by Thomas A. Balestreri, Jr.
In California a plaintiff now has two years to bring an action for personal injuries. (Code of Civil Procedure section 335.1, Senate Bill 688 of 2001 effective in 2003; The previous one-year statute of limitations for the injury or death of an individual “caused by the wrongful act or former Code of Civil Procedure section 340 (3) has been deleted.) This two-year statute of limitations is drastically less than the statute of repose periods for latent (10 years; Code of Civil Procedure section 337.15) or patent (four to five years; Code of Civil Procedure section 337.1) construction defects which cause personal injuries or property damage. (Sections 337.1 and 337.15 are statutes of repose instead of statutes of limitation. Roger E. Smith, Inc. v. SHN Consulting Engineers & Geologists, Inc. (2001) 89 Cal.App.4th 638, 647-651.) Add the issue of what exactly is “latent” versus “patent” to the ever-increasing docket of mold law and litigation, and the question of how long a plaintiff now has to bring an action for personal injuries due to a mold-related construction defect has become a topic ripe for litigation.
The easy answer may seem to be: within two years of injury but never more than four years from the date of substantial completion of the construction for personal injuries caused by a patent defect. This article will explore how California courts have balanced the shorter personal injury statute of limitations with the four-year statute of repose for patent construction defects that result in personal injury. The article will then explore the more complicated issue of the competing statute of limitations involving personal injury and latent construction defects that cause personal injuries. The final discussion covers the crucial question of “latent versus parent” defects.
The threshold issue appears to be what level of harm suffered from mold exposure is “appreciable” such that it will trigger the running of the statute of limitations clock. (Miller v. Lakeside Village Condominium Assn, Inc. (1991) 1 Cal.App.4th 1611, 1622.) An action for personal injuries caused by a latent construction defect may he brought any time after substantial completion of the construction or improvement, as long as it is also brought within two years of the plaintiff suffering “appreciable harm” and having actual or constructive knowledge of the cause. (Miller, 1 Cal.App.4th at 1624, applying rule under former one year.)
Code of Civil Procedure Section 337.1 and
Patent Construction Defects Causing Personal Injury
For personal or property injury or wrongful death arising out of a patent defect (Geertz v. Ausonio (1992) 4 Cal.App.4th 1363, 1367) “apparent by reasonable inspection”; Code of Civil Procedure section 337.1(e).“If a reasonable inspection would reveal only the manifestation of a defect but not its cause, i.e., the defect itself, then the defect is not necessarily patent.” (Id. at 1368, emphasis in original) In real property construction, the statute of repose mandates that a cause of action be brought no later than four years from the date of substantial completion of the construction. Robinson v. Chin & Hensolt (2002) 98 Cal.App.4th 702, 712:” [s]ection 337.1 provides the `outer limit of when one of its protected class may be sued for a patent defect: not later than four years after substantial completion of the project.”’) An additional year may he added if the injury occurs during the fourth year after substantial completion of the construction, but may in no event cause the statute of repose to exceed five years after substantial completion (for sake of convenience the remainder of this section will refer to this statute of repose as having a four-year limit). (Code of Civil Procedure section 337.1(a)-(b).) Courts have been adamant about this statute of repose not reviving claims barred by an applicable statute of limitations. (E.g., Roger E. Smith, Inc, 89 Cal.App.4th at 647.) For example, a plaintiff may bring suit for breach of oral contract or personal injuries within two years under sections 339 and 335.1, respectively, but in no circumstances more than four years after substantial completion under Section 337.1. (Roger E. Smith, Inc., 89 Cal.App.4th at 647.)
In a 1996 California case the plaintiff sued builders and architects for personal injuries resulting from a patent defect in a patio designed and built by the builders and architects, respectively. (Tomko Woll Group Architects, Inc. v. Superior Court (1996) 46 Cal.App.4th 1326, 1330.) Under a straight “four years from the date of substantial completion” analysis the statute of limitations issue would have been easily resolved since suit was brought more than four years after substantial completion. However, the plaintiff claimed that the patent defect arose after the patio was completed, thus begging the question “does the statute begin to run upon substantial completion of the construction or improvement, or upon the discovery of the defect by the plaintiff?” The Appellate Court put to rest any validity to the argument that the statute begins to run when the defect is discovered. The Appellate Court found in favor of the builders and architects because, quite simply, the personal injury had occurred more than four years after substantial completion of the patio. The Court stated that plaintiffs must bring their action within four years of substantial completion under section 337.1 “regardless of when the patent deficiency is discovered or when the harm occurs.” (Tomko, 46 Cal.App.4th at 1336-37.)
