Fumarelli v. Marsam Development, Inc.
| Decision Date | 20 October 1998 |
| Citation | 680 N.Y.S.2d 440,703 N.E.2d 251,92 N.Y.2d 298 |
| Parties | , 703 N.E.2d 251, 1998 N.Y. Slip Op. 8886 Thomas A. FUMARELLI, Appellant, v. MARSAM DEVELOPMENT, INC., Respondent. |
| Court | New York Court of Appeals Court of Appeals |
This litigation and appeal frame the issue whether the statutory housing merchant implied warranty, found in General Business Law article 36-B, is a full substitute for the ante common-law housing merchant implied warranty, recognized in Caceci v. Di Canio Constr. Corp., 72 N.Y.2d 52, 56, 530 N.Y.S.2d 771, 526 N.E.2d 266. We hold that the statute eclipses the case.
In 1991, plaintiff Fumarelli bought a new luxury condominium from defendant Marsam Development, Inc. The purchase agreement contained this all-encompassing provision:
The referenced "limited warranty" was also separately included in the agreement in "plain English," with extensive specificity (see, General Business Law § 777-b[4] ). The limited warranty provision "modifie[d] the housing merchant implied warranty under Article 36-B of the New York State General Business [Law] to the extent that the provisions [it] contained * * * [we]re inconsistent with or contradict[ed] the provisions of Article 36-B, and exclude[d] all other warranties both express and implied."
In October 1992, over a year after the closing and transfer of title, plaintiff discovered a flaw in the sprinkler system master pump. He subsequently discovered other problems in a bathroom drain, a hand rail, and a plumbing fixture. In February 1993, a sprinkler head burst, causing extensive damage. Plaintiff ordered repairs to be done at his own expense. Then, he notified the defendant seller of the defects, and demanded reimbursement for the damages and cost of the repairs. When Marsam Development refused to pay, Fumarelli sued.
In the facet of the case still at issue on this appeal, Supreme Court had denied dismissal of the causes of action for breach of contract. The ground was that General Business Law article 36-B does not, by necessary implication, supplant the common-law remedy.
The Appellate Division, presented solely with the question of the denial of dismissal, unanimously reversed, and granted summary judgment to defendant. The court reasoned that, although the statutory remedy coexists with the common-law version, General Business Law article 36-B allows a builder-vendor to modify or exclude the common-law one. The Appellate Division ruled that Marsam Development implemented that statutory authorization and acquired the benefit of that contractual exclusion of any other warranties. While we agree with the Appellate Division and thus affirm, we do so for the additional, overarching reason that the statute, in any event, effects a complete substitute for the common-law remedy.
Six years ago, this Court indicated how it viewed the legislation at issue. In Matter of Roberts Real Estate v. New York State Dept. of State, Div. of Licensing Servs., 80 N.Y.2d 116, 122, 589 N.Y.S.2d 392, 603 N.E.2d 242, we classified the statutory remedy as a "codification" of Caceci. Today, we build on that viewpoint and expressly hold that General Business Law article 36-B is a full, effective, and realistic substitute for the protections and rationale recognized in Caceci v. Di Canio Constr. Corp., 72 N.Y.2d 52, 530 N.Y.S.2d 771, 526 N.E.2d 266, supra.
In rendering our holding today, we bear in mind this Court's dual function to rule on the particular case and to try to settle important legal issues, as posed and litigated by the parties. At the beginning of this century, a busy, practicing lawyer wrote what could have been merely a dry treatise on the jurisdiction of the Court of Appeals (see, Cardozo, Jurisdiction of the Court of Appeals of the State of New York [2d ed.1909] ). Lawyer Cardozo summarized as follows:
(Id., at 11.)
His early expression presaged the work of a great, realistic jurist, as he effectuated, in his many opinions, and further explained, in extrajudicial writings, the role of the Court, as an institution charged with the awesome responsibility of helping lawyers serve clients by providing firmly and clearly settled, adjudicated principles for the good of all society. Thus, in 1921, as part of the Storrs Lectures at Yale Law School, Judge Cardozo described how Judges and courts decide cases and he pertinently noted that "judge-made law is secondary and subordinate to the law that is made by legislators" (see, Cardozo, Nature of the Judicial Process, at 110 [Hall eds.] ).
