Norman Properties v. Bozeman

• Decision Date: 02 February 1990
• Parties: NORMAN PROPERTIES v. Robert Dwayne BOZEMAN and Elizabeth H. Bozeman. 88-406.
• Court: Alabama Supreme Court

Page 1265

557 So.2d 1265

NORMAN PROPERTIES v. Robert Dwayne BOZEMAN and Elizabeth H. Bozeman.

88-406.

Supreme Court of Alabama.

Feb. 2, 1990.

John A. Taber of Hardin, Taber & Tucker, Birmingham, for appellant.

Mark T. Smyth, Luverne, for appellees.

HORNSBY, Chief Justice.

This case involves claims by the plaintiffs based on alleged fraud and breach of the warranty of habitability of a new house; the case arises out of the purchase of a new house in Fort Deposit, Alabama. Robert Dwayne and Elizabeth H. Bozeman sued John and Peter Norman and their wives, Genie and Delnora Norman, individually. They later amended their complaint to add as a defendant Norman Properties, a partnership composed of John and Peter Norman. The complaint requested compensatory damages as well as damages for mental and emotional anguish.

The jury returned a verdict against Norman Properties in the amount of $50,000. The jury found for the four individual defendants. Judgment was entered on this verdict. Norman Properties filed a motion for JNOV or, alternatively, for new trial or a remittitur. The trial judge denied that motion. Norman Properties appeals.

The Bozemans purchased a house from the Normans in December 1983 for $46,000. The deed conveying the lot to the Bozemans was executed by the four Normans but contained no reference to Norman Properties. However, the receipt given to Mrs. Bozeman for the down payment was signed "Norman Properties by 'Pete' Norman." The sales contract also indicated that the house was "constructed by Norman Properties." The trial testimony revealed further facts regarding this point, which are detailed below.

The Normans began building houses in Ft. Deposit on speculation. They had had no prior experience in building houses, and they had another contractor, Mike Norman (apparently no relation to the Normans in this case), actually build this particular house for them. The Normans' participation in the building and sale of the house consisted of securing the lot, selecting and reviewing the plans and specifications, coordinating the interior colors, inspecting the building site from time to time during construction, and ultimately signing the deed to the Bozemans. Both John and Peter Norman represented to the Bozemans that the home was "well built" and was an "Alabama Power good sense" [sic] home.

The Bozemans took possession of the house in December 1983 and first began to see minor problems in January or February 1984. The initial problems involved the heating system and drainage in the yard. Because the house was completed in the winter, the yard had not been graded or sodded, and rainwater would drain into the yard from the street and stand in the yard. Trial testimony revealed that even after the yard was landscaped, Mr. Bozeman had to install a "french drain" to keep the water from flowing toward and under the house. The heating unit was repaired after a repairman discovered a manufacturing defect.

Further problems developed during 1984 and 1985, including mildew on the windowsills, "hairline" cracks in the bathroom tile floors, cracks in the sheetrock walls, failure of the front door to close properly, and cracks in the driveway. The siding on the house began to loosen, and the boards appeared to be warping outward. The kitchen floor appeared dirty even after being cleaned. The testimony by Mrs. Bozeman is not specific as to the date on which each problem occurred. It appears that in the latter part of 1984 or early in 1985 the Bozemans also discovered that the rear patio had been constructed partially over an open well. They attempted on several occasions to fill the well, but each time the fill settled and the hole opened again. It also appears from the record that in 1985 or 1986, Mr. Bozeman had to attempt to repair a clogged drain.

Finally, in November 1986, the Bozemans employed the professional engineering firm of Joseph and Spain to inspect their house. At trial, Mr. Joseph was offered as an expert, without objection. He testified that his inspection in November or December 1986 revealed that the turn-down of the footing of the outer support walls was insufficient. He said that the turn-down should have been from three to five feet deep due to the fact that the house had been built on prairie soil, but that it was only one foot deep. He further testified that the concrete used in the foundation of the house was inferior and that at some points he could crumble the concrete in his hands.

