Court Opinion

ID: 9632044
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:59:48.082218+00
Date Added: 2024-06-11T18:08:06.910380
License: Public Domain

SHEPARD, Chief Justice,
dissenting.
The majority of this Court continues its recent trend in creating new causes of action where none had previously existed. Today another enormous step is taken which will resound through the construction and real estate business in Idaho. An implied warranty of habitability is created between a builder of commercial buildings and persons with whom the builder had no contract or contact whatsoever until the buildings were resold approximately five years after construction. The majority also creates an implied warranty of habitability between the subsequent purchaser and a previous owner who contracted with the builder to erect the buildings. The Court further sustains a cause of action for misrepresentation between the original *53owner and the subsequent purchaser on the sole basis that the original owner allegedly made the statement that the buildings were of good quality construction. The record is absolutely silent as to either the original owner or the builder possessing any knowledge that the quality of construction was other than good. The majority opinion is based on the sole premise that the building was not of good quality because it was built on fill soil. Both the builder and the former owner hotly deny that the buildings were constructed on fill, and both testified extensively and in detail in their depositions regarding the nonexistence of fill. While there may be some factual controversy regarding a later discovery of fill material during later excavation by the subsequent purchasers, there is a total lack of evidence that the former owner or builder had any knowledge of fill conditions at the construction site.
The majority has utilized a peculiar set of factual circumstances as a vehicle to announce its new theories of law. The plaintiffs in this case, as contrasted with those in cases cited by the majority, are not unknowing buyers of a residence built by an unscrupulous builder/developer. Rather, plaintiffs are a sophisticated and knowledgeable group of investors in real estate. Fifty percent of the corporation is owned by a California investor who buys and sells real property as a business, and who owns a hospital complex.
The former owner of the property contracted with a company for the site preparation which involved the carving out of a portion of a hillside. Thereafter, the former owner contracted with the builder Coffin for the construction of three buildings, each containing two apartments on that site. Construction was completed in 1975. Thereafter, the former owner utilized the buildings as a source of rental income and experienced no problems with the property.
Plaintiff Tusch expressed an interest in purchasing the property in 1979. One of the Tusches, a licensed realtor in Pocatello, thoroughly inspected the properties, including the foundations, in which she reported observing some cracking. Thereafter that same member of the Tusch group drafted an earnest money agreement, the terms of which were later incorporated into a real estate contract. Those documents indicate that the buyer, the Tusches, had not received or relied upon any statements or representations by the seller, the Vander Boeghs. They further indicate, “[t]he purchasers have fully inspected the above-described premises and know just exactly what they are purchasing.” Certain warranties are contained therein, and all others are disclaimed. There is no assertion that any of the described warranties have been breached in the instant case.
Based on the foregoing, the majority has affirmed the decision of the trial court as to allegations of express warranties, but strangely holds that the alleged representation of Vander Boegh as to good quality construction is not barred by the contract language. Neither, says the majority, is a claim for breach of an implied warranty of habitability barred by the contract language.
The majority decision relies heavily upon the decision of Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698 (1966). In Bethlahmy, the defendant had constructed a new residence, and in the course thereof had buried an open irrigation ditch beneath a portion of the residence. Not surprisingly, water seeped into the basement of the house making it totally uninhabitable, and plaintiffs Bethlahmy were required to abandon the house which they had purchased. Under those circumstances, the BetKlahmy Court held that a doctrine of implied warranty would be adopted only in cases involving sales of new houses by the builder.
The old rule of caveat emptor does not satisfy the demands of justice in such cases. The purchase of a home is not an every day transaction for the average family and in many instances is the most important transaction of a lifetime. To apply the rule of caveat emptor to an inexperienced buyer, and in favor of a builder who is daily engaged in the business of building and selling houses is manifestly a denial of justice.
*54Obviously, the instant case is a far cry from the circumstances of Bethlahmy.
Much of the other authority cited by the majority is likewise inapplicable to the circumstances of this case, i.e., “[i]t is wholly impractical for the typical middle-class homebuyer to employ a series of experts in various aspects of construction to examine his prospective purchase.” (Emphasis added.) The majority asserts that the implied warranty of habitability “is rooted in considerations of public policy,” and quotes various authorities:
The mores of the day have changed and the ordinary home buyer is not in a position to discover hidden defects in a structure. A home buyer should be able to place reliance on the builder or developer who sells him a new home, the purchase of which in so many instances, is the largest single purchase a family makes in a lifetime.^ (Emphasis added.)
The implied warranty of fitness [for habitability] does not impose upon the builder an obligation to deliver a perfect house. No house is built without defects, and defects susceptible of remedy ordinarily would not warrant rescission. But major defects which render the house unfit for habitation, and which are not readily remediable, entitle the buyer to [relief].
In short, the evidence in the record does not disclose that the circumstances here fit within the parameters of any of the authorities cited by the majority. The property in question here is not a new residence, but rather a five-year-old complex of income producing commercial properties. The Tusches did not purchase the property from the builder. The only evidence indicates that if the site contained fill, neither the Vander Boeghs nor Coffin was aware of its existence. As to habitability, Mrs. Tusch testified that she felt compelled to reduce the rent somewhat in one of the six apartments, and that two of the apartments were vacant during the period of construction from May through September of 1981. Other than those problems, she testified: “I have never had an extended vacancy in any of my units, and the only vacancies that there really were was between tenants for short periods of time until they had been re-rented.”
I note further, that the doctrinal rule created by the majority contains no limits as to the age of the buildings or how the state of the art in construction is to be considered, if at all; nor does it consider if only the second purchaser is to be “protected,” or whether the fifteenth purchaser also benefits by this new cause of action.
Hence, I would adhere to the rule in Bethlahmy regarding transactions between a builder/vendor and purchaser of a new residence when the circumstances are such that the residence becomes totally uninhabitable. I would decline to extend the doctrine of implied warranty of habitability to the circumstances of the instant case.