Stewart v. Bradley

• Decision Date: 14 November 2008
• Docket Number: 2070575.,2070574.
• Citation: 15 So.3d 533
• Parties: Randall STEWART v. James BRADLEY and Mary Bradley. Larry Morgan v. James Bradley and Mary Bradley.
• Court: Alabama Court of Civil Appeals

15 So.3d 533

Randall STEWART v. James BRADLEY and Mary Bradley.

Larry Morgan v. James Bradley and Mary Bradley.

2070574.

2070575.

Court of Civil Appeals of Alabama.

November 14, 2008.

Certiorari Denied February 6, 2009 Alabama Supreme Court 1080275.

James A. Kee, Jr., and Angela Collier Shields of Kee & Selby, LLP, Birmingham, for appellant Randall Stewart.

Joseph H. Driver and Kathy R. Davis of Carr, Allison, Pugh, Howard, Oliver & Sisson, P.C., Birmingham, for appellant Larry Morgan.

W. Brian Collins, Birmingham; and H. Arthur Edge III, Birmingham, for appellees.

MOORE, Judge.

Randall Stewart and Larry Morgan appeal separately from a judgment entered on a jury's verdict in favor of James Bradley and Mary Bradley. We reverse and remand for a new trial.

Procedural History

On May 6, 2003, James Bradley and Mary Bradley sued Randall Stewart and Larry Morgan seeking damages arising from the alleged negligent construction of their house. In their complaint, the Bradleys asserted claims of negligent failure to warn, negligent installation and construction, negligent supervision, misrepresentation, suppression, breach of implied warranty of habitability, breach of contract, and "third party beneficiary."

The trial court entered summary judgments in favor of Stewart and Morgan as to all claims asserted against them except the claims asserting negligent installation and construction, negligent supervision, and breach of contract. The case was tried before a jury on August 13, 2007. At the conclusion of the Bradleys' case, Stewart and Morgan filed separate motions for a judgment as a matter of law. Both Stewart and Morgan again moved for a judgment as a matter of law at the conclusion of all the evidence.

The jury rendered a verdict in favor of the Bradleys. On September 12, 2007, the trial court entered a judgment on the jury's verdict, awarding the Bradleys damages in the amount of $200,000. Morgan and Stewart filed separate postjudgment motions for a judgment as a matter of law or, in the alternative, motions for a new trial. Those motions were denied by operation of law on December 17, 2007. See Rule 59, Ala. R. Civ. P. On January 23, 2008, Stewart and Morgan each appealed to the Alabama Supreme Court; that court transferred the appeals to this court, pursuant to § 12-2-7(6), Ala.Code 1975. We have consolidated the appeals.

On appeal, both Stewart and Morgan challenge the denial of their motions for a judgment as a matter of law and the trial court's refusal to give certain of their requested jury charges. Stewart and Morgan also challenge the denial of their motions for a new trial.

Factual History

Stewart and Morgan are licensed home builders. In 2001, they collaborated on a "spec" house on Funderburg Bend Road. On June 19, 2001, the Bradleys entered into a "Sales Contract" with Stewart and Morgan in which the Bradleys agreed to purchase the house.

On June 29, 2001, the parties attended a real-estate closing regarding the property. At that closing, the Bradleys executed a document entitled "Limited Warranty Agreement," which provided, in part:

"1. Warranty Period. The Seller does hereby provide to the Buyer this Limited Warranty Agreement on the Dwelling for a period of one year (the `Limited Warranty Period') beginning on the date of conveyance of title to the Buyer or the date of initial occupancy of the Dwelling, whichever occurs first (the `Limited Warranty Commencement Date'), and the Buyer does hereby agree to the terms of this Limited Warranty Agreement and further agrees to accept this Limited Warranty Agreement as the only warranty given, in lieu of all other warranties of any kind, expressed or implied, with respect to the construction of the Dwelling and the sale thereof to the Buyer. The Limited Warranty Period has been negotiated between the Seller and the Buyer as a part of the negotiation of the terms and provisions of the Contract.

"2. Limited Warranty. The Seller hereby warrants to the Buyer that, for and during the Limited Warranty Period, the Dwelling will be free from Latent Defects, as hereinafter defined. If a latent Defect occurs in an item which is covered by this Limited Warranty Agreement, the Seller will repair, replace, or pay to the Buyer the reasonable cost of repairing or replacing, any such item. The Seller shall in its sole discretion determine whether to repair, replace or pay the reasonable cost of repairing or replacing any such item. THE LIABILITY OF THE SELLER IS STRICTLY LIMITED TO THE OBLIGATION TO REPAIR, REPLACE OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING, ANY SUCH ITEM, AND ANY RIGHT THAT THE BUYER MIGHT HAVE TO RECOVER ANY OTHER OR ADDITIONAL DAMAGES IS HEREBY WAIVED AND EXCLUDED. THE BUYER ACKNOWLEDGES THAT THE SOLE REMEDY AVAILABLE TO THE BUYER HEREUNDER IS THE RIGHT TO REQUIRE THE SELLER TO REPAIR, REPLACE OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING ANY SUCH ITEM. Steps taken by the Seller to correct any Latent Defect under this Limited Warranty Agreement shall not extend the Limited Warranty Period.