The four-year statute of repose is an absolute outer limit designed to protect those in the construction industry. As the statute itself states, it applies only to those involved in the design and construction of real property or an improvement thereto, and not “to an owner-occupied single-unit residence.” (Code of Civil Procedure section 337.1(a), (e). Specifically the statute applies to “any person performing or furnishing the design, specifications, surveying, planning, supervision or observation or construction of an improvement to real property more than four years after the substantial completion of such improvement ....” Code of Civil Procedure section 337.1(a).) Hence, the Tomko Court was quick to point out that its holding did not leave the injured party without a remedy. The Court stated that “subdivision (d) expressly prohibits another class of defendants from using [Section 337.1] as a defense,” namely the individual owner or tenant in possession. (Tomko, 46 Cal.App.4th at 1337.) Section 337.1(d) of the Code of Civil Procedure states that “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 such an improvement constitutes the proximate cause of the injury or death ....” Code of Civil Procedure section 337(d).) So essentially the builders, architects, and others associated with the construction or improvement theoretically escape liability for patent defects four years after substantial completion. However, a current owner or renter cannot use the section’s four-year statute of limitations as a defense, and may be liable for personal injuries on the basis that, as the possessor, he or she maintains “con¬trol over the property,” and is thus “in the best position to discover a defect and to prevent injury, and will he likely to have insurance.” (Tomko, 46 Cal.App.4th at 1337.) This statutory construction leaves individual owners of single-family homes, apartment com¬plexes, and the like wide open to per¬sonal injury claims more than four years after substantial completion. Given the legislative purpose of protect¬ing the construction industry, however, it is unlikely an apartment owner, for instance, could argue for such protec¬tion.
In sum, section 337.1 specifically, states that actions for personal injuries due to patent construction defects must he brought within four years from the date of substantial completion of the construction. The legislative history and subsequent case law fully support this position. “The Legislature enacted sec-don 337.1 in 1967 ‘in response to the construction industry’s fear that it could face virtually unending liability due to the advent of discovery-based accrual rules for statutes of limitation. (Robinson, 98 Cal.App.4th at 712.) Clearly the normal two-year statute of limitations for personal injury applies in patent defect cases - there is simply a two-tiered analysis. A plaintiff has two years from injury to bring suit. The contractors, on the other hand, may be sued up to four years (at most five) from the dare of substantial completion, but in no circumstances after that.
Code of Civil Procedure Section 337.15 and
Latent Construction Defects Causing Personal Injury
In contrast to Code of Civil Procedure section 337.1, just discussed, section 337.15 of the same code, which sets a 10-year statute of limitations for latent defects (Geertz v. Ausonio (1992) 4 Cal.App.4th 1363, 1367: “not apparent by reasonable inspection.”) Code of Civil Procedure section 337.15(b) does not apply to personal injuries suffered as a result of the latent defect. (Code of Civil Procedure section 337.15.) As a result, there is no 10-year statute of limitation for personal injuries due to latent construction defects. While this section has been the subject of much recent litigation, courts have consistently focused upon the absence of the words “injury to the person or for wrongful death,” when construing section 337.5, which words are found in section 337.1. Courts rely on statutory construction doctrines and hold that the absence of “the words” was intended by the Legislature. Because the Legislature specified what the stature was intended to cover, it must have purposely left out what was not included. (E.g., Grimmer v. Harbor Towers (1982) 133 Cal.App.3d 88, 92¬93. “It would strain credulity and the laws of probability to believe that the Legislature in enacting section 337.15 did not have before it the language of section 337.1.” (in Id. at 93.)) The Courts in Grimmer a Harbor Towers and Miller v. Traubner, both 1982 cases, noted that section 337.15, as originally introduced into the State Assembly, actually included “personal injury and wrongful death actions arising out of latent defects,” and that such language was excluded in subsequent amendments prior to passage as section 337.15. (Grimmer, 133 Cal.App.3d at 92-93; see also Martinez v. Traubner (1982) 32 Cal.3d 755, 758, 760, stating that “the Legislature had not intended to set a limitation period for (personal injury] claims based on the plain language of 337.15 and the section’s legislative history.”) In sum: “Personal injuries are covered by section 337.1 and, designedly, not covered by section 337.15.” (Grimmer, 133 Cal.App.3d at 94.)
