Opinion
NO. 2012 CA 0438
12-21-2012
JAMES S. STUTTS AND LISA K. STUTTS v. CHAD Z. MELTON AND LAUREN MEADORS MELTON
Randall A. Ship Baton Rouge, Louisiana Counsel for Defendants/Appellants Chad Z. Melton and Lauren Meadors Melton W. Luther Wilson Baton Rouge, Louisiana Counsel for Plaintiffs/Appellees James S. Stutts and Lisa K. Stutts
NOT DESIGNATED FOR PUBLICATION
Appealed from the
21st Judicial District Court
In and for the Parish of Livingston
State of Louisiana
Case No. 115,741
The Honorable Wayne Ray Chutz, Judge Presiding
Randall A. Ship
Baton Rouge, Louisiana
Counsel for Defendants/Appellants
Chad Z. Melton and Lauren
Meadors Melton
W. Luther Wilson
Baton Rouge, Louisiana
Counsel for Plaintiffs/Appellees
James S. Stutts and Lisa K.
Stutts
BEFORE: CARTER, C.J., GUIDRY, GAIDRY,
MCDONALD, AND WELCH JJ.
GAIDRY , J.
Chad Z. and Lauren M. Melton (Melton) appeal two judgments of the 21st Judicial District Court, one being a partial summary judgment on an issue of liability, and the other being the trial court's final judgment on liability, damages, and attorney fees. Specifically, the Appellants dispute the trial court's application of law and award of attorney fees. For the following reasons, we reverse the rulings of the trial court and dismiss the petition of James S. and Lisa K. Stutts (Stutts) with prejudice.
FACTS AND PROCEDURAL HISTORY
On or about September 13, 2005, Stutts entered into an agreement to purchase from Melton an approximately nine-month-old home located in Walker, Louisiana. On or about September 26, 2005, Melton gave to Stutts a Residential Property Disclosure Form, which conformed to La. R.S. 9:3196 et seq., stating specifically to this case that there were no known defects in the roof. The purchase of the property was completed on or about September 30, 2005.
Stutts claimed noticing stains along the walls of the house in the summer of 2006. The staining was determined to be a result of defective roofing materials. Stutts contacted the roofing manufacturer, who stated that Melton had previously discovered the defect and entered into a settlement agreement with the roofing manufacturer concerning the defective roof approximately 60 days prior to selling the home to Stutts. Despite the settlement, Melton did not replace the roof.
In the settlement, Melton was paid $13,600.00 by the manufacturer, Atlas Roofing Corporation. This settlement exhausted all rights under warranty against the manufacturer.
Stutts claims that the roof's defective condition was not apparent at the time of sale, and that instead of replacing the defective roof, Melton simply covered or cleaned the stains so that at the time of the sale the defect would not be discoverable. Stutts therefore averred in the petition that Melton had committed fraud pursuant to Louisiana Civil Code art. 1953. Stutts prayed for the cost of replacing the roof, or the amount which Melton received in the settlement with the manufacturer, plus costs for additional repairs related to the defective roof, legal interest, and attorney fees.
La. C.C. art. 1953 states: "Fraud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction."
Stutts filed a motion for summary judgment on the Art. 1953 claim, presenting evidence and testimony to prove there was no genuine issue of material fact as to whether Melton committed fraud. Melton's argument in opposition is that Art. 1953 is the incorrect remedy in this matter, and that the New Home Warranty Act (NHWA) provides the exclusive remedy. Judgment was rendered on February 17, 2009, finding Melton liable to Stutts pursuant to La. R.S. 9:3196 et seq. A bench trial was held on March 17, 2011, in which the trial court found Melton guilty of civil fraud and liable to Stutts for damages totaling $15,503.55. The court also awarded Stutts $12,000 in attorney fees. As a result, Melton appealed both judgments.
La. R. S. 9:3141 et seq.
Melton filed a motion to clarify the judgment on July 31, 3008, as three judgments were submitted and signed by the trial court, each in conflict with the other. As a result, the court revised a "Partial Summary Judgment" originally signed July 2, 2008 by eliminating the reference to Art. 1953. then signed it as the final judgment on February 17, 2009. All other previous judgments were rendered void.
ASSIGNMENTS OF ERROR
The trial court erred by finding liability on the part of Melton pursuant to La. R.S. 9:3196, as the only cause of action available to Stutts and against Melton would have been the NHWA. The trial court erred in finding liability pursuant to La. R.S. 9:3196 because, even if applicable, the alleged defects did not rise to the legal standard for disclosure pursuant to that statute. On appeal, Stutts claims that the trial court erred in its application of Art. 1953 by awarding damages and attorney fees pursuant to that article.
DISCUSSION
The New Home Warranty Act provides exclusive remedies, warranties, and peremptive periods as between the builder and owner relative to home construction and statutorily sets forth that no other provisions of law relative to warranties and redhibitory vices and defects shall apply. Ciliberti v. Mistretta, 2003-1559, p. 5 (La. App. 1 Cir. 5/14/04), 879 So.2d 789, 792, citing La. R.S. 9:3150. The NHWA was enacted in 1986 for the purpose of "providing clear, concise, and mandatory warranties for the purchasers and occupants of new homes in Louisiana and by providing for the use of homeowners' insurance as additional protection for the public against defects in the construction of new homes." Morris v. Nam Enterprises, Inc., 2005-0236, p. 6 (La. App. 1 Cir. 3/1/06), 929 So.2d 115, 119, quoting La. R.S. 9:3141. This language in the NHWA clearly characterizes the legislature's intent to make the NHWA the exclusive avenue to remedy defects in new homes. If the NHWA is applicable to the instant case, no other provision of law need be examined.
