Warranties-- express warranty--structural defects_synthetic stucco
The trial court properly denied defendant developer's motion for a directed verdict in
plaintiff homeowners' action to recover damages for breach of an express ten-year warranty
against structural defects for water damages caused by defective synthetic stucco on a home
purchased by plaintiffs because (1) there was sufficient evidence of damage to load-bearing
elements of the home in the testimony by the supervisor in charge of repairs to the home that
there was a lot of “structural, rotted wood” damage in the wall studs, headers over the tops of
windows, and sill bands; (2) in the instant case, the actual physical damage occurring to the
covered load-bearing elements of the house, if left untreated, would cause the house to become
unsafe or unlivable; and (3) plaintiffs were not required to stand idly by until the damage became
so severe that choosing to remain in the house presented a risk.
DeVore, Acton & Stafford, P.A., by Fred W. DeVore, III, for
plaintiffs-appellees.
Templeton & Raynor, P.A., by Amy F. Wise and Kenneth R.
Raynor, for defendant-appellant.
CALABRIA, Judge.
Niblock Development Corporation (“defendant”) appeals from a
judgment entered upon a jury verdict finding defendant breached its
express warranty against structural defects on the house of Ben and
Yvette Coates (collectively “plaintiffs”) and awarding damages in
the amount of $55,000.00. We find no error.
In 1995, plaintiffs purchased a house from defendant. As part
of the consideration for the purchase of the house, defendant
provided plaintiffs with a ten year warranty. In 1999, plaintiffshad the house inspected after hearing concerns from neighbors and
learning of problems associated with the exterior cladding of the
house, which was constructed of a product known as Exterior
Insulation Finish Systems, commonly referred to as synthetic
stucco. According to the inspection report, there were high
moisture readings in several areas around the house, which could
cause wood rot and softening. In addition, modifications and
caulking were needed to prevent water and moisture from continuing
to reach behind the stucco. As a result of the report, plaintiffs
undertook certain repairs, including repainting and re-caulking
areas where the moisture readings were highest.
In 2000, plaintiffs again had a moisture scan analysis
performed on the house and learned the moisture readings were as
high and sometimes higher, despite the repairs undertaken to
correct the problem. In addition, new areas where possible damage
was occurring were implicated.
In 2001, plaintiffs sought a second opinion and had yet a
third analysis performed by Phillip Jansen (“Jansen”). Jansen
recommended plaintiffs contact a contractor to remove and replace
the stucco and any portions beneath it damaged by wood rot and
softening due to moisture. Plaintiffs had the work performed at a
cost of approximately $92,699.00.
On 23 November 2001, plaintiffs filed suit against defendant,
alleging defendant had breached the terms of the express warranty
resulting in physical damage to the house and diminution in its
value. At the close of plaintiffs' evidence and at the close of
all the evidence, defendant moved for a directed verdict. Bothmotions were denied, and defendant presented no evidence at trial.
The jury found defendant had breached the express warranty and
awarded damages of $55,000.00. Defendant moved for a judgment
notwithstanding the verdict, which the trial court also denied.
Defendant appeals.
“A motion for directed verdict is to test the legal
sufficiency of the evidence to take the case to the jury.” DeHart
v. R/S Financial Corp., 78 N.C. App. 93, 98, 337 S.E.2d 94, 98
(1985). “This is a high standard for the moving party, requiring
a denial of the motion if there is more than a scintilla of
evidence to support the non-movant's prima facie case.” Ellis v.
Whitaker, 156 N.C. App. 192, 195, 576 S.E.2d 138, 140 (2003). “In
passing on a motion for directed verdict, the trial court must
consider the evidence in the light most favorable to the nonmovant,
and conflicts in the evidence together with inferences which may be
drawn therefrom must be resolved in favor of the nonmovant.” Mut.
Benefit Life Ins. Co. v. City of Winston-Salem, 100 N.C. App. 300,
304, 395 S.E.2d 705, 707 (1990).
