Aas v. William Lyon Co.

• Citation: 101 Cal.Rptr.2d 718
• Court: United States State Supreme Court (California)
• Decision Date: 04 December 2000
• Parties: (Cal. 2000) ALAN O. AAS et al., Petitioners, v. THE SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent. WILLIAM LYON COMPANY et al., Real Parties in Interest. PROVENCAL COMMUNITY ASSOCIATION, Petitioner, v. THE SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent. WILLIAM LYON COMPANY et al., Real Parties in Interest. S071258 Filed

101 Cal.Rptr.2d 718 (Cal. 2000) ALAN O. AAS et al., Petitioners,
v.
THE SUPERIOR COURT OF SAN DIEGO COUNTY,
Respondent. WILLIAM LYON COMPANY et al., Real Parties in Interest. PROVENCAL COMMUNITY ASSOCIATION, Petitioner,
v.
THE SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent. WILLIAM LYON COMPANY et al., Real Parties in Interest. S071258 IN THE SUPREME COURT OF CALIFORNIA Filed 12/4/00

Ct. App. 4/1 No. D030218

Ct. App. 4/1 No. D030399

San Diego County Super. Ct. No. 695611

San Diego County Super. Ct. No. 694688

Judge: Robert E. May

Original Appeal

Original Proceeding

Review Granted XXX 64 Cal.App.4th 916

Rehearing Granted

Attorneys for Appellant: Procopio, Cory, Hargreaves & Savitch, Steven M. Strauss, Edward I. Silverman and Victor M. Felix for Petitioners Alan O. Aas et al., Epstein & Grinnell, Douglas W. Grinnell, Luis E. Ventura; The Law Offices of Duane E. Shinnick, Silldorf, Shinnick & Duignan and Duane E. Shinnick for Petitioner Provencal Community Association and for Consumer Attorneys of California as Amicus Curiae on behalf of Petitioners Alan O. Aas et al.

Ian Herzog; Douglas Devries; Roland Wrinkle; Harvey R. Levine; Robert Steinberg; Thomas G. Stolpman; William D. Turley; Mary E. Alexander; Joseph Harbison III; Bruce Broilett; Wayne McClean; Leonard Sacks; Tony Tanke; Lea-Ann Tratten; Steven J. Kleifield; David Rosen; Moses Lebovits; Christine Spagnoli; James Sturdevant; Daniel Smith; Deborah David; Lawrence Drivon; Thor Emblem; Rick Simons; David Casey, Jr., Kasdan, Simonds, McIntyre, Epstein & Martin and Kenneth S. Kasdan for Consumer Attorneys of California as Amicus Curiae on behalf of Petitioners Alan O. Aas et al. Verboon, Whitaker & Peter, Mark A. Milstein and Michael T. Whitaker for Southern California Apartment Owners Association as Amicus Curiae on behalf of Petitioners Alan O. Aas et al.

Wolf, Rifkin & Shapiro, Leslie S. Marks and Douglas A. Lusson for League of California Homeowners as Amicus Curiae on behalf of Petitioners Alan O. Aas et al. Berding & Weil and James O. Devereaux for the Executive Council of Homeowners as Amicus Curiae on behalf of Petitioners Alan O. Aas et al.

Berger & Hopkins, Jane Francis Hopkins and A. Alan Berger for the Structural Engineers Association of California as Amicus Curiae on behalf of Petitioners Alan O. Aas et al. Orbach & Huff, David M. Huff and Eric P. Weiss for Coalition of American Structural Engineers, Park Purdue Homeowners Association, Angelina Heights Homeowners Association and Silverado Oaks Homeowners Association as Amici Curiae on behalf of Petitioners Alan O. Aas et al.

Attorneys for Appellant: Williams, Wester, Hall & Nadler and Scott A. Williams as Amicus Curiae on behalf of Petitioners Alan O. Aas et al. Burdman & Benson and Linda Angle-Keny as Amici Curiae on behalf of Petitioners Alan O. Aas et al.

Attorneys for Respondent: No appearance for Respondent.

Attorneys for Real Party in Interest: Newmeyer & Dillion, Timothy S. Menter, Gregory L. Dillion, Gene M. Witkin; Lincoln, Gustafson & Cercos, Thomas J. Lincoln and Charles K. Egan for Real Parties in Interest the William Lyon Company and Lyon Communities, Inc., Dale, Braden & Hinchcliffe and Suzanne M. Martin for Real Parties in Interest Ben F. Smith, Inc., and B & L Plastering. Wilson, Elser, Moskowitz, Edelman & Dicker, Andrew J. Blackburn and William S. Roberts for Real Parties in Interest West Coast Sheet Metal, Inc., and Ben F. Smith, Inc., Kring & Brown, Jeffrey A. Lake and Jon H. Van de Grift for Real Parties in Interest Ben F. Smith, Inc., and New Continental Tile & Marble Co., Inc., Maxie Rheinheimer Stephens & Vrevich, Barry M. Vrevich, Darin L. Wessel, Kelegian & Thomas and Michael Paul Thomas for Real Party in Interest Branco Corporation. Bullard & Olin, Robert M. Granafei and Lee H. Graham for Real Party in Interest Cal West Nurseries, Inc., Brownwood, Rice & Zurawski and Michael F. Saydah for Real Parties in Interest C.R.E. Electric and Ghianni Corporation., Acker, Kowalick & Whipple, Anthony H. Whipple, W. Frederck Kowalick, Linwood Warren, Jr., Catherine L. Rhodes and Tawnya L. Southern for Real Party in Interest Premier Window Products, Inc., Farmer, Weber & Case, David Weber; The Law Office of Mark Siegel and Mark Siegel for Real Party in Interest Sun Plumbing Company, Inc.

