In this case, we are asked to determine the enforceability of provisions in home purchase contracts that require the homeowners to submit
Petitioner The McCaffrey Group, Inc. (McCaffrey), constructed singlefamily homes in a Fresno development. Real parties in interest own 24 homes within the development. Nineteen of those homes are owned by 32 individuals who purchased their homes directly from McCaffrey (the original purchasers). Nine of the 19 homes were sold before 2003 using the 2001 version of McCaffrey's "Combined Purchase and Sale Agreement and Joint Escrow Instructions" and "Homeowner Warranty"; the other 10 homes were sold on or after January 1, 2003, using the 2003 version of McCaffrey's "Combined Purchase and Sale Agreement and Joint Escrow Instructions" and "Homeowner Warranty and Claims Procedure." Five of the 24 homes are owned by eight individuals who purchased their homes from someone other than McCaffrey after January 1, 2003 (the subsequent purchasers).
McCaffrey did so in this case, notifying the real parties in interest who purchased their homes on or after January 1, 2003, through a provision in their home warranties, that the "following contractual provisions for the nonadversarial resolution of claims are intended to, and do hereby, replace the
McCaffrey's contractual procedure, set forth in both the 2001 and 2003 versions of the sale agreements and home warranties, contains the same two-step process for addressing disputes over alleged construction defects. The first step requires the homeowner to provide McCaffrey with written notice of the claimed defects and an opportunity to inspect and repair them.
Once McCaffrey receives notice of the claim, it has "a reasonable period of time," not to exceed 60 days, to "meet and confer at a mutually-acceptable place in Fresno County, California, to discuss the Claim." Either at that meeting or another mutually agreed-upon time, "the parties and their authorized representatives shall have full access to the Property that is subject of the Claim for the purposes of inspecting the Property," and if McCaffrey "decides to take any corrective action," it must be provided full access to the Property to do so.
Real parties in interest filed suit against McCaffrey in May 2011 to recover damages allegedly suffered due to defective construction of their homes. After answering the first amended complaint, McCaffrey filed a "Motion to Compel ADR" and stay the action. McCaffrey asserted the original purchasers had breached their agreements to follow the mandatory "ADR" and judicial reference procedures set forth therein; therefore, it was contractually entitled to seek a court order staying the action and compelling the original purchasers to comply with those procedures. With respect to the subsequent purchasers, McCaffrey contended they were subject to the statutory procedures set forth in the Act; because they failed to follow those procedures, McCaffrey was statutorily entitled to seek a court order staying the action and compelling compliance with the Act. In a footnote in its memorandum of points and authorities, McCaffrey explained that while it had not attempted to enforce the "ADR" and judicial reference provisions in its homeowner agreements and "CC&Rs" against the subsequent purchasers, if the subsequent purchasers contended or conceded they were bound to such terms, it reserved the right to enforce those terms against them.
Real parties in interest opposed the motion. They first argued the subsequent purchasers could not be compelled to comply with the statutory procedure because they are subject to the contractual procedure. Real parties in interest asserted that because McCaffrey elected to implement a contractual procedure in lieu of the statutory procedure when the homes were first sold, the election was binding on the subsequent purchasers since the original buyers were instructed to pass notice of the election on to subsequent purchasers as covenants that run with the land.
Five of the real parties in interest who were original purchasers of four of the homes submitted declarations as part of the opposition.
They each declared they signed a lot of documents at McCaffrey's model home office when purchasing their homes, which they were not able to review thoroughly because they felt rushed by the sales agent. They signed, however, for various reasons, including that they "really wanted the home," they "were urged to sign quickly in order to get a home at the current price," the sales agent urged them to "sign immediately" as "the prices were going up every week," and they did not think they would be able to find another home for the same price. The declarants also stated they "had no bargaining or negotiation power" when purchasing their homes, and if they "had refused to sign any portion of the documents," they would not have been able to purchase the home. They stated that the "implications of the various paragraphs" were not explained, the sales agent's explanations were "extremely weak," and a lot of information was presented in a short amount of time. They were confused by the process or the documents. Finally, they did not understand, and were not told, that by signing the documents they were forfeiting the right to a jury trial in the event they discovered construction defects in the home.
The attorney for real parties in interest declared that in construction defect cases, his firm's custom and practice is to file a complaint against the developer for all construction defects found in the plaintiffs' homes. Once they learn the identities of the subcontractors and manufacturers involved, they bring those parties into the lawsuit. As of January 2012, real parties in
In reply, McCaffrey argued the statutory procedures could be enforced against the subsequent purchasers, but also accepted real parties in interest's stipulation they are bound to McCaffrey's contractual procedures. McCaffrey asked the court to enforce the contractual procedures against the subsequent purchasers pursuant to the stipulation.
