California Civil Jury Instructions (CACI) (2017)

4551. Affirmative Defense—Statute of Limitations—Latent Construction Defect (Code Civ. Proc., § 337.15)

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4551.Affirmative Defense—Statute of Limitations—Latent
Construction Defect (Code Civ. Proc., § 337.15)
[Name of defendant] contends that [name of plaintiff]’s lawsuit was not
filed within the time set by law. To succeed on this defense, [name of
defendant] must prove that the date on which the [construction project/
survey of real property/[specify project, e.g., roof replacement]] was
substantially complete was more than 10 years before [insert date], the
date on which this action was filed.
New December 2011
Directions for Use
Give this instruction if the defendant asserts the running of the statute of limitations
in Code of Civil Procedure section 337.15 as a defense. This section provides a
10-year outside limitation period for harm caused by a latent construction defect
regardless of delayed discovery.
The jury may also be instructed on the limitations periods for the particular theories
of recovery alleged. (See, e.g., Code Civ. Proc., §§ 338 [three years for injury to
real property], 337 [four years for breach of written contract].) However, for latent
defects, delayed discovery (see CACI No. 455, Statute of Limitations—Delayed
Discovery) generally defeats that otherwise applicable statute.
The most likely question of fact for the jury is the date of substantial completion.
The statute provides four possible events, the earliest of which may constitute
substantial completion of an improvement. (See Code Civ. Proc., § 337.15(g).) The
latest date is one year from cessation of all work on the improvement. However,
substantial completion of an improvement may occur before any of these dates.
(See Nelson v. Gorian & Assocs. (1998) 61 Cal.App.4th 93, 97 [71 Cal.Rptr.2d
345].) The statute of limitations may start to run at a later date against the
developer if the development includes many improvements. (Id. at p. 99; cf.
Schwetz v. Minnerly (1990) 220 Cal.App.3d 296, 298 [269 Cal.Rptr. 417]
[“developer” can be an “improver” and a “development” is a “work of
improvement” for purposes of subsection (g)].) For further discussion of substantial
completion, see the Directions for Use to CACI No. 4532, Owner’s Damages for
Breach of Construction Contract—Liquidated Damages Under Contract for Delay.
See also CACI No. 4524, Contractor’s Claim for CompensationDue Under
Contract—Substantial Performance.
Sources and Authority
• Statute of Limitations: Latent Defects. Code of Civil Procedure section 337.15.
“The purpose of section 337.15 has been stated as ‘to protect developers of real
estate against liability extending indefinitely into the future.’ . . . [We have]
noted that ‘[a] contractor is in the business of constructing improvements and
must devote his capital to that end; the need to provide reserves against an
uncertain liability extending indefinitely into the future could seriously impinge
upon the conduct of his enterprise.’ ” (Martinez v. Traubner (1982) 32 Cal.3d
755, 760 [187 Cal.Rptr. 251, 653 P.2d 1046], internal citations omitted.)
• “A ‘latent’ construction defect is one that is ‘not apparent by reasonable
inspection.’ As to a latent defect that is alleged in the context of the challenged
causes of action here—negligence, breach of warranty, and breach of
contract—three statutes of limitations are in play: sections 338, 337 and 337.15.
‘The interplay between these [three] statutes sets up a two-step process: (1)
actions for a latent defect must be filed within three years (§ 338 [injury to real
property]) or four years (§ 337 [breach of written contract]) of discovery, but
(2) in any event must be filed within ten years (§ 337.15) of substantial
completion.’ ”(Creekridge Townhome Owners Assn., Inc. v. C. Scott Whitten,
Inc. (2009) 177 Cal.App.4th 251, 257–258 [99 Cal.Rptr.3d 258], internal
citations omitted.)
