Fourth District Court of Appeals Issues Published Opinion Interpreting Scope and Application of SB 800 Performance Standards
(Gerlach v. K. Hovnanian’s Four Seasons at Beaumont, LLC, 2022 Cal. App. LEXIS 706*)
In February 2020, our office defended builder K. Hovnanian at trial in a case involving alleged construction defects at two homes in Riverside County, California. The Plaintiffs pled causes of action for breach of construction standards under Civil Code 896, et seq. (“SB800”), as well as breach of contract and breach of warranty. During the trial, we sought to exclude Plaintiffs’ roofing expert from testifying because he opined there were no violations of SB800’s two main roofing standards: 896(a)(4): “Roofs, roofing systems, chimney caps, and ventilation components shall not allow water to enter the structure or to pass beyond, around, or through the designed or actual moisture barriers, including, without limitation, internal barriers located within the systems themselves. For purposes of this paragraph, “systems” include, without limitation, framing, substrate, and sheathing, if any; and 896(a)(11): “Roofing materials shall be installed so as to avoid materials falling from the roof.”
Plaintiffs countered, despite the fact the statute says “shall” not allow water to enter, and “so as to avoid” materials falling off the roofs, their expert should be allowed to testify the manner in which the roofs were constructed may allow for violations of the performance standards in the future. The trial court disagreed and granted K. Hovnanian’s motion for exclusion of these opinions.
Faced with the exclusion of their expert, Plaintiffs pivoted and argued the concrete tile roofing system was subject to 896(g)(3)(A), which reads: “to the extent not otherwise covered by these standards, manufactured products, including, but not limited to, windows, doors, roofs, plumbing products and fixtures, fireplaces, electrical fixtures, HVAC units, countertops, cabinets, paint, and appliances shall be installed so as not to interfere with the products’ useful life, if any.” [Emphasis added.] However, 896(g)(3)(C) reads: “For purposes of this paragraph, manufactured product means a product that is completely manufactured offsite.”
Plaintiffs’ contention threatened to completely transform their roofing claims and, seemingly, undercut the letter and spirit of SB800. We successfully countered Plaintiffs’ ploy by convincing the trial court a concrete tile roof is a system of components which are constructed and assembled on site which does not meet the definition of a ‘manufactured product’ under the applicable law.
Adopting our argument, Plaintiffs’ roofing expert was precluded at trial from offering an opinion the roof constituted a manufactured product and its installation interfered with the useful life of the roofing products.
Accordingly, the jury awarded one plaintiff only $1,900 for a single construction standard violation unrelated to the roofs, whereas our client received a complete defense verdict against the other plaintiff. The Plaintiffs then appealed the trial court’s decision precluding the roofing claims to the Fourth Appellate District Court.
Recently, the Appellate Court issued its published opinion, accepting all our arguments and affirming the judgment. The Appellate Court published the portion of the opinion relating to roofs. The decision is important for two reasons: 1) The opinion confirms the long-held defense contention SB800 is a performance standard, i.e., a plaintiff must show evidence of a current or past violation of one of the standards to recover damages. Seemingly, with this decision, homeowner plaintiffs can no longer argue a building component was constructed such that a violation may occur in the future. 2) The Appeals Court severely limited the type of claims a homeowner can maintain under the “manufactured product” standard of 896(g)(3)(A), holding a tile roof does not qualify.
The enactment of SB800 effectively abolished the negligence standard for residential construction, replacing it with performance standards which require a breach to recover damages. While the defense bar has always argued the plain reading of SB800 required an active violation of the standards, before the Gerlach opinion, there was little case law to support this position. During trial, the Plaintiffs attempted to return California construction defect law to its pre-SB800 status where how the roof system was installed was the operative analysis rather than its performance. The trial court, and then the appeals court, agreed with our position sections 896(a)(4) and (g)(11) state the roofs “shall” not leak, or materials “shall” not fall from the roofs, affirmatively placing the burden on the Plaintiffs to prove a leak had occurred or materials had fallen from the roofs in the past or present to be able to maintain a claim. This distinction has wide-spread application to a myriad of other standards within SB800 which contain similar language.
The Court of Appeals essentially adopted our reasoning and argument verbatim: “The facts of this case vividly illustrate the problem. Plaintiffs’ roofs were more than 12 years old by the time of trial. There is no evidence that they have leaked or that material has fallen from them. But plaintiffs sought to introduce evidence that because the roofs were improperly constructed or installed, they were likely to leak or to produce falling material in the future. We agree with the trial court that this is precisely the kind of claim that the Act was intended to foreclose.” (2022 Cal App. LEXIS 706, *15.) Moreover, the Gerlach opinion could be used as a sword by developers against homeowner claims construction systems constitute “manufactured products” under SB800. The Court of Appeals was unequivocal in holding on this issue: “[A] roof is a manufactured product within the meaning of section 896, subdivision (g)(3)(A) (section 896(g)(3)(A)), only if the roof is completely manufactured off site.” (Id at *12.)
Builders and the defense bar now have citable case law interpreting the scope and application of SB800 standards for the first time. The Gerlach opinion cane be read as a requirement by the homeowners to affirmatively prove the existence of a past or current violation of one of the construction standards within SB800 to trigger damages. Likewise, the opinion also operates to curtail the plaintiff bar’s attempt to capture an ever-increasing list of conditions under the “manufactured product” standard.
 See, e.g., 896(a)(1) – (18); 896(b)(1) and (2); 896(c)(1) – (3); 896(d)(1) – (3); 896(e); 986(g)(1) and (2); 896(g)(4) – (15).