Griffin v. Black Mountain Ranch, LLC
| Decision Date | 31 August 2021 |
| Docket Number | D077381 |
| Court | California Court of Appeals Court of Appeals |
| Parties | CHRISTIAN GRIFFIN et al., Plaintiffs and Appellants, v. BLACK MOUNTAIN RANCH, LLC, Defendant and Respondent. |
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County No. 37-2015-00033538-CU-CD-CTL, Ronald L. Styn, Judge.
Tatro & Lopez and Timothy John Tatro; Rockwood & Noziska and Neal H. Rockwood, C. Brant Noziska, Shanshan Yu; Coughlin Law Firm and Sean Christopher Coughlin for Plaintiffs and Appellants.
Plante Lebovic and Brian C. Plante, Patrick Alan Craig, Gregory M Golino for Defendant and Respondent.
Plaintiffs and appellants Christian Griffin and Dominique Griffin, on behalf of a putative class of homeowners in a San Diego neighborhood known as Del Sur, sued defendant and respondent Black Mountain Ranch LLC (LLC) and other defendants for strict products liability and negligence in part on the theory that LLC, or its successors and/or assignees, had supplied, designed or constructed defective products-treated water as well as a reservoir and system of delivery to their homes-and was therefore liable for damages caused by those products. The trial court granted LLC's motion for summary judgment, ruling (1) LLC presented evidence the reservoir was substantially completed as of May 30, 2003 more than 10 years before plaintiffs filed their original complaint, barring the action under Code of Civil Procedure[1] section 337.15's 10-year statute of repose; (2) plaintiffs had not alleged willful misconduct or fraudulent concealment so as to allow them to rely upon the exception to section 337.15, but even if they had, there was no evidence LLC participated in or engaged in willful misconduct regarding the reservoir's design, development and construction; and (3) plaintiffs' evidence did not establish a joint venture with the reservoir's developer so as to permit liability on LLC.
Plaintiffs contend: (1) section 337.15's 10-year period of repose should not apply to a homeowner claim for private property damage where the questionable design work occurred miles away at a public improvement, and homeowners did not notice problems until after passage of the 10-year period; (2) LLC did not meet its burden of disposing all claims, in particular by failing to address the theory of treated/contaminated drinking water as a defective product and (3) the court erred by finding no triable issue of material fact as to whether LLC was exempt from section 337.15 by virtue of willful misconduct, which fastened to LLC by theories of successor-in-interest or joint venture liability with the other defendants, who cut corners on safety measures to prioritize the project and obtain cost savings. We affirm the judgment.
We state the facts in the light most favorable to plaintiffs as the nonmoving parties, considering the evidence except that to which objections were made and sustained. (Hampton v County of San Diego (2015) 62 Cal.4th 340, 347; Hensel Phelps Construction Co. v. Superior Court (2020) 44 Cal.App.5th 595, 602.) Many of plaintiffs' facts set out in their separate statement are undisputed, as LLC merely responded to them with argument or objections, which the trial court overruled in total.
In June 2012, plaintiffs purchased a home in the Del Sur neighborhood of Black Mountain Ranch. The development of Black Mountain Ranch is reflected in a series of development agreements between Black Mountain Limited Partnership (LP) and the City of San Diego (City). The development agreements incorporate a City-adopted and voter-approved subarea plan, which depicts a water delivery system including a transmission loop and a potable water reservoir. Under the development agreements, City required the project's developer to ensure adequate infrastructure, including a potable water supply, before the sale of any portion of the property.
In 1998, LP sold the southern portion of the development to Black Mountain Ranch Developers, LLC, which later changed its name to Santaluz LLC (Santaluz).[2] Concurrently with that conveyance, LP assigned all of its duties and obligations under the development agreements with respect to the potable water reservoir, among other things, to Santaluz (the 1998 assignment). Both LP and Santaluz intended to use the reservoir for their respective properties. Because the major “backbone infrastructure” necessary for the Del Sur portion went through Santaluz, LP's prospects and financial success essentially rose and fell on Santaluz's success or failure. Thus, LP negotiated a $30 million mortgage to securitize Santaluz's obligation to build the infrastructure. City imposed a cost-sharing arrangement under a facilities benefit assessment district, and LP and Santaluz also had private cost-sharing arrangements relating to the reservoir's construction costs. LP paid its portion of the reservoir's cost to Santaluz.
