Schepps v. Howe

• Citation: 665 P.2d 504
• Decision Date: 22 June 1983
• Docket Number: No. 5826,5826
• Parties: David P. SCHEPPS and Theresa L. Schepps, Appellants (Plaintiffs), v. Steve R. HOWE and Jerri Jean Howe, Appellees (Defendants).
• Court: United States State Supreme Court of Wyoming

Page 504

665 P.2d 504

David P. SCHEPPS and Theresa L. Schepps, Appellants (Plaintiffs), v. Steve R. HOWE and Jerri Jean Howe, Appellees (Defendants).

No. 5826.

Supreme Court of Wyoming.

June 22, 1983.

C. Edward Webster II, Cody, for appellants.

William W. Harden, Casper, for appellees.

Before ROONEY, C.J., and RAPER, ^* THOMAS, ROSE, and BROWN, JJ.

THOMAS, Justice.

In this case the court is confronted with two questions concerning the rights of purchasers of residences. The first question relates to the right to recover in fraud for misrepresentations made subsequent to the execution of a contract for the sale of the residence. The second involves the right of a purchaser to claim a warranty of habitability when the house is constructed by the seller for his own occupancy and the seller is not a professional builder-developer. In granting a summary judgment in favor of the seller the district court held that any false representation could not have been relied upon by the buyers to induce them to purchase the property since any such representations were made after a binding contract to purchase the property was formed. The district court further held that no warranty of habitability attaches to the sale of a home by the builder, if the seller who constructed the home is an amateur builder who is not intending to engage in a commercial venture at the time the home is built. We shall affirm the district court, but in so doing we will hold that in this case the buyers waived any possible warranty of habitability, and, although we are skeptical of the ruling by the district court, we will defer for another occasion the question of whether a warranty of habitability could attach under these circumstances.

In urging their position in this court the appellants (the buyers) phrase the issues presented as follows:

"1. Did the district court of Natrona County err in granting summary judgment in favor of appellees holding that appellees were not responsible for not disclosing any defects in the home to be purchased by appellants. Were appellees exempt from responsibility for fraudulently misrepresenting the manner in which the home was constructed because the parties had previously entered into a purchase offer, acceptance and receipt agreement and appellants had made an earnest money deposit.

"2. Did the district court of Natrona County err in granting a summary judgment in favor of appellees and against appellants holding that an amateur builder of a home is exempt from constructing a home in a workmanlike manner and further exempt from an implied warranty of habitability and workmanship.

In defending the appeal the appellees (the sellers) rely upon traditional grounds for protecting summary judgments. In so doing they state the pertinent issues as follows:

"A. Whether or not the Court erred in finding there was no genuine dispute as to any material fact regarding Plaintiff's allegations of fraud?

"B. Whether or not the Court erred in finding there was no dispute as to any material fact regarding Plaintiff's allegation of breach of implied warranty of habitability and negligent construction?"

We begin by noting that in considering the propriety of the grant of summary judgment this court views the record in the light most favorable to the party against whom the summary judgment was entered, giving to that party the benefit of all favorable inferences which can be drawn from any of the materials which are submitted in support of or in opposition to the motion. Hyatt v. Big Horn School District No. 4, Wyo., 636 P.2d 525 (1981); Strang Telecasting, Inc. v. Ernst, Wyo., 610 P.2d 1011 (1980); Weaver v. Blue Cross-Blue Shield of Wyoming, Wyo., 609 P.2d 984 (1980); and Bluejacket v. Carney, Wyo., 550 P.2d 494 (1976). We also note that in an appeal in a case in which a summary judgment has been granted by the district court, our task is identical to that of the district court. Reno Livestock Corporation v. Sun Oil Company, Wyo., 638 P.2d 147 (1981); Hyatt v. Big Horn School District No. 4, supra; Bancroft v. Jagusch, Wyo., 611 P.2d 819 (1980); and Centrella v. Morris, Wyo., 597 P.2d 958 (1979). Whether the district court properly awarded the summary judgment to the moving party depends upon the dual findings that there is no genuine issue of material fact, and that the prevailing party is entitled to judgment as a matter of law. Reno Livestock Corporation v. Sun Oil Company, supra; Weaver v. Blue Cross-Blue Shield of Wyoming, supra; Laird v. Laird, Wyo., 597 P.2d 463 (1979); Johnson v. Soulis, Wyo., 542 P.2d 867 (1975). According to our holdings a fact is material if proof with respect to it would have the effect of establishing or refuting one of the essential elements of a cause of action or a defense asserted by one of the parties. Hyatt v. Big Horn School District No. 4, supra, 636 P.2d at 528; Laird v. Laird, supra, 597 P.2d at 466; Timmons v. Reed, Wyo., 569 P.2d 112 (1977); and Johnson v. Soulis, supra, 542 P.2d at 872. The party submitting the motion for the summary judgment has the burden of establishing that there are no genuine issues of material fact and that he is entitled to judgment as a matter of law. Hyatt v. Big Horn School District No. 4, supra, 636 P.2d at 528; Weaver v. Blue Cross-Blue Shield, supra, 609 P.2d at 987; and Laird v. Laird, supra, 597 P.2d at 466. When the moving party supports his motion by affidavit as provided in Rule 56(e), W.R.C.P., ¹ and supplements the affidavits as provided in that rule, the other party may not rest upon the mere allegations or denials of his pleading. He is required to respond, by affidavit or otherwise, and he must set forth specific facts which show that there is a genuine factual issue for trial. Hyatt v. Big Horn School District No. 4, supra; Harris v. Grizzle, Wyo., 625 P.2d 747 (1981); Keller v. Anderson, Wyo., 554 P.2d 1253 (1976); and Newton v. Misner, Wyo., 423 P.2d 648 (1967).

