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1 DEIDRE COHEN KATZ, State Bar No. 166261
dkatz@wfbm.com
2 ROBERT L. NELDER, State Bar No. 125426 ELECTRONICALLY
rnelder@wfbm.com
3 WFBM, LLP F I L E D
Superior Court of California,
Attorneys at Law County of San Francisco
4 601 Montgomery Street, Ninth Floor
San Francisco, California 94111-2612 07/30/2020
Clerk of the Court
5 Telephone: (415) 781-7072 BY: RONNIE OTERO
Facsimile: (415) 391-6258 Deputy Clerk
6
Attorneys for Cross-Defendant
7 ROY HANSON JR. MANUFACTURING
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SAN FRANCISCO
10
11 THE INFINITY OWNERS ASSOCIATION, a Case No.: CGC-17-559163
California nonprofit mutual benefit
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 corporation, Assigned for all purposes to Judge A.C.
Massullo, Department 304, Complex
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13 Plaintiff, Litigation Dept.
14 v. CROSS-DEFENDANT ROY HANSON JR.
MANUFACTURING'S PRE-TRIAL
15 300 SPEAR REALTY VENTURE, LLC, a BRIEF ON CIVIL CODE SEC. 896,
Delaware limited liability company; STATUTE OF LIMITATIONS
16 WEBCOR CONSTRUCTION L.P., a
successor-in-interest to WEBCOR
17 CONSTRUCTION, INC., dba WEBCOR Action Filed: May 25, 2017
BUILDERS, a California limited liability Trial Date: October 13, 2020
18 partnership; PERMASTEELISA NORTH
AMERICA CORP., a Delaware corporation;
19 and DOES 1 through 400 inclusive,
20 Defendants.
21
300 SPEAR REALTY VENTURE, LLC, a
22 Delaware limited liability company,
23 Cross-Complainant,
24 v.
25 PERMASTEELISA NORTH AMERICA
CORP., VIRACON, INC.; VICTAULIC
26 COMPANY; CLA-VAL CO.; LEONARD
VALVE COMPANY; GRISWOLD
27 CONTROLS, LLC; XYLEM INC., dba BELL
& GOSSETT; RED-WHITE VALVE CORP.;
28 ZURN INDUSTRIES LLC; WATERMARK
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SECTION 896,
STATUTE OF LIMITATIONS
1 DESIGNS LTD.; LAARS SYSTEMS INC.;
WESSELS COMPANY; DE NEEF
2 CONSTRUCTION CHEMICALS (US) INC;
KRYTON INTERNATIONAL INC. and
3 ROES 1 to 100, inclusive,
4 Cross-Defendants.
5
AND RELATED CROSS-ACTIONS
6
7
8 COMES NOW Cross-Defendant Roy Hanson Jr. Manufacturing (“Hanson”) and hereby
9 submits the following Memorandum of Points & Authorities in support of its Pre-Trial Brief
10 regarding (SB 800), Civil Code Sec. 896 relative to the applicable statute of limitations for
11 plumbing in the above-referenced matter.
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 I. INTRODUCTION
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13 This construction defect action involves a downtown San Francisco high–rise
14 condominium project entitled (“The Infinity.)” Plaintiff THE INFINITY OWNERS
15 ASSOCIATION (hereinafter “Plaintiff”) initiated its action with a Notice of Commencement of
16 Legal Proceedings on August 22, 2014. As of May 25, 2017, Plaintiff had filed its construction
17 defect complaint, alleging ten causes of action against various parties including developer 300
18 Spear Realty Venture and general contractors Webcor Builders, Inc. (Exhibit G.)
19 On June 19, 2017, Plaintiff filed a First Amended Complaint (hereinafter “FAC”) which
20 continues to be the operative pleading. In the FAC, Plaintiff states ten causes of action in addition
21 to a cause of action for violation of the Right to Repair Act per Civil Code Sec. 895 – 945.5.
22 (Exhibit H.) In terms of Hanson, Plaintiff's FAC alleges plumbing claims which are subject to the
23 Right to Repair Act (the “Act”). The Act imposes a four–year statute of limitations regarding an
24 individual product manufacturer of plumbing claims. See California Civil Code Sec. 896(e).