Following the May 31, 2012 oral argument on the motion before the Hon. Alan Simpson, the court adopted its tentative decision denying the motion as to the original purchasers who submitted declarations and to the subsequent purchasers. The court continued the hearing on the motion to June 21, 2012, to allow the remainder of the plaintiffs to submit declarations evidencing procedural unconscionability, if they could do so truthfully.
As to the original purchasers who submitted declarations, the trial court found the provisions unconscionable. The trial court determined those plaintiffs had made a "fairly we[a]k showing of procedural unconscionability" which was offset by a strong showing of substantive unconscionability. The court explained these plaintiffs had presented "some evidence" their agreements were contracts of adhesion, as, based on the court's recollection, the price range of the homes when purchased "approximates the price of entry level homes in the Fresno vicinity," each declarant enumerated a combination of features that made their home specifically desirable to them, and, while the contractual provisions are "clear, easily understandable and separately initialed, the only evidence before the court is the entire contract was presented in a `take-it-or-leave-it' fashion." The court determined the contractual provisions were substantively unconscionable because they did not contain timelines like those in the Act, which require the builder to act within specified time limits and protect homeowners from inordinate delay in the pursuit of a remedy.
With respect to the subsequent purchasers, the court found that McCaffrey could not enforce the Act against them because it had opted out of the Act's prelitigation procedure when the homes originally were sold. The court determined McCaffrey's contractual provisions, not the Act, applied to the subsequent purchasers, therefore it would not compel compliance with the Act.
Real parties in interest subsequently filed declarations from nine original purchasers, seven of whom own four of the 19 original purchaser homes, and two of whom were original purchasers of a home on which one of the owners
On June 21, 2012, the trial court continued the hearing on the motion to July 14, 2012, to permit the plaintiffs who had not yet filed declarations evidencing procedural unconscionability to do so. Real parties in interest subsequently filed three more declarations from three original purchasers, but only one was from a real party in interest who had not previously submitted a declaration.
On July 13, 2012, the case was reassigned to another judge, the Hon. Kristi Culver Kapetan, for all purposes. After being continued twice, the hearing ultimately was held on August 8, 2012. The court took the matter under advisement and subsequently issued a written ruling denying the motion as to all of the real parties in interest. The court overruled McCaffrey's evidentiary objections. The court concluded that as to the original purchasers who submitted declarations, the agreements were contracts of adhesion and the provisions were substantively unconscionable "for lack of the strict deadlines that are integral to the ... Act." The court denied McCaffrey's request for severance, as "all three pre-litigation provisions are unconscionable."
As to the subsequent purchasers, the court determined McCaffrey could not enforce the Act because it had opted out of it and the contractual procedures are binding on the subsequent purchasers. Finally, with respect to the original purchasers who did not submit declarations, the court exercised its discretion
McCaffrey petitioned for a writ of mandate or prohibition to overturn the court's order denying its motion to compel compliance with the contractual procedures and judicial reference. McCaffrey contends the provisions in question are not unconscionable. We issued an order to show cause and received additional briefing in order to consider this issue of first impression.
By its motion, McCaffrey sought to compel real parties in interest to engage in a nonadversarial dispute resolution process before being allowed to continue with their lawsuit. The motion involved three categories of plaintiffs, namely (1) the original purchasers who bought their homes from McCaffrey before January 1, 2003; (2) the original purchasers who bought their homes from McCaffrey on or after January 1, 2003; and (3) the subsequent purchasers who did not buy their homes from McCaffrey. With respect to the original purchasers in the first two categories, McCaffrey sought to enforce its contractual procedures that (1) require the homeowner to provide McCaffrey with notice of the claimed construction defects and an opportunity to inspect and correct them, and (2) if the claim is not resolved, require the parties to participate in nonbinding mediation. If the court found those provisions were unenforceable, then McCaffrey sought to enforce the contractual provision that requires judicial reference of real parties in interest's claims. With respect to the subsequent purchasers, McCaffrey argued they were subject to the statutory procedures of the Right to Repair Act, but if they conceded the contractual procedures were applicable to them, then those procedures should be enforced.
