Jordan v. Talaga

• Decision Date: 09 January 1989
• Docket Number: No. 45A04-8612-CV-382,45A04-8612-CV-382
• Citation: 532 N.E.2d 1174
• Parties: Daniel JORDAN and Allie Baker, Appellants, v. Thomas TALAGA and Rebecca Talaga, Appellees.
• Court: Indiana Appellate Court

Page 1174

532 N.E.2d 1174

Daniel JORDAN and Allie Baker, Appellants, v. Thomas TALAGA and Rebecca Talaga, Appellees.

No. 45A04-8612-CV-382.

Court of Appeals of Indiana,

Fourth District.

Jan. 9, 1989.

Rehearing Denied March 13, 1989.

Nick J. Anast, Visvaldis P. Kupsis, Schererville, John W. Tousley, Terrance Pehler, Indianapolis, for appellants.

Kenneth L. Anderson, Highland, for appellees.

MILLER, Judge.

Thomas and Rebecca Talaga brought suit against Jordan and Baker, the developers of Sandridge, a subdivision in Schererville, Indiana, to recover for the diminution in value of their home and for personal property damage caused by a severe water and drainage problem on their property. The Talagas sued under the alternative theories of negligence and breach of an implied warranty of habitability alleging the developers, Jordan and Baker, knowingly sold property improved for the purpose of home building located in a substantial natural water course.

The jury returned a general verdict in favor of the Talagas in the amount of $74,000; the trial judge entered judgment for the reduced amount of $65,000 to reflect amounts received by the Talagas in settlement from other defendants. We affirm the verdict under the theory of an implied warranty of habitability.

ISSUES

Jordan and Baker raise nine (9) issues on appeal. We applaud the excellent briefs submitted by Jordan and Baker and the amicus curiae brief submitted by the Home Builders Association of Indiana, Inc. We address seven issues. One issue pertaining to negligence precludes recovery under that theory; therefore, we need not address the other two issues pertaining solely to negligence. The remaining issues, reordered and restated, are as follows:

(1) Whether the Talagas may recover economic damages under a negligence theory?

(2) Whether an implied warranty of habitability attaches to the sale of land improved by developers for the purpose of home building?

(3) Whether the Talagas gave Jordan and Baker timely notice of the defect?

(4) Whether the $74,000.00 verdict is supported by evidence?

(5) Whether an instruction advising the jury of a ten year statute of limitations applicable to actions for damages to real property invaded the province of the jury in deciding the issue of a reasonable time (6) Whether the settlement agreement releasing the Town of Schererville from the lawsuit also released Jordan and Baker?

for the Talagas to give notice under the theory of an implied warranty of habitability?

(7) Whether showing the jury the Talagas' home movie depicting a graphic flooding scene of the property was error?

FACTS

In 1972, Daniel Jordan and Allie Baker began to develop Sandridge, a subdivision in Schererville, Indiana. On the northwest border of Sandridge lies a marshy area of property owned by Robert J. Britton. A natural channel of water flows from Britton's land in a southeasterly direction through the Sandridge subdivision and eventually drains into Turkey Creek, the major drainage retaining area for the subdivision. When the land became subdivided, the channel of water ran along the border of the lot eventually purchased by the Talagas.

Jordan and Baker made improvements to the raw land to facilitate development. These improvements included constructing streets, sanitary sewers, drainage sewers, and the rough grading of lots. An engineer, Earl Goldberg, was employed to help with many of the facets of development including the provision of a plan for the drainage of water. Goldberg, Jordan and Baker knew about the existing channel of water and determined that enlarging an existing swale ¹ on the edge of the Talagas lot would adequately handle the water draining from Britton's property and direct it into the streets' storm sewers. A ten foot easement, the only easement in the entire subdivision, was provided for in the plat to accomodate this swale which was to be cut along the edge of the property. Evidence conflicted as to whether this natural swale, cut by water erosion, was ever improved to meet Goldberg's specifications. Dewey Snow, an excavating contractor, testified that he cut the swale in 1976, and Baker testified he laid sod over it. But, the Talagas and three of their neighbors all testified that a swale was never cut.

