Look at the image below which has a circled top plate break. The floor to the left of the break in the top plate is moving to the left laterally. Eventually all the force concentrates at the break as shown by the large red arrow. Because of this break in the top plate, the lateral force cannot make it to, or be resisted by, the shear wall.
The horizontal board on top of the cripple wall is known as the upper top plate and it is also the top of the shear wall where all the force is transferred. The floor needs a continuous connection to the shear walls they rest on and which protect them. The connection of the floor to the rigid shear walls is what restrains the entire floor from moving. If part of the floor is on one section of shear wall and another part of the floor is on another section of cripple wall that has not been converted into a shear wall, these segments for floor can move independently. The way this it is addressed by joining all the cripple wall segments together wherever they are separate from each other. These separations are caused by breaks in the top plate.
For example, if a shear wall holds part of the floor to the foundation at one end of the house, but the other end is not connected to the shear wall because of a top plate break, this end will not be protected. Building codes make sure this does not happen with simple regulations.
Restoring Cripple Wall Top Plate Continuity
This image shows how the two top plates are converted into a single member by stitch nailing the upper and lower top plates together on either side of the break. If this is done at every top plate break the upper top plate becomes a single member.
The red line starting at the left represents earthquake forces as they travel from the joist toe nails, into the upper top plate, then into the stitch nails to the left of the break, then into the stitch nails to the right of the break, which then transfer the load into the upper top plate to the right of the break and into the shear wall.
Another way to do this is with steel straps
This detail from the Pre-standard requires a tension capacity of 725# according to the note on the bottom right, slightly less than a Simpson L90. It should be investigated to see if 725# is strong enough.
Steel straps are designed to be used on the outside of a building so that finish material such as stucco can be put on the walls without obstruction. For work that does not require a flat surface or aesthetic considerations such as in the crawl space, sawn lumber can also be used.
This is a circumstance we confront quite often. This is a break in both top plates caused by a 3 or 4-inch plumbing stack. In this case tension and compression must be resisted. A 2 x 6 spanning the break as shown above, where the upper and lower top plates have been stitch nailed together and nails or lags are installed on either side of the break. The 2 x 6 resists tension and compression. A detail addressing this circumstance should be part of the standard.
Juxtaposition of Nails and 3″ Simpson SDS Screws
The 2 x 6 can be placed over plywood without any fear of splitting if either SDS screws or nails are used. Nails can be installed 1″ O.C. in close grain fir and redwood as shown in this 1-minute video.
Which is Better? Wood and Nails or a Strap?
Nails are always stronger than the even the strongest steel strap, and much easier to install.
It is often the case that pipes are placed horizontally along the walls and will bisect the shear wall if a framing modification is not made. The detail below represents an effective modification. This should be part of the detail.