Court Opinion

ID: 5086820
Source: CourtListenerOpinion
Date Created: 2021-10-01 14:17:25.265575+00
Date Added: 2024-06-11T08:20:25.528641
License: Public Domain

WINTERSHEIMER, Justice,
concurring in part and dissenting in part.
I must respectfully dissent from the majority opinion because I believe that in spite of rejecting the reasoning of the Court of Appeals’ adoption of the New Hampshire case of Lempke v. Dagenais, 130 N.H. 782, 547 A.2d 290 (1988) the result reached is the same. Any extension of a right of recovery to subsequent purchasers is an extension of the implied warranty of habitability. Recovery in the absence of privity of contract with the builder is inconsistent with existing Kentucky law. Crawley v. Terhune, Ky., 437 S.W.2d 743 (1969). No matter what name is attached to the right of recovery by the majority opinion, it remains an extension of the implied warranty of habitability to subsequent purchasers.
The words of the opinion admit that this Court should not create a cause of action out of “whole cloth” and rejects an opportunity to embrace an outright extension of contract law. It then however, creates that same cause of action by judicial interpretation of statutory authority.
The decision in Crawley, swpra, was based on the existence of an implied warranty for a new home and related to the fact that the builder and purchaser had a contractual relationship. The warranty was an implied provision of the contract. I do not believe Crawley supports the extension of a warranty claim to subsequent purchasers.
I also find a problem with what is, regardless of the words used, an extension of the implied warranty when considered with the restrictions on the statute of limitations. This combination gives rise to a considerable burden being placed on homebuilders in Kentucky. This Court has previously restricted limitations on liability in tort actions. Perkins v. Northeastern Log Homes, Ky., 808 S.W.2d 809 (1991); Tabler v. Wallace, Ky., 704 S.W.2d 179 (1986). It now continues that trend by using statutory interpretation when in reality, it has judicially created a cause of action against a homebuilder by a subsequent purchaser of that building far remote in time.
The result is that a purchaser of a home from a person who is not the builder can bring suit against the original builder. This matter has been considered by the Supreme Court of Oklahoma who identified it as a “greatly increased potential tort liability faced by builders and others.” Jaworsky v. Frolich, 850 P.2d 1052 (Ok.1992). In that case, a five year implied warranty extended to a remote purchaser with the cause of action accruing upon the completion of the home. Indeed, the fears of many builders that a prospective flood of litigation will follow could well be realized.
*929Various other states limit implied warranty liability against a remote purchaser in the same manner as does Oklahoma by setting the point of accrual at the time of initial occupancy and refraining from tolling the limitations period during repairs. Jaworsky, supra; Cf. Barnes v. Mac Brown & Co., Inc., 264 Ind. 227, 342 N.E.2d 619 (1976). When such liability is not limited, the effect is “tantamount to imposing strict liability in tort.” Ellis v. Robert C. Morris, Inc., 128 N.H. 358, 513 A.2d 951 (1986).
The Arizona Supreme Court first determined that liability should extend “for a reasonable period of time depending on the component part of the house involved.” Hershey v. Rich Rosen Construction Co., 169 Ariz. 110, 817 P.2d 55 (Ct.App.1991). The effect was to make the builder responsible for all alleged defects occurring during all or a large portion of the useful life of the building. Subsequently, the Arizona Legislature passed a statute of repose insulating builders from implied warranty liability after a definite period of time. Ariz.Rev.Stat.Ann. § 12-552(C).
The Arizona solution is not available in Kentucky because this Court has already characterized a Kentucky law similar to that in Atizona as being “not a statute of limitations but a statute of repose” that extinguishes the claim before it exists. Perkins, supra. Any relief determined appropriate by the Legislature is seemingly blocked. Perkins, supra; Wallace, swpra.
The expansion of liability whether under the guise of a contractual implied warranty of habitability or the judicially created interpretation based on a violation of the building code remains identical. The expansion of liability exposure creates a serious threat to the stability of the legitimate builders in the industry. There should be no concern for those builders who provide defective workmanship. Appropriate consideration should be given to the steps taken by builders such as First Lexington in regard to inspection, warranty to the original purchaser, repairs in accord with that warranty and re-inspection to verify the original repairs. To the extent that the cost of producing new residential buildings in this State will be increased because of a concern for remote claims, this matter may have grave consequences far beyond the contemplation of the original parties to this building contract.
Protecting buyers from a reduction in habitability and value caused by defective construction is a worthy goal. The public policy which guides the adoption of such protection should rest in the sound judgment of the General Assembly and not the opinions of this Court. Any action for recovery by subsequent purchasers remains a judicially created recovery for a breach of the implied warranty of habitability without the privity of contract required between the buyer and the builder. Creation of such laws by the judiciary is improper regardless of how it is hidden in the guise of statutory interpretation.