Vaughn Bldg. Corp. v. Austin Co.

• Decision Date: 22 May 1981
• Docket Number: No. 20450,20450
• Citation: 620 S.W.2d 678
• Parties: VAUGHN BUILDING CORPORATION, Appellant, v. The AUSTIN COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 678

620 S.W.2d 678

VAUGHN BUILDING CORPORATION, Appellant, v. The AUSTIN COMPANY, Appellee.

No. 20450.

Court of Civil Appeals of Texas, Dallas.

May 22, 1981.

Rehearing Denied July 1, 1981.

James V. Hammett, Jr., J. Stockton Williams, Jr., Stubbeman, McRae, Sealy, Laughlin & Browder, Austin, for appellant.

Earl Luna, Luna, Murto & Vorpahl, Dallas, for appellee.

Before GUITTARD, C. J., and AKIN and ROBERTSON, JJ.

GUITTARD, Chief Justice.

Vaughn Building Corporation sued The Austin Company for breach of express and implied warranties in a contract to construct a commercial building. The breach of express warranty alleged was Austin's failure to repair the roof after written notice, and the breach of implied warranty alleged was the unfitness of the roof for its particular purpose in that it failed to prevent water and the elements from coming inside the building. The trial court disregarded jury findings favorable to Vaughn and rendered judgment denying recovery. We hold that the verdict is supported by the evidence and that it is sufficient to support a judgment for breach of implied warranty. We also hold that the suit is not barred by limitation because Vaughn was effectively made a party plaintiff within four years after the date that the jury found an ordinary prudent person should have discovered that the roof was defective. Accordingly, we reverse and render judgment for Vaughn on the verdict without deciding whether Vaughn is entitled to recovery for breach of the express warranty.

1. Exclusion of Implied Warranty by Express Warranty

Austin seeks to support the judgment on the ground that the express warranty in the contract is exclusive and that the suit was not brought within four years after Vaughn's cause of action for breach of the express warranty arose. The contract provides for a roof of "aggregate surfaced built-up asphalt water-proofing installed in accordance with the manufacturer's specifications for a 20-year bondable type roof."

Austin contends that the intentions of the parties to exclude any implied warranty is shown by the specification of a "20-bondable type roof" and by evidence that Vaughn chose not to pay the premium for a bond to insure the roof. Austin also cites Watel v. Richman, 576 S.W.2d 779 (Tex.1978), in which the supreme court declined to approve the holding in Richman v. Watel, 565 S.W.2d 101, 102 (Tex.Civ.App. Waco 1978, writ ref'd n. r. e.) that an express warranty for a limited time does not exclude an implied warranty that otherwise would have continued for a longer period. No authority, however, is cited in support of Austin's contention that an express warranty without an express disclaimer of implied warranties is effective to exclude any implied warranty that would otherwise arise.

The express warranty here does not by its terms limit or exclude the implied warranty of fitness. Austin has not called to our attention any contractual provision to the effect that no warranties are made other than those expressly provided. We hold that a provision for an express warranty, without any disclaimer of implied warranties, does not limit or exclude the implied warranty of fitness for the particular purpose. Belt v. Spencer, 41 Colo.App. 227, 585 P.2d 922 (Ct.App.1978); Rapallo South, Inc. v. Jack Taylor Development Corp., 375 So.2d 587 (Fla.Dist.Ct.App.1979); Sallinger v. Mayer, 304 So.2d 730, 732 (La.Ct.App.1974); Griffin v. Wheeler-Leonard & Co., 290 N.C. 185, 225 S.E.2d 557 (Ct.App.1976); cf. MacDonald v. Mobley, 555 S.W.2d 916, 919 (Tex.Civ.App. Austin 1977, writ ref'd n. r. e.) (exclusion or modification of implied warranty must be conspicuous); Foremost Mobile Homes Mfg. Co. v. Steele, 506 S.W.2d 646, 647-48 (Tex.Civ.App. Fort Worth 1974, no writ) (express warranty purporting to be in lieu of all other warranties treated as nullity). Neither does proof that Vaughn chose not to pay for insurance exclude any implied warranties that would otherwise arise from the contract.

