In Stofer v. Shapell Industries, Inc. (filed January 15, 2015), the third owner of a home that was built before 2002 survived summary judgment in her construction defect lawsuit against the builder.  The house apparently had a history of problems:  including cracked floors, walls and ceilings, un-level floors, and problems with the pool and pool deck.

The premise of the lawsuit is that the builder (Shapell Industries, Inc.) had concealed 1995 and 1999 soils reports from its structural engineer.  The complaint alleged the soil conditions were defective in part because the property contained “25 to 30 feet of highly differential fill; the soil at the Property has unusually high plasticity; the fill at the Property fails to meet minimum engineering compaction standards[.]”  Because that information was not disclosed, the structural engineer “did not take into account these soil conditions when designing the foundations” for the structures built on the property.

The trial court granted the builder’s summary judgment motion because it undisputed that physical manifestation of problems occurred and existed during ownership of the property by the second owner, (between 2004 and 2008).

The court of appeal reversed summary judgment, in part, because the evidence was that the builder’s Assistant General Superintendent and Assistant Vice President of Construction did not pay attention to the property’s soil condition when the house was being constructed and did not know what soil was “fill, what’s not, what depths or anything.” Additionally, the evidence established that the builder did not inform the structural engineer  that “differential fill was present” on the property and was not sure what information he gave the structural engineer  when she designed the home’s foundation. For her part, structural engineer  could not say which reports she received and “was unaware that differential fill was present” when she designed the foundation for the home.

The case also concerns the issue of whether a party is entitled to a jury on the issues of accrual and standing:    “In the construction defect context, what the trial court and the parties refer to as “‘standing’” is “more properly phrased as when a cause of action for design or construction defects accrues and who then owns it [ ] or . . . who doesn’t own it.” (Krusi v. S.J. Amoroso Construction Co. (2000) 81 Cal.App.4th 995, 999 (Krusi), italics omitted.) We refer to the issue as one of accrual — i.e., whether plaintiff owns the causes of action against Shapell.”

The bottom line is to look at a client’s case with wide open eyes.