Like its counterpart section 337.1, section 337.15 was passed to “protect certain groups from indefinite liability.” (Robinson, 98 Cal.App.4th at 712. However, 337.15 was passed to protect from indefinite liability for injury to property only due to latent defects, as opposed to 337.1 which was passed to protect parties from indefinite liability for injury to persons or property due to patent defects. (Id.)) Or, more succinctly put, as for personal injuries resulting from latent construction defects, “section 337.15 does not limit the time within which direct actions for personal injury damages or wrongful death may be brought against the persons specified in the statute.” (Martinez, 32 Cal.3d at 759.)
While the Grimmer case did not involve mold as the cause of personal injuries, it stands for the proposition that an action for personal injuries caused by a latent defect in construction no matter when substantially completed, is allowable because section 337.15 does not limit actions for personal injury. (The defendant in Grimmer; relying on the 1980 case of Ernest W. Hahn, Inc. v. Superior Court, 108 Cal.App.3d 567, argued that since the personal injury was due to a latent defect and occurred more than 10 years after the substantial completion of the construction the action should be barred. The Grimmer Court disagreed, stating that it believed the Hahn case “was erroneously decided for the reason that section 337.15 does not apply to an action for personal injuries….” (Id. at 91-92.)) Grimmer also additionally allowed an indemnity action to survive the same time lapse “where the underlying action is based on damages for personal injuries proximately caused by a latent deficiency.” (Grimmer, 133 Cal.App.3d at 94.)
It is interesting to note that the complaint in Grimmer was filed within one year of the incident that caused the personal injuries. Since section 337.15 was deemed inapplicable, it is likely that the Court would have applied the one-year limitation under Code of Civil Procedure section 340(3) as some sort of limitation of liability, much like the Court did 11 years later in the 1991 case of Miller v. Lakeside Village Condominium Association, Inc. discussed below.
The Miller Case of Personal Injuries Caused by Mold,
and the Absence of any Mention of Section 337.1 or 337.15
In Miller v. Lakeside Village Condominium Association, Inc., the Court cited only Code of Civil Procedure section 340(3) in stating the usual rule that an action for personal injury caused by the wrongful act or neglect of someone else must be brought within one year from the suffering of appreciable harm unless a separate statute prescribes differently. (Miller v. Lakeside Village Condominium Assn, Inc. (1991) 1 Cal.App.4th 1611, 1621-22. Note that Code of Civil Procedure section 335.1 now allows a two-year statute of limitations for personal injuries or death due to the negligence or wrongful act of another.) Plaintiff Miller sued her condominium association for personal injuries suffered due to mold caused by the association’s negligence in failing to maintain and repair the plumbing system in Miller’s condominium. (Miller, 1 Cal.App.4th at 1615.) Miller moved into the condominium in January 1983, began experiencing allergies and asthma in September 1983, and these conditions worsened over the next year until Miller moved out in October 1984. Yet Miller did not file suit until August 27, 1986. (Miller, 1 Cal.App.4th at 1616-17.)
The Appellate Court upheld summary judgment for the condominium association, stating that as a matter of law the one-year statute of limitations in section 340 of the Code of Civil Procedure barred the claims. (Miller, 1 Cal.App.4th at 1624.) The Court stated that “Miller suffered appreciable and actual harm . . . by October of 1984” and this harm was “sufficient to commence the running of the statute of limitations ... whether the mold, alone or in conjunction with other factors, caused her allergies and asthma in the first instance, triggered a predisposition to allergies and asthma, or aggravated them as preexisting conditions.” (Miller, 1 Cal.App.4th at 1624, stating that whether the mold in and of itself cause appreciable harm or whether it acted in conjunction with other is nor a material fact pertinent to a statute of limitations analysis.)
Among Miller’s numerous arguments was that the delayed discovery rule should apply, which would have tolled the statute of limitations until she could gather sufficient essential facts to realize the cause of her ailment. Specifically, Miller argued that her progressively developing disease caused by the mold was nor readily discoverable and that a triable issue of fact remained as to “whether she was diligent in discovering her injury under the delayed discovery rule.” The Court disagreed, holding that Miller was “held to her actual knowledge as well as knowledge that could reasonably be discovered through investigation of sources open to her,” (Miller, 1 Cal.App.4th at 1628-29, quoting Jolly v. Eli Lilly and Co. (1988) 44 Cal.3d 1103, 1109, which stated that “inquiry notice” is enough to start the statute of limitations.)
In essence, the day Miller knew or should have known the cause of her “appreciable harm” was the day the one-year statute of limitations began to run on her claim for personal injuries. The trigger for the statute was “harm,” and was not conditional or dependent on how the harm was caused. Simply put, Miller waited too long to file suit.
