Albrecht v. Clifford

• Citation: 767 NE 2d 42,436 Mass. 706
• Parties: PETER L. ALBRECHT & another v. ALFRED G. CLIFFORD.
• Decision Date: 07 May 2002
• Court: United States State Supreme Judicial Court of Massachusetts

436 Mass. 706

767 NE 2d 42

PETER L. ALBRECHT & another¹ v. ALFRED G. CLIFFORD.

Supreme Judicial Court of Massachusetts, Essex.

January 8, 2002.

May 7, 2002.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

James W. Matthews for the plaintiffs.

William H. Sheehan, III, for the defendant.

Benjamin Fierro, III, for Home Builders Association of Massachusetts, Inc., amicus curiae, submitted a brief.

CORDY, J.

In 1993, Peter L. Albrecht and Margaret Page Albrecht bought a newly constructed single-family home with nine fireplaces from Alfred G. Clifford, an architect and general contractor. Several years later, the Albrechts learned that there were defects in the fireplaces and chimneys in another house that Clifford had built in their neighborhood. Consequently, they retained an inspector who found similar defects in the Albrechts' home. The Albrechts filed a complaint in the Superior Court asserting claims against Clifford for breach of contract (Counts I and II), breach of an implied warranty that the residence was constructed in a good and workmanlike manner (Count III), fraud and deceit (Count IV), negligent misrepresentation (Count V), and violation of G. L. c. 93A (Count VI).² A judge in the Superior Court allowed Clifford's motion for summary judgment on all the Albrechts' claims. They appealed. We transferred the appeal to this court on our own motion to consider whether an implied warranty arises out of a contract for the sale of a newly constructed residence by a builder-vendor.³ We conclude that there is such a warranty but affirm the entry of summary judgment for the defendant on statute of limitations grounds. We affirm the judge's summary judgment rulings on the Albrechts' contract claims on other grounds.

1. Background. In March, 1992, Clifford began construction of a single-family home on property he owned in Newbury (residence). In September, 1993, the Albrechts decided to buy the residence, and with the assistance of experienced and capable counsel, negotiated the terms of the sale with Clifford, including certain express warranties. On September 16, 1993, the Albrechts and Clifford executed a standard form purchase and sale agreement (agreement). Exhibit A to the agreement set forth the express warranties that Clifford and the Albrechts agreed would survive the delivery of the deed for one year, including: "all systems, e.g., plumbing, electrical, heating, fireplaces and chimneys etc., will work properly"; "the entire premises is built according to municipal and state regulations, including building, zoning, health, safety, electrical and plumbing codes"; and "the premises have been constructed in a good and workmanlike manner."⁴ However, this express warranty provision required the Albrechts to give Clifford written notice of any defects within one year of the delivery of the deed. On October 26, 1993, the Albrechts bought the residence from Clifford for $595,000. They moved in on December 23, 1993, but never used any of the fireplaces.

In December, 1996, the Albrechts were told by a neighbor that the fireplaces and chimneys in their home, also built by Clifford, were defective. The Albrechts hired a mason whose inspection of the home led him to conclude that the Albrechts' fireplaces and chimneys were also defective. The Albrechts sent two letters to Clifford asking him to repair the defects, but Clifford and the Albrechts were unable to agree on a solution. On February 6, 1998, the Albrechts filed this lawsuit. During the litigation that ensued, the Albrechts retained an expert who concluded that the chimneys, fireboxes, dampers, flues, and smoke chambers were "not constructed in a good and workmanlike manner" and did not comply with the State building code.⁵

2. Implied warranty of habitability. In 1964, the Supreme Court of Colorado was the first court in the country to abandon the doctrine of caveat emptor and hold that a builder-vendor of a completed residential home impliedly warrants that it complies with applicable building code requirements, is built in a workmanlike manner, and is suitable for habitation. Carpenter v. Donohoe, 154 Colo. 78, 83-84 (1964). Since the decision in Carpenter, the majority of jurisdictions have similarly abandoned the doctrine of caveat emptor,⁶ and adopted implied warranties of habitability or good workmanlike quality in the sale of newly constructed houses.⁷ Although we have abandoned the doctrine of caveat emptor in the context of residential leases and held that such leases carry with them an implied warranty of habitability,⁸ until today, we have not adopted such a warranty in the sale of new homes.

