J.A05042/14

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37


PAUL AND LISA BUNCH,                        :     IN THE SUPERIOR COURT OF
                                            :          PENNSYLVANIA
                          Appellees         :
                                            :
                    v.                      :
                                            :
THE CUTLER GROUP, INC. D/B/A/               :
THE DAVID CUTLER GROUP,                     :
                                            :
                          Appellant         :     No. 1860 EDA 2013


                    Appeal from the Judgment June 24, 2013
                 In the Court of Common Pleas of Bucks County
                        Civil Division No(s).: 2008-00094

BEFORE: ALLEN, JENKINS, and FITZGERALD,* JJ.

MEMORANDUM BY FITZGERALD, J.:                       FILED AUGUST 29, 2014

        Appellant, The Cutler Group, Inc., doing business as The David Cutler

Group, appeals from the judgment entered in favor of Appellees, Paul and

Lisa Bunch, in this action for breach of an implied warranty of habitability.

Appellant contends that because Appellees were subsequent, and not initial,

purchasers of the home, the trial court should have granted judgment as a

matter of law in its favor.    For the reasons set forth below, including the

recent Pennsylvania Supreme Court decision of Conway v. Cutler Grp.,

Inc., 2014 WL 4064261 (Pa. August 18, 2014), we hold Appellant is due

                                                                        -trial



*
    Former Justice specially assigned to the Superior Court.
J. A05042/14

motion, and remand with instructions to enter judgment notwithstanding the

verdict in favor of Appellant.

      We state the facts and procedural history as set forth by the trial




         early 2004. It had a brick front and hard-coat cement
         stucco on the remaining three sides. [Appellant] sold the
         home on May 24, 2004, to Otto and Patricia Furuta

         one year later, in July 2005, [Appellees] purchased the
         home from the Furutas for $715,000.

            Prior to the sale, [Appellees] hired a housing inspection
         company to uncover any potential problems.               The
         inspection revealed four issues: a problem with the
         temperature gradient in the air conditioning unit; difficulty
         opening and closing a casement window; water on a sill
         plate in the basement; and exterior deterioration of the
         stucco surrounding the patio door. The Furutas had each
         of those items repaired prior to closing, and [Appellees]
         believed all problems were remediated.

             In 2006, [Appellees] noticed a brown water stain
         surrounding two adjacent windows over the fireplace, on
         the rear wall of the house. The rear wall patio door also
         leaked water around the seal, staining the carpeting and
         joists underneath it. [Appellees] assumed that the cause
         of the problem was a faulty patio door, which they
         replaced. The leaks persisted on the rear wall, streaking
         the paint from top to bottom. Water leaks were also
         discovered around windows in the second floor master
         bathroom, in the kitchen and in the garage.

            In 2007, [Appellees] hired an engineering firm to test
         the moisture conte
         engineers drilled 37 holes on all three stucco sides, testing
         the saturation of the wood substrate beneath the stucco.
         Of the 37 test sites, 15 revealed a substrate moisture level
         of 19 percent or greater, the threshold at which fungus
         and mold begin to form. Many of the sites showed 30


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        percent moisture or greater, the saturation point of wood.
        The engineers also discovered that the home lacked proper
        expansion joints, proper waterproof felt layers, and a
        proper drainage plane.

           Also in 2007, [Appellees] sought assistance from
        [Appellant] in repairing the damage to the home.


           As a result of the engineering report, in September
        2008[, Appellees] hired a contractor to replace the faulty
        stucco and rotted framing. The contractor discovered that
        some windows had been installed with reverse lapping,
        which funneled water against the wood structure rather
        than away from it. Over several years, these construction
        defects contributed to the structural damage, permitting
        the substrate to become saturated and decay.              The
        contractor removed all stucco around the sides and rear of
        the house and replaced it with HardiePlank lap siding. The
        brick front remained intact. Every window was removed
        and the rotted framing replaced. First floor joist structures
        were remediated. [Appellees] testified that the total cost
        of needed repairs was approximately $235,000.28.

