Phillips v. ABC Builders, Inc.

• Decision Date: 21 May 1980
• Docket Number: No. 5233,5233
• Citation: 611 P.2d 821
• Parties: William H. PHILLIPS and Cindy Phillips, Appellants (Plaintiffs), v. ABC BUILDERS, INC., a corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

Page 821

611 P.2d 821

William H. PHILLIPS and Cindy Phillips, Appellants (Plaintiffs), v.ABC BUILDERS, INC., a corporation, Appellee (Defendant).

No. 5233.

Supreme Court of Wyoming.

May 21, 1980.

Micheal K. Shoumaker, Badley, Rasmussen & Shoumaker, P. C., Sheridan, signed the brief and appeared in oral argument for appellants.

Stuart S. Healy, Kennedy, Connor & Healy, Sheridan, signed the brief and appeared in oral argument on behalf of appellee.

Before RAPER, C. J., and McCLINTOCK, THOMAS, ROSE and ROONEY, JJ.

RAPER, Chief Justice.

This appeal directly challenges the constitutionality of a statute, enacted by the legislature in 1973, which immunizes a class of defendants from certain enumerated liabilities 10 years after substantial completion of any improvement to real property.Section 1-3-111, W.S.1977:

"(a) No action to recover damages, whether in tort, contract or otherwise, shall be brought more than ten (10) years after substantial completion of an improvement to real property, against any person performing or furnishing the design, planning, supervision, construction or supervision of construction of the improvement for:

"(i) Any deficiency in the design, planning, supervision, construction or observation of construction;

"(ii) Injury to any property arising out of any such deficiency; or

"(iii) Injury to the person or wrongful death arising out of any such deficiency.

"(b) Notwithstanding the provisions of subsection (a) of this section, if an injury to property or person or an injury causing wrongful death occurs during the ninth year after substantial completion of the improvement, an action to recover damages for the injury or wrongful death may be brought within one (1) year after the date on which the injury occurs."

The appellants, William and Cindy Phillips, in July, 1977 purchased a home located in Sheridan, the construction of which was substantially completed on or about May 22, 1969.After heavy rains, the basement and foundation walls began to collapse on or about May 25, 1978.The appellants were forced to vacate the home, although they were able to salvage the upper story and relocate it to another site.On September 19, 1979, the appellants filed a complaint in the district court seeking damages from the appellee, ABC Builders, Inc., which company substantially completed the home in 1969.The complaint alleged two causes of action.First, a breach of an implied warranty of fitness, and, second, negligence in the location, drainage and construction of the footings for the house.

The appellee moved to dismiss on the ground that the district court lacked jurisdiction because the "statute of limitations" had run.A hearing on the motion was conducted on October 24, 1979, and on October 29, 1979, the district court entered its judgment and order dismissing the complaint for the reason that the "statute of limitations" had run.

We will declare the statute in contravention of several provisions of the Wyoming Constitution.

Appellants assert as issues:

"I.The implied warranty of fitness for the foundation of the home exceeds ten years.

"II.The Wyoming Statutes of Limitation begin to run from the date that the injury is discovered.

"III.Wyoming Statute 1-3-111 is unconstitutional.

"A.There is no public policy reason to protect homebuilders from homeowners.

"1.Builders have a stronger bargain (sic) position.

"2.Only the builders can prevent the defect.

"3.The statute promotes shoddy and unscrupulous work.

"4.The builder is generally in a better economic position to bear the loss.

"B.There is no reason to protect architects and not owners, materialmen and manufacturers.

"C.Delayed lawsuits do not place architects and contractors at a disadvantage.

"D.There is no justification for withdrawing protection from the Homeowner."

We can address only constitutionality because that is the only issue which this record and narrowly drawn judgment will permit us to approach.However, we note that our decision in Moxley v. Laramie Builders, Inc., Wyo.1979, 600 P.2d 733, provides important guidance in any additional proceedings which may result from our decision today.In that casewe held:

" * * * A builder's implied warranty of fitness for habitation runs not only in favor of the first owner but extends also to subsequent purchasers.However, this implied warranty is limited to latent defects which are not discoverable by the subsequent purchasers by reasonable inspection and which become manifest only after the purchase."600 P.2d at 735-736.

