Winston Square Homeowner's Assn. v. Centex West, Inc.

• Citation: 213 Cal.App.3d 282,261 Cal.Rptr. 605
• Decision Date: 24 July 1989
• Docket Number: No. A040601,A040601
• Court: California Court of Appeals Court of Appeals
• Parties: WINSTON SQUARE HOMEOWNER'S ASSOCIATION, Plaintiff and Appellant, v. CENTEX WEST, INC., Wilsey & Ham, Ruscigno Concrete Construction Company, Defendants and Respondents.

Page 605

261 Cal.Rptr. 605

213 Cal.App.3d 282

WINSTON SQUARE HOMEOWNER'S ASSOCIATION, Plaintiff and Appellant, v. CENTEX WEST, INC., Wilsey & Ham, Ruscigno Concrete Construction Company, Defendants and Respondents.

No. A040601.

Court of Appeal, First District, Division 1, California.

July 24, 1989.

Berger & Hopkins and A. Alan Berger, San Jose, for plaintiff and appellant.

Douglas B. Harvey, William J. Peters, Dion N. Cominos and Gordon & Rees, San Francisco, for defendant and respondent Centex West, Inc.

Severson, Werson, Berke & Melchior and Howard W. Ashcraft, Jr., San Francisco, for defendant and respondent Wilsey & Ham.

Martin W. Mertes, Bloom & Leonard, Campbell, for defendant and respondent Ruscigno Concrete Const.

HOLMDAHL, Associate Justice.

Homeowner's association sued the developer and subcontractors of a townhouse development for various alleged defects. The issues on appeal relate to drainage problems at the development and the application of the statute of limitations thereto. Plaintiff also raises two issues regarding the award of costs to one defendant.

The judgment for defendants is affirmed.

Statement of Facts and Procedural History

Plaintiff Winston Square Homeowner's Association (hereafter, Winston Square) is composed of the homeowners of a townhouse development in Foster City. On August 25, 1982, Winston Square filed a complaint in San Mateo County Superior Court in an attempt to recover damages suffered as a result of alleged construction defects. Winston Square filed an amended complaint on August 8, 1983. The amended complaint listed five "causes of action"--declaratory relief, breach of express warranty, breach of implied warranty, strict liability, and negligence. Defendants were the developer and various subcontractors.

By the time trial began, the parties had narrowed the alleged defective construction to seven areas:

1. drainage

2. plastering

3. gutters and downspouts

4. chimney crickets

5. valley gutters

6. trim boards

7. balcony railings

The trial was bifurcated. The first phase dealt only with the affirmative defense of the statute of limitations. At the first phase, the trial court heard testimony from numerous homeowners on the chronology of the events and the nature of the defects.

The trial court filed its statement of decision on September 22, 1987. Drainage is the only area in dispute on appeal. ¹ The drainage defect caused ponding of water at various locations throughout the development. Centex West, Inc. (hereafter, Centex), the developer, and two subcontractors, Wilsey & Ham and Ruscigno Concrete Construction Company, were the defendants alleged to be liable for drainage defects.

The trial court concluded the drainage defects were patent and a four-year limitation period applied. Since the date of completion of the project was December 3, 1975, the four-year period expired before Winston Square filed its original complaint. However, in response to complaints from homeowners, Centex had endeavored to correct problems at the development. Thus, the crucial issue to be decided was whether the four-year period was tolled by Centex's attempts to effect repairs. On that issue, the trial court found no substantial evidence that any defendant performed any drainage repairs after 1976. For all the other defects, however, the court ruled the statute of limitations was tolled by the efforts of Centex to correct the problems. The court determined the statute of limitations barred recovery of damages for any drainage defects. It added that even if the drainage defects had been latent, recovery would still be barred because Winston Square was aware or should have been aware of drainage problems.

On appeal, Winston Square challenges these findings, and the award of certain costs to Wilsey & Ham.

Tolling of Statute of Limitations

Winston Square questions the trial court's application of the statutes of limitations to separate areas of damage. Winston Square contends it has one cause of action, for damages caused by the faulty construction and design of the townhouse units, and the statute of limitations must be applied uniformly to that single cause of action. Winston Square admits it espoused five separate theories of recovery, but asserts it never claimed to have separate causes of action for each area of damage. Winston Square concludes the trial court's finding that repairs by Centex tolled the limitations period for all areas of damage except for drainage defects is nonsensical.