Mr. Joseph also testified that the front stoop and the rear patio had settled. His report indicated "the quality of the concrete in the drives, patio and entrance slab all seem to be of a low quality [and] since part of the roof on the front entrance slab and over the patio is supported by a wood post, bearing on these slabs, any movement of the slab can have adverse effects on the structure." One of the posts supporting the roof had become completely unattached from the house. He said that the main slab on which the house was built also had abnormal cracking, and that moisture seeped through the floor, causing the kitchen floor to appear "dirty," even after cleaning, and causing the living room carpet to stay damp.

Mr. Joseph further testified that the windows were incorrectly installed, and that the incorrect installation caused moisture to collect on the windows and, in turn, to cause mildew on the windows. He also testified that the structural defects were present when the house was built but would not have been discovered by normal observation.

After receiving Mr. Joseph's report, the Bozemans said, they decided the house was uninhabitable. They said they were afraid that the sinking of the concrete slabs would cause the gas line to break. They also said they could not unclog the drain that was causing a sewage backup. During the spring of 1987, the drains from the bathrooms and the dishwasher again became clogged. In attempting to remedy these clogs, Mr. Bozeman had to dig up the yard to reach the pipes. His testimony indicated that the problems occurred because the pipes that had been installed were too small. This was the second time the drains had clogged, and on this occasion, sewage backed up into the house and covered the floors, including the living room carpet.

Mr. Joseph testified that it would be cost-prohibitive to correct the foundation problem. In February or March 1987, the Bozemans ceased making mortgage payments, believing the house to be worthless, they said, and they subsequently abandoned the property.

The lender foreclosed and purchased the property for $47,832.02. Mary Amos, a real estate broker, testified that, following the foreclosure sale, she listed the property for sale. At the time of trial, in August 1988, there was a contract on the house for $48,000.00. Ms. Amos testified that no major repairs had been made to the house since the foreclosure. She said she had made a "walk-through" inspection of the house and from that inspection was not aware of any structural defects. She said that the prospective purchasers had not been made aware of any defects.

Ann Carmichael, a real estate appraiser who had done an appraisal of the property, also testified that she was not aware of any structural defects. She testified, however, that any structural defects, such as those testified to by Mr. Joseph, would lower her appraisal to some extent, depending on whether they were curable and, if so, the cost of curing them.

Mrs. Bozeman testified that she and her husband had paid approximately $25,000.00 in mortgage payments, for closing costs, for the down payment, for yard work, for installation of a utility shed and a privacy fence, and for relocating expenses.

Issues

Norman Properties, the partnership, raises three issues on appeal. First, it contends that the Bozemans' fraud claim was barred by the applicable statute of limitations. Second, it claims that it was entitled to a judgment notwithstanding the verdict because the jury rendered a verdict only against it and not against its individual partners. Third, it contends that the jury's verdict of $50,000 was excessive in light of the evidence.

Statute of Limitations

There was evidence that the partners represented to the plaintiffs that the house was "well built" while knowing that it was not. Thus, the evidence would support a verdict based on fraud. See Deupree v. Butner, 522 So.2d 242, 245-46 (Ala.1988); see also Hickox v. Stover, 551 So.2d 259, 263 (Ala.1989).

Norman Properties contends, however, that the Bozemans' fraud action was barred by the statute of limitations. It raised this defense by a motion made during the trial to amend the pleadings to conform to the evidence. Norman Properties then moved for a directed verdict on this defense, which was denied, although the amendment had been allowed. Norman Properties contends that the trial judge should have found the fraud count barred as a matter of law or should have allowed the jury to determine whether the count was time-barred.

Norman Properties also contends that the judge erred in not charging the jury on the statute of limitations issue. While counsel for Norman Properties did object at trial to the omission of a statute of limitations charge, he did not state the grounds for his objection and cannot now claim this omission as error. A.R.Civ.P., Rule 51.

Under Ala.Code (1975), § 6-2-38 (Cum.Supp.1988), an action for fraud is subject to a two-year statute of limitations. However, § 6-2-3 provides:

"In actions seeking relief on the ground of fraud where the statute has created a bar, the claim must not be considered as having accrued until the discovery by the aggrieved party of the fact constituting the fraud, after which he must have two years within which to prosecute his action."

This provision has been interpreted as follows:

"Fraud is deemed to have been discovered when the person either actually discovered, or when the person ought to...