In Moxley, we went on to suggest that there are a myriad of circumstances where intervening sales of a home should not stand as an artificial barrier to suit for breach of warranty or negligence in construction in the absence of good reason therefor.In Moxley we did not, and in this casewe will not, speculate about what factual circumstances or defenses may be called into play and which can be resolved only by trial.We iterate our ultimate holding in Moxley :

" * * * A home builder's implied warranty of fitness for habitation extends to subsequent purchasers for a reasonable length of time and is limited to latent defects which become manifest after the purchase.A builder of a home is also liable for damages which are foreseeable and which are caused by his negligence, to subsequent purchasers of such a home with whom he has no contractual relation even though his work is accepted by the first owner before the damage became manifest."(Emphasis in original.)600 P.2d at 736.

This court's decision in Tavares v. Horstman, Wyo.1975, 542 P.2d 1275, will also play a significant role in any future proceedings in this case.In Tavares, we gave recognition to the special importance the home plays in our society and established a rule that a home comes complete with an implied warranty that it is fit for human habitation and that it has been built in a reasonably workmanlike manner.The duration of such an implied warranty, as well as any cause of action which might arise out of negligent design and construction, was established to be one of reasonableness, a standard we repeated in Moxley.In setting that standard we also explicitly stated that " * * * different parts of construction may have a different expected life, such as a foundation compared to a roof."Id., 542 P.2d at 1282.

With these precedents as a prologue, we consider the statute at issue in this case.If the statute is applied literally, then any implied warranties or any defect resulting from negligent design or construction automatically expires upon passage of ten years following substantial completion whether the defect is in some feature of the home which should reasonably be expected to last only a few years or whether it is in some feature of the home which should last considerably longer.

Statutes, like the one we are dealing with here, have come under the scrutiny of numerous appellate courts.The challenges have almost uniformly questioned the constitutionality of the statute.In each instance, the statutes vary in wording somewhat from state to state but the wording variations appear to play no significant role in making the statutes distinguishable.The statutes also vary in the length of the limitation from four to twenty years, a distinguishing factor of no importance.This is all to suggest that, although the words of the statutes vary and the lengths of times vary, all the decisions which have been reached in the various jurisdictions we shall consider have some bearing and provide us with guidance.Beyond these superficial considerations, we note as well that some of these statutes have withstood the challenge to their constitutionality and some have not.

Our decision will ultimately be predicated upon Wyoming law and the Wyoming Constitution.Throughout our consideration of the following cases, it is important that these Wyoming constitutional provisions be kept in mind:

Section 8, Art. I. "All courts shall be open and every person for an injury done to person, reputation or property shall have justice administered without sale, denial or delay. * * * "

Section 34, Art. I. "All laws of a general nature shall have a uniform operation."

Section 27, Art. III."The legislature shall not pass local or special laws in any of the following enumerated cases, that is to say: * * * for limitation of civil actions; * * * granting to any corporation, association or individual * * * any special or exclusive privilege, immunity or franchise whatever * * *.In all other cases where a general law can be made applicable no special law shall be enacted."

The appellants rely principally upon § 34, Art. I, in asserting this view that the statute is unconstitutional.Indeed, it is the only provision of our constitution that they cite to us.Nonetheless, we include all the above constitutional provisions because the various states which have found their comparable statute to be unconstitutional have relied on these or similar provisions either separately or in combination.Clearly, it is § 34, Art. I, which rests at the heart of our decision, although these constitutional provisions must be read together in order to draw out the full sweep of § 34, Art. I. SeeBower v. Big Horn Canal Association, 1957, 77 Wyo. 80, 307 P.2d 593.

Our analysis must be structured within the firmly-established rule that one who assails a statutory classification must carry the burden of showing that it does not rest upon any reasonable basis but is essentially arbitrary.Further, one who contests the constitutionality of a statute must do more than make bald assertions of what he thinks is discriminatory.Bell v. Gray, Wyo.1963, 377 P.2d 924, 925.The party urging the statute to be unconstitutional must demonstrate that proposition beyond a reasonable doubt.Nehring v Russell, Wyo.1978, 582 P.2d 67, 74(and cases cited there).In this case, the appellants have ably and...