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Connor v. Great Western Savings & Loan Association

447 P.2d 609, 69 Cal. 2d 850, 73 Cal. Rptr. 369 (1968)

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Connor v. Great Western Savings & Loan Association

California Supreme Court

447 P.2d 609, 69 Cal. 2d 850, 73 Cal. Rptr. 369 (1968)

Facts

Conejo Valley Development Company (Conejo) developed and sold homes that were negligently constructed on land with poor soil conditions. Great Western Savings & Loan Association (GW) (defendant) loaned Conejo the money to construct the homes and loaned individual home buyers the money to purchase the loans. Before the homes were constructed, GW learned that Conejo’s financial situation was weak. GW knew that Conejo did not hire an architect. Although GW requested the project’s plans and specifications, GW did not inspect the plans or the land or make any recommendations for plan-construction changes. During the construction process, GW approved the work that was being completed by inspecting the property to make sure the plans were being followed, although GW still did not inspect the land or the soil. Although the families who purchased the homes (the buyers) (plaintiffs) were not in privity of contract with GW, the buyers sued GW for breaching a duty of care to the buyers and under a theory of vicarious liability imposed by GW’s joint venture with Conejo. The lower court dismissed the buyers’ claims, and the buyers appealed.

Rule of Law

Issue

Holding and Reasoning (Traynor, C.J.)

Dissent (Mosk, J.)

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