Bolkum v. Staab

• Decision Date: 07 October 1975
• Docket Number: No. 196-73,196-73
• Citation: 133 Vt. 467,346 A.2d 210
• Parties: Forrest W. BOLKUM and Velma E. Bolkum v. John J. STAAB and Cecile D. Staab.
• Court: Vermont Supreme Court

Page 210

346 A.2d 210

133 Vt. 467

Forrest W. BOLKUM and Velma E. Bolkum v. John J. STAAB and Cecile D. Staab.

No. 196-73.

Supreme Court of Vermont.

Oct. 7, 1975.

Richard E. Davis Assoc., Inc., Barre, for plaintiff.

John A. Burgess Assoc., Ltd., Montpelier, for defendants.

Before BARNEY, C. J., and SMITH, DALEY, LARROW and BILLINGS, JJ. LARROW, Justice.

The Washington County (now Superior) Court, after trial by court, entered findings of fact and a judgment order awarding plaintiffs damages for defective construction items in a dwelling house sold them by the defendants. Both parties have appealed.

The defendants claim, in substance, that the implied warranty against structural defects in the sale of a newly constructed house by the builder-vendor, first accepted by the Court as the current concept in Rothberg v. Olenik, 128 Vt. 295, 262 A.2d 461 (1970), should not apply where the seller is not the builder and does not 'control' the builder. They also claim that the trial court erred in using cost of repair as a measure of damage. Plaintiffs claim the damages to be inadequate, because a proper item of inspection cost was excluded, and because the judgment entered is at variance with the findings.

In Rothberg, the court reviewed at length the case law relating to the ancient doctrine of caveat emptor and the modern concept of implied warranty against structural defects, based upon analogy to the long accepted implied warranty of fitness in sales of personal property. It decided that there was no rational doctrinal basis for differentiating between the sale of a newly constructed house by the builder-vendor and the sale of any other manufactured product. Rothberg, supra, 128 Vt. at 305, 262 A.2d 461. Defendants concede the 'salutary effect' of the Rothberg holding, but claim it loses that effect when applied to them, because they did not construct the house themselves and the court found they exercised 'no real control' over the construction done by a builder with whom they contracted.

We are somewhat at a loss to understand what the trial court meant by 'real control', a phrase it did not explain. We take it to be equated to actual control, as exercised by master over servant, rather than the general control exercised by an owner over an independent contractor. Whatever may have been intended, it was a not unusual situation presented by the findings. The defendants Staab owned a large tract of land, set out into building lots. Retaining title, they contracted with a builder to build a house on one of the lots, showed it to plaintiffs when it was almost completed, with a check list of items the Staabs agreed to complete. This was done, and the deed passed, after plaintiff had moved in. The structural defects complained of developed thereafter. Defendants now assert that they should not be encompassed by the Rothberg holding because that holding was based on cases involving 'general builders', which they are not. They cite no cases upholding this claimed distinction.

We do not here reach the case where an individual builds a house by himself or a contractor for his own use and later decides to sell it. In Rothberg we adopted by analogy the implied warranty of merchantability in the sale of goods where 'the seller is a merchant with respect to goods of that kind.' 9A V.S.A. § 2-314(1). This would, arguably, exclude the casual sale made by a seller not in the business of selling houses, as it would a sale by one not in the business of selling goods. But the facts presented here are vastly different. Defendants caused the house in question to be built expressly for resale and as part of a development plan. This is the 'business' they were in, and it is from the business activity that the implied warranty arises. The sale was commercial in nature, not casual or personal. That the defendants did not personally drive the nails has no effect on the principle involved, any more than it does in the case of chattels. The implied warranty arises from the business of selling, rather than the business of manufacture. Humber v. Morton, 426 S.W.2d 554 (Tex.1968); Smith v. Old Warson Development Co., 479 S.W.2d 795 (Mo.1972). Defendants here are not 'intermediate sellers' as they claim; they owned the lot, caused the house to be built expressly for sale, and sold it to the plaintiffs. Even if they were 'intermediate' it does not automatically follow that they would be immune from liability. Cf. Digregorio v. Champlain Valley Fruit Co., 127 Vt. 562, 255 A.2d 183 (1969). The trial court was correct in holding defendants upon their implied warranty.

Defendants claim error by the trial court in using reasonable cost of repairs as a measure of the damage sustained by plaintiffs from the structural defects found. They assert the true measure is the difference in market value between the house as built and as it should have been built. This is, as contended, the general rule of damage for breach of warranty. But the argument overlooks what is probably the usual situation, that of remediable defects, where the cost of such remedy, plus in some instances consequential damages, in fact establishes the difference in market value. The test is absolute where repairs cannot remedy the defects warranted against, as where roosters are delivered in lieu of pullets. Preston v. Montgomery Ward, 112 Vt. 295, 23 A.2d 534 (1942).

The...