## Facts

- Buyers purchased a 49-year-old home and hired a home inspector to perform a pre-purchase inspection.
- The inspection contract required that “any legal action” be filed “within one year from the date of the inspection.”
- The inspector’s report allegedly failed to disclose serious defects, particularly in the central heating and cooling system.
- After moving in, the buyers allegedly suffered illness and later obtained expert evaluations indicating defects they claimed should have been discovered and reported during the inspection.
- Buyers sued for breach of contract, negligence, and negligent misrepresentation.
- The inspector demurred, asserting all claims were barred by the contractual one-year limitations provision; the trial court sustained the demurrer without leave to amend and dismissed the action.
- Buyers appealed.

## Issues

1. Whether claims against a home inspector accrue on the inspection date under a contractual one-year suit clause, or instead accrue when the buyer discovers (or should discover) the inspector’s breach under the discovery rule.
2. Whether a home inspector who contracts to provide inspection services is limited to contract liability or may also be liable in tort for negligence and negligent misrepresentation.

## Decision

- The Court of Appeal reversed the judgment of dismissal and remanded with directions to vacate the dismissal and overrule the demurrer.
- The court held that a cause of action against a home inspector accrues when the buyer discovers, or through reasonable diligence should have discovered, the inspector’s breach.
- The court concluded that a one-year period running from the inspection date can be unreasonably short where defects are latent and may not be discoverable within that time; the clause could not bar the claims at the pleading stage on these allegations.
- The court held that home inspectors are not immune from tort liability; negligence and negligent misrepresentation claims may proceed alongside contract claims.
- Applying demurrer standards, the court accepted the pleaded facts as true and found the complaint sufficient to state claims not conclusively time-barred.

## Legal Principles

- For professional negligence-type claims against home inspectors, accrual is governed by the discovery rule: the claim accrues upon discovery of the breach, or when it should have been discovered with reasonable diligence.
- Although parties may contract to shorten a limitations period, enforcement may be denied where the contracted period, measured from a fixed event (inspection date), can expire before the plaintiff has a reasonable opportunity to discover the wrongdoing and sue.
- Home inspectors owe a duty of reasonable care in performing and reporting inspection services; breach may support tort claims, including negligence and negligent misrepresentation, when foreseeable reliance by the buyer is alleged.
- On demurrer, courts must accept well-pleaded factual allegations as true and may not resolve fact-bound questions (such as reasonable discoverability and reasonableness of a shortened limitations clause) against the plaintiff unless time-bar is clear on the face of the pleadings.

## Conclusion

The court reinstated the buyers’ action, holding that home-inspection claims accrue upon discovery (actual or constructive), that a one-year-from-inspection suit clause may be unreasonable as applied to latent defects at the pleading stage, and that home inspectors may be sued in tort as well as for breach of contract.


Moreno v. Sanchez, 106 Cal. App. 4th 1415, 131 Cal. Rptr. 2d 684 (Ct. App. 2003)