November 2021 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 2020 update.
Residential remodeling contractor. Effective January 1, 2021, newly added Bus & P C §7057.5(a) defines a residential remodeling contractor as a contractor whose principal contracting business is in connection with any project to make improvements to, on, or in an existing residential wood frame structure, and the project requires the use of at least three unrelated building trades or crafts for a single contract. See §§1.6A, 1.96, 2.102.
Departure from work standards or plans. A contractor has an independent obligation to the public to adhere to standards of performance that are established by statute; if an owner signs a disclaimer, it may be ineffectual if an architect does not direct the substandard work. See Sieg v Fogt (2020) 55 CA5th 77 in §§1.40, 1.49.
Unlicensed contractors. In Manela v Stone (2021) 66 CA5th 90, the court of appeal found that Bus & P C §7031 was not applicable because the contractor’s license was in place at all times during the performance of the contract, held first by the individual, then by the individual’s corporation. See §1.85A.
Disgorgement. For two recent cases discussing the application of the 1-year statute of limitations of CCP §340(a) to disgorgement claims brought under Bus & P C §7031(b), see San Francisco CDC LLC v Webcor Constr. L.P. (2021) 62 CA5th 266 and Eisenberg Village of the Los Angeles Jewish Home for the Aging v Suffolk Constr. Co. (2020) 53 CA5th 1201 in §1.86.
Substantial compliance. In C.W. Johnson & Sons v Carpenter (2020) 53 CA5th 165, the court of appeal held that a contractor acted reasonably and in good faith before being notified its license was being suspended, and was therefore entitled to an evidentiary hearing to determine whether it substantially complied with the contractor licensing law. See §1.95.
Home improvement contracts. Effective January 1, 2021, under Bus & P C §7159, senior citizens have a 5-day right to cancel for contracts entered into on or after January 1, 2021. See §§2.103, 2.103F, 2.156.
Construction contract litigation. In Caliber Paving Co. v Rexford Indus. Realty & Mgmt., Inc. (2020) 54 CA5th 175, the court of appeal held that the subcontractor had a viable claim for intentional interference with a contract despite the owner having a social or economic interest in the contractual relationship between the subcontractor and general contractor. See §5.128.
Public works. For a recent case discussing how work by belt sorters for a county sanitation district is within the definition of public works under Lab C §1720(a)(2), see Kaanaana v Barrett Bus. Servs. Inc. (2021) 11 C5th 158 in §6.9A.
Arbitrator’s expertise and bias. In Speier v Advantage Fund, LLC (2021) 63 CA5th 134, the court of appeal found that an arbitrator’s failure to disclose his ownership interest in an ADR company or the extent of the company’s business with an opposing firm did not raise doubt about the arbitrator’s impartiality in an arbitration between sophisticated parties in a business dispute, when both parties were represented by large firms who frequently used the services of the same ADR service provider. See §7.14.
Enforcing arbitration agreement. In Bannister v Marinidence Opco, LLC (2021) 64 CA5th 541, an employer’s failure to authenticate an employee’s electronic signature agreeing to an arbitration provision rendered the provision unenforceable because the employee provided sufficient evidence to show that she was not the only person who could have electronically executed the agreement. In Davis v Kozak (2020) 53 CA5th 897, the court of appeal held that the trial court properly denied a motion to compel arbitration even though the contract had minimal procedural unconscionability, but had two substantively unconscionable terms involving limited discovery and nonmutuality. See §7.26.
Disclosures required. In Grabowski v Kaiser Found. Health Plan, Inc. (2021) 64 CA5th 67, an arbitrator’s award was properly vacated when the arbitrator voluntarily engaged in ex parte communication with counsel for a party, making light of the opposing party’s self-representation and perceived shortcomings as an advocate, and the arbitrator did not disclose this communication within 10 calendar days. See §7.35.
Petition to compel arbitration. Arbitrability must be decided by the court unless an arbitration provision explicitly provides otherwise, and the provision must clearly and unmistakably delegate threshold issue of arbitrability. See Wilson-Davis v SSP Am., Inc. (2021) 62 CA5th 1080 in §7.44.
Nondisclosure of conflicts, bias, and business relationships. In Roussos v Roussos (2021) 60 CA5th 962, the court held that parties may not contract away California’s statutory protections involving disclosure requirements, including the right to mandatory disqualification of proposed arbitrator on timely demand, without the need for showing of good cause. See §7.130.
Design defects. For a recent case discussing how substantial evidence of reasonableness of interstate off-ramp design was sufficient to meet the summary judgment burden under Govt C §830.6, see Menges v Department of Transp. (2020) 59 CA5th 13 in §10.10.
The Right to Repair Act. The Right to Repair Act does not cover common law claims against product manufacturer based on strict liability and breach of implied warranty. See State Farm Gen. Ins. Co. v Oetiker, Inc. (2020) 58 CA5th 940 in §§10.10A, 11.42, 15.2, 15.8.
Liability of material or tool manufacturers. When employers have a cost-effective accident avoidance measure to prevent take-home asbestos exposure, they owe a duty to take such measures to protect family members facing exposure. See Loomis v Amazon.com LLC (2021) 63 CA5th 466 in §10.11.
Contractual indemnity. In Carter v Pulte Home Corp. (2020) 52 CA5th 571, the court of appeal found that a liability insurance company defending a general contractor was not entitled to relief when it sought “all or nothing” joint and several liability. See §10.32.
Peculiar risk doctrine. For a recent case discussing how a highway contractor who controlled traffic owed a duty of care to a motorist who was rear-ended when forced to stop in a blocked intersection, see Shipp v Western Eng’g, Inc. (2020) 55 CA5th 476 in §10.16.
Adjudication of good faith issues. In Atlas Constr. Supply, Inc. v Swinerton Builders (2021) 60 CA5th 175, the court of appeal found that an appeal of a good faith settlement determination not barred merely because the petition of mandate was not filed under CCP §877.6(e). See §§13.22, 13.27.
Nonsettling party’s right of offset. Civil Code §1431.2(a) does not require or authorize a reduction in the liability of intentional tortfeasors for noneconomic damages based on the extent to which the negligence of others contributed to the injuries. See B.B. v County of Los Angeles (2020) 10 C5th 1 in §13.31.
Appointment of special master or referee. When the parties agree to the appointment of a referee under CCP §638, the referee hears and decides any controversy, including discovery disputes and certain pretrial motions, and the referee’s report is binding. See Michael S. Yu, Law Corp. v Superior Court (2020) 56 CA5th 636 in §14.3.