Acosta v. Glenfed Development Corp – Case Brief Summary (California)

In Acosta v. Glenfed Development Corp. (2005) 128 Cal.App.4th 1278, the Court reversed a summary judgment that was based on a statute of limitations defense due to the existence of triable issues of material fact concerning the developer's willful misconduct.

In opposition to the developer's summary judgment motion, the plaintiffs supplied expert witness declarations stating that the construction defects "were not negligently caused. That is, they were not the result of someone trying to do something correctly, but carelessly failing to do so. Rather, the defects appeared to be the result of willful misconduct by defendants in that they were 'so serious and prevalent that they were either the result of a deliberate decision to "cut corners" for cost savings or the result of a near total, virtually reckless, failure by the developer to adequately supervise subcontractors.' The experts expressed the view that it was not reasonably possible for the builder, and the builder's contractors, agents, and employees, to have failed to observe or been aware of the defects. 'The defects are all things that could not possibly be present absent either the express or tacit approval of the builder or as a result of a complete failure by the builder to exercise even minimal supervision and conduct even minimal inspections of the work in progress.' However, none of these defects would be apparent to the average home buyer or the average realtor when inspecting a home prior to purchasing it." (Id. at p. 1289.)

Acosta concluded that the plaintiffs' expert declarations created a triable issue of material fact as to whether the defendants had engaged in willful misconduct. (Acosta, supra, 128 Cal.App.4th at pp. 1295, 1301-1302.)

The appellate court stated:

"There is evidence in this record, if believed by a trier of fact, that would support findings that (1) willful misconduct had occurred in the construction of plaintiffs' homes and that such misconduct had caused the construction defects of which plaintiffs complain, and (2) defendants, as the developer/general contractor for the project where plaintiffs' homes were constructed, (a) had at least constructive knowledge of the peril created by the construction activity and the resulting defects, (b) had at least constructive knowledge that injury or damage to future homebuyers (such as plaintiffs) was a probable, as opposed to a possible, result of the defects created by the construction activity, and (c) consciously failed to take action to avoid such injury or damage. Under the principles articulated in Cavillo-Silva v. Home Grocery (1998) 19 Cal.4th 714, 729-730, such findings would support the conclusion that willful misconduct had occurred in the construction of plaintiffs' homes and had caused plaintiffs' damages and that defendants were liable therefore." (Id. at p. 1302.)