25 Cross-Defendant Hanson is a manufacturer of water storage tanks that were installed as part of the
26 plumbing components at the Plaintiff’s property. Those tanks had a one year warranty. (Exhibit I.)
27 The Act governs Plaintiff’s claims for alleged construction defects at the Infinity property.
28 The California Supreme Court has ruled that the Act supplants common law negligence and strict
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 product liability actions with a statutory claim under the Act. Since Plaintiff never began any
2 proceeding under the Act within the four-year limitations period, any plumbing related claim
3 against Hanson is time-barred. Moreover, any existing indemnity cross-complaint against Hanson
4 is likewise excluded.
5 II. FACTUAL BACKGROUND
6 Phase I of The Infinity Project was completed in early 2008; Phase II was completed in
7 2009. (See Exhibit Nos. A and B, respectively.) The Infinity Condominium Project is subject to
8 Declaration of Conditions, Covenants & Restrictions (the “CC&R”), recorded on or about January
9 18, 2008. (Exhibit C.) The CC&R's specifically authorize an action by the Homeowner’s
10 Association under Title 7 of Part 2 of Division 2 of the California Civil Code, i.e., the Act “as
11 soon as the association has (1) class A member other than the builder.” (See Exhibit at C, at
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 Section 3.5, p. 64.) Section 3.5 of Infinity’s CC&R state in pertinent part: “The Association shall
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13 have the power to initiate claims against declarant…as soon as the Association has (1) class A
14 member other than the declarant.”
15 That member has the power to establish a committee to investigate claims of violations
16 of the Right to Repair Act, even if an employee of the Builder remains on the board of owners’
17 association. Moreover, in March, 2010, the makeup of the Association switched from majority-
18 builder to majority-homeowner. Control of the board became homeowner centric as opposed to
19 Tishman Speyer employees. The Plaintiff’s board became majority homeowners in March, 2010.
20 (See Exhibit E, deposition testimony of Geoffrey Herrick, dated November 12, 2019, pp. 168:14-
21 171:8.) In addition, the minutes of the March 16, 2010 HOA Board Meeting reflect the change to
22 majority homeowners vs. builder representatives. (Exhibit D, Infinity Owner's Association Board
23 of Director Meeting Minutes, dated March 16, 2010.)
24 Plaintiff did not initiate any claim under the Act until August 22, 2014. At that time, it
25 initiated this action through Civil Code Sec. 6000 Notice of Commencement of Legal Proceedings.
26 (Exhibit F.) However, this action was over four years after the homeowners obtained majority board
27 status. (See Exhibit Nos. C-E.) Plaintiff’s operative FAC includes plumbing claims, including those
28
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 against individual manufacturers, alleging that the plumbing system as installed materially impairs
2 the occupants’ use of the structure. (Exhibit H, FAC at parg. 52.)
3 300 Spear Venture’s cross-complaint against Hanson and others was filed as of September
4 14, 2017. (Exhibit K.) Although stating a number of causes of action, the relief sought by the
5 cross-complaint as against Hanson consists of equitable indemnification for any amounts owed to
6 Plaintiff. There is no contractual relationship between Hanson and 300 Spear Venture. (Exhibit K.)
7 Webcor filed its own cross-complaint against Hanson as of January 30, 2018. Its cross-complaint
8 alleges a number of causes of action, all of which relate to Hanson providing indemnification for
9 claims by Plaintiff. (Exhibit L.) Once again there is no direct contractual involvement between
10 Webcor and moving party.
11 Cross-Defendant Hanson manufacturers water storage tanks. In 2006 and 2007, Hanson
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 manufactured and sold epoxy-lined storage tanks to California Hydronics, Inc. (Exhibit I – Hanson
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13 Water Storage Tank Docs.) California Hydronics, Inc. had Hanson's tanks installed into the
14 plumbing system of The Infinity Project, through J.W. McClenahan. (Exhibit J – California
15 Hydronic, Inc. Plumbing Schematics and Plans.) Hanson at no time entered into a written contract
16 with 300 Spear Venture or Webcor. It offered a limited warranty on its water storage tanks – that
17 warranty was for one year only. (Exhibit I – Hanson Warranty Details.)
