Thorn v. Caskey
| Decision Date | 22 September 1999 |
| Docket Number | No. 32,310-CA.,32,310-CA. |
| Citation | 745 So.2d 653 |
| Parties | Robert Durward THORN and Sharon Cathey Thorn, Plaintiffs-Appellees, v. Huey CASKEY, d/b/a Caskey Home Builders, Defendant-Appellant, and The Ohio Casualty Insurance Co., Defendant-Appellee. |
| Court | Court of Appeal of Louisiana — District of US |
Eskridge E. Smith, Jr., A Law Corporation by Eskridge E. Smith, Jr., Linda S. Blackman, Bossier City, Counsel for Defendant/Appellant, Huey Caskey, d/b/a Caskey Home Builders.
James D. Hall, Bossier City, Counsel for Plaintiffs/Appellees, Robert Durward Thorn and Sharon Cathey Thorn.
Before NORRIS, GASKINS & PEATROSS, JJ.
This appeal arises from Huey Caskey's, Defendant's ("Caskey"), failure to complete the construction of Plaintiffs', Robert Durward Thorn's and Sharon Cathey Thorn's ("the Thorns"), home according to a turn-key contract ("the Contract") entered into by the parties. Additionally, the Thorns alleged several defects in the home resulting from Caskey's failure to comply with the specifications of the Contract and applicable building codes. The Thorns also sued The Ohio Casualty Insurance Company ("Ohio Casualty") under the general liability policy issued by it to Caskey. The trial court awarded damages to the Thorns in the amount of $37,887.89, together with attorney fees in the amount of $7,500. The trial court also found that any claims for bodily injury were not recoverable under La. R.S. 9:3141, et seq, the New Home Warranty Act ("NHWA"), and were, therefore, denied. The claims against Ohio Casualty were dismissed, with the trial court's finding of no coverage under the general liability policy.
Caskey appeals the judgment of the trial court with regard to its award of damages to the Thorns, asserting the following five assignments of error: (1) the trial court erroneously concluded that, pursuant to the NHWA, proper notice and opportunity to repair were provided to Caskey; (2) the trial court erroneously found that Caskey did not timely or reasonably make an offer to complete the construction of the home; (3) the trial court erroneously found that the Thorns established by a preponderance of the evidence that there were defects caused by failure to follow applicable building standards; (4) the trial court erroneously found that the Thorns met their burden of proving by a preponderance of the evidence that damages were incurred as a result of Caskey's alleged breach of contract or warranty; and (5) the trial court erroneously awarded excessive damages, failing to consider the Thorns' duty to mitigate their damages and the improvements, additions and expenses incurred which exceeded the allowed specifications and description of materials and agreed-upon changes. The Thorns appeal the portion of the judgment which dismissed their claim against Ohio Casualty. For the reasons stated herein, the judgment of the trial court is amended and, as amended, affirmed.
On February 17, 1993, the Thorns and Caskey entered into the Contract for the construction of the Thorns' home at 4112 Ashford in Benton, Louisiana.1 Pursuant to the Contract, Caskey was to provide all labor and material for completion of the home, "as specified in plans, and as agreed upon between owner and builder, with the exception of appliances," for the sum of $110,000. The Contract contained no date for completion of the project and the section of the Contract with regard to when payments would be made to Caskey was not complete. The Thorns provided Caskey with drawings and building specifications prepared by Guy Henry, an architectural engineer and a new home builder, which were incorporated into the Contract.
Construction began around June 1, 1993, and, according to the Thorns, was supposed to be completed in 90 to 100 days. Construction continued through September 1993 and Caskey received payments from the Thorns totaling approximately $66,550. Additionally, the Thorns had paid for materials and labor themselves totaling $7,276.88 which, when added to the payments made directly to Caskey, equal approximately 67 percent of the contract price.
Caskey then requested an additional payment from the Thorns. The Thorns told Caskey that they would pay him the final payment when the home was complete. Around the first part of October 1993, Caskey did not return to the construction site and refused to do any further work until he was paid. At that point, the home was 90 to 95 percent complete. After Caskey abandoned the job, the Thorns made several verbal requests of him to return and complete the house. The testimony reveals at least one call from Mr. Thorn and one from Mrs. Thorn wherein Caskey indicated that he would not return until he was given another payment.
