Corrosion by Codification: the Deficiencies in the Statutory Versions of the Implied Warranty of Workmanlike Construction

• Publication year: 2022

39 Creighton L. Rev. 103. CORROSION BY CODIFICATION: THE DEFICIENCIES IN THE STATUTORY VERSIONS OF THE IMPLIED WARRANTY OF WORKMANLIKE CONSTRUCTION

Creighton Law Review

Vol. 39

WENDY B. DAVIS(fn*)

1. INTRODUCTION

The common law implied warranty of workmanlike construction ("IWWC"), sometimes referred to as the implied warranty of workmanlike quality, has existed for centuries.(fn1) Defined in greater detail below, it is important to understand that the IWWC balances the allocation of risk between two contracting parties and the remedies available are found in common law and codification. The purpose of this Article is to compare and contrast the protections afforded by both. Codification does not favor the unwitting consumer but rather eviscerates the very heart and spirit in which the IWWC developed.

From its inception, this warranty has served to protect the consuming public. Arising from our English legal ancestry of common law and dating back to 1806, an obligation to perform in a proper and sufficient manner emerged.(fn2) Simplified, where a sophisticated builder sells to a buyer who is unable to control construction and is unable to assess latent problems before they arise, common law recognizes the IWWC as "an implicit term of a contract unless the contracting parties explicitly agree to vary it." In layman's terms, the IWWC stands for the proposition that should a builder fail to deliver a residence that conforms with community standards due to latent defects, the buyer has a legal remedy, as accepted and defined by a history of cases, and in some instances, by statute.

In one of the very first cases of its kind, a farmer-defendant defeated a carpenter-plaintiff's action against him by proving to the court that the carpenter had performed in a "very improper and insufficient manner."(fn3) From there, the IWWC has twisted and turned into the somewhat ambivalent theory that it has become today. Confusion surrounding its applicability and its seeming similarities to other implied warranties has caused courts and scholars to debate whether the implied warranty is based on contract or tort, which has implications for statutes of limitations, the ability to waive or disclaim, and recov-ery for non-physical injuries.(fn4) Although found to exist in all service contracts,(fn5) the focus of this Article centers around home construction.

A handful of states have codified the IWWC as it applies to construction of new dwellings. These statutes fall far short of the protection afforded by the common law. The statutes fail to protect the homeowner victim of shoddy work with restrictive and confusing statutes of limitations and expirations, arbitrary exclusions from coverage, and the ability for the contractor to disclaim the warranty. The common law IWWC is, and in the states that now choose codification was, effective. In addition, the statutes have generally caused more problems than they have solved. This Article will compare the IWCC statutes in eight states, and compare and contrast these statutes to the common law protection. Suggestions for reform will be included at the conclusion of this Article.

2. DEFINITIONS: IMPLIED WARRANTY OF WORKMANLIKE CONSTRUCTION AS COMPARED TO THE IMPLIED WARRANTY OF HABITABILITY

The implied warranty of workmanlike construction ("IWWC"), sometimes referred to as the implied warranty of workmanlike quality, focuses on the builder's conduct, requiring a minimum standard of care.(fn6) The builder is required to "construct the home in the same manner as would a generally proficient builder engaged in similar work and performing under similar circumstances."(fn7) This requirement has also been described as the "quality of work performed by one who has knowledge, training, or experience necessary for the successful practice of a trade or occupation and performed in a manner generally proficient by those capable of judging such work."(fn8) Even if the house is safe and fit for habitation, the builder may be liable under this implied warranty, for example, where a patio floor buckled as a result of improper soil compaction.(fn9) The IWWC is "based on the ac-tual and presumed knowledge of the seller, reliance on the seller's skill or judgment, and the ordinary expectations of the parties."(fn10) Courts have reasoned that the purchaser of a new home has not had the opportunity to "observe how the building has withstood the passage of time," and therefore must rely on the seller/builder.(fn11)