18 Plaintiff’s FAC includes causes of action for strict liability and negligence. (Exhibit H-
19 FAC.) The operative pleading recites general allegations of problems in the “plumbing system” as
20 well. (Exhibit G, FAC, pp. 6:8, 11:9; 12:16, 14:4.) Moreover, Plaintiff recites verbatim language
21 of the Act in its allegations in its Fifth Cause of Action for Violation of Civil Code Sec. 896.
22 (Exhibit G, FAC, parg. 52 at pp: 15:14-19:23.) Clearly, Plaintiff is alleging that the plumbing
23 system installed, which would include water storage tanks, materially impairs the use of the
24 building for its occupants.
25 No party may bring an action for violation of that subdivision more than four years after
26 the close of escrow. The four-year deadline to commence an action against a manufacturer for
27 plumbing issues, under any calculation had expired. Plaintiff did not serve its Notice of
28
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 Commencement of Legal Proceedings until August 22, 2014. (Exhibit F.) Therefore, Plaintiff’s
2 claims arising from plumbing issues are time–barred as to Cross-Defendant Hanson.
3 III. LEGAL ARGUMENT
4 A. Plaintiff's Plumbing Claim is Time-Barred Per Civil Code Sec. 896(e)
5 As explained by the California Supreme Court, the Right to Repair Act sets forth statewide
6 standards that the components of a dwelling must satisfy. See McMillian Albany, LLC v. Superior
7 Court (2018) 4 Cal.5th 241, 246-247. The Legislature intended that these detailed standards and
8 procedural requirements would be the “virtually exclusive remedy not just for economic loss but
9 also for property damage arising from construction defects." Ibid. Where an action is brought by
10 an Association (as opposed to an individual homeowner), SB 800 defines the close of escrow at
11 the date of substantial completion. See Civil Code Sec. 895(e).
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 While Plaintiff has not sued Hanson directly, Cross-Defendant’s relationship to this
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13 construction defect action arises out of these plumbing claims. Hanson is a manufacturer of water
14 storage tanks, (Exhibit I) and an "individual product manufacturer" that is contemplated under
15 Civil Code Sec. 896.
16 Through California Hydronics, Inc. and J.W. McClenahan, the Hanson water storage tanks
17 were installed into the plumbing system of The Infinity Project. (Exhibit J.) As a result, claims
18 against Hanson are necessarily encompassed within the scope of Plaintiff’s plumbing claims under
19 the Act.
20 As to plumbing claims, the Act explicitly imposes a four-year statute of limitations.
21 “Plumbing and sewer systems shall be installed to operate properly and shall not materially impair
22 the use of the structure by its inhabitants. However, no action may be brought for violation of this
23 subdivision more than four years after close of escrow.” Civil Code Sec. 896(e). Where, as here,
24 the Plaintiff is an association, the term “close of escrow” is defined to mean “the date of
25 substantial completion, as defined in Sec. 337.15 of the Code Of Civil Procedure, or the date the
26 builder relinquishes control over the Association’s ability to decide whether to initiate a claim
27 under this title, whichever is later.” See Civil Code Sec. 895(e).
28
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 The specific provisions of Civil Code Sec. 896(e), applicable to plumbing claims, prevail
2 over the more general 10 year limitations period applicable to other construction claims under the
3 Act. See Liberty Mutual Insurance Company v. Brookfield Crystal Cove, LLC (2013) 219
4 Cal.App.4th 98, 108, Collection Bureau of San Jose v. Rumsey (2000) 24 Cal.4th 301, 310-311
5 [holdings where multiple statute of limitations apply, the more specific one controls.] Considering
6 the legislative history of the Act, the shorter statute for certain systems/components in residential
7 properties was addressed and included plumbing systems and components. This would include
8 components such as Hanson's water storage tanks. See Civil Code Sec. 896(a). Any other
9 interpretation would make the four-year limitations period under Civil Code Sec. 896(e) pointless,
10 while allowing plaintiffs to evade the shorter statute of limitations.
11 In Liberty Mutual, the court addressed the legislative history of the statute of limitations
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 contained in the Right to Repair Act and held that the "legislative history also shows the purpose
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13 of the statute of limitations included in the Act reflects how long various systems in a home can be
14 expected to last." Ibid. at p. 108. The court also quoted language from the legislative history that is
15 particularly pertinent and elucidating. "The Act…shortens the statute of limitations for several
16 components of a home shorter than 10 years realistically reflecting how long those components
17 can be expected to meet the standards." Ibid. The legislative history quotes referenced in Liberty
18 Mutual underscore the shortened limitations periods for "components" and "systems" contained in
19 the home. Those components would include the water storage tanks manufactured by Hanson.