On October 18, 1993, Mrs. Thorn, with the assistance of counsel, sent a letter by certified mail to Caskey making formal demand that he return to the site, complete the construction and correct numerous defects. Attached to the letter was a list of 33 work and repair items. In the letter, Caskey was given five days to respond to the request. Caskey received the letter on October 22, but did not respond within five days. Mrs. Thorn also notified the Bossier Parish District Attorney's office and made a written complaint to the Better Business Bureau.2 In the interim the Thorns hired Roy Hicks, an electrician was by trade, to perform certain work on the home. On November 5, a meeting was held at the Thorns' home to discuss resolution of the dispute. At this meeting, Caskey offered to complete the work, but the Thorns refused and indicated that Caskey would not be allowed to do any further work for them.
The Thorns claim that even before Caskey left the job, they had noticed numerous defects in the home which they called to Caskey's attention. The exterior walls were beginning to bow, window openings had bulges in them and the walls and doors were not square. Caskey attempted to correct the bowing walls by hammering wedges between the studs and brick rather than removing the sheetrock to correct the problem. Caskey admitted using utility fir, an inferior grade lumber, in the building process, but blamed Bolinger's Millworks for sending the wrong material. Caskey also admitted using inferior grade lumber in the exterior framing which would account for the bows in the walls. Caskey installed inferior insulation boards to the exterior of the house and constructed the framing of the ceiling joists on 24" centers rather than 16" centers which caused the house to be structurally unsound and not in compliance with FHA or VA standards. Additionally, the Southern Building Code requires that 2x8's be used in certain spans, as did the specifications for the house. Caskey used 2x6's instead of 2x8's in the ceiling joists of the upstairs bedroom. He also failed to tie the downstairs back wall of the family room to the ceiling joists which, according to the testimony of Guy Henry, is also in violation of the Southern Building Code. Finally, there was sagging in the roof due to a lack of bracing in the roof rafters in the attic.
In addition to structural problems, Caskey deviated from the specifications agreed on by the parties. The plans did not call for a sloped ceiling in the bedroom. The Thorns claim that the sloped ceiling was necessary because Caskey did not frame the bedroom and bathroom according to the specifications.
The trial court found that the NHWA was the exclusive remedy of the Thorns and, further, that the Thorns had afforded Caskey reasonable notice and opportunity to repair the defects as required by the NHWA, thereby allowing the recovery of damages as set forth below.
Calculations of the damages were as follows:
a. Payments by Thorns
to Caskey $ 66,550.00
b. Payments by Thorns
to suppliers or subcontractors $ 56,844.04
c. Subtotal $122,394.04
d. Payments to Roy Hicks $ 8,203.58
e. Estimation of repairs
by Mack Stanford $ 17,290.27
___________
f. Subtotal $148,887.89
g. Less Contract Amount $110,000.00
___________
h. Total damages3 $ 37,887.89
On the issue of insurance coverage under the Ohio Casualty policy, the trial court found in favor of Ohio Casualty. Specifically, the trial court found that since the Thorns' claims were "made under the bodily injury provisions of the policy" and since the "policy was issued to Mr. Caskey to protect him in the event any such damages arose," then the policy "does not inure to the benefit of the Thorns."
We must first address the initial finding of the trial court that the NHWA is the exclusive remedy available to the Thorns in the present matter. There is limited jurisprudence interpreting the NHWA and the issue of its exclusivity is one of first impression.4
In their petition for damages, the Thorns assert a claim pursuant to the NHWA and, alternatively, for breach of contract. In Graf v. Jim Walter Homes, Inc., 97-1143 (La.App. 1st Cir.5/15/98), 713 So.2d 682, the court declined to address the issue of whether the NHWA would exclude a new home owner from bringing a breach of contract claim given a different factual situation than was presented in that case. After careful analysis of the NHWA and in light of the facts of this particular case, we find legal error in the trial court's determination that the NHWA was the Thorns' exclusive remedy. In this particular factual situation, we find that the Thorns' breach of contract claim was valid. Section 3150 of the NHWA provides:
This Chapter provides the exclusive remedies, warranties, and prescriptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply. Nothing herein shall be...
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