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Construction Defects
LATENT DEFECTS
WHEN IS A DOOR NOT A DOOR? - WHEN ITS AJAR !
WHEN IS A LATENT DEFECT NOT A LATENT DEFECT? -IT DEPENDS.
Prepared by the law offices of:
HUNT, ORTMAN, BLASCO, PALFFY & ROSSELL, INC.
LAURENCE P. LUBKA, Esq.
( See end of document for address and telephone number.
)
You hear the terms thrown around all of the time, "defect'',
"latent defect" and "patent defect". The
terms come up in insurance policies and in law suits. The
question remains, do you have a defect, is the defect latent
or patent, and why does it matter? The definition of defect
you use can make all the difference between whether you are
timely in a defect law suit or whether you can recover against
an insurance policy.
Regardless of the type of law suit, the State of California
places fixed deadlines on when one can file a legal action
For example, an action on a written contract must be brought
within four years. An action filed five years after a contract
was breached can be dismissed at the outset for violating
the deadline for contracts. Similarly, there is a three year
deadline for physical damage to private property.
These deadlines, called statutes of limitations, can have
harsh results for thaw who hesitate. The better part of valor
in many situations is to err on the side of filing a law suit
as early a, possible in order to minimize the risk of running
afoul of the statute of limitations.
Deadlines are manageable if you can easily identify a defect.
Obvious construction defects should not lead you into an untimely
claim`. It is human nature to focus on an patent (obvious)
defect. In a condominium it is the garage door that does not
open, the wall with the gaping crack or the living room floor
that has an 8 degree elope that get all of the attention.
You or your condominium association can bring these defects
to the attention of the builder and, if they are not properly
repaired, you can promptly bring a legal action.
There are two categories of defects that do not lend themselves
to such ready identification.. First, there are the defects
where the bad result is apparent, but the cause can't be found.
What do you do when the heater pours out heat, the insulation
is fully installed, but the house simply doesn't stay warm?
Is there a defect? Probably. However, it can be difficult
to maintain a legal action if you can't show what was done
wrong. This is the less common variant of a latent defect.
The second category of latent defect is one that you normally
don't know and can't know exists when the building is completed.
You did not know that the truss brackets were made of defective
material when the house was purchased. Six years later the
bracket breaks and half the house sags to the led. In this
scenario more than three or four years have passed since the
house was complete and, if the defect was patent, your opportunity
to bang a legal action is lost due to the statutes of limitation.
However, the legislature and case law have dealt differently
with latent defects by holding that the statute of limitations
doesn't begin to run until a latent defect is found. At the
same time, awareof the commercial impracticality of making
a builder liable for all time, the legislature has put a ten
year limit on any defect law suit. In short, you have 3 or
4 years from the time of identifying a defect in which to
bring an action, but in no event can you bring a defect action
more than ten years after completion.
Unfortunately, thy courts struggle over the definition of
latent defect almost every year. For starters certain insurance
policies exclude coverage of latent defects. Courts seek to
minimize the scope of exclusions in insurance contracts and
often make every effort to find the claim to be patent. At
the same time, if a court was addressing a case in which the
claim was untimely if patent (obvious), but timely if latent,
the court might make every effort to view the defect as latent.
Further' the phrase "latent defect" as used in a
contract, such as an insurance policy, may be interpreted
differently from the same phrase used in a statute.
In one 1996 case, a California's court considered the term
"latent defect" in an insurance policy. The court
dissected the phrase latent defect in its written legal opinion.
The court was considering a home owner's policy purchased
for an apartment complex. The claim was against an insurance
policy for the repair of a retaining wall which showed evidence
of distress. The owner hired a consulting firm which conducted
extensive tests and analysis and determined the wall was not
designed to bear the pressure actually exerted on it.
The court considered the definition of the word "defect"
and accepted the Webster's Third New International Dictionary
definition of "an irregularity in a surface or structure
that spoils the appearance or causes weakness or failure:
fault, flaw ... want or absence of something necessary for
completeness, perfection, or adequacy in form or function:
deficiency, weakness -- as opposed to excess." The court
noted that defects could be found in design and construction,
as well as material. The word "latent" proves to
be more of a challenge to define, but the court in the same
case concluded that a latent defect was one that could be
identified without an inspection. That raises the question
of how much of an inspection must be conducted. The court
declined to use the standard of a "reasonable inspection"
and required that in this insurance case a "most searching
inspection" standard be used. However, the court adds
that just because a defect is found after an expert's most
searching inspection that the defect is not automatically
a latent defect. The court gives an example of a defect found
after a searching inspection, but which would have been equally
evident after only cursory inspection.
In fact, whether one needs an expert to be part of the "searching
review" is unclear. Certainly one must look at all of
the facts and circumstances in deciding the necessary type
of review. Where the manifestation of a possible defect is
clear (e.g. pooling water), the need for an intensive review
becomes more significant. (This line or reasoning raises another
issue. What is the difference between a manifestation of a
defect and the defect itself.) If there is no reason to even
suspect a defect, the need for a searching review may be less
for purposes of the statute of limitations and be greater
when it comes to an insurance exclusion for latent defects.
The issues raised above remain unsettled, notwithstanding
recent cases. Again, the statute of limitations standard and
the insurance standard will tend to collide. One example of
the issue would be where there was a visible drainage problem.
One case noted that for the purposes of the statute of limitations,
the drainage problem was merely the manifestation of a possible
defect, but that the defect itself was latent in that an expert
could have attributed it to poor maintenance. If the issue
were one of a latent defect insurance exclusion, a court might
have held that it was a patent defect on its face or that
it was a patent defect if it could have been found by an expert
with less than a searching inspection. One day a court will
be faced with the nightmare of a claim that involves both
the statute of limitations ant an insurance exclusion.
CONCLUSION: By its nature the issue of whether a defect
is patent or latent is one that must be considered in view
of all of the facts. Given the high stakes of a finding that
a defect is latent (exclusion from insurance or additional
time to file a legal action), one must pay hill attention
to any problem, either at the time of purchase or when a problem
is manifested. At that time it would always be useful to have
an expert conduct a thorough inspection to determine what,
if any, defect is causing the problem. To fail to take such
action is to leave a critical issue open and the owner possibly
at risk. When is a latent defect not a latent defect? It depends.
Law Offices Of:
HUNT, ORTMAN, BLASCO, PALFFY & ROSSELL,
INC.
301 North Lake Ave. Seventh Floor
Pasadena, California 91101
(818) 440-5200
facsimile (818) 796-0107
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