972 N.E.2d 907
Ind. Ct. App.2012Background
- Corrys contracted with Woodland Homes in 2001 to build a residence on Lot 117, Perry Lake Estates; Oakmont sold the lot to Woodland at a reduced cost due to soil issues.
- Jahn, Woodland's president and an MTA realtor, advised about pilings and soil conditions, later suggesting alternative “beefed up” slab construction.
- Oakmont procured a joint soil test and advised pilings; despite that, the construction contract did not require pilings and Woodland was the builder.
- The house experienced structural problems after move-in (2002), including cracks and sinking; the Corrys eventually had helix piers installed at their expense.
- Woodland later went bankrupt; the Corrys filed suit October 31, 2007 alleging various claims against Jahn, Woodland, Malcolm, Oakmont, and MTA; Oakmont and MTA obtained partial summary judgment in 2011; judgment on the 54(B) entry occurred in 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract by Oakmont/MTA | Corrys contend Oakmont/MTA‑party to contract breached. | Oakmont/MTA not parties to the Woodland contract. | Summary judgment for Oakmont/MTA; no contract breach by them. |
| Breach of fiduciary duty via dual/limited agency | Jahn/Malcolm acted as dual/limited agents; failed to timely disclose. | No actionable fiduciary breach; limited disclosure doctrine applies. | No fiduciary claim; no damages from disclosure. |
| Implied warranty of habitability | Developer impliedly warrants soil suitability; latent defect due to soil. | Defect stems from builder’s method, not soil; no implied warranty against Oakmont/MTA. | No implied warranty of habitability against Oakmont/MTA. |
| Negligence and economic loss | Oakmont/MTA failed to supervise and caused economic loss. | Economic loss rule bars tort for pure economic loss; contract remedies applicable. | Negligence claim barred; economic loss recoverable only in contract. |
| Fraud/derivative liability for Jahn’s statements | Oakmont/MTA liable for Jahn’s misrepresentations as agent. | No agency or misrepresentation by Oakmont/MTA; statements were puffery. | No fraudulent misrepresentation; no agency liability; judgment for Oakmont/MTA. |
Key Cases Cited
- Indianapolis-Marion Co. Public Library v. Charlier Clark & Linard, P.C., 929 N.E.2d 722 (Ind. 2010) (economic loss rule in construction context; exceptions discussed)
- Jordan v. Talaga, 532 N.E.2d 1174 (Ind.Ct.App.1989) (implied warranty of habitability where developer knew of latent defects)
- Smith v. Yang, 829 N.E.2d 624 (Ind.Ct.App.2005) (reliance in implied warranty cases; remand on liability assessment)
- Haegert v. University of Evansville, 955 N.E.2d 753 (Ind.Ct.App.2011) (elements of breach of contract and damages)
- Gunkel v. Renovations, Inc., 822 N.E.2d 150 (Ind.2005) (economic loss rule; construction project context)