John sullivan/susan Sullivan v. Pulte Home Corp
232 Ariz. 344
| Ariz. | 2013Background
- Pulte Home Corporation built and sold a home in 2000 to its initial purchaser, who sold it to the Sullivans in 2003.
- The Sullivans, as subsequent buyers, did not contract with Pulte.
- In 2009 the Sullivans discovered a defective hillside retaining wall and site.
- An engineer found the wall and site construction dangerously defective; the Sullivans sought Pulte to cover repairs.
- Pulte refused, claiming it was no longer responsible for defects.
- The Sullivans filed a multi-claim action; trial court dismissed claims; court of appeals remanded on economic loss doctrine issues; Arizona Supreme Court granted review to address that doctrine’s scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the economic loss doctrine bars non-contracting tort claims | Sullivans lack contract with Pulte; doctrine should not bar tort claims | Economic loss doctrine should bar non-contracting tort claims | Doctrine does not bar Sullivans' tort claims against non-contracting party |
| Whether the Sullivans’ implied warranty remedy affects the doctrine’s reach | Implied warranty provides contractual remedy despite lack of privity | Remedy exists but is governed by repose; doctrine still applies | Economic loss doctrine does not preclude tort claims; repose limits implied warranty claim progress on remand |
| Impact of Arizona's statute of repose on the claims | Implied warranty under common law not defeated by repose in tort context | Repose precludes implied warranty actions; affects scope of remedies | Statute of repose does not bar negligence claims; does not address tort actions under doctrine on remand |
| Whether the case should be remanded for consideration of other arguments | Court should address other tort arguments raised | Remanded to address remaining arguments consistent with opinion |
Key Cases Cited
- Flagstaff Affordable Housing Ltd. P'ship v. Design Alliance, Inc., 223 Ariz. 320 (2010) (economic loss doctrine limited to contracting parties; non-contracting claims possible with substantive law)
- Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc., 218 Ariz. 574 (2008) (privity not required for implied warranty by subsequent purchasers)
- Richards v. Powercraft Homes, Inc., 139 Ariz. 242 (1984) (privity not required for breach of implied warranty of workmanship/habitability)
- Woodward v. Chirco Constr. Co., 141 Ariz. 514 (1984) (imputes warranty into construction contracts; allows subsequent purchasers’ action)
- Donnelly Constr. Co. v. Oberg/Hunt/Gilleland, 139 Ariz. 184 (1984) (economic loss rule not applied to negligence claims by non-contracting party)