Krol v. York Terrace Building, Inc.

Lowe, J., delivered the opinion of the Court. The Case By an opinion dated July 30, 1975, the Circuit Court for Baltimore County indicated that it would grant appellees’ motion for summary judgment. An appeal was noted on August 15, 1975, and the case was argued before this Court. On May 20, 1976, by per curiam opinion, we dismissed the appeal as premature because no judgment had been entered.

Krol v. York Terrace Building, Inc. (No. 856, September Term, 1975). On May 27, 1976, the trial judge ordered judgment to be entered in favor of the appellees pursuant to his prior opinion. On appeal from that judgment the parties were permitted to rely on their original briefs, although we required reargument. We reverse the belated order of the trial court directing the entry of summary judgment.

The Facts Appellants,, Mr. and Mrs. William F. Krol, agreed to purchase a home to be built by the appellees York Terrace Building, Inc. and Dover Construction Co., Inc. 1 After appellees concluded “building, equipping and completing” it pursuant to contract, the Krols- settled for and moved into the house on June 24, 1972. Less than two weeks later, on July 6, while preparing for a dinner party that evening, Mrs. Krol discovered that there was no water, although prior to that time there had been an adequate supply. The Krols survived the evening’s dinner party by the grate of friendly neighbors who loaned them water and stoic guests whose self-restraint or early departure avoided taxing the sanitary facilities. But for the remainder of the year the Krols were forced to survive on water supplied by ³²³ hoses from neighboring homes and promises from the appellees.

On one occasion during this period, appellees’ representative offered to dig the well 100 feet deeper in exchange for a release from the Krols, but, presumably once burned, the latter declined the gamble. Finally, in January 1973, appellants contracted with a well digger on their own initiative and at their own expense. The well he dug on the same lot produced an adequate and uninterrupted supply of water. In May 1973 the Krols sued the appellees for breach of express warranty, breach of implied warranty 2 and fraudulent misrepresentation, all with regard to the inadequate water.

The trial judge entered summary judgment against appellants on all three issues. On appeal appellants contend that there was sufficient evidence or inferences therefrom to provide a real dispute as to the existence of material facts on one or more of the three grounds upon which they sued. Because the evidence clearly shows that this case is subject to statutorily dictated implied warranties and because we find in the record some evidence inferentially indicative of a breach of these implied warranties, we will reverse the judgment entered by the trial court. The Standard of Review It is important to bear in mind that we are reviewing the grant of a motion for summary judgment; we are not reviewing the evidence for sufficiency under the clearly erroneous rule, Md. Rule 1086.

In short, we are second-guessing the trial judge upon whether the record contains any evidence of a genuine controversy. The test to be applied, not only by the trial court but by this Court upon review, has so oft been stated that it hardly bears repetition; but it has been no more succinctly phrased than by Judge Levine in Broadwater v. Arch, 267 Md. 329, 335 , “We suspect there are few better-settled rules in ³²⁴ this, state than that pertaining to the office of a motion for summary judgment. In a line of cases, the citation of which 'would unduly lengthen this opinion, we have repeatedly held that the summary judgment procedure is not designed as a substitute for trial or for the purpose of deciding an issue of fact, but that it merely provides for a hearing to determine whether there is an issue of fact to be tried.”, nor more clearly articulated than by Judge Powers in Vanhook v. Merchants Mut. Ins.

Co., 22 Md. App. 22 : “It is clear that in ruling on a motion for summary judgment the court does not decide disputed facts, but decides whether any real dispute as to material facts exists. Shatzer v. Kenilworth Warehouses, 261 Md. 88 , 274 A. 2d 95 (1971); Brown v. Suburban Cadillac, Inc., 260 Md. 251 , 272 A. 2d 42 (1971). To grant such a motion the court must determine that ‘the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine dispute as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ Rule 610 d. 1.” Id. at 25. The Law to Be Applied As we have indicated in the preliminary recitation of facts, appellants contracted to purchase a house to be built, equipped and completed by appellees.

