366 P.3d 1264
Wyo.2016Background
- In July 2009 Leon and Brenda Rogers contracted to buy a newly built home from Jeffrey Wright; the purchase contract contained an "as is" clause and a seller representation that there were no "known violations" of applicable codes. Only Wright (not JWright Development or JWright Companies) was a party to the sales contract.
- After moving in the Rogers discovered structural and foundation defects, improper grading, leaks, and absence of a final electrical inspection; they sued Wright, JWright Development, and JWright Companies for breach of contract, negligence, breach of warranty, negligent misrepresentation, and intentional misrepresentation.
- The district court granted summary judgment for all JWright defendants on all claims; it relied on the contract's "as is" and disclaimer/merger provisions to dismiss contract, warranty, and misrepresentation claims and concluded the Rogers could not show reliance for the tort claims.
- The Rogers appealed; the Wyoming Supreme Court reviewed summary judgment de novo and examined whether genuine issues of material fact existed as to each claim, and whether contract disclaimers barred tort recovery where fraud or independent duties might exist.
- The Court affirmed summary judgment on breach of contract (no evidence Wright knew of violations), intentional misrepresentation (no pre-contract misrepresentations by defendants), and breach of warranty against JWright Development (no consideration for an implied warranty); but reversed summary judgment on negligence as to the entities that may have built the home, recognizing an independent duty of reasonable care by builders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract (against Wright) | Wright’s representation that there were no code violations was breached because violations existed | Contract’s plain language requires Wright to know of violations; "as is" clause bars relief | Affirmed — Rogers produced no evidence Wright knew of violations when contract was signed; "as is" controls against Wright |
| Intentional misrepresentation | JWright defendants (and agent Rex) made false pre-contract representations (e.g., built on native soil; warranty included) inducing the purchase | Merger/disclaimer and "not relying" clause bar reliance; no pre-contract communications existed with defendants | Affirmed — disclaimer not dispositive for fraud, but undisputed evidence shows no pre-contract representations by JWright defendants, so claim fails |
| Negligence | Builders breached duty to construct home in a workmanlike manner causing foreseeable damages | Summary judgment because Rogers cannot show "reliance" and economic loss rule bars tort recovery for purely economic damages | Reversed in part — negligence survives against the actual builder(s) (JWright entities) because builders owe an independent duty of reasonable care; economic loss rule inapplicable where duty is independent; summary judgment improper as to negligence |
| Breach of warranty (express warranty alleged against JWright Development) | JWright Development issued warranty paperwork/advertised warranty and made repairs, creating an express or implied-in-fact warranty | No consideration or contract between Rogers and JWright Development; Rogers bought from Wright who disclaimed warranties; no implied-in-fact contract because Rogers provided no consideration | Affirmed — no consideration or contractual privity with JWright Development; no implied-in-fact warranty proven |
Key Cases Cited
- Claman v. Popp, 279 P.3d 1003 (Wyo. 2012) (elements of intentional misrepresentation and when pre-contract fraud allows avoidance of disclaimer)
- Snyder v. Lovercheck, 992 P.2d 1079 (Wyo. 1999) (fraud can defeat an "as is" clause; summary judgment standards)
- Rissler & McMurry v. Sheridan Area Water Supply Joint Powers Bd., 929 P.2d 1228 (Wyo. 1996) (economic loss rule and limits on tort recovery for purely economic losses; negligent misrepresentation context)
- Tavares v. Horstman, 542 P.2d 1275 (Wyo. 1975) (implied warranty of habitability and negligent construction claims against builders)
- Moxley v. Laramie Builders, Inc., 600 P.2d 733 (Wyo. 1979) (extending implied warranty and negligent construction protections to subsequent purchasers)
- Greeves v. Rosenbaum, 965 P.2d 669 (Wyo. 1998) ("as is" clause can waive implied warranties against seller; purchasers’ inspection responsibilities)
- Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983) (builder’s independent duty to construct without negligence; latent defect recovery for subsequent purchasers)
- Inman v. Boykin, 330 P.3d 275 (Wyo. 2014) (standard of review for summary judgment)