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FOR IMMEDIATE RELEASE February 16, 1999 |
CONTACT: John Sullivan PHONE: (916) 443-4900
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The Civil Justice Association of California (CJAC) has filed amicus briefs with the California Supreme Court in two important construction-related cases that could greatly impact the construction, cost and availability of housing in the state.
The Civil Justice Association of California brief, Aas v. Superior Court, supports the Fourth District Court of Appeals' 1998 ruling that plaintiffs in construction defect actions cannot recover for economic loss where there was no damage to person or property. The decision holds that a plaintiff in this situation cannot recover "stigma" damages -- an alleged loss in value due to construction defects. In its first brief in the case the Association argued -- and the appellate court agreed -- that the "special relationship" exception to the "no economic loss recovery without actual damages" does not apply in a developer/builder-home buyer contract.
In a second key case, Civil Justice Association of California is asking the Supreme Court to overturn an appellate decision expanding emotional distress damages to contract disputes. The case, Erlich v. Menezes, came from the Second District Court of Appeal where justices by a two-to-one vote upheld a jury award for emotional distress and pain and suffering in a dispute over breach of a construction contract.
In the Civil Justice Association of California brief the Association's general counsel Fred Hiestand argued that, "If not reversed, this opinion will severely impact the construction industry and increase future housing prices to the detriment of potential home buyers as a class."
The decision was recognized as a distinct departure from established law by dissenting appellate Justice Kenneth R. Yegan who wrote that, "No reported California case has upheld an award of emotional distress damages based upon a simple breach of the contract to build a residence and simple negligence in the building of the residence."
The jury awarded $406,700 for the cost of repairing the custom-built home and $165,000 in lost wages, emotional distress, and pain and suffering. The plaintiff claimed his new house literally made him sick and that he had to be transported by ambulance after he learned the house was structurally unsound.
These cases are being closely watched by Civil Justice Association of California and Californians for Quality Affordable Housing, a broad coalition working to increase home buyer abilities to correct building defects without the costly, prolonged litigation that is dampening multi-family residence construction in the state.
"These two threatening cases are part of a long-standing trial lawyer plan of interjecting tort liability law into contract disputes," notes John Sullivan, Civil Justice Association of California president. "We have successfully blown the whistle on this tactic in past cases and our involvement here sends a strong message to the court that it is dealing with an issue that could spread serious economic damages to other areas if the trial lawyer strategy gains a toe-hold here."
Working in the courts and Legislature, the Civil Justice Association of California is the only statewide association dedicated solely to improving California's civil liability system.
