Woodward v. Chirco Const. Co., Inc.

• Court: Arizona Supreme Court
• Writing for the Court: GORDON; HOLOHAN
• Citation: Woodward v. Chirco Const. Co., Inc., 687 P.2d 1269, 141 Ariz. 514 (Ariz. 1984)
• Decision Date: 18 September 1984
• Docket Number: No. 17420-PR,17420-PR
• Parties: Seabrook W. WOODWARD, Jr., and Susan Woodward, husband and wife, Plaintiffs/Appellants, v. CHIRCO CONSTRUCTION CO., INC., an Arizona corporation, Defendant/Appellee.

Page 1269

687 P.2d 1269

141 Ariz. 514

Seabrook W. WOODWARD, Jr., and Susan Woodward, husband and wife, Plaintiffs/Appellants, v. CHIRCO CONSTRUCTION CO., INC., an Arizona corporation, Defendant/Appellee.

No. 17420-PR.

Supreme Court of Arizona In Banc.

Sept. 18, 1984.

Philip Jones, Tucson, for plaintiffs/appellants.

Bury & Moeller by David C. Bury, Tucson, for defendant/appellee.

GORDON, Vice Chief Justice:

On March 1, 1971, plaintiffs-appellants Seabrook and Susan Woodward entered into a contract with defendant-appellee Chirco Construction Co., Inc. for the construction and purchase of a residence. The closing occurred on April 23, 1971. During the first year of occupancy, the Woodwards noticed cracking in the outer walls, misalignment of doors, and warping of floor tile. Chirco repaired these items in June of 1972.

In December of 1974, the Woodwards discovered a large crack in the concrete slab beneath the tile floor in the foyer of the residence. The crack was one inch wide in places and ran from the northern end to the southern end of the home. One could touch the soil beneath the house by placing a coat hanger in the crack. Thereafter, additional cracks formed, the fireplace separated from the wall, the wall in the family room shifted forward, the kitchen ceiling began to bow, and the floor warped. Though Chirco reinforced the foundation on each side of the home in 1975, the damage continued. Chirco made no further attempts to repair.

In May of 1976, the Woodwards sued Chirco. They claimed Chirco had been negligent in failing to perform a soil analysis prior to construction and that Chirco had breached its implied warranty of workmanlike performance and habitability. Both claims were dismissed by the trial court. The Court of Appeals affirmed dismissal of the negligence claim but reversed with respect to the claim based on the implied warranty. It held that dismissal of the implied warranty claim was improper because it was an action for debt founded upon a contract in writing and the six-year statute of limitation of A.R.S. § 12-548 had not expired. Woodward v. Chirco Construction Co., 141 Ariz. 520, 687 P.2d 1275 (1984). We accepted review of this case to expressly approve the Court of Appeals' legal reasoning and to address Chirco's claim that the Court of Appeals' decision is at odds with our decision in Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 678 P.2d 427 (1984).

In Richards, we held that the implied warranty of habitability and workmanlike performance "is imposed by law." 139 Ariz. at 244, 678 P.2d at 429. Chirco argues that because the warranty is imposed by law, it does not arise out of the contract for purchase of the residence and that even if it did arise out of the contract it creates a cause of action in tort only. Chirco urges this Court to adopt the reasoning of Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 378-79, 433 N.E.2d 147, 150 (1982), in which the court held:

"The obligation to perform in a workmanlike manner using ordinary care may arise from or out of a contract, i.e., from the purchase agreement, but the cause of action is not based on contract; rather it is based on a duty imposed by law." (Emphasis in original.)

We decline to do so. Instead, we agree with those jurisdictions that have held that injury incurred due to negligent construction of a residence may give rise to an action for breach of the implied warranty of workmanlike performance and habitability and an action for breach of the contractor's common law duty of care. Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo.1983); Cline v. Sawyer, 600 P.2d 725 (Wyo.1979), appeal after remand, 618 P.2d 144 (1980); Tavares v. Horstman, 542 P.2d 1275 (Wyo.1975). See McFeeters v. Renollet, 210 Kan. 158, 500 P.2d 47 (1972); Gilley v. Farmer, 207 Kan. 536, 485 P.2d 1284 [141 Ariz. 516] (1971); Ferguson v. Town Pump, Inc., 177 Mont. 122, 580 P.2d 915 (1978). We believe this view fosters the policy considerations behind recognition of the warranty as discussed in Columbia Western Corp. v. Vela, 122 Ariz. 28, 592 P.2d 1294 (App.1979) and Richards, supra. We see no reason to preclude a purchaser from claiming damages in contract and in tort. The purchaser of a home can seek to recover in contract for defects in the structure itself as such defects render the home less than the purchaser bargained for. See Duncan v. Schuster-Graham Homes, Inc., 194 Colo. 441, 446, 578 P.2d 637, 640 (1978) ("[W]here the plaintiff seeks only to receive what the builder promised to deliver, or damages to compensate him for [structural] deficiencies in the final product, [the action] arises from the contract of sale between the parties and is basically contractual in nature."). The purchaser can also seek to recover in tort for injuries sustained due to the contractor's failure to construct the home as a...