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Insurers, as well as builders, were victorious last week on the construction defect litigation battlegrounds. The California Supreme Court ruled on Dec. 4 that homeowners cannot sue builders for negligence unless there has actually been damage to property or bodily injury.

According to the San Diego Union-Tribune, justices decided that homeowners already have access to other remedies available through builder warranties and contracts, which can cover periods of one to 10 years. The decision came out of two San Diego cases that centered on “allegations of negligent construction and building code violations that made the homes more vulnerable to damage from fire and earthquakes,” the Union-Tribune reported.

The cases involved more than 240 homeowners living in a single-family subdivision and a condominium development in Carmel Mountain Ranch. The developer in both cases was Newport Beach-based William Lyon Co. Despite the growing need for multi- and single-family housing in California, condominium development has dropped off in recent years due to the rising tide of litigation. The ruling helps to more closely define where the liability falls and may serve to lessen the fears of both builders, who have stopped taking on these projects; and insurers, who have shied away from writing coverage for them.

Topics Lawsuits California