Arvai v. Shaw
| Decision Date | 06 May 1986 |
| Docket Number | No. 22581,22581 |
| Citation | 345 S.E.2d 715,289 S.C. 161 |
| Court | South Carolina Supreme Court |
| Parties | Richard S. ARVAI and Ellen Arvai, Petitioners, v. Jack E. SHAW and Jack E. Shaw Builders, Inc., Respondents. . Heard |
Roger L. Couch, of Lister & Couch, Spartanburg, for petitioners.
Jefferson V. Smith, Jr., of Carter, Smith, Merriam & Rogers, Greer; and Ellis M. Johnston, II, of Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, for respondents.
Richard and Ellen Arvai (the Arvais) sued Jack E. Shaw and Jack E. Shaw Builders, Inc. (Shaw) for breach of an implied warranty of habitability as to their residence. The Circuit Court granted Shaw's motion for summary judgment. The Court of Appeals affirmed. Arvai v. Shaw, 286 S.C. 357, 334 S.E.2d 287 (Ct.App.1985).
As modified, we affirm.
Shaw purchased an unimproved lot in Greenville, South Carolina, in October, 1970. A month later, he contracted with Thomas and Margaret Farr to build a house on the property. After conveying the lot to the Farrs, Shaw built the house according to the Farrs's plans and specifications.
The Farrs moved in, but were dissatisfied with the septic tank system. They reconveyed the house to Shaw. In November, 1971, Shaw sold the house to James and Frances Semones, who, in turn, conveyed it to the Arvais in September, 1976.
Six days after moving in, the Arvais experienced flooding from Brushy Creek, located at the rear of the property. Fifteen inches of water entered the utility room, garage and basement. Since that date, they have experienced additional periodic flooding.
In their complaint, the Arvais allege Shaw breached an implied warranty of merchantability and fitness for the intended purpose of habitability. Specifically, they claim the house was designed in such a manner as to make it susceptible to damage from floods. 1
The Circuit Court and Court of Appeals held an implied warranty is applicable only to houses built for speculative sale. As the Arvais' residence was custom-built according to the Farrs's plans, they held Shaw was entitled to judgment as a matter of law.
This Court granted review on a single issue:
Is an implied warranty for fitness limited to houses built for speculation or does it extend, as well, to custom-built houses?
In Rutledge v. Dodenhoff, 254 S.C. 407, 175 S.E.2d 792 (1970), this Court first recognized an implied warranty that a dwelling is fit for the purposes for which it is intended. We held the doctrine of caveat emptor is inapplicable to a transaction between a buyer and the builder-vendor of a new house.
In Lane v. Trenholm Building Co., 267 S.C. 497, 229 S.E.2d 728 (1976), this Court expanded the implied warranty doctrine. Trenholm, the first seller, contended it could not be held liable under an implied warranty because it was not the builder of the house in question. We held:
When a new building is sold there is an implied warranty of fitness for its intended use which springs from the sale itself. [Emphasis supplied].
267 S.C. at 500, 229 S.E.2d at 729.
We reasoned that the sale of a new house is the sale of a product and should be governed by the same rules which apply to sales of personalty. Hence, in Lane we held that a transaction between an innocent purchaser and the vendor who places a new home in the stream of commerce should be governed by the doctrine of caveat venditor.
In Terlinde v. Neely, 275 S.C. 395, 271 S.E.2d 768 (1980), our most recent case involving implied warranties, we held lack of privity does not bar a remote purchaser from suing an initial vendor on an implied warranty theory.
Other jurisdictions have refused to hold a general contractor or other builder liable under an implied warranty where he is not also the initial vendor of the house. See 25 A.L.R.3d 383; 10 A.L.R.4th 385. Wyoming is an exception. See Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo.1979).
The critical distinction is the source of the implied warranty. As the Supreme Court of Illinois stressed in Redarowicz v. Ohlendorf, 92 Ill.2d 171, 65 Ill.Dec. 411, 441 N.E.2d 324 (1982), the implied warranty of habitability has its roots in the execution of a contract for sale. Indeed, in Lane we held that the warranty springs from the sale. The determining factor is not whether the defendant actually builds the defective house, but that...
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Carolina Winds Owners' Ass'n, Inc. v. Joe Harden Builder, Inc.
...warranty arising from the sale of a new dwelling. This contention is foreclosed by the Supreme Court's decision in Arvai v. Shaw, 289 S.C. 161, 345 S.E.2d 715 (1986), and our prior holding in Holder v. Haskett, In Arvai, a builder named Shaw constructed a house under a contract with the own......
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...Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo.1979). We are also aware of authority to the contrary. E.g., Arvai v. Shaw, 289 S.C. 161, 345 S.E.2d 715 (1986). In a case describing the implied warranty of habitability, it has been observed that "[h]abitability is synonymous with suitab......
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...with the factual situation presented in Carolina Winds, the Court of Appeals correctly held that our decision in Arvai v. Shaw, 289 S.C. 161, 345 S.E.2d 715 (1986) prevents the buyers from recovering on an implied warranty of habitability theory. Arvai and Lane v. Trenholm Bldg. Co., 267 S.......
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