Today's discussion relating to this topic specifically in Florida -- but providing food for thought elsewhere also -- come from Division 1 member Jason M. Rodgers-da Cruz of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A. of Coral Gables, Florida. Jason's practice relates specifically to construction defect claims that often are raised on behalf of condominium associations. This article discusses a Florida Supreme Court decision issued late last year called Maronda Homes, Inc. v. Lakeview Reserve Homeowners Ass'n, 127 So. 3d 1258 (Fla. 2013).
(Note: There are four footnotes in this article, which are denoted with a bracketed number: e.g., [1].)
Florida’s Common Law
Implied Warranties: A brief review of the scope and application of Florida’s
common law implied warranties.
In representing
a purchaser, developer or a developer/builder involved in a warranty dispute
pertaining to a residence in the State of Florida, consider the Florida Supreme
Court’s most recent ruling concerning the scope and application of common law
implied warranties in Maronda Homes, Inc. v. Lakeview Reserve Homeowners
Ass’n, 127
So. 3d 1258 (Fla. 2013).
In Maronda, a homeowner’s association filed
suit against its developer for breach of common law implied warranties for a
defective storm water drainage system serving the entire property. The association
experienced buckling, splitting of pavement and asphalt, excessive flooding,
soil erosion, mosquito infestation and swamp-like conditions, which directly
affected the homes and access to the homes.
The developer filed a third party
action against the contractor seeking indemnification for the allegations
raised by the association. The
developer and the contractor filed a motion for summary judgment against the association,
and relied, in part, on the Fourth District Court of Appeal’s application of
common law implied warranties in Port
Seawall Harbor & Tennis Club Owners Association, Inc. v. First Federal
Savings & Loan Association of Martin County, 463 So. 2d 530 (Fla. 4th
DCA 1985). They argued that the defects
did not meet the elements required for asserting common law implied warranties
because the alleged defects did not immediately support the residences.[1]
The trial court agreed with the developer and
contractor and granted the motion for summary judgment. The association appealed to the Fifth
District Court of Appeal. The Fifth
District reversed the trial court and certified a conflict (to the Florida
Supreme Court) with the Fourth District’s application of common law implied
warranties in Port Seawall. An appeal to the Florida Supreme Court
ensued.
The Florida Supreme
Court conducted a historical review of the rationale and standards supporting common
law implied warranties, including 1) the privity requirement between the seller
and the owner,[2]
and 2) that common law warranties were
not extended to investors. [3]
The court then adopted the standard set forth
by the Fifth District, known as the “’essential services’” standard. The essential services standard provides that
if the improvement provides an essential service to the habitability of the
residence, then common law implied warranties apply. Conversely, if the
improvement does not provide essential services to the residence, then the
common law implied warranties do not apply. Further, the improvements need not
be physically attached to the homes but rather provide essential services to
the habitability of the home. The court
opined that the essential services standard is consistent with the “Florida
requirement that the implied warranties apply to improvements that are
’immediately supporting’ a residence.”
However, the court noted that essential services do not include “items
that provide mere convenience or aesthetic beauty, such as landscaping,
sprinkler systems, recreational facilities or other similar improvements.”
The court
also addressed the Florida Legislature’s attempt to limit common law implied
warranties in Section 553.835, Florida Statutes. [4] The legislative impetus for enacting Section
553.835, can be found in Section 553.835(1):
[t]he Legislature finds
that the courts have reached different conclusions concerning the scope and
extent of the common law doctrine or theory of implied warranty of fitness and
merchantability or habitability for improvements immediately supporting the
structure of a new home, which creates uncertainty in the state’s fragile real
estate and construction industry.
Section 553.835(4) specifically limits
common law implied warranties as a cause of action for an offsite improvement. Section 553.835(4) provides, in part,
that:
[t]here is no cause of action in law or
equity available to a purchaser of a home or to a homeowners’ association based
upon the doctrine or theory of implied warranty of fitness and merchantability
or habitability for damages to offsite improvements…
Although
the court briefly reviewed the Legislature’s definition of an offsite
improvement, it primarily focused on whether the statute could be retroactively
applied. The Court held that the statute
could not be retroactively applied as the Legislature attempted to limit vested
common law implied warranties. The court
opined that Section 553.835 violated the right of access to the courts and that
the Legislature’s attempt was a “clear violation of separation of powers
because the Legislature does not sit as a supervising appellate court over our
district courts of appeal.” Accordingly,
Section 553.835 “does not apply to any causes of action that accrued before the
effective date of this section.”
[1]Port Seawall Harbor
& Tennis Club Owners Association, Inc. v. First Federal Savings & Loan
Association of Martin County, 463 So. 2d 530 (Fla. 4th DCA
1985)(declined to extend common law implied warranties to the facts in the case
because "[t]he foot bridge in question and the defective work complained of involved roads and drainage in the subdivision and did not pertain to the "construction of homes or other improvements immediately supporting the residences.")
[2] Gable v. Silver, 264 So. 2d 418 (Fla. 1972).
[3] Conklin v. Hurley, 428 So. 2d 654 (Fla. 1983).
[4] The Florida
Legislature enacted Section 553.835, Florida Statutes, on July 1, 2012, and
intended for the statute to apply retroactively.
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