Markborough California, Inc. v. Superior Court

In this case we hold that a provision in a construction contract limiting a party’s liability to the developer of the property for damages caused by the engineer’s professional errors and omissions is valid under Civil Code section 2782.5 if the parties had an opportunity to accept, reject or modify the provision.

Petitioner (hereinafter referred to as Markborough) filed a petition for writ of mandate seeking to vacate respondent court’s order granting summary adjudication of issues in favor of real party in interest (hereinafter referred to as Glenn). We issued an alternative writ and now deny a peremptory writ. As we explain, we find the respondent court properly determined that the limitation of liability clause in the contract between Markborough and Glenn is valid and that Glenn’s liability to Markborough is limited to the amount of $67,640.

Facts

In 1981, Markborough entered into a contract with Glenn wherein Glenn agreed to design a manmade lake to be constructed as part of Markborough’s planned community known as “Sunnymead Ranch.” In February of 1986, the lake liner failed. Markborough incurred over $5 million in expenses to remedy the problem. In August of…