Liberty Homes, Inc. v. Epperson
1991 WL 82121, 581 So. 2d 449 (1991)
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Rule of Law:
Damages for mental anguish are recoverable for a breach of contract when the contractual duty is so intertwined with matters of mental concern, such as the provision of a safe and habitable home, that its breach would reasonably and foreseeably result in emotional suffering.
Facts:
- In the summer of 1985, Darniece and Fred Epperson ordered a custom-built mobile home manufactured by Liberty Homes, Inc. through a dealer, Harlan Trailer Sales.
- Liberty manufactured the home specifically for the Eppersons, whose names were identified on the internal production order.
- Immediately after moving into the home in August 1987, the Eppersons and their guests experienced electrical shocks from metal window and door frames, with a subsequent measurement showing a 150-volt current.
- Over the following year, the home exhibited persistent electrical problems, including fluctuating power, dimming lights, a buckling frame, and a leaking roof.
- On January 13, 1988, the Eppersons observed sparks shooting from a living room window and discovered smoldering wires and scorched insulation within the wall.
- Despite numerous complaints and attempted repairs by the dealer and Liberty, the dangerous electrical issues were never resolved.
- In October 1988, fearing for their family's safety and upon the advice of a Liberty repairman, the Eppersons moved into a rental home, incurring additional living expenses.
- After making 37 payments on their home, the Eppersons ceased payments, and the financing company repossessed the mobile home.
Procedural Posture:
- Darniece B. and Fred R. Epperson sued Liberty Homes, Inc. in an Alabama trial court, alleging claims including breach of express and implied warranties.
- Following a trial, the jury returned a verdict in favor of the Eppersons, awarding them $194,174.70 in damages.
- Liberty Homes filed a post-trial motion for judgment notwithstanding the verdict (j.n.o.v.), a new trial, or remittitur.
- The trial court denied Liberty's motions in their entirety.
- Liberty Homes, Inc., as the appellant, appealed the judgment to the Supreme Court of Alabama.
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Issue:
Does a breach of contract for the sale of a new mobile home containing severe and dangerous electrical defects fall within the exception that allows the purchasers to recover damages for mental anguish?
Opinions:
Majority - Shores, J.
Yes, a breach of contract for the sale of a new home with dangerous defects allows for the recovery of damages for mental anguish. While the general rule precludes recovery for mental anguish in breach of contract claims, there is a well-established exception where the contractual duty is so coupled with matters of mental concern that a breach will necessarily result in mental suffering. A contract for the purchase of a home, which is fundamental to a person's sense of security and well-being, falls squarely within this exception. The evidence demonstrated that Liberty's failure to provide a safely constructed home caused the Eppersons significant fear and distress, such as worrying about a fire and having to conduct family fire drills, which directly resulted from the breach. Therefore, the jury's award of damages for mental anguish was supported by the evidence and the law.
Analysis:
This decision reinforces and clarifies the application of the "mental concern" exception for awarding mental anguish damages in contract cases, particularly in the context of residential construction. By treating the contract for a home as one deeply connected to personal safety and peace of mind, the court elevates it above a mere commercial transaction. This precedent strengthens consumer protection, holding manufacturers liable not only for economic losses but also for the foreseeable emotional distress caused by dangerously defective homes. The ruling signals that manufacturers cannot easily escape liability for fundamental failures that threaten the habitability and safety of a dwelling, regardless of contractual privity or limited warranties that fail their essential purpose.
