Amodeo v. Ryan Homes, Inc.

• Decision Date: 07 August 1991
• Citation: 407 Pa.Super. 448,595 A.2d 1232
• Parties: Ronald J. AMODEO and Kimberly Amodeo v. RYAN HOMES, INC., a Corporation Pleasant Valley Land Co., Appeal of RYAN HOMES, INC., a Corporation. Ronald J. AMODEO and Kimberly Amodeo v. RYAN HOMES, INC., a Corporation v. PLEASANT VALLEY LAND CO., Appellant.
• Court: Pennsylvania Superior Court

Page 1232

595 A.2d 1232

407 Pa.Super. 448

Ronald J. AMODEO and Kimberly Amodeo v. RYAN HOMES, INC., a Corporation Pleasant Valley Land Co.,

Appeal of RYAN HOMES, INC., a Corporation.

Ronald J. AMODEO and Kimberly Amodeo v. RYAN HOMES, INC., a Corporation v. PLEASANT VALLEY LAND CO., Appellant.

Superior Court of Pennsylvania.

Argued April 16, 1991.

Filed Aug. 7, 1991.

Joseph M. Ramirez, Pittsburgh, for appellant in No. 1613 and for Ryan Homes, appellee in No. 1619.

Michael J. Seymour, Bethel Park, for Amodeo, appellees.

Before McEWEN, FORD ELLIOTT and CERCONE, JJ.

FORD ELLIOTT, Judge:

These related appeals are from the September 21, 1990 order of the Court of Common Pleas of Allegheny County denying the Motions for Post-Trial Relief by Ryan Homes, Inc., and Pleasant Valley Land Company, Inc., and entering judgment on the non-jury order dated April 16, 1990.

The equity action giving rise to this appeal was initiated by Ronald and Kimberly Amodeo against Ryan Homes, Inc., to recover damages, or in the alternative to rescind the contract for the purchase of their house, due to defective construction and/or fraud which resulted in acid mine drainage water infiltrating the basement of their house. Ryan Homes, in turn, joined Pleasant Valley Land Company, Inc., as an additional defendant. Pleasant Valley was the developer of the plan of lots upon which the Amodeo house was constructed by Ryan Homes.

In June of 1980, the Amodeos met with a sales representative from Ryan Homes regarding the selection and construction of a new house. The sales representative directed their attention to a new development in South Park Township known as "Village of Knot Hole Plan No. 1." After reviewing several different models, the Amodeos selected a model constructed by Ryan Homes known as the Chamberlain. This model was selected, according to the Amodeos, because it had only a single-car garage, allowing more space for a larger game-room in the basement of the house. The Amodeos had stressed to the Ryan Homes' representative that it was very important to them to have a very large game-room since they were planning to raise a family in the house. In furtherance of those plans, the Amodeos selected certain options in the construction which would ultimately lead to a finished game-room, such as additional electrical outlets, fixture boxes, phone jacks, and plumbing connections for a bathroom.

Ryan Homes designed and constructed the Chamberlain model home for the Amodeos and in doing so, installed in the foundation and basement floor of the home both an exterior and interior drainage system to handle subsurface water. The exterior drainage system was gravity operated whereas the interior system functioned with a sump pump which was needed to pump the water from the floor to the height of the basement wall in order to allow water to exit the front of the house. At the preclosing inspection the Amodeos were told, for the first time, of the existence of the sump pump. Tim Merkill, of Ryan Homes, told the Amodeos just to forget about the sump pump, that it was nothing for them to worry about.

On September 5, 1980 the Amodeos closed on their house. Approximately six months later they began to notice water accumulating on the basement floor. The Amodeos immediately contacted Ryan Homes, and Tim Merkill was sent to investigate the complaint. Mr. Merkill flushed the sump pump and crock with a water hose and indicated the Amodeos would need to do the same from time to time to prevent any future problems with water accumulating on the basement floor.

Over the next six years, the water problem in the Amodeo house worsened. The basement walls remained damp and discolored. The basement pipes clogged and deposits of orange-colored sludge appeared on the basement floor as well as in the crock. Ryan Homes was contacted repeatedly during that period and attempted several methods to cure the problem. The original sump pump was replaced with a larger, commercial pump. The interior drainage system was also redesigned to include cleanouts and larger pipes. All of the attempts to correct the problem by Ryan Homes provided temporary relief, but never cured the problem. The Amodeos eventually contacted the Pennsylvania Department of Environmental Resources, the U.S. Department of Surface Mining, and South Park Township officials. Tests performed by the DER indicated that the nature of the water being received by the Amodeo residence was acid mine drainage. Township officials informed the Amodeos that such water was not acceptable in their surface water drainage system.