20 As is understood in the matter at bar, the project was substantially completed in 2009, and
21 the resident association had control of the board to take necessary steps and action for claims,
22 including those for plumbing, as of March, 2010. Therefore, the four-year statute of limitations as
23 to plumbing claims, including plumbing components such as those manufactured by Hanson,
24 started to run as of March, 2010. Any viable claim related to plumbing had to be asserted no later
25 than March, 2014. (Exhibit Nos. C-E.) That did not occur. Plaintiff initiated a claim under the Act
26 on August 22, 2014. (Exhibit F - Commencement of Action.) Under these circumstances, the
27 plumbing claims against Hanson are time-barred as a matter of law.
28
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 B. Equitable Indemnity Claims Against Hanson Fail for Lack of
Underlying Claim by Plaintiff
2
3 In terms of any cross-complaint, those contentions against Hanson are based on implied or
4 equitable indemnity only. The indemnity-based claims of 300 Spear Venture and Webcor seek
5 relief against Hanson based upon the amounts that cross-complainants would be required to pay
6 Plaintiff for moving party’s actions. Western Steamship Lines, Inc. v. San Pedro Peninsula
7 Hospital (1994) 8 Cal.4th 100, 108-109. These equitable indemnity-based theories have no merit.
8 The plumbing claims against cross-complainants by Plaintiff are time-barred. Without a
9 meritorious claim against them, there is no viable claim for equitable indemnity owed by Hanson
10 to Cross-Complainants. See Prince v. Pacific Gas & Elec. Co. (2009) 45 Cal.4th 1151, 1159.
11 IV. CONCLUSION
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 Plaintiff’s relief for plumbing claims against Hanson is time-barred under Civil Code Sec.
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13 896(e). Moreover, any indemnity theories asserted by 300 Spear Venture and Webcor against
14 cross-defendant are precluded. Given the circumstances of the matter at bar, the statute of
15 limitations eliminates any and all claims and actions against Cross-Defendant Roy Hanson Jr.
16 Manufacturing.
17
18 Dated: July 30, 2020 WFBM, LLP
19
20
By:
21 DEIDRE COHEN KATZ
ROBERT L. NELDER
22
Attorneys for Cross-Defendant
23 ROY HANSON JR. MANUFACTURING
24
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
1 PROOF OF SERVICE
2 THE INFINITY OWNERS ASSOCIATION v. 300 SPEAR REALTY VENTURE, LLC, et al.
SAN FRANCISCO COUNTY SUPERIOR COURT CASE NO. CGC-17-559163
3 OUR CLIENT: ROY HANSON JR. MANUFACTURING
4 At the time of service, I was over 18 years of age and not a party to this action. I am
employed in the County of San Francisco, State of California. My business address is 601
5 Montgomery Street, Ninth Floor, San Francisco, CA 94111-2612.
6 On July 30, 2020, I served true copies of the following document(s) described as
7 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL
BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS
8
on the interested parties in this action as follows:
9
John Stander All Defense Counsel via
10 Charles Litt File & ServeXpress
FENTON GRANT MAYFIELD
11 KANEDA & LITT LLP
1255 Treat Blvd., Ste 805,
SAN FRANCISCO, CALIFORNIA 94111-2612
601 MONTGOMERY STREET, NINTH FLOOR
TEL (415) 781-7072 • FAX (415) 391-6258
12 Walnut Creek, CA 94597
Phone Number: (925) 357-3135
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13 Fax Number: (925) 705-4743
Attorneys for Plaintiff
14
15
BY ELECTRONIC SERVICE: I electronically served the document(s) described above
16 via File & ServeXpress, on the recipients designated on the Transaction Receipt located on the
File & ServeXpress website (https://secure.fileandservexpress.com) pursuant to the Court Order
17 establishing the case website and authorizing service of documents.
18 I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
19
Executed on July 30, 2020, at San Francisco, California.
