## Facts

- A planned residential development of about 192 units and shared facilities was built on an ocean bluff in Solana Beach, California, in phases from about 1970 to 1973.
- A homeowners association was formed under California’s planned development scheme to hold title to and manage the project’s common property.
- The project’s governing declaration authorized the association to prosecute or defend actions affecting common areas or in which all owners shared an interest or sought common relief.
- After completion of the first two phases, serious bluff erosion and related structural problems appeared in common areas.
- Negotiations failed, and the association sued the developer-related entities and later added the architect and engineering firms.
- Claims included negligence, breach of contract, declaratory relief, and strict products liability, with strict liability theory premised on mass development, construction, and marketing of the units.

## Issues

1. Whether the association had standing to sue in its own name and/or in a representative capacity for common-area and common-interest claims under the declaration and Code of Civil Procedure § 382.
2. Whether strict products liability could be stated against the developer-builder of a mass-produced residential planned development.
3. Whether strict products liability could be stated against architects and engineers for alleged design and construction defects.

## Decision

- The Court of Appeal held the association had standing to maintain the action, including in a representative capacity under Code of Civil Procedure § 382 and based on its declaration authority and ownership/management interests in common areas.
- The court held the association stated a cause of action for strict products liability against the developer-builder entities alleged to have developed, built, and marketed the housing to the public.
- The court held the association could not state a strict products liability claim against the architect and engineering defendants, whose roles were professional services rather than commercial manufacturing/marketing.
- The judgments of dismissal were reversed in part and affirmed in part, allowing claims (including strict liability) to proceed against the developer-builder while barring strict liability against the design professionals.

## Legal Principles

- A homeowners association authorized by governing documents to litigate common-area or common-interest disputes may sue as a real party in interest and may also sue representatively under Code of Civil Procedure § 382 when owners share a common interest and joinder is impracticable.
- Strict products liability may apply to a developer-builder that mass produces, constructs, and markets residential units, functioning analogously to a manufacturer placing a product into the stream of commerce.
- Architects and engineers providing professional design or engineering services are not subject to strict products liability merely because their work contributes to the finished construction; their potential liability ordinarily rests in negligence, contract, or professional-duty theories.

## Conclusion

The court recognized broad association standing to litigate common-interest construction defect claims and extended strict products liability to mass-market developer-builders, while limiting strict liability by excluding architects and engineers whose involvement is primarily professional services.


Del Mar Beach Club Owners Ass'n v. Imperial Contracting Co., 123 Cal. App. 3d 898, 176 Cal. Rptr. 886 (Ct. App. 1981)