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Erlich v. Menezes

Supreme Court of California

August 23, 1999, Decided

No. S068325.


 [*548]  [**980]  [***888]    BROWN, J. 

We granted review in this case to determine whether emotional distress damages are recoverable for the negligent breach of a contract to construct a house. A jury awarded the homeowners the full cost necessary to repair their home as well as damages for emotional distress caused by  [***889]  the contractor's negligent performance. Since the contractor's negligence directly caused only economic injury and property damage, and breached no duty independent of the contract, we conclude the homeowners may not recover damages for emotional distress based upon breach of a contract to build a [****4]  house.


Both parties agree with the facts as ascertained by the Court of Appeal. Barry and Sandra Erlich contracted with John Menezes,  [**981]  a licensed general contractor, to build a "dream house" on their ocean-view lot. The Erlichs moved into their house in December 1990. In February 1991, the rains came. "[T]he house leaked from every conceivable location. Walls were saturated in [an upstairs bedroom], two bedrooms downstairs, and the pool room. Nearly every window in the house leaked. The living room filled with three inches of standing water. In several locations water 'poured in in streams' from the ceilings and walls. The ceiling in the garage became so saturated . . . the plaster liquefied and fell in chunks to the floor."

Menezes's attempts to stop the leaks proved ineffectual. Caulking placed around the windows melted, " 'ran down [the] windows and stained them and ran across the driveway and ran down the house [until it] . . . looked like someone threw balloons with paint in them at the house.' " Despite several repair efforts, which included using sledgehammers and jackhammers to cut holes in the exterior walls and [****5]  ceilings, application of new waterproofing materials on portions of the roof and exterior walls, and more caulk, the house continued to leak--from the windows, from the roofs, and water seeped between the floors. Fluorescent light fixtures in the garage filled with water and had to be removed.

"The Erlichs eventually had their home inspected by another general contractor and a structural engineer. In addition to confirming defects in the roof, exterior stucco, windows and waterproofing, the inspection revealed  [*549]  serious errors in the construction of the home's structural components. None of the 20 shear, or load-bearing walls specified in the plans were properly installed. The three turrets on the roof were inadequately connected to the roof beams and, as a result, had begun to collapse. Other connections in the roof framing were also improperly constructed. Three decks were in danger of 'catastrophic collapse' because they had been finished with mortar and ceramic tile, rather than with the light-weight roofing material originally specified. Finally, the foundation of the main beam for the two-story living room was poured by digging a shallow hole, dumping in 'two sacks [****6]  of dry concrete mix, putting some water in the hole and mixing it up with a shovel.' " This foundation, required to carry a load of 12,000 pounds, could only support about 2,000. The beam is settling and the surrounding concrete is cracking.

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21 Cal. 4th 543 *; 981 P.2d 978 **; 87 Cal. Rptr. 2d 886 ***; 1999 Cal. LEXIS 5530 ****; 99 Daily Journal DAR 8687; 99 Cal. Daily Op. Service 6808

BARRY ERLICH et al., Plaintiffs and Respondents, v. JOHN MENEZES, Defendant, Cross-complainant and Appellant; RON REBALDO et al., Cross-defendants and Respondents.

Prior History:  [****1]  Superior Court of San Luis Obispo County. Super. Ct. No. CV70302. Paul H. Coffee, Judge, and Jay R. Ballantyne, Judge. 1 

Disposition: The judgment of the Court of Appeal is reversed and the matter is remanded for further proceedings consistent with this opinion.


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Contracts Law, Breach, Breach of Contract Actions, General Overview, Types of Damages, Compensatory Damages, Torts, Remedies, Damages, Measurement of Damages, Foreseeable Damages, Elements, Duty, Business & Corporate Compliance, Contracts Law, Nonperformance, Pain & Suffering, Emotional Distress, Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, Consequential Damages, Affirmative Defenses, Fraud & Misrepresentation, Business Torts, Bad Faith Breach of Contract, Types of Losses, Property Damages, Malpractice & Professional Liability, Attorneys, Types of Contracts, Covenants, Constitutional Law, Equal Protection, Poverty, Emotional Distress Damages, Remedies, Physical Injuries, Construction Contracts, Real Property Law, Construction Law, Contracts, Loss of Use