20
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22 Bengy Lam
23
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CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE
OF LIMITATIONS
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1 DEIDRE COHEN KATZ, State Bar No. 166261 dkatz@wfbm.com 2 ROBERT L. NELDER, State Bar No. 125426 ELECTRONICALLY rnelder@wfbm.com 3 WFBM, LLP F I L E D Superior Court of California, Attorneys at Law County of San Francisco 4 601 Montgomery Street, Ninth Floor San Francisco, California 94111-2612 07/30/2020 Clerk of the Court 5 Telephone: (415) 781-7072 BY: RONNIE OTERO Facsimile: (415) 391-6258 Deputy Clerk 6 Attorneys for Cross-Defendant 7 ROY HANSON JR. MANUFACTURING 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN FRANCISCO 10 11 THE INFINITY OWNERS ASSOCIATION, a Case No.: CGC-17-559163 California nonprofit mutual benefit SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 corporation, Assigned for all purposes to Judge A.C. Massullo, Department 304, Complex Walsworth 13 Plaintiff, Litigation Dept. 14 v. CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL 15 300 SPEAR REALTY VENTURE, LLC, a BRIEF ON CIVIL CODE SEC. 896, Delaware limited liability company; STATUTE OF LIMITATIONS 16 WEBCOR CONSTRUCTION L.P., a successor-in-interest to WEBCOR 17 CONSTRUCTION, INC., dba WEBCOR Action Filed: May 25, 2017 BUILDERS, a California limited liability Trial Date: October 13, 2020 18 partnership; PERMASTEELISA NORTH AMERICA CORP., a Delaware corporation; 19 and DOES 1 through 400 inclusive, 20 Defendants. 21 300 SPEAR REALTY VENTURE, LLC, a 22 Delaware limited liability company, 23 Cross-Complainant, 24 v. 25 PERMASTEELISA NORTH AMERICA CORP., VIRACON, INC.; VICTAULIC 26 COMPANY; CLA-VAL CO.; LEONARD VALVE COMPANY; GRISWOLD 27 CONTROLS, LLC; XYLEM INC., dba BELL & GOSSETT; RED-WHITE VALVE CORP.; 28 ZURN INDUSTRIES LLC; WATERMARK 5261275.1 -1- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SECTION 896, STATUTE OF LIMITATIONS 1 DESIGNS LTD.; LAARS SYSTEMS INC.; WESSELS COMPANY; DE NEEF 2 CONSTRUCTION CHEMICALS (US) INC; KRYTON INTERNATIONAL INC. and 3 ROES 1 to 100, inclusive, 4 Cross-Defendants. 5 AND RELATED CROSS-ACTIONS 6 7 8 COMES NOW Cross-Defendant Roy Hanson Jr. Manufacturing (“Hanson”) and hereby 9 submits the following Memorandum of Points & Authorities in support of its Pre-Trial Brief 10 regarding (SB 800), Civil Code Sec. 896 relative to the applicable statute of limitations for 11 plumbing in the above-referenced matter. SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 I. INTRODUCTION Walsworth 13 This construction defect action involves a downtown San Francisco high–rise 14 condominium project entitled (“The Infinity.)” Plaintiff THE INFINITY OWNERS 15 ASSOCIATION (hereinafter “Plaintiff”) initiated its action with a Notice of Commencement of 16 Legal Proceedings on August 22, 2014. As of May 25, 2017, Plaintiff had filed its construction 17 defect complaint, alleging ten causes of action against various parties including developer 300 18 Spear Realty Venture and general contractors Webcor Builders, Inc. (Exhibit G.) 19 On June 19, 2017, Plaintiff filed a First Amended Complaint (hereinafter “FAC”) which 20 continues to be the operative pleading. In the FAC, Plaintiff states ten causes of action in addition 21 to a cause of action for violation of the Right to Repair Act per Civil Code Sec. 895 – 945.5. 22 (Exhibit H.) In terms of Hanson, Plaintiff's FAC alleges plumbing claims which are subject to the 23 Right to Repair Act (the “Act”). The Act imposes a four–year statute of limitations regarding an 24 individual product manufacturer of plumbing claims. See California Civil Code Sec. 896(e). 25 Cross-Defendant Hanson is a manufacturer of water storage tanks that were installed as part of the 26 plumbing components at the Plaintiff’s property. Those tanks had a one year warranty. (Exhibit I.) 27 The Act governs Plaintiff’s claims for alleged construction defects at the Infinity property. 28 The California Supreme Court has ruled that the Act supplants common law negligence and strict 5261275.1 -2- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 product liability actions with a statutory claim under the Act. Since Plaintiff never began any 2 proceeding under the Act within the four-year limitations period, any plumbing related claim 3 against Hanson is time-barred. Moreover, any existing indemnity cross-complaint against Hanson 4 is likewise excluded. 