Opinion ID: 1713516
Heading Depth: 1
Heading Rank: 8

Heading: Count III in Negligence Was Properly Dismissed.

Text: Appellants claim that the district court erred when it dismissed the negligence count, count III, asserted against all appellees. Appellants contend on appeal, as they did in district court, that the law ought to impose on all appellees a duty of care in favor of subsequent owners such as appellants. Appellees claim that the district court was correct when it concluded that, notwithstanding appellants' characterization of count III as a cause of action in negligence, the duties alleged therein stemmed from the underlying contract between the contractor and the original owners such that count III failed to allege a legal duty owed to subsequent owners and thus failed to state a negligence cause of action. We agree with the district court that the complaint does not state a cause of action in negligence in favor of appellants. In urging this court to conclude that a cause of action in negligence exists as against each appellee, appellants focus primarily on foreseeability. Appellants argue that the risk of harm to subsequent owners was clearly foreseeable, thus giving rise to a case in negligence. Appellants refer us to cases such as Keyes v. Guy Bailey Homes, Inc., 439 So.2d 670 (Miss. 1983), in which it was held, inter alia, that a builder of a home could be liable in negligence to a second or subsequent purchaser and that it was not necessary that privity exist between the builder and subsequent owner. See, similarly, Terlinde v. Neely, 275 S.C. 395, 271 S.E.2d 768 (1980) (stating that subsequent owners are members of class for whom home was constructed, that they are entitled to duty of care in construction, and that key inquiry is foreseeability). Appellees direct us to contrary authority such as Foxcroft Townhome Owners v. Hoffman Rosner, 105 Ill.App.3d 951, 957, 435 N.E.2d 210, 215, 61 Ill.Dec. 721, 726 (1982), in which the court rejected a purported general duty as nebulous and held that subsequent purchasers could not recover for damages from the builder under a negligence theory. See, similarly, Redarowicz v. Ohlendorf, 92 Ill.2d 171, 441 N.E.2d 324, 65 Ill.Dec. 411 (1982) (stating in action by subsequent owner against builder that economic losses not recoverable under negligence theory). See, also, Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo.1983) (Rovira, J., dissenting) (in action by subsequent owner against builder, dissent rejecting action based on negligence because no legal duty owed subsequent purchaser). Whether a legal duty in negligence exists is a question of law. Richards v. Meeske, 268 Neb. 901, 689 N.W.2d 337 (2004). Appellants propose that we establish a legal duty; that is, appellants suggest we declare that a tort duty exists in favor of subsequent owners based upon the builder's contractual undertaking to build a house. The legal duty appellants propose is not an inevitable consequence of the contract between the builder and the original owners. That no such legal duty is inevitable is apparent from a comparison of the concepts of contractual duty and tort duty. The difference between the two has been described by Prosser as follows: The fundamental difference between tort and contract lies in the nature of the interests protected. Tort actions are created to protect the interest in freedom from various kinds of harm. The duties of conduct which give rise to them are imposed by the law, and are based primarily upon social policy, and not necessarily upon the will or intention of the parties. They may be owed to all those within the range of harm, or to some considerable class of people. Contract actions are created to protect the interest in having promises performed. Contract obligations are imposed because of conduct of the parties manifesting consent, and are owed only to the specific individuals named in the contract. William L. Prosser, Handbook of the Law of Torts § 92 at 613 (4th ed.1971). In analyzing appellants' argument, it is important to distinguish between the question of to whom a duty is owed upon which appellants focus and the question of what duty is owed. We have repeatedly said that in negligence cases, the duty is always the same, to conform to the legal standard of reasonable conduct in light of the apparent risk. Cerny v. Cedar Bluffs Jr./Sr. Pub. Sch., 262 Neb. 66, 628 N.W.2d 697 (2001). We have stated: In determining whether a duty exists, [an appellate] court employs a risk-utility test, considering (1) the magnitude of the risk, (2) the relationship of the parties, (3) the nature of the attendant risk, (4) the opportunity and ability to exercise care, (5) the foreseeability of the harm, and (6) the policy interest in the proposed solution. Fuhrman v. State, 265 Neb. 176, 183-84, 655 N.W.2d 866, 873 (2003). Because this case was decided on a motion to dismiss, we refer to the complaint to determine the duties of the parties. We have stated: In order to decide the form of redress, whether contract or tort, it is necessary to know the source or origin of the duty or the nature of the grievance. Attention