Lantzy v. Centex Homes, No. S098660.

CourtUnited States State Supreme Court (California)
Writing for the CourtBAXTER, J.
Citation2 Cal.Rptr.3d 655,31 Cal.4th 363,73 P.3d 517
PartiesHenry V. LANTZY et al., Plaintiffs and Appellants, v. CENTEX HOMES et al., Defendants and Respondents.
Docket NumberNo. S098660.
Decision Date04 August 2003

2 Cal.Rptr.3d 655
73 P.3d 517
31 Cal.4th 363

Henry V. LANTZY et al., Plaintiffs and Appellants,
v.
CENTEX HOMES et al., Defendants and Respondents

No. S098660.

Supreme Court of California.

August 4, 2003.

As Modified August 27, 2003.


2 Cal.Rptr.3d 657
Duke Gerstel Shearer, Dawn R. Brennan and Alan R. Johnston, San Diego, for Plaintiffs and Appellants

Luce, Forward, Hamilton & Scripps, Charles A. Bird, San Diego; Morgan, Miller & Blair, Kenneth M. Miller and Kathleen M. DeLaney, Walnut Creek, for Defendants and Respondents.

Fred J. Hiestand for the Civil Justice Association of California as Amicus Curiae on behalf of Defendants and Respondents.

David S. Jaffe; Piper Marbury Rudnick & Wolfe, Jeffrey A. Rosenfeld, Los Angeles, and Stephen R. Mysliwiec for National

2 Cal.Rptr.3d 658
Association of Builders as Amicus Curiae on behalf of Defendants and Respondents

Dale, Braden & Hinchcliffe, George D. Dale and Dianne M. Costales for the California Building Industry Association as Amicus Curiae on behalf of Defendants and Respondents.

2 Cal.Rptr.3d 656
BAXTER, J

Depending on the theory of recovery, a lawsuit alleging a latent defect in the construction of an improvement to real property must be brought within three or four years after the plaintiff discovers the defect, or should have done so. (See Code Civ. Proc, §§ 337, subd. 1, 338, subds. (b), (c); Regents of University of California v. Hartford Ace. & Indem. Co. (1978) 21 Cal.3d 624, 630, 147 Cal.Rptr. 486, 581 P.2d 197 (Regents).)1 However, a 1971 statute established a further general rule that no action for latent construction defects may be commenced more than 10-years after "substantial completion" of the construction project. (§ 337.15; as enacted by Stats.1971, ch. 1569, § 1, p. 3149.)2 This "absolute" 10-year limitations period applies regardless of when the defect was discovered. (Regents, supra, at p. 631, 147 Cal.Rptr. 486, 581 P.2d 197.)

Pre-1971 cases held that the discovery-based limitations period for a latent-defect suit alleging breach of an express or implied warranty is "tolled"—that is, halted and suspended in progress—while the defendant's promises or attempts to honor the warranty by repairing the defect are pending. Relying heavily on these earlier authorities, and in suits not confined to warranty theories, two Court of Appeal cases concluded that the alternate 10-year statute of limitations of section 337.15 is also subject to tolling for repairs. (Grange Debris Box & Wrecking Co. v. Superior Court (1993) 16 Cal.App.4th 1349, 20 Cal. Rptr.2d 515 (Grange Debris); Cascade Gardens Homeowners Assn. v. McKellar & Associates (1987) 194 Cal.App.3d 1252, 240 Cal.Rptr. 113 (Cascade Gardens).) A more recent Court of Appeal decision disagreed. (FNB Mortgage Corp. v. Pacific General Group (1999) 76 Cal.App.4th 1116, 90 Cal.Rptr.2d 841 (FNB Mortgage).)

Here the trial court sustained a demurrer without leave to amend and dismissed the action, concluding that the 10-year limitations period could not be extended by a defendant's promises or attempts to repair. The Court of Appeal reversed this judgment. The appellate court held that section 337.15 is subject both to equitable tolling during periods of repair and to equitable estoppel if defendants engaged in conduct that delayed the filing of suit. We granted review to resolve the extent to which the doctrines of equitable tolling and equitable estoppel should apply to the 10-year statute of limitations set forth in section 337.15.