There are a number of important policy considerations that have led other jurisdictions to adopt the type of implied warranty urged on us in this case. An implied warranty assures that consumers receive that for which they have bargained, an objectively habitable home, see Miller v. Cannon Hill Estates, Ltd., 2 K.B. 113, 120-121 (1931); it protects purchasers from structural defects that are nearly impossible to ascertain by inspection after the home is built, see Christensen v. R.D. Sell Constr. Co., 774 S.W.2d 535, 538 (Mo. Ct. App. 1989); and it imposes the burden of repairing latent defects on the person who has the opportunity to notice, avoid, or correct them during the construction process, see Duncan v. Schuster-Graham Homes, Inc., 194 Colo. 441, 444 (1978). See also Hines v. Thornton, 913 S.W.2d 373, 375 (Mo. Ct. App. 1996) ("The cause of action is directed to structural defects that a builder-vendor has the opportunity to observe but fails to correct; defects that, through the construction process, become latent and not subject to discovery by inspection").

These sound policy reasons lead us to adopt an implied warranty of habitability that attaches to the sale of new homes by builder-vendors in the Commonwealth.⁹ The adoption of such a warranty is also consistent with the protections that our law affords consumers in other contexts. See Boston Hous. Auth. v. Hemingway, 363 Mass. 184 (1973) (implied warranty of habitability in residential leases); George v. Goldman, 333 Mass. 496 (1956) (implied warranty in construction contracts to do workmanlike job and use reasonable skill). See also G. L. c. 106, § 2-314 (implied warranty of merchantability for goods). Its purpose is to protect a purchaser of a new home from latent defects that create substantial questions of safety and habitability. While the scope of this warranty must be left largely to caseby-case determination, a home that is unsafe because it deviates from fundamental aspects of the applicable building codes, or is structurally unsound, or fails to keep out the elements because of defects of construction, would breach the implied warranty we adopt today.

This implied warranty is independent and collateral to the covenant to convey, and survives the passing of title to and taking possession of the real estate. It cannot be waived or disclaimed, because to permit the disclaimer of a warranty protecting a purchaser from the consequences of latent defects would defeat the very purpose of the warranty.¹⁰

This implied warranty does not make the builder an insurer against any and all defects in a home, impose on the builder an obligation to deliver a perfect house, or protect against mere defects in workmanship, minor or procedural violations of the applicable building codes, or defects that are trivial or aesthetic. Its adoption is not intended to affect a buyer's ability to inspect a house before purchase, to condition the purchase on a satisfactory inspection result, or to negotiate additional express warranties.

To establish a breach of the implied warranty of habitability a plaintiff will have to demonstrate that (1) he purchased a new house from the defendant-builder-vendor; (2) the house contained a latent defect; (3) the defect manifested itself only after its purchase; (4) the defect was caused by the builder's improper design, material, or workmanship; and (5) the defect created a substantial question of safety or made the house unfit for human habitation. In addition, the claim must be brought within the three-year statute of limitations and the six-year statute of repose set forth in G. L. c. 260, § 2B.¹¹

The motion judge concluded that the Albrechts' claim for relief under a theory of implied warranty failed because no such cause of action had been recognized in Massachusetts. Having recognized such a warranty, we now apply the principles just announced to the record on summary judgment.

The Albrechts are purchasers of a newly constructed home from a builder-vendor, and the defects about which they complain were discovered after they purchased the residence. In addition, based on their expert's affidavit, the Albrechts have adequately demonstrated, for purposes of summary judgment,¹² that there are genuine issues of disputed fact about whether the defects were caused by the builder's improper design and workmanship, and whether they created a substantial question of safety.¹³

Whether the Albrechts can adequately demonstrate that the defects were "latent" is more questionable. Latent defects are conditions that are hidden or concealed, and are not discoverable by reasonable and customary observation or inspection. Black's Law Dictionary 429, 887 (7th ed. 1999). The defects in this case, however, were in some measure readily observable. In concluding that the fireplaces and chimneys were defective, the Albrechts' expert did not have to dismantle them or any other part of the residence. He merely made observations and measurements of the materials and components (e.g., hearths, fireplace boxes, dampers, flues, smoke chambers) that were readily accessible.¹⁴ Admittedly, some of the observations (e.g., smoke chambers, flues, and chimney interiors) were more difficult than others (hearths, fireplace boxes, and dampers), and were made...