Stearman v. Centex Homes

In Stearman v. Centex Homes (2000) 78 Cal. App. 4th 611, after a jury trial, the plaintiffs recovered in strict liability for the defective construction of their residence against the defendant builder of mass-produced housing. On appeal, the plaintiffs contended "the trial court erred in denying them recovery of the costs and fees they incurred in employing 'geotechnical and structural experts to obtain and analyze soils samples and perform the necessary design calculations' to enable plaintiffs to determine 'an appropriate repair methodology to correct the defect.' They argue, 'These "investigative" costs were completely distinct from the "litigation" costs due these experts,' and were properly recoverable as part of the cost of repair." (Stearman, supra, 78 Cal.App.4th at p. 623.) The experts in that case had differentiated their billings between investigation and litigation and the defendant did not dispute their calculations. (Ibid.) In short, the defective construction of a home's foundation resulted in severe slab movement and deformation causing extensive cracks throughout home. The remedy was to replace the slab foundation. This would require disconnecting utility lines, ripping out floors, removing windows and doors, and jacking up the structure. After the foundation was poured, the home would be lowered onto it and rebuilt. (Stearman v. Centex Homes, supra, 78 Cal.App.4th at p. 615.) Damage was not limited to the slab alone, but to other components of the home. Thus, recovery of strict liability damages was not barred by the economic loss rule. (Id. at pp. 622-623.)