This tribunal itself early reflected that it should "authoritatively declare and settle the law uniformly throughout the state * * * not [only] that individual suitors might secure their rights, but that the law should be uniformly settled, to the end that the people might understand the principles which regulate[ ] their dealings and conduct and thus, if possible, avoid litigation" (Reed v. McCord, 160 N.Y. 330, 335, 54 N.E. 737; see also, Karger, Powers of the New York Court of Appeals § 5 [3d ed.] ).
To apply this vital guidance concerning the Court's mission specifically, we note today that 10 years ago, this Court held that contracts for the sale of newly constructed homes carry an implied warranty that the construction was performed in a skillful manner and the building has no material defects (Caceci v. Di Canio Constr. Corp., 72 N.Y.2d, at 56, 530 N.Y.S.2d 771, 526 N.E.2d 266, supra ). Only months after Caceci, General Business Law article 36-B emerged. Section 777-a(1) of that article enacts that "a housing merchant implied warranty is implied in the contract or agreement for the sale of a new home." Section 777-b(3) adds that "[a] housing merchant implied warranty may be excluded or modified by the builder or seller of a new home only if the buyer is offered a limited warranty in accordance with the provisions of this subdivision."
Although General Business Law article 36-B mentions the "housing merchant implied warranty," we acknowledge that the enactment does not explicitly utter a legislative direction to supersede Caceci 's holding. To answer the question, therefore, whether the common-law remedy persists alongside General Business Law article 36-B, the Court must now look beyond the language of the statute. Our preeminent responsibility in that endeavor is to search for and effectuate the Legislature's purpose (see, Matter of Scotto v. Dinkins, 85 N.Y.2d 209, 214, 623 N.Y.S.2d 809, 647 N.E.2d 1317; Rankin v. Shanker, 23 N.Y.2d 111, 114, 295 N.Y.S.2d 625, 242 N.E.2d 802; see also, McKinney's Cons.Laws of N.Y., Book 1, Statutes §§ 91-92). In this respect, legislative history and the events associated with and occasioning the passage of the particular statute are valuable guiding lights (see, Matter of Sutka v. Conners, 73 N.Y.2d 395, 403, 541 N.Y.S.2d 191, 538 N.E.2d 1012; Bowne v. S.W. Bowne Co., 221 N.Y. 28, 31, 116 N.E. 364; see also, McKinney's Cons.Laws of N.Y., Book 1, Statutes § 124).
At the time this Court decided Caceci, the Legislature had been considering and negotiating the terms of General Business Law article 36-B. With the decision as a spur, the sponsors of the pending bill interjected the key phrase "housing merchant implied warranty" into the proposed measure (see, New York State Builders' Assn, Inc, Letter to Governor's Counsel, Bill Jacket, L.1988, ch. 709, at 24). They also added definitions of "housing merchant," "constructed in a skillful manner," and "material defect"--critical terms used in Caceci (id.). The linguistic substitutes tracked Caceci, and replaced terms used in earlier bill drafts (id.).
Caceci stands unmistakably, therefore, as the launch pad which directly shaped the substance, purpose, and enactment of General Business Law article 36-B. This foundation contributes much to our understanding and interpretation of the intended meaning and full reach of the ultimately enacted and approved statute. The words, timing, and their manifest effect demonstrate a legislative will and choice to displace the otherwise possibly uneven application of the boundaries of this important warranty protection, if it were to survive in two competing forms with overlapping sources producing case-by-case evolvement. The law-enacting branches wished to nail down the definitions of key phrases uttered in Caceci, to guide and govern the parties and industry, and to direct the courts to view the housing merchant warranties thereafter through the singular lens of General Business Law article 36-B. Indeed, it is virtually impossible to fathom how the common-law remedy would differ in definition, in practice, in pleading, and in specific remedial effectuation, if it...
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