What Exactly Defines a Latent Defect Versus a Patent Defect?
Obviously a plaintiff will want to argue that a latent defect existed so that there is no statute of repose to protect the construction industry. Along those same lines, the construction industry will be pushing heavily in favor of finding defects patent in nature so that when the four-year window closes it absolves them forever. “If a reasonable inspection would reveal only the manifestation of a defect but not its cause, i.e., the defect itself, then the defect is not necessarily patent.” (Geertz v. Ausonio (1992) 4 Cal.App.4th 1363, 1368.) Further, the word “patent” in this context refers not to the exterior visibility of the defect, but to the “patency of danger” the defect presents. (Sanchez v. Swinerton & Walberg Co. (1996) 47 Cal.App.4th 1461. 1470.)
Courts have repeatedly stated that if a defect can be discovered by an inspection made in the exercise of ordinary care and prudence. (“Case law holds the hypothetical inspection is that which the ‘average consumer’ of the property would undertake in the exercise of ordinary care and prudence.’” Chadwick v. Fire Ins. Exchange (1993) 17 Cal.App.4th 1112, 1122.) Then the defect is patent. In contrast is a latent defect, which is hidden and “would not be discovered by a reasonably careful inspection.” (Geertz, 4 Cal.App.4th at 1367.) The following has given courts some guidance in determining whether the defect at issue is parent or latent:
What constitutes a reasonable inspection “is a matter to be determined from the totality of circumstances of the particular case[]” and “must vary with the nature of the thing to be inspected and the nature and gravity of the harm which is sought to be averted.” (Citations omitted.) Whether a reasonable inspection would render a defect apparent is determined in light of “the reasonable expectations of the average consumer.” (Geertz, 4 Cal.App.4th at 1368. It is a question of fact whether a defect is apparent by reasonable inspection. (Id.))
In a 1982 case the Court found a defect in a building’s air conditioning system was latent because the precise mechanical cause of the defect could never be determined, nor even by the manufacturer or contractors. (Baker v. Walker & Walker, Inc. (1982) 133 Cal.App.3d 746, 759.) Conversely, seven years later the Court found standing water due to defective drainage was patent despite the argument that the cause was not reasonably apparent, based on testimony by several witnesses that the slanting of the pavement and contours of the land did not allow for proper drainage. (Winston Square Homeowner’s Assn. v. Centex West Inc. (1989) 213 Cal.App.3d 282, 291.) On a 1996 case the Court found standing water due to defective drainage on a landing resulting in a slip and fall hazard was patent as a matter of law because “it would be discovered by the inspection an owner would make in the exercise of ordinary care and prudence.” (Sanchez, 47 Cal.App.4th at 1470-71, noting that even if was originally latent, “once it was discovered, it became patent.” (Id. at 1471.) The reader should be cautioned however that Sanchez was not a statute of limitations case, and the Court’s statement regarding the change in the character of the defect from patent to latent may not withstand scrutiny in the context of a debate over the applicability of 337.1 over 337.15)
Essentially, the focus should be on the nature of the defect(s) which allegedly results in the occurrence of mold. Discovery should be conducted to determine whether the defect that caused the mold growth could have been discovered through reasonable inspection of the property. If the answer to that question is yes, a four-year statute defense may be appropriate in an action for bodily injury based on exposure to mold when the action is against a member of the construction industry. As to non-construction industry defendants, discovery should focus upon when “appreciable harm” occurred.
Conclusion
The usual two-year statute of limitations for personal injury applies when a cause of action is based on a patent construction defect brought within four years (and at most five years) of substantial completion of the construction. The analysis is two-tiered in that the suit must be brought within two years of “appreciable harm,” and in no event be brought past the outer limit of four (or at most five) years from substantial completion. Likewise, the usual two-year personal injury period will apply to personal injuries suffered as a result of latent construction defects, but in this instance can be brought no matter how many years after the substantial completion of the construction. However, in this latter scenario, it appears that a cause of action had better be brought within the usual “two years” after the plaintiff suffers “appreciable harm” and knows or should know the cause. In effect, the usual two-year statute of limitations applies to personal injuries caused by latent construction defects, it is just that the two-year time frame may not begin to run for many years after construction is complete. Quire clearly personal injury tort claims have a better chance at success and a much longer shelf life if caused by latent defects. Thus the defense bar should prepare to defend these claims based on the distinction between latent and patent defects whenever possible.