La. R.S. 9:3144 provides specific warranties, each beginning from the warranty commencement date. See Melancon v. Sunshine Construction, Inc., 97-1167 (La. App. 1 Cir. 5/15/98), 712 So.2d 1011, 1015. The defect Stutts complained of was color bleeding along the walls. Since this is not an internal or structural defect, the only warranty from 9:3144 that could apply is the one year warranty, which provides for any defect due to noncompliance with the building standards or any other defect in materials or workmanship not regulated by building standards.
The "warranty commencement date" means the date that legal title to a home is conveyed to its initial purchaser or the date the home is first occupied, whichever comes first. La. R.S. 9:3143 (7).
"Building standards" means the standards contained in the building code, mechanical-plumbing code, and electrical code in effect in the parish, city, or other local political subdivision where a home is to be located, at the time construction of that home is commenced, or, if the parish, city, or other local political subdivision has not adopted such codes, the Standard Building Code, together with any additional performance standards, if any, which the builder may undertake to be in compliance. La. R.S. 9:3143 (2).
Stutts's petition pleads fraud under La. C.C. art. 1953 and lack of required disclosure under La. R.S. 9:3196 et seq., but does not mention the NHWA. Stutts purchased the home from Melton on September 30, 2005, and noticed the staining in the summer of 2006. The record shows that Melton would be classified as the "builder" and Stutts as the "owner" of the home. These facts in the record make the instant case applicable to the NHWA under the one year warranty provision of La. R.S. 9:3144 (A)(1). While color staining on walls in no way threatens the plumbing, electric wiring, or internal structure of the home, it should still be considered a defect substantial enough to be remedied by the NHWA, which has been found to apply to similar cosmetic deficiencies. Although 9:3144 (B)(13) exempts any kind of damage that is not "physical damage" to the home, physical damage does not equate to structural damage. Bynog v. M.R.L., L.L.C., 2005-122, p.6 (La. App. 3 Cir. 6/1/05), 903 So.2d 1197, 1201. The Bynog case dealt with cracking plaster and yellowing paint, defects which can also be considered cosmetic. Id. at 1200, 1201. By analogy, a cosmetic defect such as staining of the walls would also qualify as "physical damage" under 9:3144 (B)(13).
"Home" means any new structure designed and used only for residential use, together with all attached and unattached structures, constructed by the builder whether or not the land was purchased from the builder. Such term includes structures containing multiple family dwellings or residences. La. R.S. 9:3143 (3).
"Builder" means any person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or addition thereto, including a home occupied initially by its builder as his residence. A person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or any addition thereto, is a "builder", whether or not the consumer purchased the underlying real estate with the home. La. R.S. 9:3143 (1).
"Owner" means the initial purchaser of a home and any of his successors in title, heirs, invitees, or assigns to a home during the time the warranties provided under [the NHWA] are in effect. La. R.S. 9:3143 (6).
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Furthermore, the Agreement to Purchase and Sell signed by Stutts and Melton on September 13, 2005, states on lines 18 and 19 of page 2 that the home and property will be governed by the NHWA if the home and property can be defined as a "home" under the NHWA. The record shows that Stutts purchased the home with the intent to use it as a residence. By signing this purchase agreement, Stutts demonstrated that he understood that the NHWA would apply should any defects in the home be discovered.
Although Stutts did not specifically raise a claim under the NHWA, all the necessary elements are pled in the petitions. We therefore can conduct a de novo review of this case to determine whether Stutts should be remedied under the NHWA.
According to the record, Chad Z. Melton was the general contractor for the construction of the home located at 34244 Fountain View Drive, Walker, Louisiana. Construction of the house was completed approximately in December of 2004. Melton subsequently moved into the home to use as a personal residence for the next nine months. While living there, Melton discovered the color bleeding due to the defective roofing. Melton contacted Atlas Roofing about the defective roofing and reached a settlement. Stutts purchased the home from Melton on September 30, 2005. In the summer of 2006, Stutts discovered the same color bleeding from the defective roofing. Stutts filed suit on April 24, 2007.
La. R.S. 9:3146 requires any action to enforce any warranty provided in the NHWA to be subject to a peremptive period of 30 days after the expiration of the appropriate time period provided in La. R.S. 9:3144. An owner's remedy for construction defects in a new home comes into existence on the warranty commencement date. In the instant case, the warranty commencement date is September 30, 2005, and the appropriate warranty time period is one year. The appropriate peremptive period would then be one year and 30 days. By calculating the pertinent dates in the record, the peremptive period expired on October 30, 2006. Suit was filed almost six months later.
The NHWA provides the exclusive remedies, warranties, and preemptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply. La. R.S. 9:3150. According to the law, the NHWA is the exclusive remedy available under these circumstances, but suit was not timely filed under the appropriate peremptive period. The trial court was bound to dismiss this suit, but rather heard a partial summary judgment on the issue of disclosure and then had a bench trial on all remaining issues. We are bound by law here to dismiss the lawsuit filed by Stutts. Thus, the issues of damages and attorney fees are moot.
DECREE
The partial summary judgment finding Chad Z. and Lauren M. Melton liable to James S. and Lisa K. Stutts under La. R.S. 9:3196 et seq. is reversed and vacated, and the judgment of the bench trial is also reversed and vacated. The petition of Mr. and Mrs. Stutts is dismissed with prejudice as untimely under La. R.S. 9:3146. All costs of this appeal are assessed to the Appellees, James S. and Lisa K. Stutts.
REVERSED. JUDGMENTS VACATED.