John F. Sullivan and Susan B. Sullivan, Plaintiffs/Appellants,
Pulte Home Corporation, Defendant/Appellee.
Appeal from the Superior Court in Maricopa County The Honorable Jonathan H. Schwartz, Judge The Honorable Joseph B. Heilman, Judge No. CV2010-004898
Opinion of the Court of Appeals, Division One 231 Ariz. 53, 290 P.3d 446 (App. 2012)
John F. Sullivan (argued), In Propria Persona, Phoenix, for John F. and Susan B. Sullivan.
Stephen E. Richman (argued), Anne L. Tiffen, Denise H. Troy, Dickinson Wright/Mariscal Weeks, Phoenix, for Pulte Home Corporation.
E. Jeffrey Walsh, Nicole M. Goodwin, Greenberg Traurig, LLP, Phoenix, for Amici Curiae Home Builders Association of Central Arizona, et al.
P. Douglas Folk, Christopher D.C. Hossack, Heather K. Seiferth, Folk & Associates, P.C., Phoenix, for Amicus Curiae American Council of Engineering Companies of Arizona
Michael J. Holden, Holden Willits PLC, Phoenix, for Amicus Curiae Arizona Builders' Alliance
VICE CHIEF JUSTICE BALES authored the opinion of the Court, in which CHIEF JUSTICE BERCH, JUSTICE PELANDER, JUSTICE BRUTINEL, and JUDGE MILLER [*] joined.
VICE BALES CHIEF JUSTICE
¶1 Arizona's economic loss doctrine limits contracting parties to their agreed upon remedies for purely economic losses. Even if a homeowner has no contract with the builder of the home, when there are construction defects, Arizona law allows the homeowner to sue the builder for breach of implied warranty. This cause of action is contractual in nature but rests on duties imposed by law. Despite the availability of this remedy, if the homeowner does not have a contract with the homebuilder, we hold that the economic loss doctrine does not bar the homeowner's negligence claims to recover damages resulting from construction defects.
¶2 Because the trial court dismissed this action for failing to state a claim upon which relief can be granted, we describe the facts as alleged in the complaint and assume them to be true for purposes of our review. Flagstaff Affordable Hous. Ltd. P'ship v. Design Alliance, Inc., 223 Ariz. 320, 321 ¶ 2, 223 P.3d 664, 665 (2010).
¶3 Pulte Home Corporation constructed a home and sold it in 2000 to its initial purchaser, who in turn sold it to John and Susan Sullivan in 2003. Because the Sullivans did not buy their home directly from Pulte, they never entered into a contract with that company. In 2009, the Sullivans first noticed irregularities with the home's hillside retaining wall. They hired an engineer who determined that the wall and home site had been constructed in a dangerously defective manner. The Sullivans notified Pulte, hoping it would cover the cost of repair, but Pulte claimed it was no longer responsible for any construction defects.
¶4 The Sullivans then filed this action to force Pulte to cover the cost of repair. Their complaint alleged consumer fraud, fraudulent concealment, negligence, negligent non-disclosure, negligence per se, negligent misrepresentation, and breach of implied warranty. The trial court dismissed all of the claims, ruling that the consumer fraud and fraudulent concealment allegations failed to state a claim because Pulte had never made any representations to the Sullivans; the breach of implied warranty claim was barred because Arizona's statute of repose precludes any implied warranty action against a builder "more than eight years after substantial completion of the ...