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Homeowner Permitted to Bring Negligence Claim against Plumber


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By Patricia Porter Kryder

Background
A construction company purchased a partially built house. Thereafter, the president of the company personally installed the water line to the residence, and sold the home as complete to the new homeowner. The contract for the sale of the home included a one-year express warranty against “defects in materials and workmanship . . .  from the date of possession and [the company] agree[d] to pass on to Buyer all warranties provided on mechanical equipment installed on the property.”

When the new homeowner received a higher than average water bill, he first attributed it to watering the lawn during the springtime months. However, when he received another high water bill and found no evidence of a leak above the ground, he contacted the company that sold him the new home.

The company dug up the water line and discovered that the main water line had separated from the coupling. An engineer hired by the homeowner determined that the water went underneath the foundation slab of the home and caused heaving, which resulted in cracks in the walls and uneven doors.

The homeowner filed a lawsuit for negligence, breach of implied warranty and strict liability, and breach of express warranty against the company. The homeowner also sued the president, individually, for negligently installing the plumbing. The Kansas trial court dismissed the claim against the plumber based upon the economic loss doctrine. The homeowner appealed.

Contractor’s liability
The Court of Appeals of Kansas, citing a recent Kansas Supreme Court case, found that the rationale underlying the economic loss rule failed to justify straying from case precedent that establishes “a homeowner’s right to assert claims against residential contractors ‘in tort, contract, or both, depending on the nature of the duty giving rise to each claim.’” Thus, a contractor could be liable for negligence in a residential construction project if the homeowner only suffered economic damages. The court held, however, that a homeowner’s claim is only possible if the homeowner can establish that the contractor owed a duty imposed by law, independent of the underlying contract.

The court considered its ruling in Kristick v Catron to determine if the contractor owed a duty to the homeowner. In Kristek, a builder contracted with and built a house for an investment company. The investment company later sold the house to a new homeowner. When the new homeowner noticed stains on the ceiling and walls of the house resulting from a water leak, the new homeowner sued the builder for damages on the theory of negligent construction. The court held in that case that a construction contractor is liable for any injury to a third party, personal or economic, resulting from work negligently performed even though the injury occurs after completion of the work and its acceptance by the owner, when such injury is reasonably certain to occur if the work is negligently done.

Here, the court found that the plumber had a legal duty, independent of any contract, to perform plumbing services without causing economic injury to third parties. As a result, the plumber could be liable for injuries sustained by third parties as a result of any torts he may have committed. The court reasoned that the individual plumber, who undertook the work as a plumber, could not hide behind the company and its contract to perform the job, because the plumber owed the prospective homeowner a legal duty of care independent of the contract with the company who contracted to perform the work.

Takeaway
The economic loss doctrine did not prevent the homeowner in this case from bringing the negligence claim against the plumber. This highlights the fact that contractors in Kansas are now subject to tort actions in residential construction even when the injured party has only suffered economic losses. It is important to note, however, that the economic loss doctrine is far from uniformly applied in every state, and it is imperative to know how it operates in your jurisdiction.

 

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