Summary
The Supreme Court of Nebraska reviewed the dismissal of claims by subsequent homeowners against a contractor and subcontractors for allegedly defective construction. The court extended the implied warranty of workmanlike performance to subsequent purchasers against general contractors for latent defects, but upheld dismissal of claims against subcontractors, an implied warranty of habitability claim, and negligence claims. The judgment was affirmed in part, reversed in part, and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether a subsequent purchaser may state a claim against a general contractor for breach of an implied warranty or duty to perform construction in a workmanlike manner despite the absence of contractual privity.
- Whether a subsequent purchaser may assert an implied warranty of habitability claim under Nebraska law.
- Whether the complaint stated a negligence claim against the contractor and subcontractors based on construction defects, alleged building-code violations, or duties arising from the original construction contract.
- Whether the accepted work doctrine barred the alleged negligence claim.
Holdings
- Nebraska recognizes an implied warranty of workmanlike performance that extends to subsequent purchasers against general contractors, even absent privity, but the claim is limited to latent defects that manifest after the subsequent purchase and were not discoverable by a reasonably prudent inspection at the time of purchase.
- Absent an express or implied agreement creating privity, subsequent purchasers may not recover from subcontractors under a claim styled as breach of an implied duty to perform in a workmanlike manner.
- Nebraska had not recognized an independent cause of action for breach of an implied warranty of habitability, and the court declined to adopt that cause of action for subsequent purchasers.
- The complaint did not state a negligence claim against the defendants based on duties arising from the contractual relationship between the original homeowners and the contractor.
- Although building codes may create a legal duty capable of supporting a negligence claim, the accepted work doctrine barred the plaintiffs' claim because the alleged defects were not inherently dangerous and the complaint did not allege that they could not have been discovered when the original owners accepted the work.
Key quotations
“Our extension of liability is thus limited to latent defects which manifest themselves after the subsequent purchase and are not discoverable by the subsequent purchaser's reasonably prudent inspection at the time of the subsequent purchase.” (616)
“The duty appellants seek to establish cannot be made without reference to the contract, and such duties do not exist independent of the contract.” (618)
“To summarize, count III fails to state a cause of action in negligence.” (620)
Factual background
The McNeil Company contracted in 1994 to design and build a house in Omaha, and the original owners took possession in January 1997. Joseph and Amy Moglia purchased the house from the original owners in August 2001. Beginning in December 2002, the Moglias discovered alleged roofing, drainage, design, and construction defects, some of which they claimed violated Omaha building codes, and sued the contractor and subcontractors.
Procedural history
The second owners of a home sued the contractor and subcontractors for defective construction, asserting breach of an implied duty to perform in a workmanlike manner, breach of an implied warranty of habitability, and negligence. The district court dismissed all counts under Rule 12(b)(6), concluding that Nebraska did not recognize an implied warranty of habitability, that the claims sounded in contract rather than negligence, and that the plaintiffs lacked contractual privity with the defendants. The Nebraska Supreme Court affirmed most of the dismissal but reversed and remanded as to the workmanlike-performance claim against the general contractor.
Remand instructions
The dismissal was reversed only as to count I, the implied-duty-to-perform-in-a-workmanlike-manner claim against McNeil Company, Inc. The cause was remanded for further proceedings; the dismissals of the claims against the subcontractors and of counts II and III were affirmed.