The Erlichs (plaintiffs) entered into a contract with Menezes (defendant) to build their home. The Erlichs moved into their home December of 1990. In February 1991, it rained heavily and the Erlichs’ home began leaking. Walls became saturated in an upstairs bedroom, two downstairs bedrooms, and the pool room. The living room filled with three inches of standing water and water poured in streams in several different locations in the house. The garage ceiling became saturated and the plaster liquefied and fell to the floor. Menezes attempted to repair the leaks, but was unsuccessful. The Erlichs had their home inspected by a general contractor and structural engineer who, in addition to confirming defects leading to the leakage, found several structural problems with the home. Mr. Erlich testified he was “absolutely sick” and suffered a heart attack after finding out about the problems with the home. Mr. Erlich suffered from a heart condition prior to the construction of the home. Mrs. Erlich testified that she feared for the safety of her family. The Erlichs filed suit under theories of fraud and negligent misrepresentation. The jury found that Menezes negligently breached the contract. The jury awarded damages for breach, as well as emotional distress damages. Menezes appealed. The Court of Appeal affirmed the decision of the trial court. Menezes appealed to the Supreme Court of California.