Many courts confuse the IWWC with the implied warranty of habitability ("IWH"), or enforce a hybrid of the two; however, the two implied warranties protect distinct interests and have distinct standards. The focus of the IWH is the quality of the structure, requiring that the structure be suitable as a home, safe and healthy for human habitation.(fn12) Even if the builder exercises all due care, this IWH may be breached if the home is unsafe, for example a home constructed on a toxic waste site or on an underground spring that will cause flooding.(fn13) Conversely, habitability may not be impaired when a defect is cosmetic, or involves ancillary space such as a patio; however, the IWWC may still be breached.(fn14)

A Pennsylvania court found no breach of the IWH when warped and delaminated plywood sheathing in the roof caused the plaintiffs inconvenience, discomfort, and annoyance during the repair, but there were no allegations that the roof defects caused water to come into the house or that the home was a substantial threat to the plaintiffs' health or safety.(fn15) Cracks in foundation walls were insufficient for a breach.(fn16) Although earlier Illinois cases required plaintiffs to allege the home was unfit for human habitation, a later case in that state broadened the implied warranty, holding that a house that was capable of being inhabited did not satisfy the implied warranty where substantial defects included defective siding and an ill-fitting bay window.(fn17) The later Illinois case referred to a requirement that the home be "reasonably fit for its intended use."(fn18) Ohio courts have similarly defined the IWWC as "akin to a claim of breach of an implied warranty of fitness for a particular purpose,"(fn19) which is a more appropriate analogy to the Implied Warranty of Habitability, not the Implied Warranty of Workmanlike Construction.

It is not unusual for a court to confuse the two implied warranties. The Tennessee Court of Appeals referred to an implied warranty of habitability, but described it as a representation that the construction was completed in a workmanlike manner, and cited as authority a case that discussed the IWWC.(fn20) North Carolina courts are similarly confused, combining the two implied warranties, referring to an implied warranty of habitability, which the court defined as construction "in a workmanlike manner, so as to meet the standard of workmanlike quality then prevailing at the time and place of construction."(fn21) A North Carolina case involved a garage that was partially blocked by steps, which would be more appropriately decided under the IWWC rather than the IWH.(fn22) Another North Carolina court stated in its introduction that a jury found the defendants liable for breach of the IWWC; however later in the opinion the court stated that the plaintiff alleged a breach of the IWH.(fn23) The confusion of the two warranties may be one reason there are many more reported cases involving these implied warranties in North Carolina than in other states.(fn24)

Some scholars also refer to an implied warranty of "workmanlike construction and habitability."(fn25) A Colorado court similarly referred to an "implied warranty of habitability and fitness," which it described as "defect due to improper construction, design, or preparation."(fn26) The confusion of the two warranties causes difficulty because different types of defects are required for a breach, different standards are ap-plied for a valid waiver or disclaimer of the warranty, and a codification of the IWWC may exclude a common law IWWC, but not the IWH. In states that have codified the IWWC, the confusion with the IWH is also problematic because some statutes do not specify solutions for these issues.

All jurisdictions are not consistent in their treatment of common law implied warranties. Washington does not recognize the implied warranty of workmanlike construction.(fn27) Missouri relies instead on implied warranties of merchantable quality and reasonable fitness, which are limited to the first purchaser of a new home from a builder.(fn28) A Missouri homeowners' association was denied recovery under these implied warranties against a builder for a defectively designed retaining wall on common property, because the association was not a first purchaser of a new home.(fn29) The author suggests that all jurisdictions should recognize the separate implied warranties of the IWH and the IWWC. Courts have implied these warranties for centuries with equitable results.

3. STATES THAT HAVE CODIFIED THE IWWC

Only a handful of states have codified the IWWC, including: Indiana, Louisiana, Maryland, Minnesota, Mississippi, New Jersey, New York, and Virginia. Each of these statutes applies only to residential dwellings and not commercial buildings. Most of these statutes cover newly constructed homes, and not remodeling, additions, or repair work, although...