Having followed the foregoing principles we conclude that certain facts in this case are not in dispute. The appellees, Steven Howe and his wife, Jerri, were residents of Park County, Wyoming, and they were engaged in the construction of their own home in Park County when Steven Howe accepted a job offer in Casper, Wyoming. The unfinished house was being constructed from plans obtained from Lumber Enterprises, Inc., of Bozeman, Montana. Although some trained assistance was obtained with respect to certain aspects of the construction, most of the construction work including the wiring, plumbing, and erection of the walls was done by Steven Howe, who had no previous experience in the construction trade. All work on the house was suspended when Steven Howe accepted the offer of employment in Casper, Wyoming.

At that juncture the property was listed for sale with the Pronghorn Agency, Inc., of Cody, Wyoming, which acted as the agent for the sellers until the property was sold to the appellants (the Schepps). The uncompleted house was placed on the market, that is it was listed, advertised and sold, on an "AS IS" basis. It was understood that the materials which were required to finish the construction would be furnished to any buyers as a part of the transaction. The cash asking price for this partially completed residence and the property on which it was located declined over the time between listing and sale.

The appellants first saw the home when it was shown to them by the realtor without the appellees being present. On September 6, 1979, the appellants signed an "Offer, Acceptance & Receipt (Specific Performance Contract) (Residential)" which was accepted and signed later on the same day by the appellees. The purchase price which the appellants offered was $82,500 subject to only a contingency of obtaining financing. The receipt of $500.00 as earnest money and part payment was acknowledged by the broker-agent upon execution of the offer. The parties then met for the first time on the date of closing, September 11, 1979. David Schepps, in his affidavit, asserts that on that occasion he was assured by Steven Howe that the house had been built by qualified contractors and was complete structurally except for some finish work. In addition the appellants state by way of affidavit that they were assured that the cost of finishing the house according to a written estimate was less than $6,000; that the house complied with the building and electrical codes and had passed inspection by a qualified inspector; and that the electrical and plumbing work had been done by competent professionals. Not long after they took possession the appellants began to experience problems with the home. A portion of the roof blew off. They then had the property inspected by a licensed building contractor, and the inspector informed the appellants that the building would not pass the state building code inspection. He also advised them that the state electrical inspector should be called to examine the house. In making a subsequent inspection the electrical inspector noted 52 violations of the state electrical code, and that inspector also advised the appellants not to use the heating system in the house until it had been corrected because of the possibility of a fire. The plumbing in the house collapsed and had to be completely redone. Numerous other problems arose as a result of the poor construction of the home, all of which required correction at great expense to the appellants.

The appellants began this present action on February 10, 1981. The appellees answered and affirmatively alleged a counterclaim for malicious prosecution. The answer generally denied the allegations of the appellants' complaint, and following discovery the appellees moved for summary judgment pursuant to Rule 56, W.R.C.P. Summary judgment was granted by the district court on January 22, 1982. The summary judgment did not treat with the counterclaim for malicious prosecution, however, and when the case first was...