California Civil Code Section 337.15 - Interpretation
In Regents of University of California v. Hartford Acc. & Indem. Co. (1978) 21 Cal. 3d 624, the California Supreme Court considered whether section 337.15, which bars latent defect actions 10 years after substantial completion, is an ordinary procedural statute of limitations or a substantive limit upon a plaintiff's cause of action.
The relevant portions of section 337.15 provide:
"(a) No action may be brought to recover damages from any person, or the surety of a person, who develops real property or performs or furnishes the design, specifications, surveying, planning, supervision, testing, or observation of construction or construction of an improvement to real property more than 10 years after the substantial completion of the development or improvement for any of the following: "(1) Any latent deficiency in the design, specification, surveying, planning, supervision, or observation of construction or construction of an improvement to, or survey of, real property. "(2) Injury to property, real or personal, arising out of any such latent deficiency. "
(b) As used in this section, 'latent deficiency' means a deficiency which is not apparent by reasonable inspection.. . . "(d) Nothing in this section shall be construed as extending the period prescribed by the laws of this state for bringing any action."
Writing for the majority, Justice Tobriner explained that section 337.15 does not pose a substantive bar but operates in conjunction with other procedural statutes to create a two-step limitation on claims:
"With judicial recognition that under some circumstances causes of action for negligence, product liability, or breach of warranty may not arise until discovery, the Legislature has responded by enacting statutes of limitation which require suit be filed within the shorter of two periods, one measured from the date of discovery and a second, longer period measured from the event giving rise to the cause of action.
Section 337.15, read together with Code of Civil Procedure sections 337 and 338, enacts such a two-step limitation: actions founded upon a latent defect in the development of real property must be filed within three or four years of discovery, depending on whether the action rests on breach of warranty or negligence, but in any case within ten years of the date of substantial completion of the improvement." ( Regents, supra, 21 Cal. 3d at pp. 640-641.)