We agree with FNB Mortgage, supra, 76 Cal.App.4th 1116, 90 Cal.Rptr.2d 841, that section 337.15's 10-year statute of limitations for latent construction defects is not subject to a general rule of equitable

2 Cal.Rptr.3d 659
tolling while promises or attempts to repair are pending. A broad tolling-for-repairs rule would contravene the Legislature's clear intent, at the time it adopted section 337.15, to ensure a generous but firm cutoff date for latent-defect suits. Moreover, the extraordinary length of the limitations period set forth in section 337.15 weighs strongly against the need for such a tolling rule as a matter of fair procedure.

Though we thus find no basis for equitable tolling during any period in which the defendant's promises or efforts to repair are pending, we do not foreclose application of the distinct doctrine of equitable estoppel. A defendant whose conduct induced plaintiffs to refrain from filing suit within the 10-year period might be equitably estopped to assert that the statute of limitations had expired. However, plaintiffs' first amended complaint alleges no facts sufficient to establish such an estoppel, and we find no basis upon which to allow a further opportunity to amend.

We will therefore reverse the Court of Appeal's judgment. We will also disapprove the Grange Debris and Cascade Gardens decisions insofar as they conflict with the views expressed in this memorandum.

FACTS

Plaintiffs filed their original complaint on August 5, 1999, and a first amended complaint on December 3, 1999, asserting both individual and class claims. The first amended complaint alleged as follows:

The Eagles Ridge project is a 450-unit development of single-family homes in Antioch. Defendants—Centex Homes and related entities (collectively Centex), American Consolidated Industries, Inc., and numerous Does—variously designed, developed, built, and/or sold the Eagles Ridge homes, or designed, manufactured, sold, and/or installed the windows. The four individual plaintiffs, whose claims typify those of the other class members, are homeowners within the development who bought their houses directly from defendants. The Eagles Ridge homes suffer from design or manufacturing defects, including leaks in the windows and window systems, that have caused damage to each of the individual residences. These defects were discovered within three years before the lawsuit was filed. They may have developed earlier, but could not have been discovered sooner with reasonable diligence. "[A]s problems resulting from unknown defects were discovered," defendants represented to plaintiffs that they would correct all problems, were experts in the construction field, and would take the steps required to ensure the quality and integrity of the residences. "[A]t various times [defendants have attempted to make repairs ... or advised plaintiffs that the ... windows were not defective and not to file a lawsuit." Despite their promises and attempts to repair, defendants "have not properly completed[,] reconstructed, repaired and/or restored the windows, interior waterproofing systems, and walls associated therewith." By their conduct, defendants are estopped to assert that the statute of limitations has expired. Damages are recoverable on theories of implied warranty, strict liability, and negligence.

Defendants demurred on two grounds. They urged the entire action was barred by section 337.15's 10-year limitations period for latent construction defects. They also insisted the complaint's class allegations were insufficient. In support of their statute of limitations argument, defendants asked the court to take judicial notice that the Notices of Completion on the four homes owned by the individual plaintiffs were recorded in November 1988, some

2 Cal.Rptr.3d 660
10-years and 9 months before plaintiffs filed their original complaint.

In response, plaintiffs urged that the first amended complaint properly pled a class action. With respect to the statute of limitations, plaintiffs argued that the complaint sufficiently alleged both equitable tolling for repairs and equitable estoppel to assert the statute by virtue of defendants' conduct that forestalled a timely lawsuit.

On April 24, 2000, the trial court filed its "Order After Hearing on Demurrer." The order sustained the demurrer without leave to amend on grounds that the action was barred by the statute of limitations. The order reasoned: The parties "appear to agree" that, unless "tolled" for about nine months, section 337.15's 10-year limitations period had expired before the complaint was filed.3 For two reasons, the allegations of the complaint are not specific enough to establish a repairs-based "estoppel." First, plaintiffs allege in the alternative that defendants either promised and attempted to repair or denied the defects and made demands not to sue; the latter conduct is insufficient to create an "estoppel." Second, by alleging simply that repairs were attempted "at various times," plaintiffs leave open the possibility this conduct occurred after November 1998 (when the statute of limitations expired unless tolled), and thus was not timely to create a "tolling." Amendments might cure these factual deficiencies, but amendment would be futile here, because section 337.15 is a "statute of repose," and thus is not subject to "equitable tolling" for repairs.