The trial court refused to enforce any of the contractual procedures with respect to all of the categories of real parties in interest on the ground the procedures are unconscionable, as the contracts are adhesive and the procedures, lack strict deadlines that are integral to the Right to Repair Act. By its writ, McCaffrey argues the provisions are not unconscionable and should be enforced as to all real parties in interest. The resolution of this issue first requires an overview of the Right to Repair Act.
The Legislature enacted the Right to Repair Act to "`specify the rights and requirements of a homeowner to bring an action for construction defects,
The Act contains five chapters. Chapter 1 lists definitions applicable to the Act. (§ 895.) Chapter 2 sets out building standards which, if violated, constitute a deficiency in construction for which the builder may be held liable to the homeowner. (§§ 896, 897.) Chapter 3 imposes an obligation on the builder to furnish a minimum one-year express written limited warranty covering the fit and finish of specified building components (§ 900), but allows the builder to offer a greater or longer warranty through an "enhanced protection agreement" (§§ 901-906). Chapter 3 also imposes an obligation on the homeowner to follow all reasonable maintenance obligations and schedules. (§ 907.) Chapter 5 sets out the procedure for claims brought under the Act, including the applicable statute of limitations (§ 941), the burden of proof (§ 942), the exclusiveness of the Act (§ 943), the damages that may be recovered (§ 944), and the affirmative defenses that may be asserted (§ 945.5). It also provides that the Act's "provisions, standards, rights, and obligations ... are binding upon all original purchasers and their successors in-interest." (§ 945.)
The chapter at issue here, division 2, part 2, title 7, chapter 4 of the Civil Code (Chapter 4), prescribes nonadversarial prelitigation procedures a homeowner must initiate before bringing a civil action against the builder for alleged construction defects. (§§ 910-938.) The homeowner is required to provide the builder with written notice of the claim that the construction of his or her residence violated any of the standards set forth in chapter 2 of the Act, and must "describe the claim in reasonable detail sufficient to determine the nature and location, to the extent known, of the claimed violation." (§ 910, subd. (a).) Once the builder has received the claim, it has 14 days to provide written acknowledgment of the claim and another 14 days to inspect and test the claimed defects. (§§ 913, 916.) The builder has an additional 40 days to conduct a second inspection or testing. (§ 916.)
The builder's offer to repair must be accompanied by an offer to mediate the dispute if the homeowner chooses; the mediation is limited to four hours, except as otherwise mutually agreed, before a nonaffiliated mediator selected and paid for by the builder, and must occur within 15 days after the request to mediate is received. (§ 919.) The mediator may be selected jointly if the homeowner agrees to split the mediator's cost. (§ 919.) If the builder offered to repair a violation and the mediation fails to resolve the dispute, the homeowner must allow the repair to be performed. (§ 919.) When the repair is completed, the homeowner may file an action for violation of the applicable standard or a claim of inadequate repair. (§ 926.) If the builder has completed a repair and no previous mediation was conducted, a mediation must be held before the homeowner may file suit against the builder. (§ 928.)
The time periods and requirements of Chapter 4 are to be strictly construed and, unless extended by the parties' mutual agreement, govern the rights and obligations under the Act. (§ 930.) If the builder fails to acknowledge receipt of the claim, elects to not go through the process set forth in Chapter 4, fails to request an inspection within the time specified, fails to make an offer to repair, fails to complete the repair within the time specified, or fails to "strictly comply with this chapter within the times specified," the homeowner is released from the requirements of Chapter 4 and may proceed with the filing of an action. (§§ 915, 920, 925, 930.) The standards set forth in the other chapters of the Act, however, continue to apply to the action. (§§ 915, 920, 925, 930.)
The builder has the option of contracting for an alternative nonadversarial prelitigation procedure in lieu of the statutory procedure. Section 914 provides: "(a) This chapter establishes a nonadversarial procedure, including the remedies available under this chapter which, if the procedure does not resolve the dispute between the parties, may result in a subsequent action to enforce the other chapters of this title. A builder may attempt to commence nonadversarial contractual provisions other than the nonadversarial procedures and remedies set forth in this chapter, but may not, in addition to its own nonadversarial contractual provisions, require adherence to the nonadversarial procedures and remedies set forth in this chapter, regardless of whether the
"At the time the sales agreement is executed, the builder shall notify the homeowner whether the builder intends to engage in the nonadversarial procedure of this section or attempt to enforce alternative nonadversarial contractual provisions. If the builder elects to use alternative nonadversarial contractual provisions in lieu of this chapter, the election is binding, regardless of whether the builder's alternative nonadversarial contractual provisions are successful in resolving the ultimate dispute or are ultimately deemed enforceable.
