On suing for breach of the warranty of habitability without privity.

Plaintiffs bought houses, apparently in the same development. There were plumbing problems. For reasons not discussed in the opinion, rather than sue the builder they sued its plumbing subcontractor for breach of implied warranty. The body of the opinion tells us that Plaintiffs didn’t allege or prove privity with the sub; a footnote, presumably added after oral argument, says they conceded they had none.The sub therefore moved for summary judgment. The trial court granted it; the Court of Appeals affirms.

Richards (1984) held that subsequent homeowners could sue the builder for breach of warranty; Lofts at Fillmore (2008) said that was true even when the builder wasn’t the seller (there the owner of apartments had the builder turn them into condos and then sold them off). But the Court of Appeals holds that they don’t go so far as to permit an action against a sub. “There is a distinction between the creation of an implied warranty by virtue of construction of a structure and the contractual relationship required to assert its breach as a cause of action.” We think we know what the court has in mind but Plaintiffs argued, citing Lofts, that the warranty arises out of the construction, not the contract, and this formulation begs that question.

The court suggests that the way to do things is to sue the builder or vendor and let them, in the normal way, sue the subs for indemnity. No doubt there’s a reason that wasn’t done here, though if it were the usual reason — insolvency of the right defendants – surely Plaintiffs would have mentioned it.

(link to opinion)