Wednesday, March 19, 2003
Contractual Time Limit on Suit Against Home Inspector Violates Public Policy, Court of Appeal Rules
By a MetNews Staff Writer
A limitations period in a home buyer’s contract with a home inspector, running from the date of the inspection rather than the date that the buyer discovered, or should have discovered, that the inspector was negligent is void as contrary to public policy, the Court of Appeal for this district has ruled.
Div. Seven reinstated a suit by Los Angeles Superior Court Commissioner Armando V. Moreno and Gloria Contreras against Deric Sanchez, who does business as Aaero Spec Quality Home Inspectors. A divided panel reversed Orange Superior Court Judge Derek W. Hunt’s order upholding the one-year limitations period in a contract between the parties.
The case was filed in Los Angeles Superior Court but assigned to Hunt. Cases in which the party is a judicial officer are normally assigned to a judge from outside the county.
Moreno was appointed an as-needed juvenile court referee in the Los Angeles Superior Court in 1986, became a full-time referee in 1992, and was made a commissioner in 1995. He lost a bid for election to the Los Angeles Municipal Court in 1996.
Moreno and Contreras hired Sanchez after completing a protracted negotiation for the purchase of a 50-year-old house in Whittier. The inspection was completed in August 1998, and escrow closed two months later.
The suit, naming Sanchez and the sellers—who were not parties to the appeal—was filed in October 1999.
The plaintiffs alleged that there were numerous defects in the house, including an inoperable drain that caused water to pond under the structure and cracking walls as a result of the house being built on expansive soil. They also claimed that a problem with the air conditioning and heating system was spreading dust and debris inside the house and that asbestos insulation had been covered over with another material.
The inspector, they said, had breached his contract and committed negligence by not discovering and reporting the conditions.
Hunt ruled that the one-year limitations clause was valid. Extending the delayed-discovery rule to home inspectors, the judge said, would be an unwarranted expansion of the law because “building inspectors really don’t fall in the same public-policy circles as lawyers and doctors.”
But Justice Earl Johnson Jr., writing for the Court of Appeal, noted that the rule has not been limited to professions requiring a license, and said there were important public policy reasons for applying it to home inspectors.
Home inspections, the jurist noted, are regulated by law and require specialized skill on the part of the inspector and trust on the part of the buyer.
There is no authority for allowing a potential defendant to avoid the application of the discovery rule by contract, Johnson went on to say. Contractual limitations periods, he added, are appropriate for “straightforward transactions in which the triggering event for either a breach of a contract or for the accrual of a right is immediate and obvious” and should not be permitted “in the context of an action against a professional or skilled expert where breach of a duty is more difficult to detect.”
Justice Walter Croskey of Div. Three, specially assigned to Div. Seven for the case, concurred, while Presiding Justice Dennis Perluss dissented.
The contractual limitations period was not unreasonable, the presiding justice argued, because it was clear and unambiguous and did not violate the legislative scheme regulating home inspections.
He also noted that the four-year statute of limitations for suits against home inspectors runs from the date of inspection and said there was no reason why a shortened limitations period cannot also run from the date of inspection if the parties so agree.
Attorneys on appeal were Harold M. Stanley for the plaintiffs and Robert A. Brown for the defendant.
The case is Moreno v. Sanchez, 03 S.O.S. 1426.
Copyright 2003, Metropolitan News Company