"(b) Nothing in this title is intended to affect existing statutory or decisional law pertaining to the applicability, viability, or enforceability of alternative dispute resolution methods, alternative remedies, or contractual arbitration, judicial reference, or similar procedures requiring a binding resolution to enforce the other chapters of this title or any other disputes between homeowners and builders. Nothing in this title is intended to affect the applicability, viability, or enforceability, if any, of contractual arbitration or judicial reference after a nonadversarial procedure or provision has been completed."
In so holding, we explained that "a builder who elects to use alternative prelitigation procedures in lieu of those set out in the statute has the right to attempt repairs, so long as it does so pursuant to procedures that are fair and enforceable. If, however, the builder imposes procedures that are found to be unenforceable, it forfeits its absolute right to attempt repairs. It may still offer to repair any defects, but the homeowner is not bound to accept the offer or to permit the builder to attempt the repairs prior to litigation. The builder thus
In Baeza, supra, 201 Cal.App.4th 1214, the trial court ordered homeowners who had sued the builder for construction defects to comply with the builder's contractual procedure and judicial reference provisions. (Id. at p. 1220.) In a writ petition, the homeowners argued they were not required to comply with the contractual provisions because the builder failed to comply with the statutory disclosure requirements contained in section 912. (Baeza, supra, 201 Cal.App.4th at pp. 1220, 1224.) We rejected this argument, holding that "a builder who opts out of the Chapter 4 nonadversarial statutory prelitigation procedures in favor of its own contractual procedures opts out of the entirety of Chapter 4, and the disclosure provisions of section 912 do not apply to such a builder." (Baeza, supra, 201 Cal.App.4th at pp. 1225-1226.) We did not address the propriety of the trial court's order requiring compliance with the contractual provisions for mediation, arbitration and judicial reference, as the homeowners failed to present a separate argument on the issue. (Id. at p. 1231, fn. 7.)
Neither case addressed the issue presented here, namely what constitutes enforceable contractual provisions. The trial court found the contractual provisions unconscionable. Real parties in interest assert that we need not decide whether McCaffrey's contractual provisions are unconscionable because they are "unlawful" under the Right to Repair Act, as they provide "no meaningful timetable" for the builder to act. Real parties in interest contend the absence of deadlines comparable to those in the Act renders the contractual provisions unenforceable, without regard to whether the provisions are unconscionable.
If the Legislature had intended to require a builder's contractual provisions to include certain deadlines, it could have stated so within section 914. It also could have made the deadlines of Chapter 4 applicable to a builder's contractual provisions by setting the deadlines as a minimum standard and allowing the builder to offer more-generous terms. That the Legislature knew how to do that is demonstrated in chapter 3 of the Act, where under section 900 builders are required to provide a minimum one-year express written limited warranty, but under section 901 they may "offer greater protection or protection for longer time periods" in their contracts with homeowners. The Legislature did not do so. Instead, it included all of the deadlines in Chapter 4, then authorized builders to opt out of Chapter 4.
Since McCaffrey's contractual provisions are not rendered unenforceable merely because they deviate from the statutory procedure, we consider the only other argument on enforceability that real parties in interest make, namely whether the contractual provisions are unenforceable because they are unconscionable.
"Unconscionability is ultimately a question of law for the court." (Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846, 851 [113 Cal.Rptr.2d 376], citing § 1670.5.) "However, numerous factual issues may bear on that question. [Citation.] Where the trial court's determination of unconscionability is based upon the trial court's resolution of conflicts in the evidence, or on the factual inferences which may be drawn therefrom, we consider the evidence in the light most favorable to the court's determination and review those aspects of the determination for substantial evidence." (Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 89 [7 Cal.Rptr.3d 267] (Gutierrez.)) If there are no material conflicts in the evidence bearing on the issue of unconscionability, our review is de novo. (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1250 [45 Cal.Rptr.3d 293].)
"Both procedural unconscionability and substantive unconscionability must be shown, but `they need not be present in the same degree' and are evaluated on `"a sliding scale."' [Citation.] `[T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.'" (Pinnacle, supra, 55 Cal.4th at p. 247, quoting Armendariz, supra, 24 Cal.4th at p. 114.) The party who prepared and submitted the contract has the burden of showing the other party had notice of the contract terms at issue, while the party asserting unconscionability has the burden of establishing it. (Trend Homes, supra, 131 Cal.App.4th at p. 956.)
