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AMI 1205 Issues—Breach of Implied Warranty of Habitability, Sound Workmanship, and Proper Const...

Arkansas Supreme Court Committee On Jury Instructions-Civil

Ark. Model Jury Instr., Civil AMI 1205
Arkansas Model Jury Instructions-Civil
November 2021 Update
Arkansas Supreme Court Committee On Jury Instructions-Civil
Chapter 12. Construction
AMI 1205 Issues—Breach of Implied Warranty of Habitability, Sound Workmanship, and Proper Construction in the Sale of a House
[Unless excluded or waived,] there are implied warranties of habitability, sound workmanship, and proper construction in the sale of a new house by a seller who was also the builder.
In this case (plaintiff) claims damages on the ground that (defendant) breached [one or more of] the implied warranty[ies] of [habitability, sound workmanship, [and][or] proper construction in the sale of a house]. In order to recover, (plaintiff) must prove each of four essential propositions:
First, that [he][she] has sustained damages;
Second, [that (defendant) is a professional builder who built the house and sold it new to (plaintiff)] [or][that defendant is a professional builder who built the house and sold it new to a prior purchaser].
Third, that the house failed to conform to the warranty[ies] that the house was [[habitable] [and][or] [constructed with sound workmanship] [and][or] properly constructed]]; [and]
Fourth, that (plaintiff) gave notice to (defendant) in a reasonable time with sufficient clarity to inform (defendant) that a breach of the implied warranty[ies] is being asserted and to give (defendant) sufficient opportunity to inspect the premises and correct the defects.
[If you find that (plaintiff) has proved each of these propositions, then your verdict should be for (plaintiff). If, however, (plaintiff) has failed to prove any one or more of these propositions [or (defendant) proves that the implied warranty[ies] [has] [have] been excluded or waived], then your verdict should be for (defendant).]
NOTE ON USE
Use AMI 1206 with this instruction when the plaintiff is a subsequent purchaser of the house.
Use AMI 1207 with this instruction when the defendant claims the implied warranties have been excluded or waived.
Because the implied warranties of habitability, sound workmanship, and proper construction are implied in the contract of sale, use AMI 2442, with modification for breach of implied warranty, as the damage instruction.
Do not use the last bracketed paragraph if the case is submitted on interrogatories.
COMMENT
“There is an implied warranty of fitness and habitability in the sale of a new house by a seller who was also the builder.” Curry v. Thornsberry, 354 Ark. 631, 128 S.W.3d 438 (2003). “By operation of law, a builder-vendor gives implied warranties of habitability, sound workmanship, and proper construction. The implied warranty does not rest upon an agreement, but arises by operation of law and is intended to hold the builder-vendor to a standard of fairness.” Bullington v. Palangio, 345 Ark. 320, 45 S.W.3d 834 (2001); Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970). This rule has been applied in situations where the purchaser has supplied plans for the house and there is poor workmanship or faulty design in the implementation of those plans by the builder. Pickler v. Fisher, 7 Ark. App. 125, 644 S.W.2d 644 (1983); Daniel v. Quick, 270 Ark. 528, 606 S.W.2d 81 (1980).
“The warranty of habitability is implied in the contract of sale and arises from that contract.” Curry, supra. In Curry, the Court determined that since an action for breach of the implied warranty of habitability is an action in contract, an award of attorney fees may be proper under Ark. Code Ann. § 16-22-308.
In a case involving a contract for the construction of a roof with skylights over an existing indoor pool area, the Court found that a contractor who was not a builder-vendor nonetheless gave implied warranties of sound workmanship and proper construction. Graham Constr. Co. v. Earl, 362 Ark. 220, 208 S.W.3d 106 (2005).
Proof of proximate causation is not an element of a claim for breach of the implied warranties of habitability, sound workmanship, and proper construction. Crumpacker v. Gary Reed Constr., Inc., 2010 Ark. App. 179 (summary judgment reversed because plaintiff not required to show that defendant's workmanship caused damage).
