Loch Ridge Const. Co., Inc. v. Barra

• Decision Date: 19 July 1973
• Parties: LOCH RIDGE CONSTRUCTION COMPANY, INC., a corp., and Art Rice Realty Co., Inc., a corp. v. A. J. BARRA and Lorraine E. Barra. S.C. 133.
• Court: Alabama Supreme Court

Page 745

280 So.2d 745

291 Ala. 312

LOCH RIDGE CONSTRUCTION COMPANY, INC., a corp., and Art Rice Realty Co., Inc., a corp. v. A. J. BARRA and Lorraine E. Barra.

S.C. 133.

Supreme Court of Alabama.

July 19, 1973.

William L. Irons, Birmingham, for appellants.

Corretti, Newsom, Rogers, May & Calton, Birmingham, for appellees.

HARWOOD, Justice.

In the suit below the plaintiffs, A. J. Barra and his wife Lorraine E. Barra, sought damages because of the alleged fraud practiced upon them by the defendants Loch Ridge Construction Company, Inc., and Art Rice Realty Company, Inc., in the sale of a house sold by Art Rice Realty Company which house was constructed by Loch Ridge.

It was averred that the defendants represented that the house had been built in a good and workmanlike manner and in accordance with plans and specifications as approved by the Veterans Administration and the Federal Housing Administration, whereas the house had not been built in a good and workmanlike manner nor in accordance with either the plans and specifications for the house nor in accordance with the plans and specifications approved by the Veterans Administration or the Federal Housing Administration.

The plaintiffs claimed damages of $25,000.00, punitive damages included.

A jury trial resulted in a verdict for the plaintiffs, damages being assessed at $37,500.00. On motion of the plaintiffs the amount of damages was reduced to $25,000.00.

The defendants filed a motion for a new trial, which was overruled after the filing of a remittitur by the plaintiffs of $10,000.00, as ordered by the court.

The defendants thereafter perfected this appeal.

In the hearing below, Mrs. Barra testified that while looking for a home she chanced upon the Loch Ridge subdivision. There she met Mrs. Betty Powers, a sales representative for Art Rice Realty Company who showed her the house in question located at 3454 Loch Ridge Trail. Mrs. Powers assured her, in response to her questions, that this house was well built and would be in perfect condition when moved into, and that all workmanship and materials were of the best grade. Mrs. Powers further stated that the house had been built according to the Veterans Administration's and Federal Housing Administration's specifications and that the Veterans Administration did the inspecting on the house, and that the house carried a full year warranty covering all defects in the house.

Later, her husband accompanied her to the house where they saw Mrs. Powers. On this occasion, Mr. Barra asked Mrs. Powers specifically if the house was built according to Veterans Administration and Federal Housing Administration specifications and she assured him it was so built. Mrs. Powers told them they were getting an excellent home because it would be a model home in the 'Parade of Homes.' Art Rice, President of Art Rice Realty Company, also told them at the closing of the sale that they were fortunate to get this house as it was going to be a model home.

At a meeting to close the sale, Art Rice, and Ralph Roberts, then President of Loch Ridge Construction Company, both stated that the house was built according to Veterans Administration and Federal Housing Administration specifications, that it was inspected by Veterans Administration, that the house would be in perfect condition when the Barras moved in.

Mrs. Barra further testified that at no time was she or Mr. Barra showed any plans or specifications, nor did either of them know of any plans or specifications other than what they had been told by Mrs. Powers, Mr. Rice, and Mr. Roberts. According to Mrs. Barra, it was more than a year after they moved into the house that they became aware that they could obtain the plans and specifications of the house from the Veterans Administration.

The sale of the house was completed on 28 August 1969, the purchase price being $30,500.00. The next day the Barras moved into the house.

Mr. Barra's testimony was corroborative of Mrs. Barra's as to the representations made by Mrs. Powers, Art Rice, and Ralph Roberts. Mr. Barra further testified that it was in reliance upon these representations that the house was purchased.

At the time of the closing of the sale, the Barras were given a warranty of completion to the effect that construction of the house was in substantial conformity with plans and specifications approved by the Federal Housing Commissioner or the Veterans Administrator. The warranty also provided that it was in addition to, and not in derogation of all other rights the purchaser might have under any other law or instrument. This warranty was executed by Loch Ridge Construction Company.

