Nichols v. BEAUFORT & ASSOCIATES, INC.

• Decision Date: 10 March 1999
• Docket Number: No. 97-177-Appeal.,97-177-Appeal.
• Citation: 727 A.2d 174
• Parties: Thomas NICHOLS et al. v. R.R. BEAUFORT & ASSOCIATES, INC. et al.
• Court: Rhode Island Supreme Court

727 A.2d 174

Thomas NICHOLS et al. v. R.R. BEAUFORT & ASSOCIATES, INC. et al.

No. 97-177-Appeal.

Supreme Court of Rhode Island.

March 10, 1999.

Raymond A. Marcaccio, Staci L. Sawyer, Providence, for plaintiff.

Michael D. Mitchell, Warwick, for defendant.

Before WEISBERGER, C.J., and LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.

OPINION

FLANDERS, Justice.

This case requires us to determine for the first time whether the buyers of a latently defective home can maintain an action against the house builder—with whom they lack any contractual privity—for the builder's alleged breach of implied warranties of habitability and workmanlike quality. Claiming latent defects and faulty workmanship in the construction of their home, the plaintiffs, Thomas and Candace Nichols (the Nichols), appeal from the Superior Court's entry of summary judgment in favor of the defendants, home builder Raymond R. Beaufort and his construction company, R.R. Beaufort & Associates, Inc. (collectively, Beaufort). For the reasons explained below, we affirm in part, reverse in part, and remand this case for further proceedings concerning the Nichols' claims for breach of implied warranties.

Facts and Travel

In 1983, Beaufort built the Nichols' home on Kimberly Lane in Cranston and immediately sold it to his cousin, Debra Cronin, and her husband (the Cronins). Within two to three months after purchasing their home, the Cronins noticed large cracks in the cement floor of the garage. Beaufort described the cracks as "pretty good size[d]," "[l]arger than normal," and "[I]arger than what would be acceptable" for industry standards. Beaufort attempted to correct this problem by pouring a new garage floor in late 1983.

Approximately a year and a half later, in June 1985, the Nichols purchased the property from the Cronins and thereafter built a 16' × 24' addition to the existing house. The record is silent concerning whether the Cronins informed the Nichols about the garage-floor cracks. Moreover, it fails to indicate whether the Nichols conducted any pre-purchase inspection of the house or whether such an inspection would have revealed the defects about which the Nichols now complain. In any event, in 1988, some three years after the purchase of the house, the garage floor caved in. Subsequently, in 1991, Mr. Nichols noticed cracks in the walls of the addition, the kitchen, and the garage. At this point, the Nichols hired Geisser Engineering Corporation (Geisser) to investigate these problems. They soon learned that, according to Geisser, Beaufort had constructed the home's foundation on unstable soil containing voids and organic materials that had decomposed over time. These voids eventually subsided, causing the walls in the various parts of the house to crack and the garage floor to collapse.

In February 1994, the Nichols filed this action in Superior Court charging Beaufort with negligent construction, breach of implied warranties, and negligent violation of certain building-code provisions when he built the house in 1983. In due course, Beaufort moved for summary judgment on the grounds that: (1) the absence of contractual privity between the Nichols and Beaufort barred the Nichols from bringing any of these claims against Beaufort, and (2) the applicable ten-year statute of repose for filing tort claims against the builder and others who improve real property had expired before the Nichols brought suit against Beaufort, see G.L.1956 § 9-1-29. After reviewing the parties' legal memoranda and hearing oral arguments, a Superior Court motion justice determined that the absence of contractual privity between the Nichols and Beaufort was fatal to the Nichols' claims. As a result, she granted Beaufort's summary-judgment motion, but did not specifically address whether § 9-1-29 barred plaintiffs' tort claims.

On appeal, we ordered the parties to show cause why we should not resolve the Nichols' appeal summarily. Cause having been shown, a panel of this Court placed the appeal on the Court's continuous argument calendar and requested the parties to brief a number of questions related to the issues raised. We now affirm in part and reverse in part, holding that: (1) even though the statute of repose barred the Nichols' negligence claims against Beaufort, they timely filed their claims alleging breach of implied warranties, and (2) such claims do not require privity of contract. Therefore, the motion justice should not have granted summary judgment on this basis.

