Los Angeles Business Law-“Business litigation” is defined as the practice of law dealing with the legal problems arising from commercial and business relationships including litigation of controversies arising from those relationships. “Business litigation law” includes evaluating, handling, and resolving such controversies before state courts, federal courts, administrative agencies, mediators and arbitrators.

Matters not qualifying for business litigation include areas of practice dealing with personal injury, routine collection matters, marital and family law or workers’ compensation. Breach of Contract-The differences between contract and tort (injury) give rise to distinctions in assessing damages and in evaluating underlying motives for particular courses of conduct. Contract damages seek to approximate the agreed upon performance . . . and are generally limited to those within the contemplation of the parties when the contract was entered into or at least reasonably foreseeable by them at that time; consequential damages beyond the expectations of the parties are not recoverable. Collections Law-Debtor-creditor law governs situations where one party is unable to pay a monetary debt to another.

There are three types of creditors. First are those who acquire a lien through statute, agreement between the parties, or judicial proceedings against a particular piece of property. This property (or proceeds from its sale) must be used to satisfy the debt to the lien-creditor before it can be used to satisfy debts to other creditors. Once a lien has been created state statutory law governs how the lien is executed against the debtor’s property. The sale of property subject to a lien to satisfy the debt is also governed by state statutory law. The type of property that may be used to satisfy a debt is governed by state and federal legislation, such as the Consumer Credit Protection Act. Secondly, a creditor may have a priority interest.

A priority arises through statutory law. If a creditor has a priority his debt must be paid ahead of other creditors when the debtor becomes insolvent. The third type of creditor is one who has neither a lien against the debtor’s property or holds a statutory priority. A debtor may attempt to fraudulently convey a piece of property to keep it out of the creditors’ hands. State laws seek to prevent this type of property transfer. Many states have adopted the Uniform Fraudulent Conveyances Act or its successor, the Uniform Fraudulent Transfer Act. Construction Defect-The 2000 decision by the California Supreme Court in Aas v. Superior Court, 24 Cal. 4th 627 had a major impact on construction defect liability in California.

The court announced a significant limitation on the scope of potential recovery by plaintiffs in construction defect actions, holding that there could be no tort recovery (negligence/strict liability) for construction defects that have not actually caused property damage, even when the defects violated provisions of the building codes intended to prevent harm to life, health and property. The Aas court reasoned: “Construction defects that have not ripened into property damage, or at least into involuntary out-of-pocket losses, do not comfortably fit the definition of ‘appreciable harm’ – an essential element of a negligence claim.

The breach of a duty causing only speculative harm or the threat of future harm does not normally suffice to create a cause of action.” The court concluded by stating it could not “justify a broad rule permitting recovery of repair costs unaccompanied by property damage or personal injury.” In the aftermath of the Aas decision, Senate Bill 800 was enacted. SB 800 applies to new construction intended to be sold as individual dwelling units, whether as single-family homes or attached units. New Civil Code ยง896 provides that a “builder” and other participants in the construction process shall be liable for violation of specified standards for new residential construction. Subsequent decisions by the California Supreme Court and Courts of Appeal also have applied the Aas decision. The passage of SB 800 and these subsequent decisions afford an opportunity to evaluate the current status of liability for construction defects in California. Aas placed considerable limits on the damages recoverable in tort for construction defects in California. Aas did not impact contract-based theories of recovery. Subsequent case law has placed further limitations on recoverable damages, clarifying that tort claims for defective construction must involve damage from the defects to “other work” and that damage which is the inevitable result of repairing the defective work probably does not qualify as “property damage.” It is likely that the courts will provide further guidance on the scope of recoverable damages. The recent trend in California law has been to limit liability for construction defects. This trend may well continue until claims are governed by SB 800, which will be quite some time in the future.