BILL NUMBER: AB 903 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 29, 2003
INTRODUCED BY Assembly Member Steinberg
FEBRUARY 20, 2003
An act to amend Sections 911, 916, and 941 of, and to amend,
renumber, and add Section 942 to, the Civil Code, relating to
construction defects.
LEGISLATIVE COUNSEL'S DIGEST
AB 903, as amended, Steinberg. Construction defect cases.
Existing law specifies the rights and requirements of a homeowner
to bring an action for construction defects.
This bill would require the California Law Revision
Commission to conduct a study to determine if the goals of achieving
a more fair and prompt resolution process in construction defects
cases has resulted from a specified recent legislative enactment.
The bill would require the commission to report its findings by March
1, 2004. The bill would also make a specified statement of
Legislative intent regarding construction defects cases
revise the definition of builder, as that term is used in
provisions regarding construction defect actions. The bill would
also recast and reorganize related provisions .
Vote: majority. Appropriation: no. Fiscal committee:
yes no . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares, as follows:
SECTION 1. Section 911 of the Civil Code is amended to read:
911. For purposes of this title, "builder" means a
builder, developer, or original seller any entity or
individual, including a developer, builder, or original seller, who,
at the time of sale, was in the business of selling residential units
to the public, and applies to the sale of new residential
units on and or after January 1, 2003.
SEC. 2. Section 916 of the Civil Code is amended to read:
916. (a) If a builder elects to inspect the claimed unmet
standards, the builder shall complete the initial inspection and
testing within 14 days after acknowledgment of receipt of the notice
of the claim, at a mutually convenient date and time. If the
homeowner has retained legal representation, the inspection shall be
scheduled with the legal representative's office at a mutually
convenient date and time, unless the legal representative is
unavailable during the relevant time periods. All costs of builder
inspection and testing, including any damage caused by the builder
inspection, shall be borne by the builder. The builder shall also
provide written proof that the builder has liability insurance to
cover any damages or injuries occurring during inspection and
testing. The builder shall restore the property to its pretesting
condition within 48 hours of the testing. The builder shall, upon
request, allow the inspections to be observed and electronically
recorded, videotaped, or photographed by the claimant or his or her
legal representative.
(b) Nothing that occurs during a builder's or claimant's
inspection or testing may be used or introduced as evidence to
support a spoilation spoliation defense
by any potential party in any subsequent litigation.
(c) If a builder deems a second inspection or testing reasonably
necessary, and specifies the reasons therefor in writing within three
days following the initial inspection, the builder may conduct a
second inspection or testing. A second inspection or testing shall
be completed within 40 days of the initial inspection or testing.
All requirements concerning the initial inspection or testing shall
also apply to the second inspection or testing.
(d) If the builder fails to inspect or test the property within
the time specified, the claimant is released from the requirements of
this section and may proceed with the filing of an action. However,
the standards set forth in the other chapters of this title shall
continue to apply to the action.
(e) If a builder intends to hold a subcontractor, design
professional, individual product manufacturer, or material supplier,
including an insurance carrier, warranty company, or service company,
responsible for its contribution to the unmet standard, the builder
shall provide notice to that person or entity sufficiently in advance
to allow them to attend the initial, or if requested, second
inspection of any alleged unmet standard and to participate in the
repair process. The claimant and his or her legal representative, if
any, shall be advised in a reasonable time prior to the inspection
as to the identity of all persons or entities invited to attend.
This subdivision shall not apply to the builder's insurance company.
Except with respect to any claims involving a repair actually
conducted under this chapter, nothing in this subdivision shall be
construed to relieve a subcontractor, design professional, individual
product manufacturer, or material supplier of any liability under an
action brought by a claimant.
SEC. 3. Section 941 of the Civil Code is amended to read:
941. (a) Except as specifically set forth in this title, no
action may be brought to recover under this title more than 10 years
after substantial completion of the improvement but not later than
the date of recordation of a valid notice of completion.