While it owned the property, LP began negotiating what later became a participation agreement with City, and LP worked with City as the reservoir design process began. LP entered into a service agreement with Rick Engineering for the reservoir design, and Rick Engineering was the engineer of record for the reservoir. John Powell & Associates (Powell), the reservoir design consultant, was a sub-consultant to Rick Engineering. Rick Engineering worked concurrently for both LP and Santaluz, as did a law firm involved in the project. Powell was responsible for dividing up the costs as between LP and Santaluz, and also worked on behalf of both LP and Santaluz. As early as February 1998, Rick Engineering and Powell were aware of City's position that water quality was an issue given the reservoir's remote distance from the treatment plant. Powell also acknowledged that with a rectangular shaped reservoir, poor water circulation in the tank might be a concern, but that piping, shape and overall water system operation could be configured to optimize flow patterns.[3]
The final reservoir design was for a 25-million-gallon reservoir having two equal basins of 12.5 million gallons each. In a June 1998 presentation to City of its preliminary design, Powell stated the reservoir's size made circulation patterns and water quality a “significant concern, ” and while a specific piping configuration had been proposed, it recommended a circulation study be undertaken to look at alternatives that might provide superior circulation patterns. By the end of 1998, Powell recommended in view of the reservoir's increased size that a circulation modeling study be conducted to determine water quality impacts of the basins' design, and to consider installing baffles to improve circulation.[4] Santaluz representatives pushed back on having to pay for the studies and expressed concern about the timing of their permit process. The study was eventually completed. Powell recommended an alternative without baffles for reduced construction cost; it observed such baffles were expensive to install, required continual maintenance, and impeded other maintenance operations.
In mid-1999, Santaluz entered into the participation agreement with City for the reservoir's design and construction. It took over the reservoir's development. City thereafter chose the Powell-recommended alternative for the reservoir design. In 2000, Santaluz, Powell and City rejected contractor requests to submit alternate bids for dual round storage tanks.
In about 2002, LLC was formed and acquired the northern portion of the development (Del Sur) from LP.
The reservoir was completed in 2003, and at some point City took over ownership. In June 2003, LP assigned all of its “right, title and interest” under the 1998 assignment to LLC. At the same time, LP, LLC, and Santaluz entered into an assignment agreement in which LP delegated its “duties and obligations” under the development agreements to LLC, with Santaluz's consent.
In 2015, plaintiffs sued LLC and Doe defendants alleging causes of action for strict liability and negligence on behalf of themselves and a putative class of homeowners in Del Sur with copper-plumbed homes. They alleged LLC supplied them with “defective” water, that is, water with elevated levels of copper, damaging their plumbing and causing health concerns.
Following LLC's successful demurrer, plaintiffs filed a first amended complaint. This time, plaintiffs alleged LLC “and its successors and/or assignees designed, distributed, and/or supplied the defective water systems, and distributed and/or supplied the defective water.” According to plaintiffs, the water they received was “defective” and they alleged “its lack of suitability and damaging effects was worsened by the defective water system designed and constructed by [LLC] and its successors and/or assignees.” Plaintiffs alleged “[b]y the time the water reaches the lots the water is corrosive to copper.”
After an unsuccessful demurrer, LLC moved for summary judgment on various grounds. In part, LLC argued it had no liability for either the defective potable water or the reservoir because City treated and sold the water, and LLC built the water system according to “legislative mandate, ” namely the publicly-approved and adopted development agreement and subarea plan. It argued City's water distribution system, assertedly constructed by different parties over many years, was not a product to which strict products liability applies, but even if it was, LLC was not liable for a non-defective component part, that is, the northern transmission loop lines that it had constructed. LLC argued plaintiffs could not establish it owed a duty of care as a matter of law to support their negligence cause of action.
The trial court denied the...
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