Winston Square correctly notes California follows the primary right theory for defining a cause of action. "Under the theory, the invasion of one primary right gives rise to a single cause of action. [Citations.] It is the right sought to be established, not the remedy or relief, which determines the nature and substance of the cause of action. [Citation.]" (R & A Vending Services, Inc. v. City of Los Angeles (1985) 172 Cal.App.3d 1188, 1194, 218 Cal.Rptr. 667.)

Winston Square believes Centex invaded one primary right--Centex failed to provide homes and grounds free of defects. ² The various areas of damage are merely manifestations of this single breach of duty. Winston Square asserts the language "no action shall be brought," in the applicable statutes of limitation, Code of Civil Procedures sections 337.1 and 337.15, means the limitations period applies to causes of action, not to individual areas of damage. ³ Centex suggests Mack v. Hugh W. Comstock Associates (1964) 225 Cal.App.2d 583, 37 Cal.Rptr. 466, has resolved the issue of whether repair of one construction defect tolls the limitations period as to only that defect. ⁴ In Mack, the plaintiffs contracted for the construction of a new home. The radiant heating system installed in the new home was defective, and on numerous occasions leaks occurred causing damage to the house and furnishings. Each time a leak occurred, the plaintiffs notified the two defendants and the defendants would attempt to repair the system. After several years of trouble with the system, the plaintiffs had it replaced. They then sued the defendants under a breach of warranty theory for the cost of installing the new system, damage to the house and furnishings, and mental anguish. The appellate court concluded the three-year statute of limitations was tolled during the period the defendants endeavored to make repairs. Therefore, the causes of action (against each defendant) for breach of warranty were timely filed with respect to the costs of installing the new system. (Id. at pp. 589-590, 37 Cal.Rptr. 466.) However, since the plaintiffs did not allege the defendants had undertaken any repairs to the house or furnishings, the statute of limitations was not tolled with respect to damages to real and personal property other than the heating system itself. (Id. at p. 590, 37 Cal.Rptr. 466.) ⁵

Centex notes the instant case presents even stronger facts than Mack--here, the drainage problems were unrelated to the other areas of damage.

Centex also believes this case is analogous to cases where courts have allowed separate causes of action when the harm is progressively developing, or continuing. (See Anderson v. Brouwer (1979) 99 Cal.App.3d 176, 181, 160 Cal.Rptr. 65; Avner v. Longridge Estates (1969) 272 Cal.App.2d 607, 616, 77 Cal.Rptr. 633.) In such cases, a new limitations period begins to run with each manifestation of the defect, unless reasonable inspection and further inquiry after discovery of the initial defect would have shown the extent of the deficiencies. (Ibid.)

Centex's arguments are persuasive. Under Winston Square's theory, only one statute could apply and all construction defects at a development would have to be uniformly classified as patent or latent. Sections 337.1 (patent defects) and 337.15 (latent defects) refer to "deficiency" in the singular. Winston Square's fears that an acceptance of the trial court's ruling will lead to absurd results and increased litigation are groundless, as demonstrated by this very case. The trial court does not appear to have had any trouble segregating the various areas of damage, deciding which were patent and which were latent, and determining those on which Centex had performed repairs.

The other damage areas in this case all related to structural defects, which caused water intrusion in the townhouse units. Though Winston Square's pleading was sufficient, applying the definition of "cause of action" strictly, one could probably set forth three causes of action--one for drainage defects, one for defects causing water intrusion in the townhouse units, and one for defective balcony railings.

Recovery for drainage problems is barred because Winston Square did not timely resolve the matter. The trial court's application of the statutes of limitations to separate areas of damage was proper.

Patent Versus Latent Defects

Winston Square contends the trial court's finding that drainage problems were a patent defect was erroneous. Winston Square argues the defect was latent and the proper statute of limitations was 10 years as provided by section 337.15, rather than 4 years as provided by section 337.1.

The trial court stated: "The court finds that whatever defects may have existed in the drainage system at the Winston Square project were patent in nature. Based on the testimony presented, the court finds that the majority, if not all, of the ponding problems were simply caused by rainwater with nowhere to go.... Prior to December, 1975, many homeowners had observed standing water at various places throughout the project.... Based on the testimony of a number of witnesses, the court finds that the magnitude of the drainage problem did not increase appreciably over the years--rather that the amount of ponding varied only with the amount of rain. Therefore the court finds that the defendants have established that the defective condition complained of could have been discovered by December, 1975, if pl...