Shortly after moving in, and continuing, many defects began to appear in the house. Mr. Barra would write letters to Art Rice Realty Company and Loch Ridge concerning the defects. The air conditioning system did not cool the house and made a lot of noise; the kitchen cabinets were warped and nicked; the vanity in the upstairs bathroom had to be taken out and redone; in the spring of 1970, leaks developed in the roof; in July 1970, the basement became flooded by leakage from the condensation hose on the air conditioner; in late August of 1970, the dishwasher came loose from the wall and the kitchen floor became spongy from leakage and the floor tiles came loose in a considerable area; also in the fall of 1970, a water closet in the 'middle bathroom' came loose and water flooded the bathroom, and basement; and the driveway cracked.

The above are but a few of the problems the Barras were beset with. We will not list them all.

Mr. Barra testified that though he had written Mr. Art Rice and Mr. Roberts several letters concerning the defects in the house, he did not know at the time of writing these letters that the matters about which he complained were in fact departures from the plans and specifications for the house, as he had never been shown any plans and specifications by anyone.

In October 1970, he wrote the Veterans Administration in Montgomery inquiring if he could obtain plans and specifications for his house. Being informed he could obtain such plans from the Veterans Administration upon the payment of $14.00, he forwarded this amount to the Veterans Administration and received the plans and specifications in October 1970. It was then he became aware that the house had not been built according to the plans and specifications.

Two registered engineers, Mr. James Ray Spence, and Mr. Andrew Payne, were employed individually and separately by Mr. Barra to make an inspection of his house in relation to the plans and specifications.

Mr. Payne testified he examined the house as to its conformity to the plans and specifications for its construction, and also as to whether its construction conformed to the minimum building requirements of the Veterans Administration and the Federal Housing Administration.

Mr. Payne testified that the combined air conditioning and heating unit was completely inadequate to properly cool and heat the house, and the ducts and vents were too small. The heating and cooling system conformed to neither the plans and specifications nor the minimum building requirements of the Veterans Administration or the Federal Housing Administration. This defect could be corrected only by installing a new heating and cooling system, including new ducts and vents.

The attic was improperly insulated. While the specifications called for four inches of insulation, portions of the floor of the attic were bare, while about an inch of insulation was on other portions, and probably four or five inches in the corners. The plans called for a louver to be installed on the rear of the house, but this louver was missing. The ventilation in the attic was nil, with the collection of hot air resulting. Even had a proper sized cooling system been installed, it could not have adequately cooled the house without ventilation in the attic.

The specifications called for panelling in the kitchen, but the kitchen was not panelled. Also, a stainless steel sink was called for but an enamel sink had been installed. Certain cabinets called for in the specifications had not been installed in the kitchen.

The joists had not been fastened to each other as called for in the specifications.

The board and batten work above the brick work on the outside of the house had been installed improperly as had the entrance doors. In some cases finishing nails had been used instead of flat headed nails. The boards would pull off of the finishing nails with warping.

Mr. Payne also noted a complete absence of foundation drains as required by the minimum building requirements of the Federal Housing Administration. Such condition resulted in an excess of moisture, mildew, and dampness in the lower portion of the house.

In short, Mr. Payne testified that in many instances the house was not constructed according to the plans and specifications, nor in compliance with the minimum building requirement of the Veterans Administration and the Federal Housing Administration, and in many instances the house was not constructed in a workmanlike manner.

In Mr. Payne's opinion, the costs of correcting the various defects and variances which he found would be $10,275.00, according to an itemized breakdown he had prepared during his inspections.

Mr. James Ray Spence, the second consulting engineer employed by the Barras to inspect the house in reference to its compliance with the plans and specifications for the house, and with the minimum building requirements of the Veterans Administration and the Federal Housing Administration, testified as to his inspection of the house and its variances from the above mentioned standards. Mr. Spence's testimony was substantially corroborative of Mr. Payne's testimony in regard to the variances and deficiencies between the house and the said plans, specifications, and minimum standards of the Veterans Administration and...