Lochrane Engineering, Inc. v. Willingham Realgrowth Inv. Fund, Ltd.

• Citation: 552 So.2d 228,14 Fla. L. Weekly 2424
• Decision Date: 12 October 1989
• Docket Number: Nos. 88-1501 and 88-1502,s. 88-1501 and 88-1502
• Parties: 14 Fla. L. Weekly 2424 LOCHRANE ENGINEERING, INC. and Frank N. Anderson, Appellants, v. WILLINGHAM REALGROWTH INVESTMENT FUND, LTD., et al., Appellees.
• Court: Florida District Court of Appeals

Page 228

552 So.2d 228

14 Fla. L. Weekly 2424

LOCHRANE ENGINEERING, INC. and Frank N. Anderson, Appellants, v. WILLINGHAM REALGROWTH INVESTMENT FUND, LTD., et al., Appellees.

Nos. 88-1501 and 88-1502.

District Court of Appeal of Florida Fifth District.

Oct. 12, 1989.

Rehearing Denied Nov. 21, 1989.

James C. Mize, Jr., of Bull & Mize, Orlando, for appellant Lochrane Engineering, Inc.

John H. Bill of Allen, Brown & Builder, P.A., Winter Park, for appellant Frank N. Anderson.

Marvin E. Rooks of Rooks & Willingham, Maitland, for appellees Willingham Realgrowth Investment Fund, Ltd., et al.

COWART, Judge.

This case involves the proper measure of damages for breach of implied warranty by the seller of new residential units where the septic tank sewage disposal system was inadequate. This case also involves the liability of, and the proper measure of damages against, a design engineer who negligently designed the inadequate but repairable septic tank system.

A landowner-developer-seller (Anderson), constructing certain residential units for sale, had plans prepared by Walmsley and hired a general contractor (Nubar), a civil engineer (Lochrane) and a septic tank sub-contractor (Seagrave-Brownie) to install a septic tank sewage disposal system. The buyer (Willingham) from the developer-seller found the sewage system inadequate and sued all who were involved (except Walmsley) on various theories. The developer-seller cross-claimed against the engineer and the septic tank contractor.

At trial, two experts suggested three possible remedies for the insufficient septic tank and drain field sewage disposal system. The expert (Carson) for the plaintiff-buyers was of the opinion that the best possible solution was to connect the units to a City of Orlando central sewage system and he estimated the engineering cost to study the feasibility of that alternative at $17,300 and, if it were found feasible, estimated the actual cost of such connection at $94,820. The expert (Barnes) for the septic tank contractor (Brownie) was of the opinion that the problem was that the drain fields were too small to handle the quantity and quality of the effluent from the septic tanks but that the septic tank system was repairable on-site in either of two ways: (1) by adding a secondary tank and enlarging the drain fields at an estimated cost of $800 per system or a total of $8,000, or (2) by installing an aerobic system to aerate and improve the quality of the effluent from each tank at an estimated cost of $2,500 per system or a total of $25,000.

The buyer testified that the buyer had paid $3,000 to pump the septic tanks out. The trial court entered a judgment for $45,000 against the developer-seller, the septic tank contractor ¹ and the engineer. The developer-seller and the engineer appeal.

The trial court found the developer-seller liable to the buyer on theories of negligence and implied warranty. The seller's legal duties to the buyer were ex contractu and not ex delicto. This means that the seller's obligations and liabilities to the buyer were founded not in the breach of the general public duty, imposed by law, to use due care, the breach of which is the tort of negligence, but in contract, either from express promises or promises implied by law from the factual relationship of the parties. The proper theory of recovery was not for the tort of negligence but the breach of a warranty implied by law by consumer protection minded courts in the sales of real estate as an exception to the late common law rule of caveat emptor, specifically, the breach of an implied warranty of fitness for habitation. ² Of course the defects in the sewage disposal system were latent.

Although the buyer bought five residential duplex units (ten dwelling units) as an investment for rental, we apply Gable v. Silver, 258 So.2d 11 (Fla. 4th DCA 1972), cert. dismissed, decision adopted, 264 So.2d 418 (Fla.1972) and not the narrow exception for investment-related improvement of vacant land made in Conklin v. Hurley, 428 So.2d 654 (Fla.1983). We therefore affirm the judgment finding the seller of the new residential units impliedly warranted to the buyer that the units' sewage disposal systems were adequate to serve the normal needs of such units.