            On January 4, 2008, [Appellees] filed the instant action
        against [Appellant, raising two claims for breach of the
        implied warranty of habitability]. On April 15, 2013, a
        three-day jury trial commenced. On April 17, 2013, a jury
        verdict was rendered in favor of [Appellees] for the sum of
        $151,325.00.     On April 26, 2013, [Appellant] filed a
        motion for post-trial relief [for, inter alia, judgment
        notwithstanding the verdict]. On May 6, 2013, [Appellees]
        filed a petition for delay damages. On May 10, 2013,
        [Appellees] filed an amended petition for delay damages.
        On May 10, 2013, [Appellant] filed a response in
        opposition to delay damages. On June 3, 2013, [the trial]
        court issued an order granting delay damages of
        $21,232.13.      On June 13, [the trial] court denied
                                    -trial relief.

Trial Ct. Op., 8/15/13, at 2-4 (footnotes and capitalization omitted).   The

court entered judgment against Appellant on June 24, 2013. Appellant filed



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a timely notice of appeal on June 25, 2013, and timely filed a court ordered

Pa.R.A.P. 1925(b) statement.

      Appellant raises the following issues:

          Whether the trial court should have entered judgment as a
          matter of law in favor of the builder and against the
          purchasers on their claim for breach of the implied
          warranty of habitability.

          Whether the trial court should have granted
          request for a new trial as to all issues.

          Whether the trial court abused its discretion or erred as a

          untimely request for delay damages.



      For its first issue, Appellant contends that the trial court erred by not

entering judgment notwithstanding the verdict in its favor.             Specifically,



habitability fails because Appellees had prior knowledge of the alleged

defect.     Alternatively,   Appellant    suggests   that   Appellees    introduced

insufficient evidence of their damages. For the following reasons, we hold

Appellant is due relief.

          In reviewing a motion for judgment [notwithstanding the
          verdict], the evidence must be considered in the light most
          favorable to the verdict winner, and he must be given the
          benefit of every reasonable inference of fact arising
          therefrom, and any conflict in the evidence must be
          resolved in his favor.           Moreover, a judgment
          [notwithstanding the verdict] should only be entered in a
          clear case and any doubts must be resolved in favor of the

          evidence is not to be based on how he would have voted


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           had he been a member of the jury, but on the facts as


           There are two bases upon which a judgment
           [notwithstanding the verdict] can be entered: one, the
           movant is entitled to judgment as a matter of law, . . .
           and/or two, the evidence was such that no two reasonable
           minds could disagree that the outcome should have been
           rendered in favor of the movant[.] With the first a court
           reviews the record and concludes that even with all factual
           inferences decided adverse to the movant the law
           nonetheless requires a verdict in his favor, whereas with
           the second the court reviews the evidentiary record and
           concludes that the evidence was such that a verdict for the
           movant was beyond peradventure.

Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 890-91 (Pa. Super. 2011)

(per curiam) (quotation marks and citations omitted), appeal granted in

part, 47 A.3d 1174 (Pa. 2012)



appellate briefs, our Supreme Court decided Conway, which addressed

whether subsequent purchasers of a home may raise a cause of action for

breach of implied warranty of habitability. We state the facts in Conway, as

set forth by our Supreme Court:

              In September 2003, The Cutler Group, Inc.[1] . . . sold a
           new house in Bucks County to Davey and Holly Fields.
           After living in the house for three years, Mr. and Mrs.
           Fields sold the house to Michael and Deborah Conway . . . .
           In 2008, [the Conways] discovered water infiltration
           around some of the windows in the home, and, after
           consultation with an engineering and architectural firm,
           concluded that the infiltration was caused by several

1
    This party is also the Appellant in the instant case.




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J. A05042/14

        construction defects. On June 20, 2011, [the Conways]
        filed a one-count complaint against [The Cutler Group],
        alleging that its manner of construction breached the home

        Court in Elderkin v. Gaster, 288 A.2d 771, 777 (Pa.
        1972). [The Cutler Group] filed preliminary objections in
        the nature of a demurrer, arguing, inter alia, that, as a
        matter of law, the warranty recognized in Elderkin
        extends from the builder only to the first purchaser of a
        newly constructed home because there is no contractual
        relationship between the builder and second or subsequent
        purchasers of the home. Recognizing that courts have
        traditionally required a showing of privity of contract
        before permitting a party to proceed with a warranty
        claim, the trial court concluded that the question presented

        damages caused by latent defects . . . [in] relatively new


        preliminary objections on the ground of lack of privity
        between the parties, and dismis
        complaint with prejudice. [The Conways] appealed to the
        Superior Court.

