Haskell Co. v. Lane Co., Ltd.
1993 WL 8989, 612 So.2d 669 (1993)
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Rule of Law:
Under the common law doctrine of caveat emptor as applied in Florida, a seller of commercial real property has no duty to disclose latent defects to the buyer, and therefore cannot be held liable in negligence for harm resulting from such defects.
Facts:
- In 1980, The Lane Company, Ltd. (Lane) hired The Haskell Company (Haskell) to construct a commercial building.
- After its completion in late 1980, Lane leased the building to a tenant, which was later succeeded by H.J. Wilson Company, Inc. (Wilson).
- In September 1981, Lane sold the building to First Capital Income Properties, Ltd. There was no allegation that Lane actively concealed or misrepresented any facts about the property to First Capital.
- The property was sold again, and Wilson became a subsidiary of Service Merchandise Company, Inc.
- In July 1986, five years after Lane had sold the property, a portion of the building's roof collapsed during a severe rainstorm.
- The collapse caused significant property damage to Wilson/Service Merchandise and personal injuries to shoppers inside.
- The collapse was allegedly caused by a latent defect in the roof's drainage system that existed at the time Lane sold the building.
Procedural Posture:
- Injured shoppers and the current tenant (Service Merchandise/Wilson) filed separate negligence lawsuits in a Florida trial court against the original owner (Lane) and the builder (Haskell).
- Haskell filed cross-claims against Lane, seeking contribution in the event Haskell was found liable.
- In the trial court, Lane moved for summary judgment on all claims, arguing that the doctrine of caveat emptor negated any duty to disclose defects.
- The trial court granted summary judgment in favor of Lane.
- Haskell, Service Merchandise, and Wilson (appellants) appealed the summary judgments to the District Court of Appeal of Florida, First District, where Lane was the appellee.
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Issue:
Does the common law doctrine of caveat emptor apply to the sale of commercial real property to bar negligence and contribution claims against a prior owner for failing to disclose a latent, dangerous defect?
Opinions:
Majority - Webster, J.
Yes. The common law doctrine of caveat emptor applies to the sale of commercial real property, shielding a former owner from liability for negligence for the failure to disclose a latent defect. While Florida law has abolished caveat emptor for residential real property transactions, as established in Johnson v. Davis, precedent dictates that the doctrine still applies to commercial property. The court is bound by stare decisis to follow this precedent and therefore must affirm the summary judgment in favor of Lane. However, the court finds little justification for the distinction between residential and commercial property and believes the doctrine is an outdated concept that is contrary to modern notions of justice. For this reason, the court certifies a question to the Florida Supreme Court asking it to re-evaluate the continued application of caveat emptor to commercial real estate transactions.
Concurring - Wolf, J.
Yes. The court is bound by existing law to affirm the trial court's decision. However, the Supreme Court should revisit the issue. A less drastic measure than abolishing caveat emptor entirely for commercial realty would be to adopt section 353 of the Restatement (Second) of Torts, which would impose liability on a seller for failing to disclose known conditions that pose an unreasonable risk of physical harm to people on the property. Adopting this specific rule would address the dangerous conditions in this case and align with sound public policy.
Analysis:
This decision exemplifies an intermediate appellate court's adherence to the doctrine of stare decisis while simultaneously signaling that the precedent is obsolete and unjust. The court's detailed critique of caveat emptor and its certification of the issue to the Florida Supreme Court effectively invited the higher court to abrogate the doctrine for commercial real estate. This case sets the stage for a significant change in Florida property law, potentially extending the modern duty of disclosure from the residential context to the commercial context, thereby unifying the legal standards for fairness in all real property sales.