must be given to the cause of the complaint; in other words, the character of the action must be determined from what is asserted concerning it in the petition in the cause. Fuchs v. Parsons Constr. Co., 166 Neb. 188, 192, 88 N.W.2d 648, 651 (1958). With the exception of the duty based on city building codes discussed below, it is clear from the complaint that appellants seek to benefit from and establish a duty based on the original owners' contractual arrangement with the contractor. The duty appellants seek to establish cannot be made without reference to the contract, and such duties do not exist independent of the contract. Although we have found that a negligence cause of action will lie between the original owner and builder flowing from their contract, Mondelli v. Kendel Homes Corp., 262 Neb. 263, 631 N.W.2d 846 (2001), we decline to extend and impose a legal duty on appellees in favor of subsequent homeowners stemming from the contract between the original homeowners and the contractor. With respect to appellants' allegation that the defects violated Omaha building codes, we agree with appellants that building codes create a legal duty, thus giving rise to a potential negligence claim. See Mondelli, supra (discussing negligence action based on violation of construction building code brought by original owners against city). Assuming for analysis that the failure to construct the house according to code is a breach of a legal duty giving rise to a potential negligence claim, a review of the complaint shows that due to the accepted work doctrine discussed below, the claim does not benefit appellants. We review the complaint to ascertain the facts underlying our analysis, accepting all the allegations in the complaint as true and drawing all reasonable inferences in favor of appellants. The complaint shows that appellants were not the original owners or occupiers of the house. The complaint alleges that the defects existed in January 1997, but that appellants did not purchase the house from the original owners until August 2001. The original owners thus accepted the house. The complaint does not allege that appellants had an inspection performed prior to purchasing the house. The complaint does not allege that appellants protected themselves by express agreement in the deed or contract for sale by taking an assignment of the rights which the original owners may have had. See Lee v. Clark and Associates Real Estate, Inc., 512 So.2d 42 (Ala.1987) (declining to find action based on negligence in favor of subsequent purchasers and suggesting that subsequent purchasers can protect themselves by express agreement in deed or contract for sale). Appellees refer us to and appellants concede that Nebraska applies the accepted work doctrine in construction cases. See, Dvorak v. Bunge Corp., 256 Neb. 341, 590 N.W.2d 682 (1999); Parker v. Lancaster Cty. Sch. Dist. No. 001, 254 Neb. 754, 579 N.W.2d 526 (1998). We stated in Parker: The general rule is that a construction contractor is not liable for injuries or damage to a third person with whom he is not in contractual relation resulting from the negligent performance of his duty under his contract with the contractee where the injury or damage is sustained after the work is completed and accepted by the owner. Delicious Foods Co. v. Millard Warehouse, 244 Neb. 449, 507 N.W.2d 631 (1993); Erickson v. Monarch Indus., 216 Neb. 875, 347 N.W.2d 99 (1984); Stover v. Ed Miller & Sons, Inc., 194 Neb. 422, 231 N.W.2d 700 (1975). 254 Neb. at 757, 579 N.W.2d at 528. We have also stated: This court has recognized an exception to the accepted work doctrine in situations where the parties dealt with inherently dangerous elements or the defect at issue was latent and could not have been discovered by the owners or employer. Id. The roofing defects and drainage defects alleged in the complaint are not inherently dangerous. Compare Dvorak, supra (stating that installation of high voltage wiring through conduit and connection of such wiring were inherently dangerous). Furthermore, although the complaint states that the defects were not reasonably discoverable by appellants, this allegation does not satisfy the exception to the accepted work doctrine that the defect could not have been discovered. See Parker, 254 Neb. at 757, 579 N.W.2d at 528. To the contrary, the complaint alleges, inter alia, that the roofing defects were noted in December 2002 when appellants engaged a home inspector to inspect for insurance purposes. Even drawing all reasonable inferences in favor of appellants, it cannot be said that the defects could not have been discovered when the house was accepted by the original owners, and, therefore, appellants cannot benefit from the exceptions to the accepted work doctrine. To summarize, count III fails to state a cause of action in negligence. There are no allegations which would impose a legal duty on any appellee in favor of appellants, and to the extent a legal duty based on building code violations is alleged, the accepted work doctrine precludes the cause of action based in negligence. Count III in negligence was properly dismissed.