Conway, M., et ux v. The Cutler Group, Inc., Aplt.
626 Pa. 660
| Pa. | 2014Background
- In 2003 Cutler Group sold a new house to the Fields; the Fields later sold it to the Conways, who discovered latent water infiltration and sued Cutler in 2011 alleging breach of the builder’s implied warranty of habitability.
- The trial court dismissed the complaint for lack of contractual privity between the Conways and the builder; the Superior Court reversed, holding the implied warranty extends to subsequent purchasers.
- The Superior Court relied on policy concerns and on Spivack, which had extended the warranty to a later user-purchaser where the original purchaser never occupied the unit.
- The Pennsylvania Supreme Court granted review to decide whether a subsequent purchaser may recover contract damages for breach of the builder’s implied warranty of habitability.
- The Supreme Court reversed the Superior Court, holding the warranty remains grounded in contract and requires privity when the original buyer was a purchaser-user; extension to subsequent purchasers is a legislative, not judicial, matter.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the builder’s implied warranty of habitability extends to second or subsequent purchasers | Conway: public policy and fairness require extending the warranty; privity is unnecessary because the warranty is a judicial creation protecting homebuyers | Cutler: warranty rests on contract/privity between builder and original purchaser; extension would impose indeterminate liability and should be left to the legislature | The implied warranty of habitability does not extend to subsequent purchasers when there is no privity with the builder; privity required under these facts |
Key Cases Cited
- Elderkin v. Gaster, 288 A.2d 771 (Pa. 1972) (establishes builder-vendor implied warranty of habitability for original purchaser)
- Spivack v. Berks Ridge Corp., 586 A.2d 402 (Pa. Super. 1990) (extends warranty to first user-purchaser where original buyer never occupied unit)
- Conway v. Cutler Group, Inc., 57 A.3d 155 (Pa. Super. 2012) (Superior Court decision extending warranty to subsequent purchasers)
- Speight v. Walters Dev. Co., 744 N.W.2d 108 (Iowa 2008) (Iowa Supreme Court extends implied construction warranty to subsequent purchasers)
- Nichols v. R.R. Beaufort & Assocs., Inc., 727 A.2d 174 (R.I. 1999) (Rhode Island limits builder liability for subsequent purchasers to certain latent defects and timeframes)
- Long Trail House Condo. Ass’n v. Engelberth Constr., Inc., 59 A.3d 752 (Vt. 2012) (Vermont declines to eliminate privity requirement for implied warranty claims)
- Coburn v. Lenox Homes, Inc., 378 A.2d 599 (Conn. 1977) (Connecticut defers to statute and refuses to extend implied warranty to subsequent purchasers)