Plaintiffs appealed, and the Court of Appeal reversed. Unlike the trial court, the Court of Appeal agreed with those decisions (Grange Debris, supra, 16 Cal. App.4th 1349, 20 Cal.Rptr.2d 515; Cascade Gardens, supra, 194 Cal.App.3d 1252, 240 Cal.Rptr. 113) that extended equitable tolling for repairs to section 337.15, and rejected the contrary reasoning of FNB Mortgage, supra, 76 Cal.App.4th 1116, 90 Cal.Rptr.2d 841. Moreover, the Court of Appeal concluded, just as section 337.15 is subject to equitable tolling, the statute also is not immune from equitable estoppel. The Court of Appeal ruled that plaintiffs had pled grounds for an equitable estoppel, sufficient to survive demurrer, by alleging that defendants' repeated promises to repair had caused them to delay filing suit.

We granted Centex's petition for review.4 We now conclude that the Court of Appeal's judgment must be reversed.

DISCUSSION

1. Equitable tolling.

Section 337.15, enacted in 1971, provides generally that "[n]o action may be brought" against those involved in the design,...

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442 practice notes
  • People v. Blackburn, H037207
    • United States
    • California Court of Appeals
    • August 14, 2013
    ...justice demands it.” ’ [Citations.]” ( Id. at p. 100, 84 Cal.Rptr.3d 734, 194 P.3d 1026, fn.omitted; see Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517 [“effect of equitable tolling is that the limitations period stops running during the tolling event, and......
  • People v. Blackburn, H037207
    • United States
    • California Court of Appeals
    • April 23, 2013
    ...demands it." ’ [Citations.]" ( Id. at p. 100, 84 Cal.Rptr.3d 734, 194 P.3d 1026, fn.omitted; see Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517 ["effect of equitable tolling is that the limitations period stops running during the tolling eve......
  • Reid v. City of San Diego, D072493
    • United States
    • California Court of Appeals
    • May 25, 2018
    ...doctrine of equitable tolling has been applied only in few "carefully considered situations." ( Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517.) Equitable tolling under the circumstances Plaintiffs propose here is not one such situation.4. No bas......
  • Hooper v. Ebenezer Senior Services, No. 4350.
    • United States
    • Court of Appeals of South Carolina
    • March 10, 2008
    ...to prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no prejudice. Lantzy v. Centex Homes, 31 Cal.4th 363, 2 Cal.Rptr.3d 655, 73 P.3d 517, 523 (2003) (quotations and citations The Delaware Supreme Court examined the application of equitable tollin......
  • Request a trial to view additional results
438 cases
  • People v. Blackburn, H037207
    • United States
    • California Court of Appeals
    • August 14, 2013
    ...justice demands it.” ’ [Citations.]” ( Id. at p. 100, 84 Cal.Rptr.3d 734, 194 P.3d 1026, fn.omitted; see Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517 [“effect of equitable tolling is that the limitations period stops running during the tolling event, and......
  • People v. Blackburn, H037207
    • United States
    • California Court of Appeals
    • April 23, 2013
    ...justice demands it." ’ [Citations.]" ( Id. at p. 100, 84 Cal.Rptr.3d 734, 194 P.3d 1026, fn.omitted; see Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517 ["effect of equitable tolling is that the limitations period stops running during the tolling event, and......
  • Reid v. City of San Diego, D072493
    • United States
    • California Court of Appeals
    • May 25, 2018
    ...The doctrine of equitable tolling has been applied only in few "carefully considered situations." ( Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370, 2 Cal.Rptr.3d 655, 73 P.3d 517.) Equitable tolling under the circumstances Plaintiffs propose here is not one such situation.4. No basis for......
  • Hooper v. Ebenezer Senior Services, No. 4350.
    • United States
    • Court of Appeals of South Carolina
    • March 10, 2008
    ...to prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no prejudice. Lantzy v. Centex Homes, 31 Cal.4th 363, 2 Cal.Rptr.3d 655, 73 P.3d 517, 523 (2003) (quotations and citations The Delaware Supreme Court examined the application of equitable tollin......
  • Request a trial to view additional results

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