The Home Improvement Liability That Lingers : Owners Who Improve Property May Be Liable for Injury After House Is Sold
Unless the state Supreme Court overturns a recent appeals court decision, owner occupants of single-unit homes who make changes on their property will be risking permanent liability, even after the house has been sold.
Homeowners--or contractors who are hired to make changes--will be gambling because the appellate decision emphasizes that, under certain circumstances, if someone is injured in a home you sold years ago, it can still be your fault.
Under most circumstances, statutes of limitations protect former homeowners from liability for injuries suffered in homes they have sold.
However, in the words of attorney Stuart Brody, “a quirk in the California law potentially provides that anyone making a change in an owner-occupied, single-unit residence is not protected by the statute of limitations.
“Of course,” added Brody, who represents Jon and Marion Kubichan, “we do not support that interpretation of the law.”
The Kubichans (he is a producer-screenwriter who produced television’s “Room 222” in the 1970s) are in danger of being found responsible for a tragedy that occurred May 7, 1976. On that date, Clinton Preston, then 22 months old, tumbled into a small pool surrounding a fountain in the backyard of a San Fernando Valley home.
Clinton’s parents, Stephen and Cynthea Preston, were visiting Susan and Richard Reid. The Reids had been leasing the home since September, 1974, from Allan Goldman, who had bought the one-acre property from the Kubichans in October, 1973.
Child Brain-Damaged
Some time in late 1971 or early 1972, the Kubichans had built the pool into which Clinton Preston fell . . . a fall that left the child a seriously brain-damaged quadriplegic.
A Superior Court jury voted unanimously to hold the Kubichans blameless for the accident.
But the Superior Court decision was overturned in a unanimous opinion written for the Second District Court of Appeal in Los Angeles by Justice Eugene McClosky
The Court of Appeal ruled, in effect, that the Kubichans may be held responsible for an accident that occurred about 4 1/2 years after they built the pool, 2 1/2 years after they sold the house and 1 1/2 years after a third party had leased the place.
In its 37-page opinion, the Court of Appeal deals with many facets of the Kubichan case. Perhaps the most important is its finding that the Superior Court judge had given improper instructions to the jury that held the Kubichans blameless.
Scott Simon, the attorney who represented the Kubichans in Superior Court, disagreed with the Appeal Court opinion, contending that the judge’s instructions in Superior Court were correct under the law.
The crux of the instructions given by the judge was that someone who sells real estate is not responsible for injuries occurring on that property after the sale if the new purchaser had an opportunity to discover and correct a patent defect (a defect apparent by reasonable inspection) that caused the injuries.
The Kubichans’ situation is unusual.
In many circumstances of potential liability, statutes of limitations play a role, observed Michael Goldstein, one of Clinton Preston’s attorneys. “Those statutes require suits to be filed within a year of the occurrence of the injury in question or, if the injury is to a minor, before that minor reaches the age of 19,” Goldstein said.
“So, we can see that there are statutes of limitations protecting persons who build residences or make changes in residences that are not owner occupied. But there is an exception for changes made in owner-occupied, single-unit residences, and that exception applies to our case.”
‘Seems Rather Arbitrary’
“I don’t know why the Legislature accepted that exception . . . it seems rather arbitrary,” said Gary Schwartz, professor of law at UCLA and an expert in personal injury law.
Some light is cast on the question by a letter written in 1967, when then Gov. Ronald Reagan was considering signing legislation that led to the exception. Howard H. Morgridge, president of the California Council of the American Institute of Architects, wrote the governor:
“The bill does not apply to the owner or occupant of property, since he is in a position to see and observe the patent defect and correct it.”
Brody, the lawyer who represented the Kubichans in Superior Court, pointed out that “in most jurisdictions in the United States there would be no liability in this situation,” and he reeled off several specific states, including Washington, Illinois, New Mexico and Oregon.
Attorneys for the Kubichans have appealed to the state Supreme Court. If the Supreme Court hears the case, it can uphold or reject all or part of the Appeal Court decision. In any event, if the Supreme Court agrees to hear the case, it will write an opinion that will become state law.
If the Supreme Court overturns the Court of Appeal opinion, the Kubichans will be off the hook and the case will be over.
Back for a New Trial
However, if the Supreme Court upholds all or part of the Court of Appeal opinion, the Kubichans must go back to Superior Court for a new trial to establish whether they built a patently dangerous pool, the extent of their responsibility and, in the event they are declared responsible, the extent of damages.
If the Supreme Court flatly declines to hear the Kubichan case, the case goes back to Superior Court for a new trial and the Appeal Court decision becomes law.
The Supreme Court can decline to hear the case and order the Appeal Court opinion to be “depublished,” which would mean the Appeal Court decision would not become law, but it still would apply to the Kubichans and the case would go back to Superior Court for a new trial.
The case may have far-reaching impact, according to Alex Creel, senior counsel for the California Assn. of Realtors.
“It’s an important case,” Creel said. “I suppose it’s making new law from the perspective of homeowners who build allegedly unreasonably dangerous conditions on their property. (Now they) may have to look forward to liability. I don’t know of another case where similar circumstances occurred, where they went back and literally held the homeowner who built the alleged danger as liable.”
The Kubichans’ lawyer, Simon, maintains that unless the Kubichan decision is overturned in the State Supreme Court, the home insurance industry will be in “chaos.”
However, the ruling probably won’t make much overall difference to the insurance industry, according to David Simmons, regional representative of the Insurance Information Institute, an organization supported by some 300 property and casualty insurance companies.
Insurance Industry Pays
Simmons observed that if the Kubichans are not declared liable, chances are some other insured party--the homeowner at the time of the accident, for example--will be held responsible. So the insurance industry would have to pay in any case.
Kubichan disagrees, and notes that the jury that first heard the case unanimously declared there was no liability for the lease holder, owner or former owner of the home.
Gary Schwartz, UCLA Law School’s personal injury expert, suggests a simple course of action for homeowners and others concerned about finding themselves in predicaments similar to the Kubichans’
“People who have sold homes should consider buying an ‘umbrella policy,”’ Schwartz said. “If you move from a house in Northridge to a house in Westwood, you’re going to buy a liability policy for the house in Westwood. In some cases, the policy for the Westwood house would also cover the former residence in Northridge. But in many cases it would not.
“If the new homeowners’ policy does not cover liability for former homes, the persons involved should get an umbrella policy. It doesn’t cost very much--about $85 a year or so for an individual--and it covers all sorts of personal injury liability: you could bump into someone walking to the bus in the morning, or if you’re sued for libel or slander you’d be covered. And you’d be covered if someone fell into a pond at a residence you had sold years ago.”