5 II. FACTUAL BACKGROUND 6 Phase I of The Infinity Project was completed in early 2008; Phase II was completed in 7 2009. (See Exhibit Nos. A and B, respectively.) The Infinity Condominium Project is subject to 8 Declaration of Conditions, Covenants & Restrictions (the “CC&R”), recorded on or about January 9 18, 2008. (Exhibit C.) The CC&R's specifically authorize an action by the Homeowner’s 10 Association under Title 7 of Part 2 of Division 2 of the California Civil Code, i.e., the Act “as 11 soon as the association has (1) class A member other than the builder.” (See Exhibit at C, at SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 Section 3.5, p. 64.) Section 3.5 of Infinity’s CC&R state in pertinent part: “The Association shall Walsworth 13 have the power to initiate claims against declarant…as soon as the Association has (1) class A 14 member other than the declarant.” 15 That member has the power to establish a committee to investigate claims of violations 16 of the Right to Repair Act, even if an employee of the Builder remains on the board of owners’ 17 association. Moreover, in March, 2010, the makeup of the Association switched from majority- 18 builder to majority-homeowner. Control of the board became homeowner centric as opposed to 19 Tishman Speyer employees. The Plaintiff’s board became majority homeowners in March, 2010. 20 (See Exhibit E, deposition testimony of Geoffrey Herrick, dated November 12, 2019, pp. 168:14- 21 171:8.) In addition, the minutes of the March 16, 2010 HOA Board Meeting reflect the change to 22 majority homeowners vs. builder representatives. (Exhibit D, Infinity Owner's Association Board 23 of Director Meeting Minutes, dated March 16, 2010.) 24 Plaintiff did not initiate any claim under the Act until August 22, 2014. At that time, it 25 initiated this action through Civil Code Sec. 6000 Notice of Commencement of Legal Proceedings. 26 (Exhibit F.) However, this action was over four years after the homeowners obtained majority board 27 status. (See Exhibit Nos. C-E.) Plaintiff’s operative FAC includes plumbing claims, including those 28 5261275.1 -3- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 against individual manufacturers, alleging that the plumbing system as installed materially impairs 2 the occupants’ use of the structure. (Exhibit H, FAC at parg. 52.) 3 300 Spear Venture’s cross-complaint against Hanson and others was filed as of September 4 14, 2017. (Exhibit K.) Although stating a number of causes of action, the relief sought by the 5 cross-complaint as against Hanson consists of equitable indemnification for any amounts owed to 6 Plaintiff. There is no contractual relationship between Hanson and 300 Spear Venture. (Exhibit K.) 7 Webcor filed its own cross-complaint against Hanson as of January 30, 2018. Its cross-complaint 8 alleges a number of causes of action, all of which relate to Hanson providing indemnification for 9 claims by Plaintiff. (Exhibit L.) Once again there is no direct contractual involvement between 10 Webcor and moving party. 11 Cross-Defendant Hanson manufacturers water storage tanks. In 2006 and 2007, Hanson SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 manufactured and sold epoxy-lined storage tanks to California Hydronics, Inc. (Exhibit I – Hanson Walsworth 13 Water Storage Tank Docs.) California Hydronics, Inc. had Hanson's tanks installed into the 14 plumbing system of The Infinity Project, through J.W. McClenahan. (Exhibit J – California 15 Hydronic, Inc. Plumbing Schematics and Plans.) Hanson at no time entered into a written contract 16 with 300 Spear Venture or Webcor. It offered a limited warranty on its water storage tanks – that 17 warranty was for one year only. (Exhibit I – Hanson Warranty Details.) 18 Plaintiff’s FAC includes causes of action for strict liability and negligence. (Exhibit H- 19 FAC.) The operative pleading recites general allegations of problems in the “plumbing system” as 20 well. (Exhibit G, FAC, pp. 6:8, 11:9; 12:16, 14:4.) Moreover, Plaintiff recites verbatim language 21 of the Act in its allegations in its Fifth Cause of Action for Violation of Civil Code Sec. 896. 