(b) As used in this section, "action" includes an action for
indemnity brought against a person arising out of that person's
performance or furnishing of services or materials referred to in
this title, except that a cross-complaint for indemnity may be filed
pursuant to subdivision (b) of Section 428.10 of the Code of Civil
Procedure in an action which has been brought within the time period
set forth in subdivision (a).
(c) The limitation prescribed by this section shall not be
asserted by way of defense by any person in actual possession or the
control, as owner, tenant or otherwise, of such an improvement, at
the time any deficiency in the improvement constitutes the proximate
cause for which it is proposed to make a claim or bring an action.
(d) Sections 337.15 and 337.1 of the Code of Civil Procedure shall
not apply to actions under this title.
(e) Existing statutory and decisional law regarding tolling of the
statute of limitations shall apply to the time periods for filing an
action or making a claim under this title, except that repairs made
pursuant to Chapter 4 (commencing with Section 910), with the
exception of the tolling provision contained in Section 927, do not
extend the period for filing an action, or restart the time
limitations contained in subdivisions (a) or (b) if 7091 of the
Business and Professions Code. If a builder arranges for a
contractor to perform a repair pursuant to Chapter 4 (commencing with
Section 910), as to the builder the time period for calculating the
statute of limitation in subdivisions (a) or (b) if Section 7091 of
the Business and Professions Code shall pertain to the substantial
completion of the original construction and not to the date of
repairs under this title. The time limitations established by this
title do not apply to any action by a claimant for a contract or
express contractual provision. Causes of action and damages to which
this chapter does not apply are not limited by this section.
In order to make a claim for violation of the standards set
forth in Chapter 2 (commencing with Section 896), a homeowner need
only demonstrate, in accordance with the applicable evidentiary
standard, that the home does not meet the applicable standard,
subject to the affirmative defenses set forth in Section 945.5. No
further showing of causation or damages is required to meet the
burden of proof regarding a violation of a standard set forth in
Chapter 2 (commencing with Section 896), provided that the violation
arises out of, pertains to, or is related to, the original
construction.
SEC. 4. Section 942 of the Civil Code is amended and renumbered to
read:
942.
943. (a) Except as provided in this title, no other cause
of action for a claim covered by this title or for damages
recoverable under Section 944 is allowed. In addition to the rights
under this title, this title does not apply to any action by a
claimant to enforce a contract or express contractual provision, or
any action for fraud, personal injury, or violation of a statute.
Damages awarded for the items set forth in Section 944 in such other
cause of action shall be reduced by the amounts recovered pursuant to
Section 944 for violation of the standards set forth in this title.
(b) As to any claims involving a detached single-family home, the
homeowner's right to the reasonable value of repairing any
nonconformity is limited to the repair costs, or the diminution in
current value of the home caused by the nonconformity, whichever is
less, subject to the personal use exception as developed under common
law.
SEC. 5. Section 942 is added to the Civil Code, to read:
942. In order to make a claim for violation of the standards set
forth in Chapter 2 (commencing with Section 896), a homeowner need
only demonstrate, in accordance with the applicable evidentiary
standard, that the home does not meet the applicable standard,
subject to the affirmative defenses set forth in Section 945.5. No
further showing of causation or damages is required to meet the
burden of proof regarding a violation of a standard set forth in
Chapter 2 (commencing with Section 896), provided that the violation
arises out of, pertains to, or is related to, the original
construction.
(a) It is the intent of the Legislature that this act improve the
procedures for the administration of civil justice, including
standards and procedures for early disposition of construction
defects cases.
(b) In an effort to ensure that the intent of the Legislature has
been accomplished with the enactment of Chapter 722 of the Statutes
of 2002, the California Law Revision Commission shall conduct a study
to determine if the goals of achieving a more fair and prompt
resolution process has resulted from the enactment of Chapter 722 of
the Statutes of 2002. The California Law Revision Commission shall
provide its findings to the Chief Clerk of the Assembly and the
Secretary of the Senate on or before March 1, 2004.