Thus by definition they became entitled to the implied warranties of improved real property sales, as codified at the time of sale in Md. Code, Art. 21, § 10-203. They are “buyers” within the contemplation of § 10-201 (d): “Definitions. As used in this subtitle, unless the context otherwise requires: ³²⁵ (d) ‘Buyer’ means the original purchaser of improved realty, and the heirs and personal representatives of the original purchaser.” (emphasis added). Furthermore, no dispute was brought to our attention by any of the appellees (who are the owner-builders and relevant subcontractors) that they do not fit the definition of “Seller” set forth in § 10-201 (c): “(c) ‘Seller’ means any person or corporation whose business it is to erect or otherwise create an improvement upon realty, or to whom a completed improvement has been conveyed for resale in the course of his (its) business.” And certainly the newly constructed house of which the Krols took possession on June 24, 1972, is an “Improvement” within the meaning of § 10-201 (a): “(a) ‘Improvements’ includes all newly constructed private dwelling units and all fixtures and structures which are made a part of the newly constructed private dwelling units at the time of their construction by building contractors and subcontractors.” Among the several warranties provided in § 10-203 is the warranty that a newly built house be “fit for habitation” for one year from delivery of the deed or completion of the improvement: “(a) Unless excluded or modified pursuant to subsection (c) of this section, in every sale warranties are implied that the improvement is (1) Free from faulty materials, (2) Constructed according to sound engineering standards, (3) Constructed in a workmanlike manner, and (4) Fit for habitation, at the time of the delivery of the deed to a completed improvement, or at the time of the com ³²⁶ pletion of an improvement not completed when the deed is delivered, provided, however, that these warranties do not apply to any condition that an inspection of the premises would have revealed to a reasonably diligent buyer at the time the contract was signed.” 3 (emphasis added ).

That the life of such warranties is limited to one year is made clear in the next section, § 10-204, although two additional years are permitted for the filing of suit: “(a) In the event of the breach of any of the several warranties provided for in this subtitle, the court may award such legal or equitable relief, or both, as justice may require. (b) Except in the case of an express warranty where a longer period of time is specified, the several warranties provided for in this subtitle shall expire: (1) In the case of a dwelling completed at the time of the delivery of the deed to the buyer, one year after the delivery or after the taking of possession by the buyer, whichever occurs first, and (2) In the case of a dwelling not completed at the time of delivery of the deed to the buyer, one year after the date of completion or the taking of possession by the buyer, whichever occurs first. Any action arising under this subtitle shall be commenced within two years after defect was discovered or should have been discovered or within two year-s after the expiration of the warranty, whichever occurs first.” (emphasis added). In short, the warranty guarantees that the Krols’ new home be “Fit for habitation at the time ... of the delivery of the deed ...., ³²⁷ for a period of “ . . . one year after the taking of possession by the buyer.” We were unable to understand why the parties did not argue the applicability of the warranty of fitness for habitation or why that particular warranty was not addressed in the opinion of the trial judge.

When discussing the applicability of the “Implied Warranties” the trial judge did not mention the “fit for habitation” warranty in § 10-203 (a) (4), but addressed only the first three warranties in § 10-203 (a) dealing with (1) materials, (2) engineering standards and (3) workmanship. After citing the Real Property Article he stated simply: “In the case at Bar, there is no complaint of faulty materials, improper engineering in the construction, or unworkmanlike construction.” A closer scrutiny of his opinion indicated that the trial judge must have relied upon the current version of the warranties statute (as revised by the Code Revision Commission) presently set forth in Md. Code, Real Prop.' Art., §§ 10-202 — 10-205. Presumably, the failure of the trial judge to address the “fit for habitation” warranty arose from the misleading form in which the warranty statute was printed upon revision: “(a) Warranties which are implied. — Except as provided in subsection (b) or unless excluded or modified pursuant to subsection (d), in every sale, warranties are implied that the improvement is: (1) Free from faulty materials, (2) Constructed according to sound engineering standards, (3) Constructed in a workmanlike manner, and (4) Fit for habitation; at the time of the delivery of the deed to a completed improvement, or at the time of completion of an improvement not completed when the deed is delivered.” (emphasis added). Real Prop.

Art., § 10-203 (a). ³²⁸ The Opinion Had the judge addressed the statute in Md. Code, Art. 21, § 10-203, and in the form of its original enactment in Laws, 1970, Ch. 151, § 1, that oversight might have been avoided by gleaning the meaning made more obvious from the style in which it was set out on the page and which we again set forth here for comparative analysis: 4 “(a) Unless excluded or modified pursuant to subsection (c) of this section, in every sale warranties are implied that the improvement is (1) Free from faulty materials, (2) Constructed according to sound engineering standards, (3) Constructed in a workmanlike manner, and (4) Fit for habitation, at the time of the delivery of the deed to a completed improvement, or at the time of the completion of an improvement not completed when the deed is delivered, provided, however, that these warranties do not apply to any condition that an inspection of the premises would have revealed to a reasonably diligent buyer at the time the contract was signed.” (emphasis added). Md. Code, Art. 21, § 10-203 (a). The trial judge appears to have concluded that the warranty of habitability could not apply because adequate water was flowing at the time the deed was delivered, presumably at settlement. However, it is clear that the extended phrase beginning with “at the time” applies to all four warranties set forth in § 10-203 (a) and not, as