Hershey v. Rich Rosen Construction Co

Brief Fact Summary. Hershey, (Appellees) are the subsequent purchasers of a residential home built by Rich Rosen Construction Co., (Appellant). Appellee brought suit for damages caused by Appellant’s faulty stucco application more than twelve years ago. Appellants appeal the trial court’s judgment in favor of Appellees.

Synopsis of Rule of Law. An implied warranty should be voided for lack of a reasonable inspection only if the defect could have been discovered during in an inspection made by the average purchaser, not an expert. The duration that an implied warranty will exist is a factual determination that will depend in part on the life expectancy of the questioned component in a non-defective condition and whether liability is reasonable at the point of the breach under the particular facts of the case.

Facts. Appellant completed construction of the house at issue in this case on April 1, 1976. Appellees purchased a home from the second owner of this house. Prior to the purchase, Appellees performed a “walk-around inspection during which he did not see any cracks or defects in the stucco on the exterior of the house. After two years Appellees discovered that the problem resulted from the exterior application being improperly done at the time of construction. There were building code violations and the workmanship was below average at best. At that point Appellee brought this suit. Appellant contends that a “reasonable inspection” must include, as one of its components, an inspection by an expert or professional home inspection services to scrutinize the house for internal defects prior to purchase. In addition, Appellant contends that the trial court’s extension of an implied warranty more than twelve years after completion of construction is unreasonable and fails to meet the limit
ations on the warranty set forth in previous cases.

Issue.
Whether the “reasonable inspection of the structure prior to purchase” required to recover for a latent defect under a theory of implied warranty was met by plaintiffs’ inspection or whether an inspection by an expert was required; and

Whether the time period between the stucco installation and the filing of the complaint is an unreasonable time to extend a home builder’s implied warranty of habitability and workmanship for a stucco installation.

Held.
The evidence in this case clearly established that the average purchaser would not have discovered the defect upon reasonable inspection and that plaintiff made such an inspection.

Under these circumstances, based on the expected life of the defective component of the house, twelve years was not an unreasonable period for an implied warranty of habitability and workmanship to exist.

Discussion.
A reasonable inspection does not require expert examination. The policy behind the requirement of a reasonable inspection is to avoid a windfall to the purchaser who negotiates a reduction in the purchase price based upon defects and then subsequently seeks damages from the builder for the same defects. The requirement that a reasonable inspection made prior to purchase be done by an expert rather than by the purchaser would negate the policy considerations for recognizing an implied warranty in the first place. In this case the evidence showed that the average purchaser would not have discovered the defect upon a reasonable inspection and that the plaintiff made such an inspection.

The twelve year warranty period is not unreasonable. In this case, the trial court heard expert testimony that a stucco exterior has a normal life expectancy of thirty to fifty years. The process applied to Appellees’ house could be reasonable expected to last more than twelve years that it did. The evidence also established that the damage from the defective stucco application was latent, gradual, and progressive, occurring over a period of at least ten years. The defect was not discoverable by reasonable inspection until it actually was discovered by Appellees. Therefore twelve years is not an unreasonable period of time for an implied warranty of habitability and workmanship to exist.