Santos v. RMA Group

Filed 1/17/07  Santos v. RMA Group CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

            APPEAL from the Superior Court of San Bernardino County.  J. Michael Gunn, Judge.  Affirmed with directions.

            R.E. Scott & Associates and R.E. Scott for Plaintiffs and Appellants.

            Ritchie, Klinkert & McCallion and James E. Klinkert for Defendants and Respondents.

1.  Introduction

            Plaintiffs Albert Santos and Barbara Santos appeal from the trial court's judgment dismissing plaintiffs' complaint against defendants RMA Group, a geotechnical consulting firm, and geologists Gary Wallace and Elvis Duane Lyon after sustaining their demurrer to plaintiffs' second amended complaint.^[1]  Plaintiffs purchased a lot from Long Pham and Hoa Pham, relying on representations that the property was graded properly and ready to build on.  The lot, however, required additional grading and, as a consequence, new architectural plans.  Plaintiffs filed an action against the Phams, their realtors, RMA, and other defendants.  RMA filed a demurrer on various grounds, including that the 10-year statute of limitations barred plaintiffs' causes of action.  RMA had performed its analysis and produced a grading report about 12 years before plaintiffs filed the current action.

            On appeal, plaintiffs argue that the statute of limitations does not apply because RMA's conduct amounts to intentional misconduct or fraudulent concealment under Code of Civil Procedure section 337.15, subdivision (f).  Because plaintiffs failed to state an adequate claim for fraud, we conclude that the trial court properly sustained the demurrer based on the 10-year statute of limitations.

2.  Factual and Procedural History

            As alleged in plaintiffs' second amended complaint, plaintiffs purchased a vacant lot, commonly described as 3114 Payne Ranch Road in Chino Hills, from Long Pham and Hoa Pham on May 15, 2000.  At the time of the purchase, the Phams and their realtor David Beno and his company Moneta Investments, Inc. (Moneta) informed plaintiffs that the lot had been graded and subdivided by Cornell Development, Inc. (Cornell) and the John Pat Payne Trust in the early 1990's.  They also informed plaintiffs that, in 1992, Associated Engineers, Inc. (Associated) and RMA had performed soils engineering studies on the lot.  After these studies, RMA produced a grading report verifying that the lot was ready to build without further grading.

            After having purchased the lot, plaintiffs discovered that the lot had not been graded properly.  Plaintiffs thereafter incurred expenses to have the lot reevaluated and re-graded and to have an architect draw up new plans.

            On March 9, 2004, plaintiffs initially filed their action against the Phams, Beno, Moneta, Cornell, the trustees of the Payne Trust, Associated, and RMA.  The causes of action in the first complaint were reasserted in the second amended complaint with a few changes.  As to RMA, the second amended complaint alleged causes of action for negligence, fraud by nondisclosure, fraud by intentional concealment, fraud by intentional misrepresentation, and negligent misrepresentation.

            RMA filed a demurrer on various grounds including that plaintiffs failed to allege facts sufficient to constitute a cause of action and that plaintiffs' claims were barred by the applicable statute of limitations.  The trial court sustained the demurrer and dismissed RMA from the lawsuit.

3.  Discussion

            Plaintiffs claim that the trial court erred in sustaining the demurrer because the complaint stated a sufficient cause of action and the statute of limitations was tolled by defendants' fraudulent concealment.

            In reviewing a trial court's decision sustaining a demurrer, we apply independent review to determine whether the complaint properly states a cause of action.  (Kendrick v. City of Eureka (2000) 82 Cal.App.4th 364, 368.)  We accept as true all the facts properly pleaded in the complaint and those facts that may be reasonably inferred from those specifically pled.  (Wagner v. Apex Marine Ship Management Corp. (2000) 83 Cal.App.4th 1444, 1448.)  We are not bound by the specific ground relied upon by the trial court, but must affirm the court's ruling if supported by any ground offered in the motion.  (See Mendoza v. Town of Ross (2005) 128 Cal.App.4th 625, 631.)  Where the demurrer is based on a statute of limitations, the defect must be apparent on the face of the complaint.  (Ibid.)

            Preliminarily, we note that, although the trial court's decision was based on plaintiffs' failure to show that RMA owed plaintiffs a duty of care, RMA concedes that a showing of privity was not required for a third party to state a cause of action for negligence or fraud where the defendant had reason to expect that the misrepresentation would adversely affect the third party.  (See Geernaert v. Mitchell (1995) 31 Cal.App.4th 601, 608-609; Newhall Land & Farming Co. v. Superior Court (1993) 19 Cal.App.4th 334, 351; Barnhouse v. City of Pinole (1982) 133 Cal.App.3d 171, 191.)

            We turn then to the alternative ground offered in RMA's demurrer, namely, the applicable statute of limitations.  A construction defect lawsuit for tortious conduct generally must be filed within three years of discovering the defect.  (Code Civ. Proc., § 338;^[2] Regents of University of California v. Hartford Acc. & Indem. Co.(1978) 21 Cal.3d 624, 630.)  Even if the latent defect remains undiscovered for an extended period of time, a lawsuit must be brought within 10 years of substantial completion of the work.  (§ 337.15; see also Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 369; Felburg v. Don Wilson Builders (1983) 142 Cal.App.3d 383, 391.)  Section 337.15 defines a predictable and finite period during which professionals and tradespeople in the construction industry remain exposed to liability for completed work.  (See Sandy v. Superior Court (1988) 201 Cal.App.3d 1277, 1285-1286.)

            Section 337.15 specifically provides, in part:  â€