Moglia v. McNeil Co., Inc.
Decision Date | 22 July 2005 |
Docket Number | No. S-04-554.,S-04-554. |
Citation | 270 Neb. 241,700 N.W.2d 608 |
Parties | Joseph MOGLIA and Amy Moglia, husband and wife, appellants, v. McNEIL COMPANY, INC., et al., appellees. |
Court | Nebraska Supreme Court |
W. Patrick Betterman, Dave J. Skalka, and Jennifer M. Betterman, of Law Offices of W. Patrick Betterman, Omaha, for appellants.
Donald G. Furlow and Jason C. Demman, of Brodkey, Cuddigan, Peebles & Belmont, L.L.P., Omaha, for appellee Landgraphics, Inc.
Michael G. Mullin and Michaela A. Messenger, of McGrath, North, Mullin & Kratz, P.C., L.L.O., Omaha, for appellees K D Roofing, Inc., and Keith M. Duggan.
Michael T. Gibbons and Aimee C. Bataillon, of Woodke & Gibbons, P.C., L.L.O., Omaha, for appellees McNeil Company, Inc., and Patrick McNeil.
Appellants, Joseph Moglia and Amy Moglia, sued various subcontractors and the contractor, claiming that their home was defectively constructed. Appellants were the second owners of the home. The amended complaint filed January 15, 2004, alleged three cause of action as follows: count I, "Breach of Implied Duty to Perform in a Workmanlike Manner"; count II, "Breach of Implied Warranty of Habitability"; and count III, "Negligence." All appellees filed motions to dismiss under Neb. Ct. R. of Pldg. in Civ. Actions 12(b)(6) (rev.2003). The district court granted the motions and dismissed the complaint. With the exception of the dismissal of count I, breach of implied duty to perform in a workmanlike manner alleged against the contractor, the McNeil Company, Inc., the district court did not err. We affirm in part, and in part reverse and remand for further proceedings.
According to the complaint, in October 1994, the McNeil Company contracted with Michael and Kathleen Fahey to design and build a house in Omaha, Nebraska. The construction concluded, and the Faheys took possession of the house on January 17, 1997. On August 1, 2001, appellants purchased the house from the Faheys. The Faheys are not parties to the instant litigation.
Appellants allege that beginning in December 2002 and continuing through October 2003, they discovered numerous defects in the design and construction of the house. Appellants specifically allege they first learned of roofing defects in December 2002 when they engaged a home inspector to inspect the premises for insurance purposes. They thereafter learned of drainage problems. Appellants allege that some or all defects violate the Omaha building codes.
On September 5, 2003, appellants filed suit against the contractor and several subcontractors who worked on the house. On January 15, 2004, appellants filed an amended complaint (complaint), naming as defendants the contractor, the McNeil Company, and Patrick McNeil, an employee of McNeil Company; the roofing subcontractor, K D Roofing, Inc., and Keith M. Duggan, an employee of K D Roofing; and the drainage subcontractor, Landgraphics, Inc. All defendants are appellees on appeal. The complaint contains three counts, asserted against various defendants, as follows: count I, "Breach of Implied Duty to Perform in a Workmanlike Manner," alleged against the McNeil Company, K D Roofing, Duggan, and Landgraphics; count II, "Breach of Implied Warranty of Habitability," alleged against the McNeil Company; and count III, "Negligence," alleged against all defendants. Appellants alleged they had sustained various damages and sought relief therefor.
In response to the allegations in appellants' complaint, each defendant filed a motion to dismiss under rule 12(b)(6), claiming that the complaint failed to state a claim upon which relief could be granted. The motions came on for hearing on April 6, 2004. In dismissing the complaint, the district court concluded that Nebraska did not recognize a cause of action for breach of an implied warranty of habitability. Thereafter, the district court concluded that all of appellants' claims sounded in contract and not in negligence. Finally, the district court determined that appellants lacked privity of contract with all of the defendant-appellees and that as such, the complaint failed to state a cause of action. The district court granted all appellees' motions and dismissed appellants' complaint with prejudice. Appellants filed this appeal.
Appellants claim that the district court erred in sustaining each appellee's motion to dismiss.
