Is a Homebuilder Liable for Hidden Defects? PA Supreme Court to Decide

Homebuilder Liable

By Mark R. Fischer, Esq.

May 20, 2014

No one really knows what surprises lie ahead after purchasing a home.  That’s because many of the potential problems with a home cannot be seen by the purchaser, even with a reasonable inspection.  Also, even though problems may exist from the time the home is built, they may not reveal themselves until years after the work is completed.

Implied Warranty of Habitability

One of the ways the law protects new home buyers against the risk of these hidden defects (i.e., latent defects) is through what is called an “implied warranty of habitability.”  This type of warranty is not found in any written contract with the builder, but is instead implied in the purchase of the home.  It places the risk on the builder for any hidden defects that affect the purchaser’s ability to live in the home.  The types of defects covered by this implied warranty depend on the circumstances of each case and the cause of the problem, but they can range from foundation problems to leaking windows.  For many years in Pennsylvania, this implied warranty of habitability has been applicable to the purchase of a new home.  However, Pennsylvania law has remained unclear on whether this implied warranty passes on to a subsequent purchaser of the home.  Well an answer finally appears to be on the way.

Trial Court: Case Dismissed

On May 7, 2014 the Pennsylvania Supreme Court heard oral arguments in Conway v. Cutler Group, Inc. (Docket No. 80 MAP 2013), in which they will decide whether the implied warranty of habitability extends beyond the initial purchaser of a home to subsequent purchasers.  In the case, the homeowners purchased the home at issue from the original owners about three years after it was built.  After moving-in the new homeowners found water infiltrating the windows in the master bedroom.  An expert found the leaking to be caused by several problems with the construction of the home and recommended that the exterior of the home be stripped and redone.  The homeowners brought an action against the builder asserting a claim under the implied warranty of habitability.  However, the trial court dismissed the case, finding that the implied warranty only applied to the original purchasers of the home.

Initial Appeal: Implied Warranty Extended

The homeowners appealed to the Pennsylvania Superior Court [2012 PA Super. 242, 57 A.3d 155 (2012)], which reversed the trial court’s decision and ruled that the implied warranty of habitability does pass on to subsequent purchasers of a home.  The Superior Court explained that because the hidden defects in a new home may not materialize for several years, it would be unfair to let the builder off the hook for such defects just because the home is sold to a second owner a few years after it is built.  Although this ruling expanded the reach of this implied warranty, the Superior Court noted that there are limits to the rule.  For example, Pennsylvania law requires claims relating to the construction of improvements on real property to be filed within 12 years from the date the construction is completed, meaning the implied warranty of habitability can only last for 12 years.

Will This Ruling Become Controlling Law in PA?

The Pennsylvania Supreme Court will now decide if the Superior Court’s decision should be confirmed as the controlling law in Pennsylvania.  Stay tuned for an update on the Supreme Court’s decision.

If you are a homeowner or contractor with questions about this case or similar issues in Pennsylvania or New Jersey, feel free to contact Mark Fischer at 610-275-0700 or by email at mfischer@highswartz.com.

The information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.

Employees Using Social Media, Can Anything You ‘Post’ Be Used Against You?

iStock_000016428789XSmallBy Thomas D. Rees, Esq.May 2, 2014 Sometimes I think that, before they post about individual employment issues on social networking sites, social media users should see a warning similar to the Miranda warning: “You have the right to remain silent; anything you say may be used against you!”In two recent cases, heeding this warning could have prevented a job loss or loss of a valuable settlement. Case #1:  Sometimes, you may even have a duty to remain silent!Employers and employees settle termination and discrimination cases every day.  Typically, the employer pays the employee an agreed upon sum, the employee releases the employer from all liability, and both parties agree to keep the settlement confidential. Keeping the settlement confidential suggests the following rule: No discussion on social networking sites!In Gulliver Schools v. Snay, So.3d, 2014 WL 769030 (Fla. App. Feb. 26, 2014), the plaintiff’s college-age daughter violated this rule, with disastrous results.  She used Facebook to discuss her father’s confidential $80,000 settlement of his employment dispute with a private school.  The daughter said, “Mama and Papa Snay won the case against Gulliver.  Gulliver is now officially paying for my vacation to Europe this summer.  S**K IT.” The daughter sent the posting to 120 Facebook friends right after the parties entered into the settlement.The school found out about the post.  The school refused to make the settlement payment, contending that the daughter’s Facebook post breached the settlement agreement. (The agreement required the plaintiff to disgorge the whole settlement amount on the breach of the confidentiality agreement.)  The father sued to enforce the agreement, won at the trial court level, but lost on the school’s appeal.  The father said he had not told the daughter that he had won his case, but he had mentioned the settlement to the daughter, even though the agreement allowed only disclosure to his spouse.  Ironically, the daughter had no plans to go to Europe.The temptation to vent is strong, and social media is an available vehicle to vent. But a confidential settlement agreement of an individual employment claim is just that – confidential– and therefore not a wise subject for a social media posting. Case #2: Don’t air dirty family laundry and expect to keep your job in a family concern!In Smizer v. Community Mennonite Early Learning Center, 538 Fed. Appx. 711 (7th Cir. 2013), affirming 2013 WL 1154263 (N.D. Ill. Mar. 19, 2013), three generations of one family worked in a nonprofit preschool.  The mother was the Executive Director, the grandmother was a volunteer, and the son worked as a teacher’s assistant.  The son supported his sister in a bitter custody dispute over the sister’s daughter; the mother and grandmother took the opposite side.  When the court ruled for the sister, the son apparently posted a profanity-laden tirade on Facebook, directed at the mother and grandmother.  The mother learned about the post through various employees and individuals who were the son’s Facebook friends.  The mother fired her son for insubordination because of the Facebook post.  The son sued for gender discrimination, and denied making the Facebook post.  The courts upheld the termination on summary judgment, citing the mother’s reasonable belief that the son had posted the offensive message.The Gulliver and Smizer decisions lead to one more rule for employees, totally aside from the importance of the confidentiality issues: It’s a good idea not to gloat in public when you win a point on your employer, particularly in profane or snarky terms.Finally, before posting a controversial Facebook message, individual employees would do well to remember the lament of one of our least effective Presidents, Warren G. Harding.  As his presidency unraveled because of the corruption of his Ohio cronies, Harding said: “I have no trouble with my enemies….  But my friends, my g*d-d**ned friends, they’re the ones who keep me walking the floor at night!”  NOTE:  This blog addresses social media postings regarding individual issues and employers in the private sector.  It does not address the possibility that postings about working conditions might be treated as a concerted activity that is protected by the National Labor Relations Act (aka the Wagner Act).  Nor does it address issues related to postings by public employees, which may in certain situations be protected constitutionally. For more about these cases or employment law, please contact Thomas D. Rees at 610-275-0702 or by email at trees@highswartz.comThe information above is general: we recommend that you consult an attorney regarding your specific circumstances.  The content of this information is not meant to be considered as legal advice or a substitute for legal representation.