Deisch v. Jay
| Decision Date | 19 April 1990 |
| Docket Number | 89-58,Nos. 89-57,s. 89-57 |
| Citation | 790 P.2d 1273 |
| Parties | Gordon DEISCH, Individually, Regency Construction, a Corporation, Patio Homes Partnership, and Betty Tuttle, Individually, Appellants (Defendants), v. Amos JAY, Jean Jay, Robert E. Himes and Evelyn Himes, Appellees (Plaintiffs). Amos JAY, Jean Jay, Robert E. Himes, and Evelyn Himes, Appellants (Plaintiffs), v. Gordon DEISCH, Individually Regency Construction, a Corporation, Patio Homes Partnership, and Betty Tuttle, Individually, Appellees (Defendants). |
| Court | Wyoming Supreme Court |
Steven F. Freudenthal of Herschler, Freudental, Salzburg, Bonds & Rideout, P.C., Cheyenne, for appellants in No. 89-57 and appellees in No. 89-58.
Robert B. Carroll, Cheyenne, for appellees No. 89-57 and appellants in No. 89-58.
Before CARDINE, C.J., and THOMAS, MACY, GOLDEN JJ., and WOLFE, DJ.
The major issue in this appeal concerns the nature of a residence builder-vendor's implied warranty of workmanship and fitness for habitation given to the residence owner.
The builder-vendor of two townhouses appeals the court's judgment awarding money damages to two homeowners in their action which alleged that the builder-vendor had negligently constructed their townhouses or had breached an implied warranty of workmanship and fitness for habitation. Cross-appealing, the two homeowners claim that they received inadequate damages awards. 1
We affirm in all respects.
In its appeal, builder-vendor states the issues in this way:
1. Whether the scope and meaning of the implied warranty of habitability for a residence adopted by the trial court--whether a reasonable person faced with such a defect would be warranted in concluding that a major impediment to habitation existed--is the proper legal standard under Wyoming law?
2. If the legal standard adopted by the trial court is correct, whether the trial court properly applied the standard to conclude that a defect which would "discourage" improvements such as a basement bedroom constituted a major impediment to habitation when the trial court had previously concluded that the townhomes were habitable and the "basements are likewise habitable, at least as presently used?"
3. Whether the judgment of the trial court can stand when the evidence most favorably construed to the plaintiffs was that Plaintiffs held a subjective belief that the alleged defect prevented improvements to their unfinished basements satisfactory to them?
4. Whether the Plaintiffs Jays failed to mitigate their damages with regard to the band instruments?
5. Whether the trial court's findings and judgment are clearly erroneous, unsupported by or contrary to the evidence, or against the great weight of the evidence?
Homeowners assert the issues as follows:
I. Does the scope of the implied warranty of habitability in Wyoming require a residence to be totally uninhabitable?
II. Did plaintiffs take reasonable steps to mitigate the damages to their basements and property?
In the homeowners' cross-appeal, the homeowners state the sole issue as:
"Were Plaintiffs awarded adequate compensation for costs of repairs to their basements?"
Builder-vendor states the issue as:
Was there sufficient evidence to support the trial court's findings with respect to damages?
Regency Construction Company, Inc. (Builder-vendor), in 1982-83 constructed residential townhomes in the vicinity of Carlson and Sycamore Streets in Cheyenne, Wyoming. Builder-vendor sold one of these townhomes directly to Mr. and Mrs. Amos Jay (Jays). Builder-vendor sold another of these townhomes to Mr. and Mrs. Arthur Schliske, who in turn sold the townhome to Mr. and Mrs. Robert E. Himes (Himes).
Both the Jays and the Himes experienced excessive humidity and dampness problems in their basements which resulted in the development of mold and mildew and an offensive odor. Some of their personal property stored in the basement was damaged. As a result, they brought an action on May 11, 1988, against Builder-vendor alleging negligent construction of their townhomes and breach of an implied warranty of habitability. For relief, they sought either specific performance to correct basement defects or money damages to compensate them for the loss of value of their townhomes or removal and replacement of their basement floors or for loss of use of their basements. They did not seek rescission and restitution.