Moreover, we conclude that Austin's attempt to limit Vaughn's rights to the express warranty is contrary in principle to the decision of the supreme court in City of Midland v. Waller, 430 S.W.2d 473 (Tex.1968). In that case a contract for construction of a swimming pool contained a one-year express warranty similar to the warranty in the present contract. The city sued for damages resulting from defects discovered twenty months after acceptance. No claim was made for breach of the one-year express warranty, and the contractor obtained a summary judgment on the ground that the architect's certificate of completion barred recovery for the defects alleged. This judgment was affirmed by the court of civil appeals in City of Midland v. Waller, 418 S.W.2d 915 (El Paso 1967), but the supreme court reversed, holding that latent defects becoming evident after the one-year warranty period and which could not have been discovered by the exercise of ordinary care may be made the basis of a suit for damages on account of such defects. 430 S.W.2d at 478. Although the suit was not brought on an implied warranty theory, as is the present case, we see no basis for a distinction. Here, the jury found that the defects in the roof should have been discovered on November 29, 1972, more than two years after expiration of the one-year period. Without disregarding this finding, a holding that Vaughn's claim is limited by the one-year warranty provision would be inconsistent with City of Midland. Accordingly, we must consider Austin's contention that the trial court properly disregarded this finding because there is no evidence and, in the alternative, insufficient evidence to support it.

We conclude that there is evidence supporting the finding that a person of ordinary prudence should have discovered the defect on November 29, 1972. Although leaks had begun within the first year after acceptance of the building on January 7, 1969, and a written notice of such leaks was given on January 19, 1970, Austin had attempted to repair those leaks. Later, according to the evidence, repeated complaints of leaks were made, to which Austin responded by making repairs which appeared for a time to be successful. Other leaks developed at different locations, which Austin also repaired. Austin's employees represented that locating the leaks was difficult and repeatedly stated that most of the leaks were caused by poor maintenance rather than by defective construction. The leakage became more severe until late in 1972, when Vaughn decided that something had to be done. On November 29, 1972 (the day the jury found an ordinary prudent person should have discovered the leaks), the parties met, examined the roof, and discovered extensive bubbles in the roofing material. In 1974 Vaughn employed a roofing expert to determine the cause of the problems and a method of resolving them. This expert testified that the roof had certain defects resulting from improper installation of roofing materials, but that leakage in itself did not necessarily indicate a defect in construction.

In the light of this evidence, we are unable to say that the occurrence of leaks, which Austin repaired from time to time, establishes as a matter of law that an ordinary prudent person should have discovered the defects in the roof before November 29, 1972. Consequently, we hold that there is at least some evidence to support the jury's finding, and, consequently, that the one-year limitation period provided by the contract cannot be applied in view of City of Midland. We cannot consider Austin's contention that the evidence is factually insufficient to support that finding because judgment notwithholding the verdict cannot properly be rendered on that ground. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965); Southwestern Bell Telephone Co. v. Ramsey, 542 S.W.2d 467, 474 (Tex.Civ.App. Tyler 1976, no writ); Steubing v. Munson, 487 S.W.2d 853, 855-56 (Tex.Civ.App. Eastland 1972, writ ref'd n. r. e.).

2. Accrual of Cause of Action

Since we hold that Vaughn's cause of action for implied warranty is not barred by the provisions of the contract, we must consider whether it is barred by limitation. In this contention we must determine both when the limitation period began to run and when the running of limitation was interrupted by commencement of the suit for the benefit of Vaughn. The rule is well established in Texas that a cause of action for breach of implied warranty does not arise until the buyer discovers or should have discovered the injury. Metal Structures Corp. v. Plains Textiles, Inc., 470 S.W.2d 93, 99 (Tex.Civ.App. Amarillo 1971, writ ref'd n. r. e.); Summers v. Bransford-Hinds Building Co., 383 S.W.2d 947, 948-50 (Tex.Civ.App. Eastland 1964, writ ref'd n. r. e.); Pruetex Lemon Juice, Inc. v. S. Riekes & Sons, 351 S.W.2d 119, 122-23 (Tex.Civ.App. San Antonio 1961, writ ref'd n. r. e.). Austin contends that these decisions are not authoritative because they erroneously apply the two-year statute of limitation to implied warranty cases, rather than the four-year statute, which was held applicable in Certain-Teed Products Corp. v. Bell, 422 S.W.2d 719, 721 (Tex.1968). As we read Certain-Teed, it holds that the four-year statute applies to implied warranties arising out of written contracts. The cases cited do not pass on which statute applies, but rather on when the cause of action accrues. On that question they appear to be authoritative.

Austin contends that a contrary rule is established by City of Midland v. Waller, 430 S.W.2d 473 (Tex.1968), which has already been discussed. That opinion, as we read it, does not decide the question of when the cause of action accrued because that question was not raised. The court held that the suit was not barred because the four-year statute of limitation, rather than the one-year warranty provision, applied to a claim for defects which could not have been discovered by the exercise of ordinary care within...