22 (Exhibit G, FAC, parg. 52 at pp: 15:14-19:23.) Clearly, Plaintiff is alleging that the plumbing 23 system installed, which would include water storage tanks, materially impairs the use of the 24 building for its occupants. 25 No party may bring an action for violation of that subdivision more than four years after 26 the close of escrow. The four-year deadline to commence an action against a manufacturer for 27 plumbing issues, under any calculation had expired. Plaintiff did not serve its Notice of 28 5261275.1 -4- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 Commencement of Legal Proceedings until August 22, 2014. (Exhibit F.) Therefore, Plaintiff’s 2 claims arising from plumbing issues are time–barred as to Cross-Defendant Hanson. 3 III. LEGAL ARGUMENT 4 A. Plaintiff's Plumbing Claim is Time-Barred Per Civil Code Sec. 896(e) 5 As explained by the California Supreme Court, the Right to Repair Act sets forth statewide 6 standards that the components of a dwelling must satisfy. See McMillian Albany, LLC v. Superior 7 Court (2018) 4 Cal.5th 241, 246-247. The Legislature intended that these detailed standards and 8 procedural requirements would be the “virtually exclusive remedy not just for economic loss but 9 also for property damage arising from construction defects." Ibid. Where an action is brought by 10 an Association (as opposed to an individual homeowner), SB 800 defines the close of escrow at 11 the date of substantial completion. See Civil Code Sec. 895(e). SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 While Plaintiff has not sued Hanson directly, Cross-Defendant’s relationship to this Walsworth 13 construction defect action arises out of these plumbing claims. Hanson is a manufacturer of water 14 storage tanks, (Exhibit I) and an "individual product manufacturer" that is contemplated under 15 Civil Code Sec. 896. 16 Through California Hydronics, Inc. and J.W. McClenahan, the Hanson water storage tanks 17 were installed into the plumbing system of The Infinity Project. (Exhibit J.) As a result, claims 18 against Hanson are necessarily encompassed within the scope of Plaintiff’s plumbing claims under 19 the Act. 20 As to plumbing claims, the Act explicitly imposes a four-year statute of limitations. 21 “Plumbing and sewer systems shall be installed to operate properly and shall not materially impair 22 the use of the structure by its inhabitants. However, no action may be brought for violation of this 23 subdivision more than four years after close of escrow.” Civil Code Sec. 896(e). Where, as here, 24 the Plaintiff is an association, the term “close of escrow” is defined to mean “the date of 25 substantial completion, as defined in Sec. 337.15 of the Code Of Civil Procedure, or the date the 26 builder relinquishes control over the Association’s ability to decide whether to initiate a claim 27 under this title, whichever is later.” See Civil Code Sec. 895(e). 28 5261275.1 -5- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 The specific provisions of Civil Code Sec. 896(e), applicable to plumbing claims, prevail 2 over the more general 10 year limitations period applicable to other construction claims under the 3 Act. See Liberty Mutual Insurance Company v. Brookfield Crystal Cove, LLC (2013) 219 4 Cal.App.4th 98, 108, Collection Bureau of San Jose v. Rumsey (2000) 24 Cal.4th 301, 310-311 5 [holdings where multiple statute of limitations apply, the more specific one controls.] Considering 6 the legislative history of the Act, the shorter statute for certain systems/components in residential 7 properties was addressed and included plumbing systems and components. This would include 8 components such as Hanson's water storage tanks. See Civil Code Sec. 896(a). Any other 9 interpretation would make the four-year limitations period under Civil Code Sec. 896(e) pointless, 10 while allowing plaintiffs to evade the shorter statute of limitations. 11 In Liberty Mutual, the court addressed the legislative history of the statute of limitations SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 contained in the Right to Repair Act and held that the "legislative history also shows the purpose Walsworth 13 of the statute of limitations included in the Act reflects how long various systems in a home can be 14 expected to last." Ibid. at p. 108. The court also quoted language from the legislative history that is 15 particularly pertinent and elucidating. "The Act…shortens the statute of limitations for several 16 components of a home shorter than 10 years realistically reflecting how long those components 17 can be expected to meet the standards." Ibid. The legislative history quotes referenced in Liberty 18 Mutual underscore the shortened limitations periods for "components" and "systems" contained in 19 the home. Those components would include the water storage tanks manufactured by Hanson. 