Opinion ID: 1372809
Heading Depth: 2
Heading Rank: 1

Heading: mere lender

Text: The Court of Appeals held that First Union was a mere lender as a matter of law and therefore did not impliedly warrant the habitability of the house purchased by the Kirkmans. We disagree. It is clear that First Union was not a developer; that it was not in a joint venture with Miller Housing; and that it was not amalgamated with Miller Housing. It is equally clear, however, that First Union foreclosed before construction was complete, took title to the property, and sold the house to the Kirkmans. Contrary to the opinion of the Court of Appeals, there remains a genuine issue of material fact whether First Union was substantially involved in completing the construction. As stated above, there is evidence in the record that First Union's contractor finished the heating and air systems and all of the hardwood floors; sub-contracted out plumbing work; installed light fixtures and appliances; fixed the sheetrock walls; and painted some or all of the interior of the house. The Court of Appeals focused on the Kirkmans' suggestion that the forty to fifty thousand dollars which First Union paid to complete the house was a substantial portion of the roughly two hundred and forty thousand dollars that constituted the total construction cost. The court opined that the Kirkmans were arguing that substantial involvement was to be determined solely by a mathematical approach. Kirkman, 356 S.C. at 530-31, 590 S.E.2d at 39. That is not the Kirkmans' argument. They raise First Union's expenditure only to emphasize their thesis that all of the work performed by First Union's contractor over the course of two months was a substantial portion of the total work. In addition, the Court of Appeals improperly relied on Roundtree Villas and the fact that First Union was not involved in the installation of the [allegedly defective] stucco siding. Kirkman, 356 S.C. at 531, 590 S.E.2d at 39. As mentioned above in note 2, in Roundtree Villas we held that a lender could be liable for faulty construction with respect to those parts of the house on which it worked, but we specifically held that such liability would lie in tort, not contract. See 282 S.C. at 423, 321 S.E.2d at 50-51. There was an issue in Roundtree Villas concerning a lender's warranty liability, but our discussion of it was very brief. We found that none of the defendants warranted the habitability of the house because none was a seller of the house. Id. at 423, 321 S.E.2d at 51; see also Kennedy, 299 S.C. at 340, 384 S.E.2d at 734 (discussing the limited warranty holding in Roundtree Villas ). In sum, there remains a genuine issue of material fact whether First Union was substantially involved in completing the house. If it was, then it impliedly warranted the habitability of the house, unless it effectively disclaimed the warranty.