November 2022 Update
The current update includes changes throughout this publication that reflect recent developments in case law, legislation, court rules, and jury instructions. Summarized below are some of the more important developments included in this update since publication of the 2021 update.
Title 16 Cal Code Regs §823(a) and (b), which defined “Responsible Managing Employee” and regulated contractors organized as partnerships, was repealed and integrated into Bus & P C §§7068 and 7068.1. See §§1.9, 9.20.
Business and Professions Code §7068.1 itself was amended to require an “employee duty statement.” See §1.11.
Business and Professions Code §§7071.6(a) and 7071.9(a) were repealed and replaced, with the new statutes both requiring a $25,000 bond. See §§1.12, 1.13, 1.15, 1.18, 1.20, 1.81A.
The aggregate liability of a contractor’s license bond surety is limited to $7,500, except for certain claimants such as homeowners. Bus & P C §§7071.9 and 7071.10. Note that when the bond amount increases to $25,000 effective January 1, 2023, the $7,500 limit will remain in effect. Bus & P C §7071.9 (operative Jan. 1, 2023). See §1.15.
Business and Professions Code §7151 was amended slightly to include solar energy installations into the definition of “home improvement.” See §§1.96, 2.101.
Business and Professions Code §7159.5(c) was amended to include several factors for determining a violator’s ability to pay full restitution when violating Bus & P C §7159.5. See §2.109.
Business and Professions Code §7152 was amended slightly to further regulate home improvement salespersons representing more than one contractor. See §2.156.
Both the California Solar Initiative (CSI) and the New Solar Homes Partnership (NSHP) programs have ended statutorily. See §4.7.
A new §4.8B has been added addressing the intersection of land use, green building, and housing. See §4.8B.
The California Air Resources Board (CARB) proposed amendments to 17 Cal Code Regs §§95371–95378 have been effective since January 1, 2022. See §4.18.
A discussion of the Title 24 regulations regarding Home Energy Ratings Systems (HERS) and HERS inspectors has been added. See §4.19.
A new §4.26R has been added to discuss Carbon Capture and Sequestration. See §4.26R.
California Rules of Court Emergency Rule 9 sunset on June 30, 2022, but the tolling provisions for cases filed prior to this date remain in effect. See §§5.137, 15.32.
A showing of duress or threats may be required to be able to sue after a settlement agreement. Martinez-Gonzalez v Elkhorn Packing Co. (9th Cir 2022) 25 F4th 613, 622 (distinguished Rich & Whillock, Inc. v Ashton Dev. on grounds that employee signed arbitration agreement few days after starting work and employer never threatened to withhold his wages). See §5.146.
While the 90-day limitation of CC §8460 for enforcement of a mechanics lien used to be tolled until the later of (1) the end of such period or (2) 30 days after notice of the termination of the automatic stay (see Miner Corp. v Hunters Run Ltd. P’ship (In re Hunters Run Ltd. P’ship) (9th Cir 1989) 875 F2d 1425, 1426), recent case law indicates that courts are not likely to provide for tolling due to amendments to 11 USC §546(b) in 1994 that provide an alternative to filing a civil action (i.e., giving notice). Since giving notice does not violate the stay, tolling is inapplicable. See Philmont Mgmt. v 450 S. Western Ave., LLC (In re 450 S. Western Ave., LLC) (BAP 9th Cir 2022) 633 BR 894, 902. See §5.164.
Busker v Wabtec Corp. (2021) 11 C5th 1147 and Mendoza v Fonseca McElroy Grinding Co. (2021) 11 C5th 1118 both discuss the difficult question of how to define “public work.” See §6.9A.
Leshane v Tracy VW, Inc. (2022) 78 CA5th 159, Viking River Cruises, Inc. v Moriana (2022) __ US __, 142 S Ct 1906, Hodges v Comcast Cable Communications, LLC (9th Cir 2022) 21 F4th 535, Southwest Airlines Co. v Saxon (2022) __ US __, 142 S Ct 1783, and Chamber of Commerce v Bonta (9th Cir 2021) 13 F4th 766 all deal with the applicability (or lack thereof) of arbitration, especially in the contexts of the Federal Arbitration Act (FAA) and Labor Code Private Attorneys General Act of 2004 (PAGA). See §§7.4, 7.55.
Trinity v Life Ins. Co. of N. Am. (2022) 78 CA5th 1111 discusses the enforceability of arbitration agreements. See §7.25.
Nelson v Dual Diagnosis Treatment Ctr., Inc. (2022) 77 CA5th 643 and DeLeon v Pinnacle Prop. Mgmt. Servs., LLC (2021) 72 CA5th 476, meanwhile, discuss when arbitration clauses are unconscionable or when a motion to compel arbitration may be dismissed. See §7.26.
Quach v California Commerce Club, Inc. (2022) 78 CA5th 470 discusses when the behavior of the parties can or cannot waive an intent to compel arbitration. See §7.28.