At the bench trial, both parties introduced lay and expert testimony concerning the existence, nature and extent, and cause of the excessive humidity and dampness in the basements. They also introduced expert evidence about the appropriate repairs and costs of repairs. As to be expected, the parties' evidence was in conflict on many of these matters. Not in conflict, however, was that neither the Jays nor the Himes was forced by the alleged defects to abandon living in their townhomes and using in normal fashion the areas apart from the basements.
Sorting through the conflicting evidence, the trial court concluded that, more likely than not, a perched water table in the ground underlying the basements existed as a source of moisture from which capillary action was fed, leading to excessive humidity and dampness in the basements. Further, the trial court concluded that the builder-vendor's evidence on the appropriate remedy of installing a capillary break and on the cost of that remedy was reasonable under all the circumstances. As a result of these conclusions, the trial court found in favor of the homeowners on their theory of breach of an implied warranty of habitability, but not on their theory of negligent construction. Each homeowner was awarded the sum of $1,980 for diminution in value of their townhome. Additionally, the Jays were awarded $765 for personal property damages and the Himes were awarded $87.04 for certain repair bills. These appeals followed.
Builder-vendor mounts a double-edged attack on the judgment in favor of the homeowners. First, the builder-vendor claims that the trial court departed from this court's rule of liability for the breach of an implied warranty of habitability first established for new homeowners in Tavares v. Horstman, 542 P.2d 1275 (Wyo.1975) and then extended to subsequent purchasers in Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo.1979). Builder-vendor states the rule to be that an implied warranty of habitability is breached only by major defects which render the house unfit for habitation. Using that statement of the rule, the builder-vendor then argues that the evidence showed no major defects existed in either townhome and neither townhome was unfit for habitation. Second, the builder-vendor claims that the evidence showed that the Jays failed to mitigate their personal property damages for which they were awarded $765. We shall discuss each claim in order.
Builder-vendor incorrectly states the rule of implied warranty of habitability adopted by this court in Tavares. There, the purchasers of a new home sued the land developer-builder-vendor to recover $2,083 which the purchasers spent to correct a defective septic system. The purchasers sought money damages, not rescission of the sale transaction and restitution. After reviewing decisions from other jurisdictions in which many courts had adopted an implied warranty rule, we discarded the rule of caveat emptor and embraced this rule: "[W]here a vendor builds new houses for the purpose of sale, the sale carries with it an implied warranty that it is constructed in a reasonably workmanlike manner and is fit for habitation." Tavares, 542 P.2d at 1282. In the course of its review of the decisions from other jurisdictions, this court quoted with approval from Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698, 711 (1966):
The implied warranty of fitness does not impose upon the builder an obligation to deliver a perfect house. No house is built without defects, and defects susceptible of remedy ordinarily would not warrant rescission. But major defects which render the house unfit for habitation, and which are not readily remediable, entitle the buyer to rescission and restitution.
Thus, we see that the implied warranty rule accommodates either a recovery of money damages for minor defects susceptible of remedy or rescission and restitution for major defects which render the house unfit for habitation and which are not readily remediable.
In Moxley, the second homeowner sued to recover $3,892 for electrical rewiring and $20 for the cost of the state safety inspection. Like the homeowners in Tavares, Moxley did not seek rescission and restitution. In reinstating the amended complaint which alleged a breach of an implied warranty of fitness and habitability, this court reiterated the Tavares rationale:
Courts will judicially protect the victims of shoddy workmanship. Consumer protection demands that those who buy homes are entitled to rely on the skill of the builder and that the house is constructed so as to be reasonably fit for its intended use.
* * * * * *
It is the structure and all its intricate components and related facilities that are the subject matter of the implied warranty.
* * * * * *
The purpose of a warranty is to protect innocent purchasers and hold builders accountable for their work.
In Anderson v. Bauer, 681 P.2d 1316 (Wyo.1984), this court again reviewed liability under the implied warranty rule. Although reversing the developer's liability, this court affirmed the builder's liability for money damages to eight homeowners whose basements had received water seepage. Each homeowner testified about the water seepage, the resulting damage, the dampness, and the inability to use or inhabit the basement. Id. at 1323. The corrective action considered necessary included installation of drain tile around foundations and removal and...
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