B & M HOMES, INC. v. Hogan
376 So.2d 667 (1979)
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Rule of Law:
Damages for mental anguish are recoverable in an action for breach of a contract for the construction of a residence when it is foreseeable that the breach would cause severe emotional distress, as such a contract is intrinsically coupled with matters of mental concern and solicitude to the homeowner.
Facts:
- Thomas and Carol Ann Hogan entered into a written agreement to purchase a lot and a new house to be constructed on it for $37,500.
- The agreement was signed by Kenneth R. Morrow as the seller, without any indication that he was acting as an agent for a corporation.
- Morrow was, in fact, the secretary and agent for B & M Homes, Inc., the company that owned the lot and built the house.
- During construction, Mrs. Hogan noticed a hairline crack in the home's concrete slab foundation and pointed it out to Morrow, who told her it was common and not to worry about it.
- After the Hogans moved in, the crack widened significantly, extending through the house and causing severe structural damage.
- The Hogans reported the worsening crack to Morrow, who sent a repairman for cosmetic fixes, but nothing was done to repair the defective slab itself.
- The Hogans were forced to continue living in the defective house, fearing for their safety because they believed the structural problems might cause gas and water lines to burst.
- An expert witness testified that the defective slab rendered the house worthless and likely could not be permanently repaired.
Procedural Posture:
- Thomas and Carol Ann Hogan (plaintiffs) sued B & M Homes, Inc. and Kenneth R. Morrow (defendants) in an Alabama trial court.
- A jury returned a verdict in favor of the Hogans for $75,000.
- The trial court ordered a remittitur, which was appealed to the Supreme Court of Alabama.
- The Supreme Court of Alabama reversed and remanded on the ground that the plaintiffs were not given the option of a new trial in lieu of the remittitur.
- On remand, the trial court entered a corrected remittitur order, reducing the judgment to $50,000, which the Hogans accepted.
- B & M Homes, Inc. and Kenneth R. Morrow (appellants) appealed from the remitted judgment to the Supreme Court of Alabama.
- The Hogans (appellees) cross-appealed, asking the Supreme Court to reinstate the original $75,000 jury verdict.
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Issue:
Do damages for mental anguish constitute a proper element of recovery in an action for breach of contract to construct a house?
Opinions:
Majority - Embry, J.
Yes. Damages for mental anguish are a proper element of recovery in an action for breach of a contract to build a house. While the general rule prohibits mental anguish damages in contract actions, an exception applies where the contractual duty is so coupled with matters of mental concern or solicitude that a breach will foreseeably result in mental anguish. The court reasoned that the purchase of a home is the largest single investment for the average family and is not a mere commercial transaction. A residence is a person's 'castle,' and it is reasonably foreseeable to any builder that constructing a home with severe defects would cause the homeowner extreme mental anguish. Therefore, contracts for residential construction fall within this special category, and plaintiffs do not need to prove physical symptoms to recover for their emotional distress.
Concurring - Torbert, C.J.
N/A. This opinion concurs in the result but writes separately to address a procedural issue. Chief Justice Torbert argues that the old common law rule regarding a 'fatal variance'—where a plaintiff who alleges a joint cause of action must prove joint liability or have the case dismissed—has been abrogated by Alabama Rule of Civil Procedure 20. He contends the court should explicitly recognize that this archaic rule is no longer valid, as the modern rules of procedure permit judgments against one or more defendants according to their respective liabilities without requiring dismissal of the entire action.
Analysis:
This decision solidifies an important exception to the traditional rule barring damages for emotional distress in breach of contract cases. By classifying residential construction contracts as matters of 'mental concern and solicitude,' the court elevates them above ordinary commercial agreements. This precedent significantly strengthens the position of homeowners against builders, allowing recovery not just for the economic loss of a defective home but also for the foreseeable emotional toll such a defect imposes. The ruling holds builders to a higher standard of accountability, recognizing that the service they provide is deeply personal to the client and that a breach can have profound non-economic consequences.