We begin with the enforceability of the contractual procedures with respect to the original purchasers who bought their homes on or after January 1, 2003. These procedures appear in the original purchasers' standardized sale agreements and home warranties, as well as the CC&Rs. Real parties in interest contend these provisions are substantively unconscionable because they do not comport with the Right to Repair Act and are procedurally unconscionable because they are contained in contracts of adhesion that were presented to them on a take-it-or-leave-it basis.
In the present case, the trial court found procedural unconscionability had been established because the sale agreements are contracts of adhesion, and while the contractual procedures are "clear, easily understandable and separately initialed," the contracts were presented to the original purchasers on a
Real parties in interest do not contend that procedural unconscionability exists based on surprise or even misrepresentation; instead, they contend it exists because the sale agreements are contracts of adhesion. We need not decide this issue because, even if we assume real parties in interest have shown an imbalance of bargaining power, that McCaffrey prepared the contracts as the stronger party to its own advantage, and McCaffrey would not have stricken the prelitigation provisions if real parties in interest had asked, real parties in interest have shown only a low level of procedural unconscionability, as the element of surprise or misrepresentation is not present. (See Trend Homes, supra, 131 Cal.App.4th at p. 960.) Accordingly, in order to prevail, real parties in interest must establish a high level of substantive unconscionability. (Ibid.)
McCaffrey's contractual procedure begins with the homeowner providing notice of the claim of construction defects. After McCaffrey receives the claim, the parties are required to meet and confer within a reasonable time, not to exceed 60 days. At that meeting, the homeowner is to provide McCaffrey with access to the property for the purpose of inspection. If McCaffrey decides to take corrective action, then the homeowner must provide McCaffrey full access to the property so it can do so. If the claim is not resolved, then the claim must be submitted to mediation according to the procedures adopted by "JAMS" or another entity offering mediation services. The mediation is to be held "as soon as practicable." Within 10 days of the selection of the mediator, or within a timeframe set by the mediator, the parties are to submit brief memoranda on their positions. The mediation is to begin at most 10 days later, and must conclude within 15 days of its start. The parties bear their own mediation expenses with the exception of the mediation administrative fee and costs and the mediator's fee and costs, which are shared equally unless the parties agree otherwise.
Real parties in interest contend these contractual provisions are substantively unconscionable because (1) they state no meaningful timeline within which McCaffrey must act, thereby giving McCaffrey a license to delay, (2) the homeowner is required to pay half the cost of the mediation, (3) the notice provision disadvantages homeowners, and (4) the provisions take away other rights enumerated in Chapter 4 that are not included in the contractual procedures.
The purpose of Chapter 4 of the Act "is to give a builder the opportunity to resolve a homeowner's construction defect claim in an expeditious and nonadversarial manner." (Darling v. Superior Court (2012) 211 Cal.App.4th 69, 82 [149 Cal.Rptr.3d 331].) As this court explained in Anders, "one of the major purposes of the legislation is to promote prelitigation repairs of construction defects in order to avoid the costs of litigation and the resulting increased costs of construction. The provisions establishing a timetable for the repairs also protect homeowners by preventing inordinate delay in their pursuit of a remedy." (Anders, supra, 192 Cal.App.4th at p. 590.)
The contractual provisions at issue here set out a procedure that gives McCaffrey the right to repair any claimed construction defects and requires mediation should the homeowner remain dissatisfied. While the provisions do
Real parties in interest disagree, arguing the absence of express deadlines for McCaffrey to act renders the procedures unfair, as a homeowner would not know precisely when to file suit should McCaffrey either delay in acting or fail to act, and the homeowner necessarily would have to litigate the issue of reasonableness once a lawsuit is filed. It is true that "`[w]hat constitutes a reasonable time is a question of fact ...,'" which depends on "`the situation of the parties, the nature of the transaction, and the facts of the particular case.'" (Wagner, supra, 41 Cal.4th at p. 30.) But real parties in interest have not shown that, in the context of construction defect claims, it is difficult to know when a builder has decided not to repair the claimed defect, has agreed to repair it but failed to initiate the repair, or did not complete the repair. Either the builder responds to demands for action or it does not. If it does not respond, the homeowner may be reasonably assured that he or she is relieved of any further requirement to engage in a prelitigation resolution process.