Standard of Review

This Court reviews an order granting summary judgment by applying the same standard used by the motion justice. See Nogueras v. Ling, 713 A.2d 214, 216 (R.I. 1998). "Viewing the evidence in a light most favorable to the nonmoving party, we examine the record, including the pleadings and any affidavits or discovery materials, to determine whether any material facts remain in genuine dispute such that the case should proceed to trial and to determine whether the moving party is entitled to judgment as a matter of law." Id.

Analysis

I

Statute of Repose

The Nichols argue that a genuine issue of material fact existed concerning whether the ten-year statute of repose prescribed in § 9-1-29 barred their tort claims.¹ Section 9-1-29 immunizes construction contractors—as well as others who construct, furnish materials for, or provide professional services in connection with improvements to real property—against tort claims that have not been brought within ten years of the improvement's substantial completion. Section 9-1-29; see also Boghossian v. Ferland Corp., 600 A.2d 288, 289 (R.I.1991). Here, the uncontradicted evidence indicated that Beaufort substantially completed the construction of the Nichols' house no later than September 26, 1983, the date when the city's building official issued the certificate of use and occupancy. However, the Nichols failed to file their complaint against Beaufort until February 18, 1994, more than ten years after Beaufort substantially completed the home's construction.

Notwithstanding the issuance of the use and occupancy certificate more than ten years before the Nichols initiated this action, the evidence also indicated that Beaufort returned to work on the house in the late part of 1983, when he repaired the large cracks that appeared in the Cronins' garage floor. The Nichols therefore assert that Beaufort did not substantially complete construction of their house until he finished this repair work. In support of their argument, the Nichols that Beaufort's "late part of 1983" repair work to the garage floor most likely would have continued into 1984, thereby creating a genuine factual issue concerning whether the Nichols filed their tort claims within the ten-year-statute-of-repose period. But even if we were to assume, arguendo, such post-certificate-of-occupancy repair work could serve to extend the applicable substantial-completion date, a litigant cannot avoid summary judgment by merely posing factual possibilities without submitting admissible evidence thereof.

Here, the Nichols offered no such evidence to establish that Beaufort performed any repair work after the later part of 1983, much less that Beaufort substantially completed this work at any time on or after February 18, 1984, the last date (ten years before they filed this action) on which substantial completion of any improvement to the property could have occurred for the Nichols to have timely filed their complaint. Accordingly, no genuine issue of material fact existed concerning whether § 9-1-29's ten-year-statute-of-repose period had expired before the Nichols filed their complaint on February 18, 1994. Hence, dismissal of their tort claims on summary judgment was proper.²

III

Absence of Contractual Privity Between Plaintiffs and Defendant

The Nichols argue that under the circumstances of this case, the implied warranties of habitability and workmanlike quality that the law imposes upon a builder-vendor in connection with the sale of a new home should extend to protect subsequent purchasers of that home. In Padula v. J.J. Deb-Cin Homes, Inc., 111 R.I. 29, 32, 298 A.2d 529, 531 (1973), we held that when a builder-vendor sells a new house or one that is under construction, "he [or she] implicitly warrants that the construction has been or will be done in a workmanlike manner and that the dwelling will be reasonably fit for human habitation." Thereafter, we extended the application of these implied warranties to a situation where a builder-vendor first created a one-year intervening tenancy and then sold what could have been characterized as a "used" house to the plaintiff-purchaser. See Casavant v. Campopiano, 114 R.I. 24, 327 A.2d 831 (1974). We determined that, notwithstanding the intervening tenancy, the house was still relatively "new" and that the one-year tenancy "was [not] of such [an] extended duration as to make an application of the [implied] warranties unreasonable." Id. at 27, 327 A.2d at 833.

The thrust of the above-cited cases was to afford protection to new home buyers from any latently defective work and possible overreaching by knowledgeable builder-vendors. However, we refused to extend the application of these implied warranties to protect used-home buyers in a suit against a vendor who was not also the builder of the house. See Sousa v. Albino, 120 R.I. 461, 388 A.2d 804 (1978). There, the Court reasoned as follows:

"The applicability of the implied warranty is based upon the premise that, with respect to the sale of new homes, the purchaser has little choice but to rely upon the integrity and professional competence of the builder-vendor. The public interest dictates that if the construction of a new house is defective, its repair cost should be borne by the responsible builder-vendor who created the defect and is in a better economic position to bear the loss, rather than by the ordinary purchaser who justifiably relied...