Lakeview Reserve Homeowners v. Maronda Homes, Inc., 5D09-1146.

• Decision Date: 29 October 2010
• Docket Number: No. 5D09-1146.,5D09-1146.
• Citation: 48 So.3d 902
• Parties: LAKEVIEW RESERVE HOMEOWNERS, etc., et al., Appellant, v. MARONDA HOMES, INC., et al., Appellee.
• Court: Florida District Court of Appeals

48 So.3d 902

LAKEVIEW RESERVE HOMEOWNERS, etc., et al., Appellant,
v.
MARONDA HOMES, INC., et al., Appellee.

No. 5D09-1146.

District Court of Appeal of Florida,
Fifth District.

Oct. 29, 2010.

48 So.3d 903

Robyn Severs Braun and Patrick C. Howell of Taylor & Carls, P.A., Altamonte Springs, for Appellant.

Thomas R. Slaten, Jr., and John C. Palmerini of Larsen & Associates, P.A., Orlando, Amicus Curiae, Community Associations Institute, Mid Florida Chapter, in support of Appellant.

Steven L. Brannock of Brannock & Humphries, Tampa, Scott Johnson and Heather Pinder Rodriguez of Holland & Knight LLP, Orlando, for Appellee Maronda Homes, Inc. of Florida.

Stephen W. Pickert and Anthony R. Kovalcik of Moye, O'Brien, O'Roarke, Pickert & Martin, LLP, Maitland, for Appellee T.D. Thomson Construction Co.

Nicholas A. Shannin of Page, Eichenblatt, Bernbaum & Bennett, P.A., Orlando, and Keith C. Hetrick, Tallahassee, Amicus Curiae, Florida Home Builders Association, in support of Appellee.

ROBERTS, C.J., Associate Judge.

Lakeview Reserve Homeowners Association, Inc. ("the Association") appeals from the final summary judgment entered in favor of Maronda Homes, Inc. and T.D. Thomson Construction Company (collectively "the Developer") ¹. The sole issue for our review is whether a homeowners association has a claim for breach of the common law implied warranties of fitness and merchantability, also referred to as a

48 So.3d 904

warranty of habitability, against a builder/developer for defects in the roadways, drainage systems, retention ponds and underground pipes in a residential subdivision. We hold that it does and, accordingly, reverse.

The Developer developed a residential subdivision in Orange County, Florida, and incorporated the Association to serve as the homeowners association of that subdivision. In developing the subdivision, the Developer performed certain site work, including construction of the stormwater drainage system and private roadways. During construction of the subdivision, the Developer retained control of and managed the subdivision. Ultimately, the Developer transferred all control of the subdivision to the individual lot owners and the Association.

The Association filed a complaint against the Developer for breach of the implied warranties of fitness and merchantability based on latent defects in the subdivision's common areas. Specifically, it claimed that the roadways, retention ponds, underground pipes, and drainage systems throughout the subdivision were defectively constructed. The Developer filed a motion for summary judgment, arguing that the common law implied warranties of fitness and merchantability do not extend to the construction and design of private roadways, drainage systems, retention ponds and underground pipes, or any other common areas in a subdivision, because these structures do not immediately support the residences. The trial court agreed and entered summary judgment against the Association.

In entering summary judgment, the trial court relied upon Conklin v. Hurley, 428 So.2d 654 (Fla.1983), and Port Sewall Harbor & Tennis Club Owners Association, Inc. v. First Federal Savings and Loan Association of Martin County, 463 So.2d 530 (Fla. 4th DCA 1985). We review the trial court's order de novo. Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (Fla.2000). The Developer urges us to likewise rely on Conklin and Port Sewall, and to uphold the trial court's decision. We decline to do so, and, instead, hold that there is a common law warranty of habitability applicable in the case at bar. Although we are constrained by the holding in Conklin, it is our opinion that the facts of the instant case are distinguishable from the facts in Conklin. We, nevertheless, reach a different conclusion than our sister court in Port Sewall, which applied the holding in Conklin to a similar set of facts as presented here. We, therefore, certify conflict with the Fourth District Court of Appeal.

A review of the history of the application of implied warranties for habitability is instructive. For centuries, caveat emptor, "let the buyer beware," was generally the rule of law. This served well at a time when parties were thought to usually be on equal footing and neither had a significant advantage in discerning potential defects to goods sold in the marketplace. This theory was particularly persistent in land sales, where a buyer could, and wisely should, inspect the land to ensure it was suitable for the buyer's intended use. The notion of caveat emptor initially carried over into the construction and sale of homes and commercial buildings. Buyers could still inspect the land, and early building construction and land development was relatively simple.

As mass production of goods became more complicated and more common, courts began to impose liability on manufacturers and sellers, who were in a superior position to know of, or discover, defects than were the consumers. See, e.g., Manheim v. Ford Motor Co., 201 So.2d 440 (Fla.1967). Following this trend, courts

48 So.3d 905

have shown willingness to reject the notion of caveat emptor, and to impose liability on developers and sellers of realty. This movement away from caveat emptor is due in large part to today's complex development climate. Permitting, site planning and site work, and construction of subdivisions and planned unit developments are significantly more complex than ever before, and a homebuyer is no longer on a level playing field with a builder/developer, as was once the case.

In Florida, the first case to extend the implied warranties of fitness and merchantability to purchasers of new homes was Gable v. Silver, 258 So.2d 11 (Fla. 4th DCA 1972) (hereinafter Gable I ). There, the court quoted with approval the following language from Wells, Implied Warranties in the Sale of New Homes, 23 U. Fla. L.Rev. 626 (1971):

The question remains in Florida whether caveat emptor will be extended to foreclose implied warranties in the sale of new homes.

It has been contended that adoption of the remedy of implied warranty would adversely affect the stability of the new house market. The use of implied warranties with the respect to the sale of new chattels, however, has not had the effect of destroying the stability of the market place for chattels, ... Moreover, under the theory of implied warranty the purchaser would always have the burden of proving the house was defective when sold and could only recover if he were the first occupant of a new house.

Although the theory of implied warranty should not drastically affect the position of the legitimate builder-vendor, the doctrine could be very effective in reducing the number of those undesirables within the industry who have no intention of standing behind the quality of their work.... It should also be noted that the legitimate builder-vendor is much more capable of distributing the cost of his mistakes than is the innocent home buyer.

Undoubtedly, the law regarding the liability of a builder-vendor of new houses is changing. The above cases indicate a growing trend away from caveat emptor and toward the theory of implied warranty. The movement brings the law much closer to the realities of the market for new homes than does the anachronistic maxim of caveat emptor. The law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping its common law principles abreast of the times. Ancient distinctions which make no sense in today's society and tend to discredit the law should be readily rejected.

Gable I, 258 So.2d at 17.

The Fourth District noted that, at the time of its decision, the rule that implied warranties do not extend to realty was fast eroding, as fourteen other jurisdictions had already rejected the rule.² In extending

48 So.3d 906

the implied warranties to the sale of homes, most courts echoed sentiments similar to those expressed by the Arkansas Supreme Court in Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922, 923 (1970), in which the court stated:

Both the rapidity and the unanimity with which the courts have recently moved away from the harsh doctrine of caveat emptor in the sale of new houses are amazing,....
... The contrast between the rules of law applicable to the sale of personal property and those applicable to the sale of real property was so great as to be indefensible. One who bought a chattel as simple as a walking stick or a kitchen mop was entitled to get his money back if the article was not of merchantable

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