AZAPP is a blog that provides a thorough, up-to-date, and efficient resource to stay abreast of significant developments concerning civil cases in Arizona's appellate courts - the two Divisions of the Arizona Court of Appeals and the Arizona Supreme Court.
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Thursday, January 27, 2005
Hayden Business Center Condominiums Ass'n v. Pegasus Development Corp.: Division One Holds that Implied Warranty of Good Workmanship Claim Does Not Extend to Subsequent Purchasers of Commercial Buildings.
An implied warranty of good workmanship claim is a contract claim, and thus generally only the parties to a contract may bring such a claim. But there are exceptions to this limitation. One exception that the Arizona Supreme Court has recognized permits subsequent purchasers of homes to bring such implied warranty claims against the entity that manufactured the homes. This exception is based on public policy considerations, including the relative unsophistication of homebuyers as compared to homebuilders and the increasing mobility of families. In this case, however, the Court of Appeals was asked to extend this exception to subsequent purchasers of commercial buildings. The Court declined to do so, reasoning that the same public policy factors are not present with respect to commercial properties, becuase there is not generally a "gross disparity in sophistication" between buyers and sellers of commercial properties, and because commercial buildings "generally are not mass-produced." The Court accordingly affirmed the trial court's grant of summary judgment against the Hayden Business Center Condominiums Association (the Association), the assignee of the claims of various subsequent purchasers of commercial property that Pegasus Development Corporation (Pegasus) helped to build. The Court also affirmed the trial court's denial of the Association's motion to amend its complaint to add a negligence claim against Pegasus, holding that a negligence claim was barred by precedent establishing that a purchaser of property can sue only in contract for economic harm arising out of defective construction.
The opinion was authored by Judge Thompson and joined by Judges Gemmill and Irvine.
An implied warranty of good workmanship claim is a contract claim, and thus generally only the parties to a contract may bring such a claim. But there are exceptions to this limitation. One exception that the Arizona Supreme Court has recognized permits subsequent purchasers of homes to bring such implied warranty claims against the entity that manufactured the homes. This exception is based on public policy considerations, including the relative unsophistication of homebuyers as compared to homebuilders and the increasing mobility of families. In this case, however, the Court of Appeals was asked to extend this exception to subsequent purchasers of commercial buildings. The Court declined to do so, reasoning that the same public policy factors are not present with respect to commercial properties, becuase there is not generally a "gross disparity in sophistication" between buyers and sellers of commercial properties, and because commercial buildings "generally are not mass-produced." The Court accordingly affirmed the trial court's grant of summary judgment against the Hayden Business Center Condominiums Association (the Association), the assignee of the claims of various subsequent purchasers of commercial property that Pegasus Development Corporation (Pegasus) helped to build. The Court also affirmed the trial court's denial of the Association's motion to amend its complaint to add a negligence claim against Pegasus, holding that a negligence claim was barred by precedent establishing that a purchaser of property can sue only in contract for economic harm arising out of defective construction.
The opinion was authored by Judge Thompson and joined by Judges Gemmill and Irvine.
Posted date: Thu, Jan 27, 2005