• “The test to determine whether a construction defect is patent is an objective
test that asks ‘whether the average consumer, during the course of a reasonable
inspection, would discover the defect. The test assumes that an inspection takes
place.’ This test generally presents a question of fact, unless the defect is
obvious in the context of common experience; then a determination of patent
defect may be made as a matter of law (including on summary judgment).”
(Creekridge Townhome Owners Assn., Inc.,supra, 177 Cal.App.4th at p. 256,
internal citations omitted.)
• “Our reading of the express words of section 337.15, our giving consideration
to its legislative history, and harmonizing that section in the context of the
statutory framework as a whole, leads us to conclude that 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,supra, 32 Cal.3d at p. 759.)
• “The 10-year period commences to run in respect to a person who has
contributed towards ‘an improvement’ when such improvement has been
substantially completed irrespective of whether or not the improvement is part
of a development.” (Liptak v. Diane Apartments, Inc. (1980) 109 Cal.App.3d
762, 772 [167 Cal.Rptr. 440].)
• “In 1981, the Legislature codified the holding in Liptak by adding subdivision
(g) to section 337.15. ‘The Senate Committee on Judiciary and the Senate
Republican Caucus digests for the bill that became Code of Civil Procedure
section 337.15, subdivision (g) state in pertinent part: “ ‘In [Liptak], the [C]ourt
of [A]ppeal held that with respect to a developer, the ten-year limitation period
does not commence until the development is substantially completed. [¶] With
respect to a person who has contributed to an improvement on the developed
property, the court held that the period commences when that particular
improvement has been substantially completed, regardless of the completion
time of the development itself. [¶] AB 605 would codify the Liptak holding on
these issues.’ ” [Citation.]’ ” (Nelson,supra, 61 Cal.App.4th at pp. 96–97,
internal citations omitted.)
• “Turning to the plain meaning of the statute as well as the legislative intent of
enactment of section 337.15, subdivision (g), it is clear the intent was to define
what event triggered the 10-year period and not what label is used to define the
person who performed the work of improvement. The particular development or
work of improvement can be one ‘improvement’ such as grading. It can also be
a ‘particular development,’ i.e., a completed structure or dwelling. When the
work of improvement meets one of the four criteria of section 337.15,
subdivision (g), the ‘improver’—whether an architect, engineer, subcontractor,
contractor, or developer—is entitled to raise the provisions of section 337.15,
subdivision (g), as a bar to an action which seeks damages for latent defects
after the 10-year period has passed.” (Schwetz,supra, 220 Cal.App.3d at p.
• “Appellants claim that the 10-year period is calculated pursuant to section
337.15, subdivision (g)(1)–(4), which describes four events: (1) a final
inspection, (2) the notice of completion, (3) use or occupancy of the property,
or (4) termination or cessation of work for one year. Subdivision (g), however,
states that the 10-year period ‘shall commence upon substantial completion of
the improvement, but not later than’ the occurrence of any one of the four
events described in subdivision (g)(1) through (g)(4). . . . [¶] The trial court
correctly ruled that the notice of completion date (§ 337.15, subd. (g)(2)) did
not control if the improvement was substantially completed at an earlier date.”
(Nelson,supra, 61 Cal.App.4th at p. 97, original italics.)
• “ ‘As used in section 337.15 “an improvement” is in the singular and refers
separately to each of the individual changes or additions to real property that
qualifies as an “improvement” irrespective of whether the change or addition is
grading and filling, putting in curbs and streets, laying storm drains or of other
nature.’ ” (Nelson,supra, 61 Cal.App.4th at p. 97.)
Secondary Sources
3 Witkin, California Procedure (5th ed. 2008) Actions, § 488
12 California Real Estate Law and Practice, Ch. 441, Consumer’s Remedies,
§ 441.08A (Matthew Bender)
10 California Forms of Pleading and Practice, Ch. 104, Building Contracts,
§§ 104.25, 104.267 (Matthew Bender)
14 California Points and Authorities, Ch. 143, Limitation of Actions, § 143.49
(Matthew Bender)