Sullivan v. Pulte Home Corp.
290 P.3d 446
Ariz. Ct. App.2012Background
- Pulte built a hillside community and sold the home at issue to the original purchaser in 2000; the Sullivans bought from that purchaser in 2003, with no direct contract between Pulte and the Sullivans.
- The home was built with a retaining wall; the Sullivans discovered problems with the wall and site grading in March 2009 and informed Pulte, which disclaimed ongoing responsibility.
- Engineers concluded the wall construction and lot grading did not meet proper standards.
- The Sullivans filed suit in February 2010; Pulte removed to federal court, then remanded to state court; after remand the superior court dismissed on Rule 12(b)(6) and awarded Pulte $5,000 in fees.
- The Sullivans appeal, and the appellate court affirms some rulings, reverses others, and remands for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the statute of repose bars implied warranty claims | Sullivan argues § 12-552 may not bar implied warranties | Pulte contends eight-year repose applies to implied warranty claims | Statute of repose applies and bars the implied warranty claim |
| Constitutional validity of § 12-552 as applied | Constitutionality under Article 18, §6 (anti-abrogation) supports tolling or invalidation | § 12-552 is constitutional as applied to contract claims | § 12-552 constitutional as applied to contract-based implied warranties |
| Equitable tolling of the statute of repose | Equitable tolling could extend time for latent defects discovered late | Tolling is inappropriate for a statute of repose | Equitable tolling does not apply to § 12-552 |
| Economic loss doctrine applicability | No privity; ELD should not bar tort claims | ELD bars tort claims where a contract remedy exists | ELD does not bar tort claims; Sullivans not in privity with builder |
| CFA and fraudulent concealment claims for a subsequent purchaser | CFA applies to concealment of defects affecting sale; Sullivans relied on builder reputation | CFA does not protect subsequent purchasers; no direct sale/interaction | CFA claim not viable for a subsequent purchaser; fraudulent concealment claim dismissed |
Key Cases Cited
- Cullen v. Auto-Owners Ins. Co., 189 P.3d 344 (Ariz. 2008) (wellpled facts accepted for Rule 12(b)(6) review)
- Albano v. Shea Homes Ltd. P’ship, 254 P.3d 360 (Ariz. 2011) (tolling not allowed for statute of repose; anti-abrogation limits tort claims, not contract)
- Flagstaff Affordable Housing Ltd. P’ship v. Design Alliance, Inc., 223 P.3d 664 (Ariz. 2010) (economic loss doctrine limits contractual remedies in construction defects; privity matters)
- Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc., 190 P.3d 733 (Ariz. 2008) (implied warranty sounds in contract; privity not required for contract claim)
- Samaritan Health Sys. v. Superior Court, 981 P.2d 584 (Ariz. 1998) (anti-abrogation analysis for contract vs. tort claims)
- Sammartino? (as cited) Wells Fargo Bank v. Ariz. Laborers' Local, 38 P.3d 12 (Ariz. 2002) (fraudulent concealment discussion cited; party to transaction requirement)
- Woodward v. Chirco Constr. Co., 687 P.2d 1269 (Ariz. 1984) (implied warranty arises out of contract)