Notably, when filing a lawsuit without completing the Right to Repair Act's prelitigation procedures, it is the homeowner's burden to "factually establish" that he or she has been released from those procedures due to the builder's failure to comply with them. (Standard Pacific Corp. v. Superior Court (2009) 176 Cal.App.4th 828, 834 [98 Cal.Rptr.3d 295].) The burden under McCaffrey's contractual provisions is no different; a homeowner may establish excuse from the contractual procedures by showing that McCaffrey unreasonably delayed in making an offer to repair, initiating the repairs, or completing the repairs, and thus proceed with the lawsuit. Determining
Thus, McCaffrey is required to act in good faith in conducting the inspection, determining whether to repair, and in completing the repairs. If it fails to do so, it exposes itself to additional liability for breach of the covenant of good faith and fair dealing. For this reason, McCaffrey has an incentive to cooperate with the homeowner in the repair process and to promptly exert its contractual rights and carry out its contractual responsibilities.
Real parties in interest contend the Legislature enacted the "highly detailed process" of Chapter 4 because it wanted the process to begin and end without court supervision before a lawsuit is filed. While that may be true, the Legislature allowed builders to opt out of that process and adopt their own prelitigation procedures. In doing so, the Legislature did not place any restrictions on what those procedures must include. Real parties in interest question why the Legislature would adopt such detailed procedures only to allow the builder to circumvent them by creating stripped down procedures of which homebuyers are seldom aware. There is no clear answer to that question other than to say it did not do so.
Significantly, a homebuyer is given notice of the contractual procedures before entering into a home purchase contract, as those procedures do not become part of the bargain unless they are set out in the contractual documents and the buyer agrees to them. (Baeza, supra, 201 Cal.App.4th at p. 1227.) Since section 914 requires the contract to reflect the builder's
Real parties in interest next contend the contractual mediation provision is unconscionable because it requires the homeowner to pay half the cost of the mediation, which could go on as long as the mediator chooses since the mediator has discretion to conduct the mediation as he or she sees fit. For this reason, real parties in interest complain that the mediation fees are likely to be sizeable and therefore would function as a penalty or tax they must pay before being granted access to the court system.
Real parties in interest argue they are disadvantaged because the notice provision requires the notice of claim to "describe the nature and location of the Claim in reasonable detail." Real parties in interest assert this is a different standard than the Right to Repair Act, which states that the notice "shall describe the claim in reasonable detail sufficient to determine the nature and location, to the extent known, of the claimed violation." (§ 910, subd. (a).) Real parties in interest reason that instead of being required to state what they know, the contractual provision requires them to "provide an objectively reasonable amount of detail in describing the nature and location of the defects in their home." Real parties in interest claim the contractual standard is problematic because it is more stringent and invites litigation of the meaning of what is "reasonable."
In sum, real parties in interest have not met their burden of establishing that the contractual procedures, as stated in the paragraphs entitled "Claim Notice: Right to Inspect and Correct" and "Nonbinding Mediation," are unconscionable. We therefore find these provisions are enforceable as to the original purchasers who bought their homes on or after January 1, 2003.
Real parties in interest conceded below, and concede in this proceeding, that the contractual procedures apply to the subsequent purchasers. As we have determined, those procedures are enforceable. While in its moving papers below McCaffrey sought to force the subsequent purchasers to comply with the Right to Repair Act's procedures, it also stated that if the subsequent purchasers contended or conceded they were bound to the contractual procedures, it reserved the right to enforce those terms against them. In their opposition below, real parties in interest conceded the subsequent purchasers were subject to the contractual procedures. Based on this concession, McCaffrey asked the trial court to enforce the contractual procedures against the subsequent purchasers. Having requested the relief below, and as real parties in interest do not assert any other argument with respect to the enforceability of the contractual procedures against the subsequent purchasers, we conclude that the subsequent purchasers must comply with them.
In sum, all of the real parties in interest must comply with the contractual procedures in their contracts with McCaffrey, which include providing notice of the claim, giving McCaffrey an opportunity to repair and correct, and participating in nonbinding mediation. Since we are ordering compliance with the contractual procedures, we do not decide whether the judicial reference clause is enforceable against any of the real parties in interest, as some or all of the real parties in interest may resolve their complaints with McCaffrey.
The petition for writ of mandate is granted. Let a peremptory writ of mandate issue directing the respondent court to (1) vacate its orders of May 31, 2012, and August 27, 2012, denying petitioner's "Motion to Compel ADR," and (2) enter a new order granting the motion and compelling all of
Cornell, Acting P. J., and Franson, J., concurred.
The only difference between the 2001 and 2003 versions is that the 2001 version states the notice need only describe the nature of the claim and the proposed remedy.