“A motion for judgment notwithstanding the verdict [(“JNOV”)]
is simply a renewal of the movant's earlier motion for directed
verdict.” DeHart, 78 N.C. App. at 98, 337 S.E.2d at 98. “A JNOV
motion pursuant to Rule 50 seeks entry of judgment in accordance
with the movant's earlier motion for directed verdict,
notwithstanding the contrary verdict actually returned by the
jury.” Streeter v. Cotton, 133 N.C. App. 80, 82, 514 S.E.2d 539,
541 (1999). “The test for determining the sufficiency of the
evidence when ruling on a motion for judgment notwithstanding theverdict is the same as that applied when ruling on a motion for
directed verdict.” DeHart, 78 N.C. App. at 99, 337 S.E.2d at 98.
On appeal, defendant contends the trial court erred in denying
his motion for directed verdict because (I) plaintiffs presented no
evidence of “actual, physical damage to a load bearing element of
the house,” and (II) plaintiffs presented no evidence that the
structural problems existing caused the house to be unsafe or
unlivable.
I. Actual, Physical Damage to Covered Elements
Plaintiffs' claims are premised on the coverage provided by
the express warranty accompanying the purchase of their house. The
warranty provided, in pertinent part, as follows:
Your new home is warranted for ten (10) years
against structural defects. A structural
defect being defined as actual physical damage
to those load-bearing elements of the home
that would cause it to become unsafe or
otherwise unlivable. The following load-
bearing portions are covered: foundation
systems and footings, beams, girders, lintels,
columns, walls and partitions, floor systems,
and roof framing systems.
“An express warranty is contractual in nature, and its terms are
therefore construed in accordance with their plain meaning[.]”
Allen v. Roberts Constr. Co., 138 N.C. App. 557, 570-71, 532 S.E.2d
534, 542 (2000) (citations omitted).
Defendant first asserts the evidence presented at trial
concerning the damage to the house was insufficient to show that it
was the type of damage for which the warranty provided coverage.
Victor Searfoss, the supervisor in charge of the repairs to
plaintiffs' house, testified generally that his work consisted of
repairing structural problems and damaged wood. He stated therewas a “lot of structural, rotted wood damage” in the walls around
the house. Specifically, he testified damaged portions included
wall studs and headers over the top of windows. He further
explained a header functions to “support . . . the structure above
the window.” Additionally, he testified the sill bands, which
“sit[] on the foundation wall itself” were damaged and required
repair. The sill bands are the part of the structure that
functions to “support everything from the floor on up.”
This testimony was more than a scintilla of evidence tending
to support plaintiffs' claim that defendant breached the terms of
the express warranty, particularly with respect to the degradation
of the walls and floor systems. Accordingly, we reject defendant's
argument.
II. Condition of House
Defendant also asserts the express warranty was not breached
because the damage to the house did not cause it to become unsafe
or unlivable. Defendant's argument would place plaintiffs in the
untenable position of choosing between the following two options:
(1) ignore the increasing damage and risk until it became so severe
that their well-being was compromised by remaining in the house, or
(2) undertake repairs at their own expense before the terms of the
warranty could be invoked. We reject this argument outright. In
the instant case, the actual, physical damage occurring to the
covered load-bearing elements of the house, if left untreated,
“would cause [the house] to become unsafe or unlivable.” Nothing
more is required by the terms of the warranty. We find meritless
defendant's argument that, as a prerequisite to invoking thewarranty provisions, plaintiffs were required to stand idly by
until the damage became so severe that choosing to remain in the
house presented risk. Indeed, as plaintiffs correctly point out,
not only would such action in the instant case have allowed the
damage to increase unchecked, it could also raise issues concerning
the defense of failure to mitigate damages. This assignment of
error is overruled, and we find the proceedings below to be without
error.
No error.
Judges McGEE and HUDSON concur.
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