Blagg v. Fred Hunt Co., Inc., 80-288
| Decision Date | 16 March 1981 |
| Docket Number | No. 80-288,80-288 |
| Citation | 272 Ark. 185,612 S.W.2d 321 |
| Parties | J. Ted BLAGG and Kathye Blagg, His Wife, Appellants, v. FRED HUNT COMPANY, INC., Appellee and Cross-Appellant. |
| Court | Arkansas Supreme Court |
Robert B. Wellenberger, Monticello, for appellants.
Southern & James by Theodore Holder, Little Rock, for appellee and cross-appellant.
The appellee, Fred Hunt Company, Inc., a house builder, bought a lot in the Pleasant Valley Addition to Little Rock, built a house on it, and sold it to the Dentons on October 9, 1978. The Dentons sold the house to the American Foundation Life Insurance Company, which on June 29, 1979, sold the house to appellants, J. Ted Blagg and Kathye Blagg. This purchase by appellants was made a few days less than 9 months after the date of the original sale. The appellants filed a two-count complaint alleging that after they purchased the home a strong odor and fumes from formaldehyde became apparent. They traced this defect to the carpet and pad which was installed by appellee. A motion to dismiss was filed by the appellee and the trial court granted the motion on count one of the complaint, the implied warranty count, on the basis of lack of privity. The court denied the motion on count two, which is framed in terms of strict liability.
When considering a motion to dismiss a complaint pursuant to Arkansas Rules of Civil Procedure, Rule 12(b)(6), on the ground that it fails to state a claim on which relief can be granted, the facts alleged in the complaint are treated as true and are viewed in the light most favorable to the party seeking relief.
Count one of the complaint is based upon an implied warranty. The trial judge dismissed this count because the appellants are not in privity with the appellee. This court, in Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970), abandoned the doctrine of caveat emptor and took the view that a builder-vendor impliedly warranted the home to the first purchaser. The issue of first impression in this case is whether the liability of the builder-vendor should be extended to a second or third purchaser.
Since Wawak, the original homebuyer has been able to place reliance on the builder-vendor's implied warranty. This has protected that investment which, in most instances, represents the family's largest single expenditure.
We find no reason that those same basic concepts should not be extended to subsequent purchasers of real estate. This is an area of the law being developed on a case by case basis. Our ruling is based on the complaint before us and involves a home which had a defect that became apparent to the third purchasers, the appellants, within 9 months of the original sale date. Obviously, there is a point in time beyond which the implied warranty will expire and that time should be based on a standard of reasonableness.
We hold that the builder-vendor's implied warranty of fitness for habitation runs not only in favor of the first owner, but extends to subsequent purchasers for a reasonable length of time where there is no substantial change or alteration in the condition of the building from the original sale. This implied warranty is limited to latent defects which are not discoverable by subsequent purchasers upon reasonable inspection and which become manifest only after the purchase. Wyoming adopted this rule in a well reasoned opinion. Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo.1979).
Appellants next contend that even if the implied warranty extends to subsequent purchasers, we should affirm the trial court as there is an express warranty which is exclusive. We do not consider this argument as the complaint does not allege an express warranty, and the sufficiency of the complaint is all that is tested.
We hold that count one of the complaint should not have been dismissed.
Appellee, in its cross-appeal, contends that the trial judge committed error in not dismissing count two of the complaint, the claim for damages under strict liability. We affirm the trial judge's ruling.
Our strict liability statute, Ark.Stat.Ann. § 85-2-318.2 (Supp.1979) is as follows:
Liability of Supplier Conditions. A supplier of a product is subject to liability in damages for harm to a person or to property if:
(a) the supplier is engaged in the business of manufacturing, assembling, selling, leasing or otherwise distributing such product;
(b) the product was supplied by him in a defective condition which rendered it unreasonably dangerous; and
(c) the defective condition was a proximate cause of the harm to person or to property. (Acts 1973, No. 111, § 1, p. 331.)
This 1973 act broadens somewhat § 402(A) of the Restatement, Second, Torts (1965).
Before this statute was adopted, this Court avoided adopting strict liability in tort. See Ford Motor Company v. Reid, 250 Ark. 176, 465 S.W.2d 80 (1971); Higgins v. General Motors Corporation, 250 Ark. 551, 465 S.W.2d 898 (1971); and Gatlin v. Cooper Tire and Rubber Company, 252 Ark. 839, 481 S.W.2d 338 (1972). The case of Mack Trucks of Arkansas, Inc. v. Jet Asphalt and Rock Company, 246 Ark. 101, 437 S.W.2d 459 (1969) deals with § 85-2-318.1 and was decided before § 85-2-318.2, the statute we are interpreting, was enacted. We have approved the doctrine of strict liability in accordance with the statute. Cockman v. Welder's Supply Co., 265 Ark. 613, 580 S.W.2d 455 (1979); Harrell Motors, Inc. and Chrysler Motors Corp. v. Billy Flanery, Ark., 612 S.W.2d 727 (1981).
Our first issue is whether this strict liability statute encompasses count two of the complaint. It is an oversimplification, but correct, to state that the construction of the word "product" is determinative. To decide the proper construction we have examined the few cases in other jurisdictions and various treatises.
Judge Henry Woods in The Personal Injury Action in Warranty Has the Arkansas Strict Liability Statute Rendered it Obsolete ?, 28 Ark.L.R. 335 (1974), gives a most perceptive preview of the real issue. He notes that we must choose between the persuasive reasoning of two outstanding jurists Chief Justice Traynor in Seely v. White Motor Company, 63 Cal.2d 9, 403 P.2d 145, 45 Cal.Rptr. 17 (1965), and Justice Francis in Santor v. A & M Karagheusian, Inc., 44 N.J. 52, 207 A.2d 305 (1965). If the Traynor view is adopted, the...
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