Sutton Place of Santa Clara Cnty. Owners Ass'n v. Queen

• Decision Date: 30 January 2020
• Docket Number: H045422
• Parties: SUTTON PLACE OF SANTA CLARA COUNTY OWNERS ASSOCIATION, Plaintiff and Appellant, v. JOLENE KAY QUEEN, Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

SUTTON PLACE OF SANTA CLARA COUNTY OWNERS ASSOCIATION, Plaintiff and Appellant, v. JOLENE KAY QUEEN, Defendant and Respondent.

H045422

COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT

January 30, 2020

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Santa Clara County Super. Ct. No. 2012-1-CV-226469)

Respondent Jolene Kay Queen, dba North Bay Windows (North Bay), provided windows and sliding glass doors and related services for the construction of a common interest residential development (the Development) governed by Appellant Sutton Place of Santa Clara County Owners Association (Sutton Place). After discovering damage to the property allegedly caused by water intrusion, Sutton Place filed suit against numerous defendants involved in the construction of the Development, including North Bay. North Bay raised as an affirmative defense the statute of repose set forth in Code of Civil Procedure section 337.15,¹ which bars construction defect claims filed against certain persons more than 10 years after the substantial completion of a project. Sutton Place sought recovery based on strict product liability grounds, alleging North Bay was part of the stream of commerce providing the windows and doors and did not participate in the construction of the Development. Sutton Place contended the 10-year limit did not applyto North Bay, as it was a mere supplier of materials to the project, rather than a person protected by section 337.15.

In a bifurcated trial on the applicability of section 337.15 as an affirmative defense, the trial court determined North Bay's activities at the construction site brought it within the scope of the 10-year statute of repose, such that Sutton Place's claims against North Bay were time-barred under the statute. On appeal from the resulting judgment, Sutton Place argues the trial court erred when it determined North Bay was a person described in section 337.15, as North Bay's on-site activities were incidental to its role as a supplier of materials. Sutton Place further argues the section does not preclude its claim against North Bay because it sued for product defects, not construction defects; its claims are not premised on any of the activities performed by North Bay at the construction site; and even if section 337.15 applies, it does not preclude claims based on North Bay's role as a supplier of allegedly defective products. Reviewing the matter de novo, we find the statute of repose bars Sutton Place's claims against North Bay, and affirm the judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

Sutton Place was formed in 1996 as the governing body of a common interest development located in Santa Clara County, consisting of residential units separately owned by Sutton Place's individual members, and common areas in which the members hold undivided interests, collectively referred to as the Development. The parties stipulated that the date of substantial completion of the Development was March 27, 1998. North Bay provided windows and sliding glass doors manufactured by Milgard Manufacturing, Inc. (Milgard) to the Development during its construction in 1996 through 1998, as well as services related to the windows and doors.

In June 2012, Sutton Place filed a complaint for damages arising from defective construction against multiple defendants, alleging causes of action for negligence and violation of statute, products liability, breach of implied warranty, and breach of contract,amongst others, and seeking general, special, and punitive damages, prejudgment interest, and litigations costs, including attorney fees. Relevant to this appeal, Sutton Place alleged that defects in the window-wall assembly installed in the Development resulted in water intrusion and mold infestation in the exterior wall assemblies; specifically, Sutton Place claimed the exterior cladding system, consisting of products known as "EIFS" and "DEFS," was defectively designed and installed. Although not specifically named as a defendant in the initial complaint, North Bay filed an answer to the complaint in October 2015, denying all allegations set forth in the complaint. As an affirmative defense, North Bay alleged that the complaint was barred by various statutes of limitations, including section 335 et seq., the portion of the Code of Civil Procedure specifying "[t]he periods prescribed for the commencement of actions other than for the recovery of real property . . . ." (§ 335.) While North Bay cited several specific statutory provisions, it did not explicitly reference section 337.15, which is found in the chapter of the Code of Civil Procedure beginning with section 335.²

In March 2017, Sutton Place filed a third amended complaint, naming North Bay as a defendant; in this amended complaint, Sutton Place claimed North Bay, along with other defendants, "graded, prepared the site for, assembled, manufactured, installed, supervised and provided other services and work related to the construction of the Development," and that it "designed, engineered, provided specifications for, tested, assembled, manufactured, supplied, wholesaled, retailed and/or provided materials and/or component parts used in the construction of the Development." North Bay was included in the category of defendants against whom Sutton Place alleged causes of action fornegligence and violation of statute, products liability, breach of implied warranty, and breach of contract.

Prior to trial, Sutton Place settled with all defendants except North Bay, including Mathilda Construction Limited Partnership (Mathilda), the general contractor for the Development, and Milgard, the manufacturer of the subject windows and doors. North Bay maintained that Sutton Place's claims against it were barred by the 10-year statute of repose set forth in section 337.15, which, as discussed in more detail later in this opinion, precludes actions for latent construction defect claims brought against certain participants in the construction process more than 10 years after substantial completion of the project. The parties stipulated that the trial court would hold a bench trial on the bifurcated issue of this affirmative defense. Sutton Place did not dispute that more than ten years had passed from the date of completion of the Development to the date it filed the original complaint. Rather, it argued that section 337.15 did not apply, as North Bay was a product supplier rather than a provider of work or services that caused damage at the development, such that Sutton Place's claims against North Bay should be governed by the statutes of limitation that run from the date a plaintiff discovers its claims against the defendant, namely those of sections 337 [setting a four-year limitation for actions based on a contract] and 338 [setting a three-year limitation for actions based on stated tort claims].

For purposes of the bifurcated trial, the parties agreed Sutton Place did not need to prove liability and damages, as the only issue was the application of section 337.15; the trial court accepted the parties' agreement that the court adopt the pleadings as true for those purposes. For the benefit of the trial court, Sutton Place's counsel described the assumed defects as follows: "The defect in the windows. There's various defects, manufacturing defects such as they weren't sealed properly at the factory. There's corner joints that aren't connected properly. . . . [T]here's actually a variety of different things. But the result is, it causes water that hits the window to go through the window assemblyand then down into the wall assemblies." Jolene Queen, the sole proprietor of North Bay, was the sole witness to testify at the trial.

Queen considered herself to be a "dealer" for Milgard windows, and confirmed that one could have called her a supplier. She ordered Milgard products individually through purchase orders created after viewing plans and specifications for a particular project, and after she was awarded the project. Those products would then be manufactured based on her order and shipped directly to jobsites. In bidding projects, Queen would "guarantee that what was on the plans and specifications was being represented fully in [the] bid, so that everything that was required to finish the job was part of the bid. [¶] We would also show up to inspect and take deliveries, and we did a service called a lock-in-slide at the end of the project. We would go into the project and operate every window, make sure it operated correctly, and install the screens." In terms of inspecting the delivered product, Queen would meet the delivery truck and inspect to make sure the delivery was what she ordered and in the proper amounts. She did not physically inspect every detail of every window. "We would overview, look and make sure that the windows were in good shape, there was no broken glass, that they weren't damaged in any way, and that the number of windows that we were supposed to have were there."

Queen testified that all of the windows and doors were specially ordered for the Development. This is how Milgard conducted business at the time; it did not stock product. The windows for this project were "special in that they were mulled, they were two wide windows. It was not all that common." The patio doors had a transom, which was also not common. Queen testified that she would have shipped what was called for on the plans to frame the windows. Queen did not select or determine what windows to use; she ordered the windows specified in the plans by the architect. Though Queen custom ordered Milgard's windows, the architect determined the specifications. She did not make...