December 24, 2020

State Farm General Insurance Company v. Oetiker, Inc. (Dec. 24, 2020, B302348) __ Cal.App.5th __ [2020 WL 7417020]

Defendant manufactured clamps used for the plumbing in a couple’s home. Years later, the couple’s home sustained significant water damage, and the couple’s insurer brought a subrogation action against defendant, alleging the leak occurred because of the defective clamps. Defendant asserted the 10-year statute of repose in California’s Right to Repair Act of 2002 barred the claim, but the insurer argued the 10-year limitation period did not apply because the Act’s manufactured product exception applied to remove the insurer’s claims from coverage of the Act. The trial court rejected the insurer’s application of the exception and granted defendant’s motion. The insurer appealed.

The Court of Appeal first held the Right to Repair Act applied because the manufactured product exception to the Act only applies when a party seeks to recover the cost of the defective product itself. Here, the insurer sought to recover damages resulting from the use of the defective product, and the Act and its statute of repose therefore applied. 

The court then went on to explain that for product manufacturers, the Right to Repair Act expressly displaces common law causes of action only for negligence and breach of contract. As a result, the court held the insurer’s negligence claims were subject to and time-barred by the Act’s 10-year statute of repose. However, the insurer’s strict liability and breach of implied warranty claims fell outside the purview of the Act, meaning they were not subject to the Act’s statute of repose and were therefore timely.