Attorneys for Real Party in Interest: Kolod, Wager & Gordon, Scott M. Kolod, Jerome A. Wager, Vekeno Kennedy; Law Offices of Elisa J. Nemeth and Elisa J. Nemeth for Real Party in Interest Allstate Plumbing, Cozad & Krutcik and Ronald J. Cozad for Real Party in Interest Schmid Insulation Contractors, Inc., Berger, Kahn, Safton, Moss, Figler, Simon & Gladstone, Timothy A. Nicholson and Stephen L. Weber for Real Party in Interest Surecraft Supply, Inc., Perkins & Miltner and Timothy E. Salter for Real Party in Interest Bowers Construction Co.,

Callahan, McCune & Willis and Norma Marshal for Real Party in Interest Frank Bowers Construction, Balestreri, Pendleton & Potocki, Thomas A. Balestreri, Jr., Mary B. Pendleton, Michael M. Freeland, Maurine P. Brand; Kring and Brown and Jeffrey A. Lake for South Coast Framers, Inc., Alta Drywall, Inc., West Coast Sheet Metal and D.J. Drywall, Inc., as Amici Curiae on behalf of Real Parties in Interest. Lewis, D'Amato, Brisbois & Bisgaard, Robert V. Closson, Terrell A. Quealy and Judith A. Lewis for United National Insurance Company as Amicus Curiae on behalf of Real Parties in Interest. John H. Findley, Sharon L. Browne and Stephen R. McCutcheon, Jr., for Pacific Legal Foundation as Amicus Curiae on behalf of Real Parties in Interest. Dale, Braden & Hinchcliffe, George D. Dale, Suzanne M. Martin; Perkins & Miltner, Timothy E. Salter; and Kathryn Turner-Arsenault for the Construction Defect Defense Action Coalition Amicus Curiae on behalf of Real Parties in Interest. Fred J. Hiestand for the Association for California Tort Reform as Amicus Curiae on behalf of Real Parties in Interest.

Cox, Castle & Nicholson, Sandra C. Stewart, Jeffrey D. Masters, Debbie L. Freedman; Gray, Cary, Ware & Freidenrich and Jonathan B. Sokol for the Building Industry Legal Defense Foundation and the California Building Industry Association as Amici Curiae on behalf of Real Parties in Interest.

White, Gentes & Garcia, Timothy S. Noon and Charles R. Bongard for the Associated General Contractors of America, San Diego Chapter, Inc., as Amicus Curiae on behalf of Real Parties in Interest.

Thelen Reid & Priest, Gary L. Fontana, Hilary N. Rowen, James A. Riddle; Craig A. Berrington and Laura L. Kersey for American Insurance Association as Amicus Curiae on behalf of Real Parties in Interest.

Parker & Stanbury, Jenna L. Price and Mary-Tyler Crenshaw for West Coast Sheet Metal and H & D Construction as Amici Curiae on behalf of Real Parties in Interest.

Morris, Polich & Purdy, Randy Koenig and Gary L. Jacobsen as Amici Curiae on behalf of Real Parties in Interest.

Gibbs, Giden, Locher & Turner, Barry C. Vaughan and Michael I. Giden for CalMat Co. as Amicus Curiae.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Unpublished Opinion

WERDEGAR, J.

In this case we are asked to decide whether homeowners and a homeowners' association may recover damages in negligence from the developer, contractor and subcontractors who built their dwellings for construction defects that have not caused property damage. Plaintiffs would find an affirmative answer in the tort of "negligent interference with prospective economic advantage" described in J'Aire Corp. v. Gregory (1979) 24 Cal.3d 799, 804-805. Applying settled law limiting the recovery of economic losses in tort actions (Seely v. White Motor Co. (1965) 63 Cal.2d 9, 18), we answer the question in the negative and, thus, affirm the decision of the Court of Appeal.

I. BACKGROUND

This matter comes to us on review of consolidated writ proceedings affecting two cases in the superior court. Plaintiffs in Aas et al. v. William Lyon Company et al. (Super. Ct. San Diego County, 1996, No. 695611) (Aas) own the single-family homes in the Belle Fleur subdivision. Plaintiff in Provencal Community Association v. William Lyon Company et al. (Super. Ct. San Diego County, 1996, No. 694688) (Provencal) is the homeowners' association responsible for managing and maintaining the Provencal condominium project. Defendants (as relevant here) include the William Lyon Company and Lyon Communities, Inc. (collectively Lyon), which served as developer and general contractor of Belle Fleur and Provencal, and the many subcontractors who participated in those projects.

Plaintiffs in each case allege their dwellings suffer from a variety of construction defects affecting virtually all components and aspects of construction. Based on these defects, plaintiffs assert causes of action for negligence, strict liability, breach of implied warranty and, in the Aas case alone, breach of contract and express warranty. Plaintiffs in both cases seek, among other things, the cost of repairing the alleged defects. Additionally, plaintiffs in Aas expressly seek damages representing the diminution in value of their residences.

Trial has not yet commenced. In pretrial proceedings, defendants in both cases moved for orders in limine excluding evidence of those alleged construction defects that have not caused property damage. (There is no claim of personal injury.) Plaintiff in Provencal responded with an offer of proof asserting that some of the alleged defects violate provisions of the applicable building codes intended to prevent harm to life, health and property.¹ Plaintiff acknowledged, however, that many of the defects enumerated in defendants' motions have not actually caused property damage. The same is true in Aas. After extensive oral argument in each case, the trial court granted defendants' motions as to plaintiffs' tort claims, only.² With the court's encouragement, plaintiffs sought review of the rulings in limine by...