San Luis Trails Ass'n v. E.M. Harris Bldg. Co., Inc.

• Decision Date: 04 February 1986
• Docket Number: No. 50139,50139
• Citation: 706 S.W.2d 65
• Parties: SAN LUIS TRAILS ASSOCIATION, Plaintiff-Appellant, v. E.M. HARRIS BUILDING CO., INC., Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 65

706 S.W.2d 65

SAN LUIS TRAILS ASSOCIATION, Plaintiff-Appellant, v. E.M. HARRIS BUILDING CO., INC., Defendant-Respondent.

No. 50139.

Missouri Court of Appeals,

Eastern District,

Division Two.

Feb. 4, 1986.

Rehearing Denied March 11, 1986.

Susan H. Mello, Clayton, for plaintiff-appellant.

Francis J. Vatterott, St. Ann, for defendant-respondent.

REINHARD, Judge.

Plaintiff, a homeowners association, appeals from the granting of defendant's motion to dismiss plaintiff's second amended petition for damages based on breach of an implied warranty. We affirm.

Plaintiff first filed a two-count petition against defendant, the developer, designer and builder of a residential subdivision in Jefferson County, seeking to recover in excess of $100,000 which plaintiff had expended to replace and repair private streets within the subdivision. Count I was premised on negligence, while in Count II strict liability was asserted. Defendant filed a motion to dismiss for failure to state a cause of action. The trial court sustained defendant's motion and granted plaintiff 20 days to file amended pleadings. No appeal was taken from that dismissal.

Plaintiff's amended petition contains the following allegations:

1. That at all times material hereto, Plaintiff, SAN LUIS TRAILS ASSOCIATION, was a not-for-profit corporation, organized and existing pursuant to the laws of the State of Missouri.

2. That at all times material hereto, Defendant, E.M. HARRIS BUILDING CO., INC., was a corporation organized and existing pursuant to the laws of the State of Missouri, with a principal office and registered agent in Jefferson County, Missouri.

3. That at all times material hereto, San Luis Trails was a residential subdivision, partly located in St. Louis County but with Plats 4, 5, and 6 located in Jefferson County and further, that Plats 4, 5, and 6 including lots, common area, and streets, were developed and constructed by Defendant and its agents, with construction commencing in 1978 and the same still being under development.

4. That from 1978 to the present, Defendant and its agents sold to individuals, real estate, buildings, and appurtenances thereto, located in San Luis Trails subdivision, Plats 4, 5, and 6, for the purpose of developing a community of single-family homes.

5. That Plaintiff was incorporated and set up by Defendant and its agents to hold title to the common area and maintenance of streets located in Plats 4, 5, and 6 of San Luis Trails for the benefits and use of the Association's membership, the individual property (lot) owners of Plats, 4, 5, and 6.

6. That said streets were never dedicated and accepted by Jefferson County as public roads, and therefore, remained under the sole control and maintenance of Plaintiff for the benefit and use of its members.

7. That Defendant knew or should have known by using ordinary care that the Plaintiff's membership, all the property owners of Plats 4, 5, and 6 would use the streets located in Plats 4, 5, and 6 as their primary access to and from their respective homes; and, Defendant impliedly warranted that these streets were reasonably fit for such a use; and, that Defendant further impliedly warranted that the streets were constructed in a skillful and workmanlike manner and were free from defects in workmanship and materials.

8. That Plaintiff, through its property-owner membership, reasonably relied on the skill and judgment of Defendant as to the suitability of the streets located in Plats 4, 5, and 6 for normal use and also as to the manner in which the streets were constructed.

9. That, in fact, the subdivision streets were not suitable for use as subdivision streets, were not constructed in a skillful and workmanlike manner, and were not free from defects in workmanship and materials in that from 1980 to the present time the streets have deteriorated to the extent that they have become unsafe for driving, person, and property, and are in constant need of major repair.

10. That Plaintiff has demanded Defendant replace and/or make the necessary repairs to the subdivision streets, but Defendant has refused to do so.

11. That as a direct result of the unskillful and unworkmanlike manner in which the streets were constructed and Defendant's refusal to correct the resulting condition, Plaintiff and its membership have been damaged in the amount of One Hundred Thousand Dollars ($100,000.00) for the cost of having subsequent repair work done on the subdivision streets.

Defendant filed a motion to dismiss the amended petition for failure to state a cause of action. The trial court sustained defendant's motion, and designated the dismissal as a final order for purposes of appeal.

On appeal plaintiff asserts that the amended petition stated a claim under an implied warranty theory, and "when properly construed stated a claim for misrepresentation" as well.

On review of the trial court's dismissal of a petition, our duty is to determine if the facts pleaded and reasonable inferences to be drawn from the allegations, when viewed in the light most favorable to the plaintiffs, demonstrate any basis for relief. We must accept as true all facts averred in the petition, construe all averments liberally and favorably to the plaintiffs and determine whether they invoke principles of substantive law upon which relief may be granted. Chubb Group of Insurance Companies v. C.F. Murphy & Associates, Inc., 656 S.W.2d 766, 770 (Mo.App.1983).

With this in mind we examine the concept of implied warranty as it relates to real estate. In Smith v. Old Warson Development Company, 479 S.W.2d 795 (Mo. banc 1972) the Missouri Supreme Court allowed an original purchaser of a new home to recover from a builder/vendor for damages resulting from latent structural defects on the basis of a common law implied warranty of habitability or quality. The court noted:

Although considered to be a 'real estate' transaction because the ownership to land is transferred, the purchase of a residence is in most cases the purchase of a manufactured product--the house. The land involved is seldom the prime element in such a purchase, certainly not in the urban areas of the state. The structural quality of a house, by its very nature, is nearly impossible to determine by inspection after the house is built, since many of the most important elements of its construction are hidden from view. The ordinary 'consumer' can determine little about the soundness of the construction but must rely upon the fact that the vendor-builder holds the structure out to the public as fit for use as a residence, and of being of reasonable quality.

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Common sense tells us that a purchaser under these circumstances should have at least as much protection as the purchaser of a new car, or a gas stove, or a sump pump, or a ladder.

Id. at 799.

Relaxing the caveat emptor rule in this limited area would not require a builder-vendor to construct a perfect house as the test would be one of reasonableness of quality. (emphasis ours).

Id. at 801.

The remedy established in Old Warson was further defined in Crowder v. Vandendeale, 564 S.W.2d 879 (Mo. banc 1978), where the court stated:

The language of Old Warson has...