What Will the Supremes Do?

McMillan Albany LLC v. Superior Court (2015) 239 Cal.App.4th 1132

Presently, a similar case to the Elliott Homes (See Feb. post) is currently being considered by the California Supreme Court on the issue of the Builder’s Right to Repair Act’s exclusivity. The facts are somewhat similar to Elliott – a group of homeowners filed a construction defect lawsuit against their builder (McMillan) based on common law theories (strict liability, breach of warranty, etc.) without going through the pre-litigation procedures set forth in the Act. McMillan moved to stay the lawsuit pending completion of the procedures. The Court denied the motion, reasoning that because the lawsuit was not brought under the Act, the procedures found in the Act’s scheme did not apply.

The court of appeal, though, rejected the Liberty Mutual holding in similar fashion to Elliott Homes. They issued a writ of mandate to vacate the trial court’s ruling and entered a new order to stay the lawsuit until the Act’s procedures were completed. The homeowners appealed to the California Supreme Court, and in August of 2016, arguments were scheduled on the issue. We anxiously await the Supreme Court’s decision on this. Unless and until the California Supreme Court reconciles the foundational disagreement over the exclusivity of the Act, there will remain some doubt as to whether the Act truly will remain the sole and exclusive source of law governing defect claims.