20 As is understood in the matter at bar, the project was substantially completed in 2009, and 21 the resident association had control of the board to take necessary steps and action for claims, 22 including those for plumbing, as of March, 2010. Therefore, the four-year statute of limitations as 23 to plumbing claims, including plumbing components such as those manufactured by Hanson, 24 started to run as of March, 2010. Any viable claim related to plumbing had to be asserted no later 25 than March, 2014. (Exhibit Nos. C-E.) That did not occur. Plaintiff initiated a claim under the Act 26 on August 22, 2014. (Exhibit F - Commencement of Action.) Under these circumstances, the 27 plumbing claims against Hanson are time-barred as a matter of law. 28 5261275.1 -6- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 B. Equitable Indemnity Claims Against Hanson Fail for Lack of Underlying Claim by Plaintiff 2 3 In terms of any cross-complaint, those contentions against Hanson are based on implied or 4 equitable indemnity only. The indemnity-based claims of 300 Spear Venture and Webcor seek 5 relief against Hanson based upon the amounts that cross-complainants would be required to pay 6 Plaintiff for moving party’s actions. Western Steamship Lines, Inc. v. San Pedro Peninsula 7 Hospital (1994) 8 Cal.4th 100, 108-109. These equitable indemnity-based theories have no merit. 8 The plumbing claims against cross-complainants by Plaintiff are time-barred. Without a 9 meritorious claim against them, there is no viable claim for equitable indemnity owed by Hanson 10 to Cross-Complainants. See Prince v. Pacific Gas & Elec. Co. (2009) 45 Cal.4th 1151, 1159. 11 IV. CONCLUSION SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 Plaintiff’s relief for plumbing claims against Hanson is time-barred under Civil Code Sec. Walsworth 13 896(e). Moreover, any indemnity theories asserted by 300 Spear Venture and Webcor against 14 cross-defendant are precluded. Given the circumstances of the matter at bar, the statute of 15 limitations eliminates any and all claims and actions against Cross-Defendant Roy Hanson Jr. 16 Manufacturing. 17 18 Dated: July 30, 2020 WFBM, LLP 19 20 By: 21 DEIDRE COHEN KATZ ROBERT L. NELDER 22 Attorneys for Cross-Defendant 23 ROY HANSON JR. MANUFACTURING 24 25 26 27 28 5261275.1 -7- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 1 PROOF OF SERVICE 2 THE INFINITY OWNERS ASSOCIATION v. 300 SPEAR REALTY VENTURE, LLC, et al. SAN FRANCISCO COUNTY SUPERIOR COURT CASE NO. CGC-17-559163 3 OUR CLIENT: ROY HANSON JR. MANUFACTURING 4 At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of San Francisco, State of California. My business address is 601 5 Montgomery Street, Ninth Floor, San Francisco, CA 94111-2612. 6 On July 30, 2020, I served true copies of the following document(s) described as 7 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS 8 on the interested parties in this action as follows: 9 John Stander All Defense Counsel via 10 Charles Litt File & ServeXpress FENTON GRANT MAYFIELD 11 KANEDA & LITT LLP 1255 Treat Blvd., Ste 805, SAN FRANCISCO, CALIFORNIA 94111-2612 601 MONTGOMERY STREET, NINTH FLOOR TEL (415) 781-7072 • FAX (415) 391-6258 12 Walnut Creek, CA 94597 Phone Number: (925) 357-3135 Walsworth 13 Fax Number: (925) 705-4743 Attorneys for Plaintiff 14 15 BY ELECTRONIC SERVICE: I electronically served the document(s) described above 16 via File & ServeXpress, on the recipients designated on the Transaction Receipt located on the File & ServeXpress website (https://secure.fileandservexpress.com) pursuant to the Court Order 17 establishing the case website and authorizing service of documents. 18 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 19 Executed on July 30, 2020, at San Francisco, California. 20 21 22 Bengy Lam 23 24 25 26 27 28 5261275.1 -8- 5312-3.5393 CROSS-DEFENDANT ROY HANSON JR. MANUFACTURING'S PRE-TRIAL BRIEF ON CIVIL CODE SEC. 896, STATUTE OF LIMITATIONS