(a) Notwithstanding Section 664.6, if parties to a pending construction defect action stipulate personally or, where a party's contribution is paid on its behalf pursuant to a policy of insurance, the parties stipulate through their respective counsel, in a writing signed by the parties outside the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.
§ 664.7.Judgment Entered Upon Term of Stipulated Settlement In Construction Defect Action
Title 8. Of the Trial and Judgment In Civil Actions · Chapter 8. The Manner of Giving and Entering Judgment · Enacted 1998 · no amendments on record · Last verified July 28, 2026
In one sentenceSection 664.7 lets parties to a pending construction defect action enter a stipulated judgment on their settlement the same way § 664.6 allows, but permits counsel to bind an insurer-funded party by stipulation even outside § 664.6's narrower signature rules, a change the Legislature intended to modify existing case law on an attorney's authority to settle in this context.
Full Text of § 664.7
(b) It is the intent of the Legislature that this section modify the holding of Levy v. Superior Court (1995), 10 Cal. 4th 578, regarding the authority of counsel in a construction defect action to bind a party to a settlement.
(c) For purposes of this section, "construction defect action" shall mean any civil action that seeks monetary recovery against a developer, builder, design professional, general contractor, material supplier, or subcontractor of any residential dwelling based upon a claim for alleged defects in the design or construction of the residential dwelling unit.
Plain-English Summary
Construction defect litigation often involves many parties whose contribution to a settlement is funded through insurance, and § 664.7 tailors § 664.6's stipulated-judgment mechanism to that reality. Parties to a pending construction defect action can stipulate — personally, or through counsel where an insurer is paying a party's share — in a signed writing outside court or orally before the court, and the court, on motion, can enter judgment on the settlement's terms. If the parties ask, the court can also retain jurisdiction to enforce the settlement until it's fully performed.
Subdivision (b) states the Legislature's purpose directly: this section is meant to modify existing case law limiting counsel's authority to bind a party to a settlement in a construction defect action, giving attorneys more room to settle on a client's behalf when an insurer is funding that client's contribution.
Subdivision (c) defines "construction defect action" broadly — any civil action seeking money from a developer, builder, design professional, general contractor, material supplier, or subcontractor over an alleged defect in the design or construction of a residential dwelling.
Frequently Asked Questions
How is § 664.7 different from § 664.6?
It lets counsel stipulate to a settlement on an insurer-funded party's behalf in construction defect cases, even where § 664.6's own signature rules would be narrower.
What counts as a "construction defect action" under this section?
Any civil action seeking money from a developer, builder, design professional, general contractor, material supplier, or subcontractor over an alleged residential design or construction defect.
Does the court have to retain jurisdiction to enforce the settlement?
Only if the parties request it.
Amendment History
Added by Stats. 1998, Ch. 856, Sec. 1. Effective January 1, 1999.
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as: construction defect settlement californiastipulated judgment construction defect