Lantzy v. Centex – Case Brief Summary (California)

In Lantzy v. Centex (2003) 31 Cal.4th 363the court considered the interplay between statutes of limitation applicable to suits for latent construction defects.

Prior to 1971 suits to recover for construction defects were generally subject to limitation periods of three or four years depending on the theory of recovery.

These periods were extended, often significantly, by court decisions holding the statutes of limitations did not begin to run until the defects were or should have been discovered and the plaintiff's time to sue was tolled while promises or attempts to repair were pending.

In response to contractors' assertions this " 'perpetual and never ending risk' " was imperiling the state's construction industry the Legislature enacted Code of Civil Procedure section 337.15. Section 337.15 " 'imposed an absolute requirement that a suit ... to recover damages for a latent construction defect be brought within 10 years of the date of substantial completion of construction, regardless of the date of discovery of the defect.' "

The issue in Lantzy was whether the "absolute" 10-year limitations period of section 337.15 was subject to the doctrines of equitable tolling and equitable estoppel in an action filed 10 years and nine months after substantial completion of the plaintiffs' homes.

The court acknowledged section 337.15 did not specifically mention equitable tolling or equitable estoppel. Nevertheless the court found applying the doctrine of equitable tolling to the statutory limitations period would "contravene the legislative purpose" of providing repose to potential defendants after "the already lengthy period during which they were exposed to suit."

The court further held, however, this same legislative purpose would not be contravened by allowing the plaintiffs to plead the doctrine of equitable estoppel in response to defendant's statute of limitations defense.

Other than noting equitable tolling and equitable estoppel "are distinct doctrines" Lantzy did not explain why the latter should not suffer the same fate as the former under section 337.15.

The explanation may lie in the court's statement that to invoke the doctrine of equitable estoppel is to "invoke the venerable principle that ' "one cannot justly or equitably lull his adversary into a false sense of security, and thereby cause his adversary to subject his claim to the bar of the statute of limitations, and then be permitted to plead the very delay caused by his course of conduct as a defense to the action when brought." ' "

In other words the court may have based its distinction on a preference for a system of law based on justice and morality over one based on the commercial interests of any particular class.