Since Ryan Homes was not able to offer any further alternatives that could possibly cure the problems, the Amodeos finally filed a lawsuit on September 9, 1987, seeking to either rescind the contract or in the alternative, recover damages.

The non-jury trial resulted in a verdict in favor of the Amodeos in the amount of $32,500.00 as the costs to repair the house, along with an additional $17,288.92 in attorney's fees and other costs associated with bringing the lawsuit.

Both Ryan Homes, Inc., and Pleasant Valley Land Company, Inc., filed timely motions for post-trial relief, which were subsequently denied. These timely appeals followed.

Ryan Homes, Inc., appellant at No. 1613 Pittsburgh 1990, raises the following issues for our consideration.

I. Does the statute of limitations bar a claim of breach of warranty of habitability that was discovered by

plaintiffs more than four years before they commenced the action?

II. Are damages for breach of a construction contract limited to the diminution in market value of the property when the cost of repair greatly exceeds the loss of value?

III. Must plaintiffs who have prevailed on a claim for breach of implied warranty of habitability bear their own attorney fees and litigation expenses?

IV. Is a developer of property that is obligated to deliver lots suitable for construction of homes solely responsible for any damages caused by an unsuitable lot?

Pleasant Valley Land Company, Inc., appellant at No. 1619 Pittsburgh 1990, likewise raises four issues for our consideration. Pleasant Valley's first three issues are identical to those posed by Ryan Homes. ¹ Their fourth issue questions whether it is the builder who is solely liable for plaintiffs' damages for building on a lot which was unsuitable for construction.

We shall address Ryan Homes' first three issues separately, and then consider both appellants' final issues together.

Regarding the first issue raised by Ryan Homes, it is their position that the Amodeos' claims were barred by the applicable statute of limitations. Although the Amodeos filed a five-count complaint, they recovered only on their theory of breach of implied warranty of habitability. The appropriate limitations period for such a claim is set forth at 42 Pa.C.S.A. section 5525, which provides in pertinent part that "[t]he following actions and proceedings must be commenced within four years: (1) an action upon a contract, under seal or otherwise, for the sale, construction or furnishing of tangible personal property or fixtures ..." In applying this statute under these circumstances it was necessary for the trial court to resort to the discovery rule. The discovery rule requires a determination as to when a plaintiff knows of or should know of the injury he has sustained. See Levenson v. Souser, 384 Pa.Super. 132, 557 A.2d 1081 (1988). In this case that would mean when the Amodeos knew or should have known that their house was uninhabitable by reason of the water problem in the basement. The discovery rule does apply to cases involving defective construction. See A.J. Aberman, Inc. v. Funk Building Corp., 278 Pa.Super. 385, 420 A.2d 594 (1980). Applying the discovery rule to the facts of the case, the trial court concluded that "[c]ommunication between the Amodeos and Ryan Homes continued until January of 1987 during which time Ryan Homes manifested a commitment to accept responsibility for the problem." The court, therefore, found the action to be filed timely in September of 1987. Ryan Homes maintains that the trial court erred in reaching such a conclusion. According to Ryan Homes, the Amodeos' cause of action accrued in March of 1981 when they first noticed water in their basement. Since the suit was not filed until six years later, the argument continues, it is necessarily barred by the applicable four-year limitation period. Based upon our review of the record in this case we are inclined to agree with the trial court's conclusion that the action was not time barred, although we conclude that the action accrued at a time different from that found by the trial court.

At the outset of our analysis we note the following:

It is settled that the findings of a trial judge sitting without a jury must be accorded the same weight and effect on appeal as a jury verdict, and will not be disturbed in the absence of an abuse of discretion or a finding of lack of evidentiary support.... An appellate court, however, is not bound by the trial court's conclusions of law based on its findings of fact.... It is also clear that the party favored by the findings of the trial judge is entitled to have the evidence viewed in the light most favorable to him; that is all the evidence and proper inferences favorable to him must be taken as true and all unfavorable inferences rejected.... This is particularly true in a case in which the credibility of witnesses must be closely evaluated.

Concorde Investments, Inc. v. Gallagher, 345 Pa.Super. 49, 58-59, 497 A.2d 637, 642 (1985) (citations omitted).

It is equally important to note that "[w]hether the statute has run on a claim is usually a question of law for the judge, but where, as here, the issue involves a factual determination, i.e., what is a reasonable period, the determination is for the jury." Smith v. Bell Telephone Co., 397 Pa. 134, 142, 153 A.2d 477, 481 (1...