Nixon v AmeriHome Mortgage Co. (2021) 67 CA5th 934 and Ngo v BMW of N. Am., LLC (9th Cir 2022) 23 F4th 942 discuss the power of the courts to coordinate and compel either arbitration or litigation. See §7.32.
Patterson v Superior Court (2021) 70 CA5th 473 held that parties who successfully oppose motions to compel arbitration in FEHA lawsuits must also demonstrate that the motion to compel was groundless in order to obtain attorney fees. See §§7.44, 7.101.
An arbitrator’s partial decision that leaves subsequent issues open for resolution will only be considered an “award” if the open issues “could not have been decided as part of the partial final award because their nature and scope were uncertain as of the award date.” Kirk v Ratner (2022) 74 CA5th 1052. See §§7.98, 7.102.
A petition to vacate or to correct an award must be served and filed within 100 days after service on the petitioner of a signed copy of the award. Parties may not waive this 100-day deadline either implicitly or through express stipulation. See Law Fin. Group, LLC v Key (2021) 67 CA5th 307, 322 (denying excusal for late filing). See §7.115.
Sheen v Wells Fargo Bank (2022) 12 C5th 905 discusses the economic loss rule in the context of construction defects and the applicability of the Biakanja test. See §§9.96, 11.21, 11.22, 11.30, 11.42.
People v Sanchez (2016) 63 C4th 665, People v Veamatahau (2020) 9 C5th 16, Sargon Enters., Inc. v University of S. Cal. (2012) 55 C4th 747, and Strobel v Johnson & Johnson (2021) 70 CA5th 796 all discuss expert testimony—more specifically, when it can be excluded as hearsay. See §10.3.
Bacoka v Best Buy Stores, LP (2012) 71 CA5th 126 discusses the liability of owners for damage allegedly caused by construction defects by their employees or contractors. See §10.4.
Tansavatdi v City of Rancho Palos Verdes (2021) 60 CA5th 423 and City of Chico v Superior Court (2021) 68 CAth 352 address statutory immunities, including “design immunity” as opposed to “duty to warn of a dangerous condition (trap),” as well as human interventions in natural conditions. See §10.5.
In Foley Invs., LP v Alisal Water Corp. (2022) 72 CA5th 535, the court distinguished Barham v Southern Cal. Edison Co. (1999) 74 CA4th 744, finding that inverse condemnation was inapplicable when the public entity’s facilities are not maintained for a public use. See §10.8A.
In Gonzalez v Mathis (2021) 12 C5th 29, the California Supreme Court held that a landowner can only be liable for an injury to an independent contractor or its employees if the landowner exercises control over a part of the independent contractor’s work in a manner that affirmatively contributes to the injury. In Sandoval v Qualcomm Inc. (2021) 12 C5th 256, the California Supreme Court held that by turning over control of the worksite to the general contractor, the owner presumptively delegated to the contractor any preexisting duties owed to persons on the property. See §§10.15, 10.16.
Pulte Home Corp. v CBR Elec., Inc. (2020) 50 CA5th 216 and Berg v Pulte Home Corp. (2021) 67 CA5th 277 discuss equitable subrogation. See §10.32.
Beware the “gravamen rule.” See Vera v REL-BC, LLC (2021) 66 CA5th 57 (review denied), agreeing that the gravamen of a complaint was in fraud rather than breach of contract, and applying the shorter fraud statute of limitations. See §11.11.
In Travelers Indem. Co. v Navigators Specialty Ins. Co. (2021) 70 CA5th 341, the court allowed equitable indemnity claims between insurers even if they were not joint tortfeasors. See §§11.44, 13.5.
There was a major change and reorganization of the sections involving business interruption, direct physical damage or loss, and loss of use. The effects of COVID-19 legislation as well as the effects of decisions in Inns-by-the-Sea v California Mut. Ins. Co. (2021) 71 CA5th 688, United Talent Agency v Vigilant Ins. Co. (2022) 77 CA5th 821, Mudpie, Inc. v Travelers Cas. Ins. Co. (CD Cal 2020) 487 F Supp 3d 834, aff’d (9th Cir 2021) 15 F4th 885, Pappy’s Barber Shops, Inc. v Farmers Group, Inc. (SD Cal 2020) 487 F Supp 3d 937, and Protégé Restaurant Partners LLC v Sentinel Ins. Co. (ND Cal 2021) 517 F Supp 3d 981 are all discussed. This affects §§12.123, 12.123A, 12.124, 12.125, 12.126, 12.127. 12.129, 12.131, 12.132, and 12.134A.
Some additional discussion regarding the motion under CCP §877.6(e) to adjudicate or challenge a settlement is added via Pacific Fertility Cases (2022) 78 CA5th 568, 585: “[The court] concludes that the statutory writ of mandate procedure set forth in §877.6(e) is the sole means of obtaining appellate review of the good faith determination.” See §13.22.