In June 1975, Bruce Piper of Piper Enterprises, Inc. purchased the lot in question from Jordan and Baker for $8,599.00. Piper built a tri-level home and sold it to the Talagas for $42,500 on or about October 31, 1975. Piper selected and purchased the lot from the plat map posted in Jordan's office and knew about the easement which existed for drainage purposes but did not know that the water course periodically swelled into a stream that flowed onto and across the lot. He experienced no water problems during the construction of the Talagas' home.

In February, 1976, the Talagas experienced for the first time water flooding into their backyard. They contacted both Piper and Jordan to tell them about the situation. Piper came and assisted Thomas Talaga in digging a ditch along the northwest side of the lot to drain the water around the house. Piper described the condition as "bad," saying the water was standing two or three inches deep and came close to the house.

Unbeknownst to the Talagas, Jordan, too, went to inspect the flooding on their lot. He testified at trial that he later telephoned the Talagas to say that they should complete the final grading of their lot to allow the standing water to drain away. Although Jordan and Baker had done the rough grading of the lot, the Talagas had agreed with Piper to take care of the final grading.

Rebecca Talaga again telephoned Jordan the next month to tell him that she and her husband wanted to build a garage to adjoin their existing driveway on the north side of their house and therefore needed to know about the plans for taking care of the drainage. Jordan told her once the weather became dry, he planned to cut a swale along a ten-foot easement on the northern boundary of the Talagas' property. The In 1979, Britton began to remove sand and dirt from his property which apparently exacerbated the Talagas flooding problem. ² The Talagas continued to have flooding on their property two or three times a year. They tried to alleviate the situation by installing an eight-inch plastic pipe over the existing pipe Jordan and Baker had installed under the easement. The Schererville Fire Department sometimes pumped the water out of the backyard and into the street. Neighbors worked with the Fire Department to try to impede the water course. Neighbors brought their own pumps to help take the water away. Several neighbors testified that they used wheel barrows to reload and reinstall the sand and earth that washed from the Talagas' yard and underneath their driveway into the street below. One neighbor testified he had helped with this procedure 20 to 25 times. The Talagas testified they had been especially careful to keep the drainage pipe free of debris so that its capacity for carrying the water away would not be impeded. They also dug a trench to route the water around their house. Yet, these attempts to deter the water failed, and in 1983 and again in 1985, water not only flooded their land, but came into their house as well. It was after the 1983 incident of flooding inside the house that the Talagas consulted an attorney and initiated this lawsuit.

Talagas proceeded to have their garage built in April at a cost of $3,450. Then, in late summer, Jordan and Baker installed an eight-inch drainage pipe under the ground beneath the easement. That pipe connected to a storm sewer in the street. Baker testified that the purpose of the pipe was to drain any casual water that might accumulate in the swale, but it was not intended to drain the water that flowed onto the lot from the Britton property. Baker testified that he then had a swale constructed over the pipe.

Robert Lippman, a civil engineer and licensed land surveyor, prepared a model, drawn to scale, of the Talagas' house and the surrounding land. He testified he had examined U.S. Geological Survey maps and aerial photographs of the Sandridge area which were made in 1970, 1975, and 1980. In his opinion there was a natural water course that flowed from the pond on the Britton property onto the Talaga lot before 1975, probably having been there since the time of the glaciers. He said this flow should have been calculated in the development of Sandridge, and that an eight-inch pipe extending into the street was not sufficient to take the flow, especially when the street itself was full of water.

Lippman testified further that the Talagas' house had been damaged by both the volume and the velocity of water coming from 20 acres, down a narrow ditch, and spreading down both sides of their driveway. He said in his opinion a reasonable, prudent developer would not put a stream of that nature onto a lot; and, too, that it would not be the normal course of action for a developer to allow a house to be built on such a lot. Lippman stated that to have made the lot useable, the water should have been diverted underground or away from it. Otherwise, the land was useless. He also said that if the Talagas were to redirect the downspouts on their house, the flow of rainfall on their lot would be lessened, but it would be a "drop in the bucket" compared to the amount of water that would continue to course across their land. ³

Lippman testified there were several ways the water could have been handled initially. He said the Town required that sewers be made to accomodate a five-year rain, which was the most economical plan for developers. However, he noted this plan often got the developers into trouble. He suggested the water could have been handled by retaining it on the Britton property. Or, the size of the storm sewer in the street and the drainage pipe to the back of the lot could have been increased so that the water could course...