of the
standards set forth in section 896 “use the causation of damage as part of the
test for whether a given part is defective.” (McMillin, supra, 4 Cal.5th at p.
253.)
7 The builder may conduct a second inspection or testing if the builder
deems it necessary and certain conditions are met. (§ 916, subd. (c).)
10
design professional, individual product manufacturer, or material
supplier responsible for its contribution to the violation of the
standards, the builder must provide notice to that person or entity
sufficiently in advance to allow them to attend the inspection and
testing and to participate in the repair process. (§ 916, subd. (e).) After
the inspection or testing, the builder may offer in writing to repair the
violation.8 The offer must include, among other things, a detailed
statement explaining the nature and scope of the repair, with a
reasonable completion date for the repair, and it must compensate the
homeowner for all applicable damages recoverable under the Act.
(§ 917.) The offer to repair must also be accompanied by an offer to
mediate the dispute if the homeowner so chooses. (§ 919.) If the
homeowner rejects the offer to mediate, he or she must either authorize
the builder to proceed with the repair, or request that the repair be
completed by an alternative contractor chosen by the homeowner in
accordance with specified procedures. (§ 918.) If mediation takes place
but fails to resolve the dispute, the homeowner must allow the repair to
be performed either by the builder or by the alternative contractor as
selected under 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,
8 The builder may in the alternative make an offer of cash and no repair
in exchange for a release. In such a case, the homeowner may either accept
the offer or reject it and proceed with filing an action under the Act. (§ 929.)
11
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 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
12
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 made under this
title, the homeowner is only entitled to damages for the reasonable
13
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
14
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; Gillotti v. Stewart (2017) 11
Cal.App.5th 875, 890, 893.) 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
15
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 seemingly
contradictory sentences in the same statute?
Plaintiffs contend that, despite the inclusion of class actions on
the list of exclusions, the first sentence of the statute cannot be
interpreted to exclude class actions asserting claims under the Act
because a class action is neither a cause of action nor a form of
damages; rather, “it is a procedural vehicle for enforcing substantive
law.” (Citing City of San Jose v. Superior Court (1974) 12 Cal. 3d 447,
462.) Thus, they argue that the inclusion of class actions in the list
merely means that the Act does not cover causes of actions for personal
injuries, fraud-based claims, or other statutory causes of action, or class
actions asserting those causes of action. They contend the last sentence
reinforces that interpretation because it demonstrates that the Act
anticipates the use of class action procedures to bring claims under the
Act and facilitates the use of the procedure by waiving the prelitigation
requirements.
Kohler contends the sentences are not contradictory. It argues
that the first sentence of the statute excludes all class actions for any
claim under the Act, while the last sentence refers to class actions for
claims that are outside of the Act. It reasons that because the language
used in the last sentence is so similar to the language used in the
16
exclusion set forth in section 896(g)(3)(E)9 —both refer to claims “solely”
for a defective component or manufactured product—the last sentence
must be understood to be referring to the same claims. And, since
section 896(g)(3)(E) excludes those claims from operation of the Act, the
last sentence of section 931 must be understood to refer to claims that
are outside the Act.
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 [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),
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
9 Section 896(g)(3)(E) provides: “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.” The last sentence of section 931 provides: “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.”
17
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 [“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”].)
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
18
product” used in the 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
19
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 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 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
20
[“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, 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
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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 filing
an action in court. Builders, insurers, and other business groups are
hopeful that this right to repair will reduce litigation.” (Sen. Com. on
Judiciary, Analysis of Sen. Bill No. 800 (2001-2002 Reg. Sess.) as
amended Aug. 28, 2002, p. 5, italics added.)
That the Legislature considered the prelitigation process a critical
component of the Act is demonstrated by the detail and scope of
Chapter 4. As our summary of that chapter shows, the Legislature left
no doubt that the goal of this process was to have disputes resolved and
repairs performed as quickly as possible, and, if possible, without
litigation. It makes sense, then, that the Legislature intended to
exclude class actions for virtually any claim under the Act, because
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class actions make prelitigation resolution impossible.10 Even if the
named plaintiffs bringing a class action comply with the prelitigation
process, thus giving the builder of their homes an opportunity to
attempt to repair whatever defect is claimed as to their homes, the
builders of other homes are given no such opportunity with respect to
the unnamed class members, thus thwarting one of the most significant
aspects of the Act.11 (See McMillin, supra, 4 Cal.5th at pp. 255-256
[rejecting an interpretation of the Act that would thwart the mandatory
prelitigation process and the granting of a right to repair].)
C. Application to the Present Case
Having determined that section 931 excludes class actions, with a
narrow exception created by the last sentence, we must determine
10 This is especially true in a case such as this one, which alleges the
incorporation of a widely-used plumbing fixture into potentially hundreds of
thousands of dwellings, presumably constructed by thousands of different
builders, each of whom must be given notice of the alleged defect and an
opportunity to repair it.
11 Plaintiffs argue that this significant aspect is not thwarted in this case
because only the builders are given an opportunity to attempt to repair the
claimed defects under the Act. That is not correct. It is true that the
claimant must give notice to the builder, rather than the manufacturer, prior
to filing an action. But the claimant must do so whenever an action is to be
filed “against any party.” (§ 910.) If the manufacturer is to be held
responsible in whole or in part for the violation of the standards, the builder
must provide notice to the manufacturer, allow the manufacturer to attend
the inspection and testing of the alleged violation, and allow the
manufacturer to participate in the repair process. (§ 916, subd. (e).)
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whether the claim alleged in this case may be brought in a class action.
We conclude it may not.
First, the narrow exception applies only to “class action claims
that address solely the incorporation of a defective component into a
residence.” (§ 931.) But plaintiffs’ claim does not address solely the
incorporation of a defective component into their homes. Rather, they
allege that the use of the allegedly defective valves and mixer caps
violated and/or caused violations of several of the standards set forth in
section 896, and that they caused damage to other components in their
homes.12
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
12 We note that plaintiffs also allege that the valves and mixer caps
violated and/or caused violations of section 897. It would appear that if
plaintiffs’ claim was limited to that allegation, that might qualify as a claim
that addresses solely the incorporation of a defective component into their
homes, so long as the defect caused damage. (§ 897 [“To the extent that a
function or component of a structure is not addressed by these standards, it
shall be actionable if it causes damage”]; see also McMillin, supra, 4 Cal.5th
at pp. 253-254 [explaining that the Act covers, with certain specified
exceptions, claims alleging violations of the standards under section 896, and
claims under section 897 for defective components that do not violate an
articulated section 896 standard but cause damage].) But their claim is not
so limited, and therefore the claim does not come within section 931’s
exception to the class action exclusion.
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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 [“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.
//
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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 and different order granting the motion in its entirety.
Kohler shall recover its costs with regard to this writ proceeding.
CERTIFIED FOR PUBLICATION
WILLHITE, J.
We concur:
MANELLA, P. J.
COLLINS, J.
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