312 P.3d 1130
Ariz. Ct. App.2013Background
- Plaintiffs (homeowners led by Yanni) sued plumbing subcontractors (Tucker Plumbing and Brewer Enterprises) alleging defective brass fittings and improper installation caused premature corrosion, leaks, and related construction defects.
- Subcontractors were hired by a general contractor/developer; there was no contractual privity between homeowners and subcontractors.
- Plaintiffs framed the claim as breach of the implied warranty of workmanship and habitability (a contract-based remedy recognized for new-home construction).
- Subcontractors moved for summary judgment arguing privity is required to sue for breach of the implied warranty; plaintiffs cross-moved, arguing privity is not required and the warranty arises from the construction itself.
- The trial court granted summary judgment for subcontractors, citing remoteness and that other parties (builder/developer/general contractor) are primary.
- On appeal, the court affirmed, holding existing privity exceptions do not extend to subcontractors in these circumstances and plaintiffs may pursue remedies against builders/contractors who can in turn seek indemnity or assign claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether contractual privity is required to sue a subcontractor for breach of the implied warranty of workmanship and habitability | Privity is unnecessary; the implied warranty "arises from the construction" and thus extends to those who actually performed the work | Only parties or privies to the contract may enforce the implied warranty; subcontractors contracted with the general contractor, not homeowners, so no privity | Privity requirement remains; Richards and Lofts created narrow exceptions but did not extend liability to subcontractors absent privity |
| Whether Richards and Lofts abolished privity in the new-home setting to allow suits against subcontractors | Those cases removed privity barriers for defective-home buyers and thus should allow claims against subcontractors | Richards and Lofts were limited to allowing suits against builders/vendor arrangements and do not extend to subcontractors | Richards and Lofts are narrow exceptions for builders/vendor relationships; they do not abolish privity as to subcontractors |
| Whether statutory definitions or administrative enforcement (PDA, repose statute, ROC) alter implied-warranty privity requirements | Statutes and ROC practice show public policy favors homeowner protection and should permit suits against subcontractors | Statutes and ROC provide procedural remedies/time limits but do not create or expand the judicially created implied-warranty cause of action | Statutes/ROC procedures do not create a cause of action or eliminate privity; they do not affect implied-warranty scope |
| Whether plaintiffs are left without remedy if subcontractors are not liable directly | Subcontractors are the parties that "actually constructed" the defects, so homeowners would be left without effective recourse if barred | Homeowners can sue builders/developers/general contractors, who can seek indemnity or assign claims; statutory and common-law remedies remain | Plaintiffs may pursue the general contractor/vendor/developer, who can indemnify or assign claims; direct suits against subcontractors are barred without privity |
Key Cases Cited
- Columbia Western Corp. v. Vela, 122 Ariz. 28, 592 P.2d 1294 (App. 1979) (recognized implied warranty of workmanship and habitability in new-home construction)
- Lofts at Fillmore Condo. Ass’n v. Reliance Commercial Constr., Inc., 218 Ariz. 574, 190 P.3d 733 (2008) (permitted implied-warranty claims where business form would otherwise deny innocent buyers redress; narrowly expanded privity exception for builders)
- Richards v. Powercraft Homes, Inc., 139 Ariz. 242, 678 P.2d 427 (1984) (held subsequent buyers may sue builder-vendor for implied warranty despite lack of privity)
- Webb v. Gittlen, 217 Ariz. 363, 174 P.3d 275 (2007) (discussed assignability of unliquidated non-personal injury claims)
- Nastri v. Wood Bros. Homes, Inc., 142 Ariz. 439, 690 P.2d 158 (App. 1984) (treated workmanship and habitability as a single implied warranty)