"....

"4. LIMITATION UPON LIABILITY. THE SOLE REMEDY AVAILABLE TO THE BUYER UNDER THIS LIMITED WARRANTY AGREEMENT IS THE RIGHT TO REQUIRE THE SELLER TO REPAIR, REPLACE OR PAY THE REASONABLE COST OF REPAIRING OR REPLACING LATENT DEFECTS, AS HEREIN DEFINED, IN THE DWELLING. THE SELLER'S TOTAL LIABILITY UNDER THIS LIMITED WARRANTY AGREEMENT SHALL NOT EXCEED THE ORIGINAL PURCHASE PRICE PAID TO THE SELLER UNDER THE CONTRACT, LESS THE VALUE OF THE REAL PROPERTY UPON WHICH THE DWELLING IS LOCATED. THIS LIMITED WARRANTY AGREEMENT DOES NOT EXTEND TO OR INCLUDE LIABILITY FOR INDIRECT OR CONSEQUENTIAL DAMAGES.

"....

"9. Opportunity to Perform. Prior to filing any action under this Limited Warranty Agreement, the Buyer must give to the Seller reasonable notice of and a reasonable opportunity to repair, replace or pay the reasonable cost of repairing or replacing any Latent Defect covered hereunder.

"....

"13. Notice to the Seller. The Buyer shall notify the Seller in writing before the expiration of the Limited Warranty Period of any defect covered by this warranty.... FAILURE OF THE BUYER TO GIVE SUCH WRITTEN NOTICE TO THE SELLER BEFORE THE EXPIRATION OF THE LIMITED WARRANTY PERIOD SHALL BAR ANY RIGHT TO RECOVERY BY THE BUYER PURSUANT TO THIS LIMITED WARRANTY.

"....

"15. WAIVER OF WARRANTIES AND CLAIMS. EXCEPT AS TO ANY VA/FHA WARRANTY DELIVERED TO THE BUYER AT CLOSING, IF ANY, THIS LIMITED WARRANTY AGREEMENT IS GIVEN IN LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, HABITABILITY AND WORKMANSHIP, AND IS ALSO IN LIEU OF ANY CLAIMS FOR CONSEQUENTIAL DAMAGES, MENTAL ANGUISH OR DISTRESS, AND FOR DAMAGES BASED UPON NEGLIGENCE, FRAUD OR MISREPRESENTATION, AND THE BUYER HEREBY EXPRESSLY WAIVES AND DISCLAIMS ANY SUCH WARRANTIES AND CLAIMS WITH RESPECT TO BOTH THE DWELLING AND THE REAL PROPERTY UPON WHICH THE DWELLING HAS BEEN CONSTRUCTED."

(Capitalization and underlining in original.)

According to the Bradleys, they moved into the house in the fall of 2001 and they immediately had problems with the house. It is undisputed that the Bradleys contacted Stewart and Morgan complaining of problems with the house during the fall of 2001. Stewart and Morgan described Mary Bradley's initial complaint as involving only "punch list" items. However, Mary described her initial complaints as involving, among other things, cracking, loose molding, and unlevel floors. Mary testified as to her communications with Stewart and Morgan concerning problems with the house:

"I'll go back to the start of it. When it first cracked and the molding around the door started coming loose, I called them out and I asked them why because we had moved furniture in the house and it had got it off level [sic]. They patched it up. They done some painting, stuff like that. The next time I had to call them out there, the children was running across the floors and the dishes trying to fall out and all that unlevel [sic]. The center beam was off.... [and] the floors was falling through. I had to take two screws and screw my curio up to the wall to level it up."

James Bradley testified that, after moving in, he noticed that

"just that everything that you walked around, everything when you put all the furniture in there and got weight on it, it would rattle as you walked through there and everything.... The floors wasn't level.... The water coming off the hill and ran up underneath the house when you got real rainy season, muddy.... I liked the house except for it not being level."

James testified that he telephoned either Stewart or Morgan and that "[t]hey told me that wasn't nothing the matter with it. They would send somebody out there and level it up the best they could. Even after they did that, the thing was still way out of level."

James testified that Stewart and Morgan came back "again and again" and that he thought that "they sent somebody out there just about all the time to look at it every time you would say something about it but they never did fix it." Mary acknowledged that, after her contacts with Stewart and Morgan in the fall of 2001, her next contact with them had occurred in December 2002. It is undisputed that Stewart and Morgan talked with the Bradleys in January 2003 about their complaints.

On February 5, 2003, Mary wrote to Stewart and Morgan, again setting out her complaints about the house. Later in February 2003, after receiving Mary's letter, Stewart and Morgan went to the Bradleys' house to make additional repairs; they were accompanied by a representative of the manufacturer of the engineered floor system. According to Stewart and Morgan, they had been prepared to undertake whatever repairs were necessary at the house but they were specifically prepared to work on the foundation, the floor system, and the regrading of the lot....