           In a unanimous, published opinion, the Superior Court
        reversed. Conway v. Cutler Group, Inc., 57 A.3d 155
        (Pa. Super. 2012). . . .

           [The Cutler Group] then petitioned for allowance of
        appeal in this Court, and we accepted the following issue
        for review:

               Did the Superior Court wrongly decide an
               important question of first impression in
               Pennsylvania when it held that any subsequent
               purchaser of a used residence may recover

               implied warranty of habitability to new home
               purchasers?

Conway, 2014 WL 4064261, at *1-*2 (footnotes and citation omitted).




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     The Conway Court agreed with The Cutler Group, held the Superior

Court erred

previously inhabited residence may not recover contract damages for breach

                                                     Id. at *1. Our Supreme

Court reasoned as follows:

        [W]e conclude that the question of whether and/or under
        what circumstances to extend an implied warranty of
        habitability to subsequent purchasers of a newly
        constructed residence is a matter of public policy properly
        left to the General Assembly. . . .

           It is well establishe
        declare public policy is limited.

               In our judicial system[,] the power of courts to
               formulate pronouncements of public policy is
               sharply restricted; otherwise they would
               become     judicial  legislatures  rather   than
               instrumentalities for the interpretation of law.
               Generally speaking, the Legislature is the body
               to declare the public policy of a state and to
               ordain changes therein.

                                  *    *    *

               The right of a court to declare what is or is not
               in accord with public policy does not extend to
               specific economic or social problems which are
               controversial in nature and capable of solution
               only as the result of a study of various factors
               and conditions. It is only when a given policy is
               so obviously for or against the public health,
               safety, morals or welfare that there is a virtual
               unanimity of opinion in regard to it, that a court
               may constitute itself the voice of the community
               in so declaring.

                                  *    *    *



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               If, in the domain of economic and social
               controversies, a court were, under the guise of
               the application of the doctrine of public policy, in
               effect to enact provisions which it might
               consider expedient and desirable, such action
               would be nothing short of judicial legislation,
               and each such court would be creating positive
               laws according to the particular views and
               idiosyncrasies of its members.       Only in the
               clearest cases, therefore, may a court make an
               alleged public policy the basis of judicial
               decision.

        Mamlin      v.Genoe (City of Philadelphia Police
                          , 17 A.2d 407, 409 (Pa. 1941); see
        also Weaver v. Harpster, 975 A.2d 555, 563 (Pa. 2009)
        (citing Mamlin).

                      reasoning, as reiterated in Weaver, applies
        with force to the factual circumstances and arguments in
        this case. Accordingly, we decline to extend the implied
        warranty of habitability beyond its firm grounding in
        contract law. Under the facts of this case, where the
        builder-vendor sold a new home to a purchaser-user, we
        hold that an action for breach of the implied warranty
        requires contractual privity between the parties.

Id. at *5 (footnote omitted).

      Instantly, the facts of this case are identical to the facts in Conway.

In this case, Appellant sold a new home to the Furutas       purchasers-users

who then, in turn, sold the home to Appellees     subsequent-purchasers. See

id.

[Appellant] sold a new home to a purchaser-user, we hold that an action for

breach of the implied warranty requires contractual privity between the

          See id. Because Appellees purchased the home from the Furutas,




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J. A05042/14

action for breach of implied warranty must fail. See id. Accordingly, even

after viewing the record in the light most favorable to Appellees, we hold the



                                             -trial motion, and remand with

instructions to the trial court to enter judgment in favor of Appellant. See

Braun, 24 A.3d at 890-91.

                                                                -trial motion

reversed. Remanded with instructions to the trial court to enter judgment



Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary

Date: 8/29/2014




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