In 1988 the Nelsons of Camarillo bought a lot in a lots-only development and built a custom home on it. They found out that instead of 10 years from the date they purchased the lot in which to sue for soil subsidence (sinking), they only had until December of 1995, because the grading subcontractor substantially completed its work in December of 1985.
In January of this year, the Nelsons appealed the judgment of the Superior Court of Ventura County that ruled their complaint for soil subsidence damages was filed too late. By statute, a homeowner has 10 years within which to file an action against an "improver" of land. The grading subcontractor, D.W. Burhoe Construction, Inc. (Burhoe), finished grading the lots in the development in December of 1985, and the Nelsons filed their suit for soil subsidence damages on April 5, 1996, 10 years and 5 months later.
The Nelsons believed that they had 10 years from July 14, 1987, the date the "notice of completion" of their lot was filed by the developer, to file their suit. However, the statute, California Code of Civil Procedure section 337.15, explains that the 10-year period begins upon substantial completion of the improvement, but not later than the date of final inspection, the recording of the notice of completion, the date of use or occupancy of the improvement, or one year after termination of the work of improvement. So the notice of completion date did not commence the 109-year period, because the improvement of the grader was substantially completed at an earlier date. And the completion of the grader commenced the 10-year period, because the last sentence of subsection (g) of the statute states: "The date of substantial completion shall relate specifically to the performance of ... construction or construction services by each professional or trade rendering services to the improvement".
The Nelsons then proposed that "improvement" refers to the entire tract of land, not just their lot, but in an earlier case, the Court of Appeal held that as used in Code of Civil Procedure section 337.15, an improvement refers to each of the individual changes or additions to real property that qualifies as an "improvement" irrespective of whether the change or addition is grading and filling, putting in curbs and streets, laying storm drains or of other nature.
The Court of Appeals upheld the judgment of the Superior Court of Ventura County denying the Nelsons their day in court to sue for subsidence damages.