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)

“This appeal requires us to determine when a quiet title action for an easement by implication accrues pursuant to A.R.S. 12-821.” If that doesn’t sound as fascinating to you as it does to us then that means you have a life. But whoever wrote this opinion may have too much of one.

The opinion’s statement of the facts is not crystal clear but the bottom line is that the U of A’s experimental farm in Pinal County put up a gate that blocked a nearby landowner from using a road he claimed an easement over. The parties sued each other for declaratory judgment and to quiet title; the landowner added a trespass count. The trial court ruled for the ABOR; the landowner (or, rather, by this time, the successor trustee of his estate) appealed.

The Court of Appeals affirms. The opinion spends some time reciting basics about the law of easements; as often happens in these things, its author seems to have found the subject an exotic and complicated novelty. (That might be true also of “fee simple,” which the opinion throws in a footnote to explain. Its never clear, actually, that the opinion knows greatly more about real-property law than someone read in the hornbook it repeatedly cites.)

The opinion then makes the point that the statute of limitations applies to an action that asserts an interest in someone else’s property, though not to one that seeks merely to quiet title to one’s own. But it goes on and on about this and eventually decides, based on one Utah case, that the former is not  a “true” quiet title action. There may be a basis for this in common-law theory but it will come as a surprise to those who’ve actually practiced Arizona law. It will also surprise those who’ve read the first seven pages of the opinion, in the course of which we’re told that a) an easement is an interest in real property and b) under our statute (12-1101) a quiet-title action can be brought by one who claims an interest in real property. Finally, just in case we’ve left anyone out, it will surprise those who read the next page of the opinion, which admits that quiet-title relief can be granted to one who proves an easement by implication.

Why does the court do this?  Because, having told us in the first paragraph that the issue is when a quiet-title action accrues, halfway through the opinion it changes its mind and says that the issue is “when [the] declaratory judgment claim began to accrue.” Apparently that’s because in the court’s mind this isn’t a “real” quiet-title action but just a DJ.

The statute against the State is one year (that’s 12-821). The gate went up in early 2008; the landowner complained about it, demanded a quitclaim deed for the easement, and threatened suit in September 2008; but he didn’t file until December 2009. So the claim is barred.

On the trespass claim the argument was that it was continuing, i.e., that a new claim arose every time the gate was closed. The court says that it needn’t address that because you can’t have a trespass claim without a property right and the action to establish that right is barred by limitations.

The landowner made a couple of other arguments but we pass over them as they are unenlightening and seem kind of silly.

(link to opinion)

This discusses the withdrawal of an admission made under Rule 36.

After the defendant failed to answer a Request for Admissions the plaintiff moved for summary judgment. The defendant then answered the Request, raising question of fact, and arguing that the delay did not prejudice the plaintiff. The trial court disagreed and granted summary judgment. The defendant appealed.

The plaintiff did not file a brief or an appearance in the Court of Appeals. The court specifically finds that this was a confession of reversible error. So why not just say that and reverse in a memorandum? Once upon a time courts avoided making law in cases like this. In any event, the Court of Appeals reverses, finding an abuse of discretion.

The end of the opinion says some useful things, based on actual Arizona authority: summary judgment should not be used as a sanction (which is what the opinion says was done here, though that’s not entirely clear), nor should default judgment.

But the bulk of the opinion discusses the Rule 36 issue, which it indicates is one of first impression.

Under Rule 36 admissions can be withdrawn or amended when “presentation of the merits will be subserved” and the propounding party can show prejudice. Citing some federal cases (it says there is no Arizona authority), the court says that it is an abuse of discretion not to consider both factors. Why a trial court must consider both when either can be dispositive the opinion does not say.

Regarding the presentation of the merits, the summary judgment foreclosed some of the defendant’s counterclaims. Therefore, the court says, granting the plaintiff relief would have promoted the presentation of the merits. But by what logic do we distinguish between a ruling based on an admission and the legal consequences of that ruling? At what point, and on what basis, do we say that an admission shouldn’t be allowed to support summary judgment because the judgment would have too much legal effect? Is it seriously now the law that you can be stuck with your admissions unless you filed a counterclaim?

On the prejudice issue the plaintiff had argued delay. The court says that under Rule 36 prejudice is the difficulty you could face in presenting your case if your opponent is allowed to retract an admission. It isn’t delay – or, as as the court carefully phrases it, “failure to meet a deadline” (keep that in mind for future use: responding to discovery eight months late and only in response to a dispositive motion is now “failure to meet a deadline”). But what about the Arizona cases saying that prejudice is indeed about things like delay? Since when can you get relief on a motion based on a discovery lapse unless you complain of delay? And if you’re going to put those cases aside and create a Rule-36-only species of prejudice don’t you at least explain that that’s what you’re dong?

Why is this happening? Because this was a tough situation. The defendant’s lawyer thought he responded to the Request but the response got lost in his file. As a result the defendant might lose her house to a claim that the Court of Appeals – as it tells us by reciting some facts extraneous to any issue in the opinion – thinks dicey. And the delay argument was iffy; a different trial court, on a different day, might have exercised its discretion differently.

All the more reason to avoid addressing the details of Rule 36, which the court could perfectly well have done, rather than to tell a trial judge that he abused his discretion when what he probably did was to pay attention to the law of Arizona, rather than to the federal cases now preferred by the Court of Appeals, and to the plaintiff’s arguments, which the Court of Appeals didn’t have to bother reading or considering.

(link to opinion)