Strict Products Liability Action Against a Condominium Developer
In La Jolla Village Homeowners' Assn. v. Superior Court (1989), the trial court struck from the homeowners association's complaint a cause of action for strict products liability against all subcontractors "involved in 'constructing and manufacturing'" a new condominium building. (La Jolla Village, supra, 212 Cal. App. 3d at pp. 1136-1137.)
The cause of action for strict products liability against the condominium's developer was not struck. (Id. at pp. 1136-1138.)
In granting the subcontractors' motion to strike, the trial court stated: "'I don't believe the strict products liability doctrine extends to the subcontractors for performing services as opposed to supplying a component product.'" (Id. at p. 1138.)
The trial court explained:
"There is no strict liability on the part of the subcontractors who furnished primarily services as opposed to a component part like a furnace or something of that nature." (Ibid.)
The plaintiff homeowners association filed a petition for writ of mandate challenging the trial court's ruling. (Id. at p. 1139.)
In denying the petition, the court stated:
"An overview of strict products liability cases involving residential developers reflects that the doctrine of strict liability has been applied to defendants who are characterized as mass producers, developers and sellers/lessors of real property developments and extended no further.
No reported California case has held that a subcontractor hired by a developer can be held strictly liable for defects in a mass-produced housing project and we decline to do so now." (La Jolla Village, supra, 212 Cal. App. 3d at p. 1144, fn. omitted.)
We noted: "In the typical general contractor/developer-subcontractor relationship, the general contractor is the principal in charge of the planning, designing, constructing, supervising, inspecting and then selling of the residential units.
The general contractor hires subcontractors to carry out the planning, designing, and constructing of the units. . . . the subcontractor customarily performs one task which is integrated into a whole.
It does not control the trades which precede or follow it on the job. . . . Hence the subcontractor does not have control over the whole 'product' nor over its own 'component part' except as to dealings with its own work within the limits placed on it by its contract with the general contractor.
It does not typically construct a finished product to its own specifications (like a tire made for an automobile), but works to the plans of the developer." (Id. at pp. 1144-1145.)
We concluded: "A subcontractor who does not have any ownership or control over the project or over its portion of the project being built should not be held strictly liable for defective or dangerous conditions of the mass-produced homes." (Id. at p. 1145.)
We further concluded: "We decline to extend the doctrine of strict products liability to persons who have no control over or financial interest in, other than for their own payment for services, the project or product being 'manufactured.'" (Id. at p. 1146.)
As support for our holding, we cited and summarized three cases 15 that "generally distinguished 'subcontractors' from builders/developers as providers of services who were only liable for their own negligence or intentional acts," but we also observed "their reasoning conveys a broader reach to include all subcontractors in the typical real estate construction project regardless of whether they provided 'services' or a 'product.'" (La Jolla Village, supra, 212 Cal. App. 3d at p. 1146.)
On further contemplation of this issue, we believe we overstated the reasoning and reach of the three cases we cited in La Jolla Village.
None of the cases involved manufacturers of products installed in mass-produced homes. Rather, all three cases involved providers of services in the design or construction of real property projects. (Id. at pp. 1146-1147.)
Therefore, our statement that the reasoning of these cases extended "to include all subcontractors in the typical real estate construction project regardless of whether they provided 'services' or a 'product,'" was dictum to the extent it addressed the application of strict products liability to a "product." (Id. at p. 1146.)
Furthermore, we note that the facts in La Jolla Village involved subcontractors that provided only services in the construction of the condominium building and did not involve any subcontractors or material suppliers that manufactured or distributed a component product installed in the condominium building.
Therefore, we conclude the suggestion in La Jolla Village that subcontractors that manufacture or distribute component products installed in a residential building are not subject to strict products liability was dictum.
In La Jolla Village, we further noted a subcontractor that provided services could nevertheless be held strictly liable if it had a "special status or relationship" with respect to the construction project or its developer. (La Jolla Village, supra, 212 Cal. App. 3d at p. 1147.)
We noted: "While a subcontractor may also be the developer of a project or be in a joint venture having a financial interest in and control of the project, if such a special status or relationship applies, the subcontractor would not really be a subcontractor, regardless of its providing services to the project, and it could conceivably be treated as part of the manufacturing link." (Ibid.)
However, on consideration of the facts of that case, we concluded the plaintiff had not alleged that the subcontractors had such a special status or relationship. (212 Cal. App. 3d at pp. 1147-1149.)
Accordingly, we denied the petition and upheld the trial court's striking of the cause of action for strict products liability against the subcontractors that provided services in the construction of the condominium building. (212 Cal. App. 3d at p. 1152.)