Section 6 Old Warson - Development of the Cause of Action

• Library: Consumer Law and Practice 2010

Implied warranty claims under Smith v. Old Warson Development Co., 479 S.W.2d 795 (Mo. banc 1972) (referred to as Old Warson), discussed in § 3.5 above, can only be brought by the first purchaser of the new home; "remote vendees" - that is, any buyers after the first one - do not have a claim against the builder. Crowder v. Vandendeale, 564 S.W.2d 879 (Mo. banc 1978). Although Old Warson indicated that the cause of action sounds in tort, the Supreme Court of Missouri later held in Crowder that the claim can only be asserted by the first buyer because the doctrine is grounded in contract and requires privity between the plaintiff and the builder. Crowder, 564 S.W.2d at 881.

Crowder also states that the contract nature of the remedy supports a requirement that the builder be given notice of the alleged defect and an opportunity to cure the defect before suit is brought, which the Court says was implied but not made explicit by Old Warson. See § 3.12 below for additional discussion of whether notice to the home builder and an opportunity to cure is required. Crowder also rejects the possibility of an additional remedy in negligence against a builder by a later purchaser, stating that the benefits that might be gained by permitting such a remedy are outweighed by the disadvantages.Crowder, 564 S.W.2d at 881-82. It should be noted that a portion of Crowder discussing the permissibility of a strict liability tort claim when the only damage is to property has been called into question. See Sharp Bros. Contracting Co. v. Am. Hoist & Derrick Co., 703 S.W.2d 901, 903 (Mo. banc 1986).

The implied warranty of quality and fitness in a new home can extend to parts of the construction that are outside the four walls of the new home. In Hershewe v. Perkins, 102 S.W.3d 73 (Mo. App. W.D. 2003), the court of appeals held that retaining walls constructed on the property at the same time as the new home fell within the implied warranty. While accepting the builder/seller's assertion that Old Warson requires that the structure at issue "must either be a part of the residential structure, provide direct support to the residential structure, or be integral to its use," Hershewe, 102 S.W.3d at 76, the court rejected the argument that the retaining walls at issue were outside of this scope as a matter of law. The court rejected the argument that the retaining walls were purely cosmetic, citing the testimony of the plaintiff's civil and structural engineer. But Hershewe stated that "it is logical that the doctrine of implied warranty . . . does not apply to an item extraneous or unrelated to the home." Id.

Hershewe noted that Christensen v. R.D. Sell Construction Co., 774 S.W.2d 535 (Mo. App. W.D. 1989), also rejected the claim that the structures at issue - driveway and stairs leading to a new residence - were outside of the implied warranty. But streets constructed by a real estate developer have been held to be outside of the implied warranty on a new home. San Luis Trails Ass'n v. E.M. Harris Bldg. Co., 706 S.W.2d 65, 68-69 (Mo. App. E.D. 1986).

The home does not have to be unusable for the implied warranty to apply. Hershewe, 102 S.W.3d at 78; Christensen, 774 S.W.2d at 538-39 (a claim was not defeated by the fact that the...