Judge Ronald L. Styn issued a minute order on May 29, 2015 clarifying a question of standing which frequently arises in SB-800 cases. In Union Square at Broadway Homeowners Association v. Western Pacific Housing-Broadway, LLC, Superior Court of California, County of San Diego, Central, Case No: 37-2011-00091935-CU-CD-CTL, Judge Styn was confronted with a discovery referee’s recommendation regarding documentation of proof of standing, i.e., written assignments of rights from the original owners to pursue defect claims to subsequent purchasers. Judge Styn found that such written assignments of rights were not discoverable because they are not required to show the present owners’ standing under SB 800 “a present owner has standing simply by virtue of the fact that he or she is a present owner”. Minute Order, 5-29-2015.
The Union Square case is a class action case brought by present homeowners in a condominium development who own windows designed or manufactured by Milgard Manufacturing. In the discussion of standing as an affirmative defense, the Court clarified that standing is not an affirmative defense, but rather, standing is part of the plaintiff’s case in chief. Pillsbury v. Karmgard (1994) 22 Cal.App.4th, 743, 758. Because lawsuits must be prosecuted in the name of real party in interest, the Court was tasked with clarifying who is the real party in interest in an SB 800 cause of action. The specific statutory language of SB 800 defines a “claimant” or “homeowner” as including “the individual owners of single-family homes, individual unit owners of attached dwellings, and, in the case of a common interest development, any association as defined in Section 4080”. Civil Code of California Section 895(f). The Court reasoned that the statutory definition does not refer to a present owner, but the statutory definition does use the present tense. Therefore, the term “owners” as used in the section can only mean present owners. The Court reinforced this finding by noting that this interpretation is consistent with California Civil Code Section 944 which limits the homeowners’ damages to those which would only be available to present owners, i.e. “the reasonable value of repairing any damages caused by the repair efforts, the reasonable cost of repairing and rectifying any damages resulting from the failure of the home to meet the standards . . . .”.
In addition, the Court supported its holding by noting the consistency with the construction of California Civil Code Section 945 which states that the rights and obligations under SB 800 “are binding upon all original purchasers and their successors-in-interest”.
This construction defect litigation evolved from a conventional construction defect case into a class action on window product issues against a window manufacturer, Milgard. The importance of this ruling is that it clarifies that SB 800 supersedes common law on standing. This ruling makes clear that the issue of standing is already addressed in SB 800 and that it is part of the plaintiff’s proof. Therefore, the previously argued affirmative defense of lack of standing argued by defendants in SB 800 cases is not available.
If you would like to learn more about the effect of this ruling, please contact Nelse T. Miller, Partner at 858-513-1020, Nmiller@lorberlaw.com.