CACI 4550 Affirmative Defense—Statute of Limitations—Patent Construction Defect (Code Civ. Proc., § 337.1)

New December 2011; Revised November 2018

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Give this instruction if the defendant asserts the running of the statute of limitations in Code of Civil Procedure section 337.1 as a defense. This section provides a four-year limitation period from the date of substantial completion for harm caused by a patent construction defect. Do not give this instruction if the claim is for injuries to persons or property based on tort principles occurring in the fourth year after substantial completion. (See Code Civ. Proc., § 337.1(b).)

For 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 Compensation Due Under Contract—Substantial Performance.

Code of Civil Procedure section 337.1 does not apply to construction defect claims within the Right to Repair Act (Civ. Code, § 895 et seq.). (Civ. Code, § 941(d).) The act applies to all claims for property damage or economic loss except for breach of contract, fraud, personal injury, or violation of a statute. (Civ. Code, § 943(a); see McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 249 [227 Cal.Rptr.3d 191, 408 P.3d 797]; see also Civ. Code, § 941 [statute of limitations under Right to Repair Act].)

•Statute of Limitations for Patent Defects. Code of Civil Procedure section 337.1.

•“The statute of limitations in section 337.1 exists to ‘provide a final point of termination, to protect some groups from extended liability.’ ” (Delon Hampton & Associates, Chartered v. Superior Court (2014) 227 Cal.App.4th 250, 254 [173 Cal.Rptr.3d 407].)

•“[A] patent defect is one that can be discovered by the kind of inspection made in the exercise of ordinary care and prudence. In contrast, a latent defect is hidden, and would not be discovered by a reasonably careful inspection.” (The Luckman Partnership, Inc. v. Superior Court (2010) 184 Cal.App.4th 30, 35 [108 Cal.Rptr.3d 606].)

•“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. v. C. Scott Whitten, Inc. (2009) 177 Cal.App.4th 251, 256 [99 Cal.Rptr.3d 258], internal citations omitted.)

•“[T]he [Right to Repair Act] leaves the common law undisturbed in some areas, expressly preserving actions for breach of contract, fraud, and personal injury. In other areas, however, the Legislature’s intent to reshape the rules governing construction defect actions is patent. Where common law principles had foreclosed recovery for defects in the absence of property damage or personal injury the Act supplies a new statutory cause of action for purely economic loss. And, of direct relevance here, even in some areas where the common law had supplied a remedy for construction defects resulting in property damage but not personal injury, the text and legislative history reflect a clear and unequivocal intent to supplant common law negligence and strict product liability actions with a statutory claim under the Act.” (McMillin Albany LLC, supra, 4 Cal.5th at p. 249, internal citations omitted.)