Blagg v. Fred Hunt Company, Inc.
612 S.W.2d 321, 1981 Ark. LEXIS 1227, 272 Ark. 185 (1981)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A builder-vendor's implied warranty of habitability for latent defects extends to subsequent purchasers for a reasonable period of time. Additionally, a newly constructed house is considered a 'product' for the purposes of a strict liability claim.
Facts:
- Fred Hunt Company, Inc., a home builder, constructed a new house in the Pleasant Valley Addition to Little Rock.
- On October 9, 1978, Fred Hunt Company, Inc. sold the house to the Dentons.
- The Dentons subsequently sold the house to the American Foundation Life Insurance Company.
- On June 29, 1979, less than nine months after the original sale, American Foundation sold the house to J. Ted and Kathye Blagg.
- After purchasing the home, the Blaggs discovered a strong odor and fumes from formaldehyde.
- The Blaggs traced the source of the fumes to the carpet and pad that had been installed by the original builder, Fred Hunt Company, Inc.
Procedural Posture:
- J. Ted Blagg and Kathye Blagg (appellants) filed a two-count complaint against Fred Hunt Company, Inc. (appellee) in an Arkansas trial court.
- Count one alleged breach of implied warranty, and count two alleged strict liability.
- Fred Hunt Company, Inc. filed a motion to dismiss both counts.
- The trial court granted the motion to dismiss the implied warranty count on the basis of lack of privity.
- The trial court denied the motion to dismiss the strict liability count.
- The Blaggs appealed the trial court's dismissal of the implied warranty count to the Arkansas Supreme Court.
- Fred Hunt Company, Inc. filed a cross-appeal challenging the trial court's refusal to dismiss the strict liability count.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
1. Does a builder-vendor's implied warranty of habitability extend to a subsequent purchaser of a home who is not in privity of contract with the builder-vendor? 2. Is a newly constructed house considered a 'product' for the purpose of a strict liability claim under Ark. Stat. Ann. § 85-2-318.2?
Opinions:
Majority - Justice Robert H. Dudley
1. Yes. The builder-vendor's implied warranty of fitness for habitation extends to subsequent purchasers for a reasonable length of time. The court reasons that the policy considerations protecting the first purchaser of a home, which is often a family's largest investment, should also apply to subsequent purchasers. Extending the warranty is a logical progression of the law established in Wawak v. Stewart, which first recognized the implied warranty for first purchasers. The warranty extension is limited to latent defects not discoverable by a reasonable inspection that manifest within a reasonable time after the original sale and where there has been no substantial change to the property. 2. Yes. A newly constructed house is a 'product' for the purpose of a strict liability claim. The court adopts the reasoning from New Jersey courts, finding no meaningful distinction between the mass production and sale of homes and that of other products like automobiles. Public policy requires placing liability on the builder-vendor who created the risk and is in the best position to control the quality of the 'product.' Therefore, the Arkansas strict liability statute, which applies to defective products, also applies to defects in a newly constructed home.
Analysis:
This decision significantly expands liability for home builders in Arkansas by eliminating the traditional privity requirement for breach of implied warranty claims. By extending the warranty of habitability to subsequent purchasers, the court aligned itself with a modern, pro-consumer trend in property law. Furthermore, by classifying a new home as a 'product' for strict liability purposes, the court opened a new avenue for recovery for homeowners, treating defects in construction similarly to defects in manufactured goods and placing a greater duty on builders to ensure the safety and quality of their work.