In Cinnamon Valley Resort v. EMAC Enterprises, Inc., 89 Ark. App. 236, 202 S.W.3d 1 (2005), a case involving the construction of two luxury log cabins for a resort, the appellate court approved the combination of an issue instruction that included the element of notice to the defendant in a reasonable time of its failure to perform work in a good and workmanlike manner and a separate instruction that the notice “only needed to be of sufficient clarity to apprise [defendant] of the alleged defects and problems being asserted, and to give [defendant] sufficient opportunity to inspect the premises and correct the alleged defects and problems.” The essence of the two instructions on the issue of notice in Cinnamon Valley have been included in the fourth element of this instruction.
Absent fraudulent concealment, the statute of repose set out in Ark. Code Ann. § 16-56-112 will bar a claim for breach of the implied warranty of habitability brought five years after substantial completion of the house. Rogers v. Mallory, 328 Ark. 116, 941 S.W.2d 421 (1997) (finding that the court's holdings in cases such as Sanders v. Walker, 298 Ark. 374, 767 S.W.2d 526 (1989), and Blagg v. Fred Hunt Co., 272 Ark. 185, 612 S.W.2d 321 (1981), that the implied warranty of habitability extends to subsequent purchasers and exists for a “reasonable length of time” is nonetheless subject to Ark. Code Ann. § 16-56-112).
“The cost of correcting defects, rather than the difference in value, is the proper measure of damages [for a breach of the implied warranties of habitability, sound workmanship, and proper construction] when the correction would not involve unreasonable destruction of the work; and the cost of repairs would not be grossly disproportionate to the results to be obtained.” Daniel, supra (citing Carter v. Quick, 263 Ark. 202, 563 S.W.2d 461 (1978)). However, as explained in Page v. Ballard, 2011 Ark. App. 357, a plaintiff may elect to seek damages based on the difference in value rather than the cost of correcting the defects. If so, the defendant may affirmatively challenge the plaintiff's selection of damages by presenting alternative damages evidence and seeking a jury instruction. In Page, the court held that it was not error to give a damages instruction based on the difference in value where the defendant did not present evidence of the cost to correct defects. See also Carter, supra (burden of proving that the cost of correcting defects was disproportionate, or an economic waste, was on the defendant). In certain instances, the court may instruct the jury on both measures of damage and allow it to select the one that is appropriate. Page, supra.
Ordinarily, notice must be given in a reasonable time with sufficient clarity to apprise the vendor-builder that a breach of implied warranty is being asserted and to give him sufficient opportunity to inspect the premises and correct the defects. Pickler, supra.
Breach of the implied warranties of habitability, sound workmanship, and proper construction can also be based upon faulty design by the builder-vendor. Wingfield v. Page, 278 Ark. 276, 644 S.W.2d 940 (1983); Coney v. Stewart, 263 Ark. 148, 562 S.W.2d 619 (1978). The implied warranty extends to a septic tank, which is an integral part of the house. Coney, supra.
When a contract for residential construction contains an express warranty on a subject, that warranty is exclusive and there can be no implied warranty on that subject. Carter, supra. However, in order for an express warranty to exclude the implied warranties of habitability, sound workmanship, and proper construction, the express warranty must expressly promise habitability, sound workmanship, and proper construction. Bullington, supra; Wingfield, supra.
There are no implied warranties of habitability, sound workmanship, and proper construction where the sellers are not professional builders and lived in the house before selling it. Morris v. Rush, 77 Ark. App. 11, 69 S.W.3d 876 (2002).
Unless an environmental contaminant exists or has occurred in an improvement on real estate, an improvement on real estate (including a house) is not a “product” for purposes of a products liability action. See Ark. Code Ann. § 4-86-102 (c)(2). However, any tangible object or good produced that is affixed to, installed on, or incorporated into real estate or any improvement on real estate is considered a “product.” Id.
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