Time for Living, Inc. v. Guy Hatfield Homes/All American Development Co.

We here review summary judgments granted in favor of a cross-defendant sued in indemnity. The defendants and cross-complainants are real property developers who were timely sued by consumers for latent defects in the “work of improvement” purchased by the consumers. The cross-defendant is a prior owner who improved the property at an earlier date and could not be sued directly by the consumer plaintiffs because of the bar of the statute of limitations. The issue raised is whether the developers can bring their claim in indemnity against the prior owner, on the theory that the prior owner’s work on the land contributed to the latent defects, even though the statute of limitations would preclude the claim if brought directly by the consumers. The trial courts below, apparently concluding the prior improver’s activities were as a matter of law not “transactionally related” to the matters alleged in the consumers’ lawsuits, ruled the indemnity cross-complaint was improper.

We disagree. Our review of the statutory scheme and case law convinces us that when a person (prior owner, subcontractor or developer) contributes to a work of improvement, the ultimate developer is…