The district court's grant of a motion to dismiss for failure to state a claim under rule 12(b)(6) is reviewed de novo, accepting all the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party. Anderson v. Wells Fargo Fin. Accept., 269 Neb. 595, 694 N.W.2d 625 (2005).
Count I, Breach of Implied Duty to Perform in Workmanlike Manner, Was Properly Dismissed as to K D Roofing, Duggan, and Landgraphics but Was Improperly Dismissed as to McNeil Company.
Appellants allege in count I of the complaint that K D Roofing, Duggan, Landgraphics, and the McNeil Company breached an implied duty to perform in a workmanlike manner. On appeal, appellants claim that the district court erred when it dismissed count I for failure to state a cause of action. As to K D Roofing, Duggan, and Landgraphics, we conclude the district court did not err in dismissing count I. However, we conclude that the district court erred in dismissing count I as to the McNeil Company.
With respect to K D Roofing, Duggan, and Landgraphics, we agree with the district court that in the absence of an allegation of privity, count I, styled "Breach of Implied Duty to Perform in a Workmanlike Manner," fails to state a cause of action against these subcontractors. We have long held that in the absence of an otherwise binding agreement, express or implied, there is no privity of contract between a subcontractor and the property owner who negotiated the original agreement with the general contractor. Boyd v. Benkelman Public Housing Authority, 188 Neb. 69, 195 N.W.2d 230 (1972). We have thus previously concluded that there is no liability on the part of subcontractors in favor of original owners, and given the more attenuated relationship with subcontractors, it logically follows that in the absence of privity, no liability on the part of subcontractors in favor of subsequent owners will be implied. See, Cox v. Curnutt, 271 P.2d 342 (Okla.1954); B & C Construction Co. v. Grain Handling Corp., 521 S.W.2d 98 (Tex.Civ.App. 1975).
In urging this court to extend the warranty of workmanlike performance in favor of subsequent owners despite the absence of privity, appellants refer us to several Nebraska cases, including Peterson v. North American Plant Breeders, 218 Neb. 258, 354 N.W.2d 625 (1984), and Herman v. Bonanza Blds., Inc., 223 Neb. 474, 390 N.W.2d 536 (1986). Peterson involved extending an implied warranty of merchantability to a subsequent purchaser of seed corn under the Uniform Commercial Code. Herman involved an action in which a steel building owner sued the manufacturer of a component part where the manufacturer had made express warranties upon which the owner relied. These cases are distinguishable from the case at bar. In the instant case, there are no Uniform Commercial Code imperatives and no alleged express warranties which would lead us to impose liability on the subcontractors in favor of the subsequent owners of the home based on the implied warranty to perform in a workmanlike manner. Given the absence of an allegation of privity, the district court did not err in dismissing count I as to K D Roofing, Duggan, and Landgraphics, and we affirm this portion of the district court's order.
Unlike subcontractors, as to contractors, we have long recognized that "[a]s a general rule a contractor constructing a building impliedly warrants that the building will be erected in a workmanlike manner. . . ." Henggeler v. Jindra, 191 Neb. 317, 318, 214 N.W.2d 925, 926 (1974). We note that the law implies the warranty, and we have applied this warranty between an original homeowner and a contractor. Id. This implied warranty "provides the owner with an action against the contractor if the contractor's work is not of good quality [and] free from defects." 3 C. Allen Foster et al., Construction and Design Law § 20.3a at 27 (1998). Appellants note that the ultimate objective encompassed by the warranty of workmanlike construction is the construction of a home of good quality and urge this court to extend the warranty such that it impliedly favors subsequent owners. We find merit in appellants' argument. Although we have not previously extended the warranty, we are aware that elsewhere, the warranty of workmanlike performance has explicitly been extended to subsequent purchasers. E.g., Aronsohn v. Mandara, 98 N.J. 92, 484 A.2d 675 (1984). Although using the language of the warranty of workmanlike construction and the warranty of habitability somewhat interchangeably, we are aware that both warranties have been extended in favor of subsequent purchasers by additional courts. E.g., Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 678 P.2d 427 (1984); Keyes v. Guy Bailey Homes, Inc., 439 So.2d 670 (Miss.1983). But see, contra, Butler v. Caldwell & Cook, 122 A.D.2d 559, 505 N.Y.S.2d 288 (1986).
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