The $45,000 damage award against the developer-seller was composed of $3,000 for maintenance (meaning the cost of pumping out the septic tanks to make the inadequate system temporarily functionable), $25,000 for installation of an aerobic system and $17,000 for an engineering study to determine the feasibility of connecting these residential units to a municipal central sewer system. In announcing its decision, the trial court expressly relied on the expert Barnes, whose opinion was that the septic tank system while inadequate, was repairable. The testimony of that witness would have supported a trial court decision that, as a practical matter, a satisfactory on-site repair to the sewer system as originally designed could have been accomplished by the expenditure of $8,000 for more drain field area and a second septic tank rather than the more expensive installation of an aerobic system which was not part of the original design. While we seriously considered reducing the damage award to $8,000 we finally decided to defer to the trial court's discretion on this point. ³

If defective construction can be repaired, the proper measure of the owner's damages is the cost to repair which substantially gives the owner that to which he is entitled either under an express or implied contract. ⁴ In this case, the buyer entered into a purchase contract with the developer-seller before the units in question were constructed based on plans and specifications for the proposed construction; therefore, the relationship between the developer-seller and the buyer in this case was essentially the same in law as that between a construction contractor and an owner ⁵ and here the plans did not call for the residential units to be connected to a municipal central sewer system (nor for the septic tank to have an aerobic system) but only for a standard septic tank-drain field sewage disposal system. The buyer (owner) was not entitled to damages relating to either the cost of an engineering feasibility study to connect to a central sewer system or the cost of making such connection and was certainly not entitled to both the $25,000 cost of repairs by adding the aerobic system and the $17,000 cost of studying the feasibility of connecting to the municipal sewer system and that $17,000 item of damages is hereby reversed and stricken.

As stated above, the developer-seller cross-claimed against the engineer (Lochrane), who allegedly designed the septic tank system as installed, and against the septic tank contractor, who installed the system. These cross-claims, for indemnity and contribution, were to the effect that if the developer-seller was found liable to the plaintiff-buyer because of defects in design or construction of the septic tank system, then, for the same reasons, the developer-seller was entitled to recover from the engineer or the septic tank installer, or both. At the close of the non-jury trial, the trial court stated that because the developer-seller had not gone forward (meaning had not called witnesses to present testimony) with the counterclaims, they were dismissed; but the trial court, without stating the legal theory upon which it was done, held the engineer and the septic tank installer, neither of whom had contractual privity with the plaintiff-buyer, both jointly and severably liable with the developer-seller to the buyer for the entire amount awarded the buyer as damages. A proper legal theory for that result is not clear from the record or arguments on appeal. ⁶ In any event, and on whatever theory, surely an obligor who has voluntarily undertaken, but who has willfully or negligently failed to perform, an express contractual obligation to deliver goods or services to a contract obligee, does not have a duty or obligation implied by law to a third party greater in degree of required performance or in measure and amount of damages, than that expressly promised and owed to the contract obligee. Specifically, the engineer in this case should not be liable to the plaintiff/buyer for more money damages than the engineer would have been liable to the developer-seller.

The duty of a professional who renders services, such as a doctor, lawyer, or engineer, is different from the duty of one who renders manual services or delivers a product. The contractual duty of one who delivers a product or manual services, is to conform to the quality or quantity specified in the express contract, if any, or in the absence of such specification, or when the duty and level of performance is implied by law, to deliver a product reasonably suited for the purposes for which the product was intended (such as is involved in this case, the implied duty to deliver an adequate septic tank system) or to deliver services performed in a good and workmanlike manner. However, the duty imposed by law upon professionals rendering professional services is to perform such services in accordance with the standard of care used by similar professionals in the community under similar circumstances. ⁷ The measure of damages for breach of such different duties is likewise often different.

If a fixed-price contractor agrees to install an adequate drain field and installs a 1,000 square foot drain field which is later determined to be insufficient and to need 200 square feet more area, the contractor, being liable for the cost of repairs, is liable to the owner in damages for the cost of installing the additional feet of drain field. However, if a knowledgable owner retains a civil engineer, knowledgable as to hydrogeology and drain field design and requests a professional opinion as to specifications for a drain field adequate for a three-bedroom...