{"id":895742,"date":"2019-04-16T15:10:47","date_gmt":"2019-04-16T21:10:47","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=895742"},"modified":"2019-04-16T15:10:55","modified_gmt":"2019-04-16T21:10:55","slug":"court-limits-reach-implied-warranty-claims","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/court-limits-reach-implied-warranty-claims\/","title":{"rendered":"Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors"},"content":{"rendered":"\n<p>Thomas Cronin | <a href=\"http:\/\/www.grconstructionlawblog.com\/illinois-supreme-court-limits-reach-of-implied-warranty-claims-against-contractors\/\">Construction Law Blog<\/a> | February 25, 2019<\/p>\n\n\n\n<p>In a recent decision, the Illinois Supreme Court held that a purchaser of a newly constructed home could not assert a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser.&nbsp;<em>Sienna Court Condo. Ass\u2019n v. Champion Aluminum Corp.<\/em>, 2018 IL 122022, \u00b6 1. The decision overruled&nbsp;<em>Minton v. The Richards Group of Chicago<\/em>, which held that a purchaser who \u201chas no recourse to the builder-vendor and has sustained loss due to the faulty and latent defect in their new home caused by the subcontractor\u201d could assert a claim of a breach of the warranty of habitability against the subcontractor. 116 Ill. App. 3d 852, 855 (1983).<\/p>\n\n\n\n<p>In&nbsp;<em>Sienna Court Condo. Ass\u2019n<\/em>, the plaintiff alleged that the condo building had several latent defects which made individual units and common areas unfit for habitation. 2008 IL 122022 at \u00b6 3. The Court rejected the plaintiff\u2019s argument that privity should not be a factor in determining whether a claim for a breach of the warranty of habitability can be asserted.&nbsp;<em>Id.<\/em>&nbsp;at \u00b6 19. The Court also rejected the plaintiff\u2019s argument that claims for a breach warranty of habitability should not be governed by contract law but should instead be governed by tort law analogous to application of strict liability.&nbsp;<em>Id.<\/em><\/p>\n\n\n\n<p>The Court reasoned that the economic loss rule, as articulated in&nbsp;<em>Moorman Manufacturing Co. v. National Tank Co.<\/em>, 91 Ill. 2d 69, 91 (1982), refuted the plaintiff\u2019s argument that the implied warranty of habitability should be covered by tort law. 2008 IL 122022 at \u00b6 20. Under the economic loss rule, a plaintiff \u201ccannot recover for solely economic loss under the tort theories of strict liability, negligence, and innocent misrepresentation.\u201d&nbsp;<em>National Tank Co.<\/em>, 91 Ill. 2d at 91. The Court explained that the rule prevented plaintiffs from turning a contractual claim into a tort claim. 2008 IL 122022 at \u00b6 21. The Court further noted that contractual privity is required for a claim of economic loss, and an economic loss claim is not limited to strict liability claims.&nbsp;<em>Id.<\/em>&nbsp;Because the plaintiff\u2019s claim was solely for an economic loss, it was a contractual claim in nature; therefore, the Court concluded that \u201cthe implied warranty of habitability cannot be characterized as a tort.\u201d&nbsp;<em>Id.<\/em>&nbsp;at \u00b6 22.<\/p>\n\n\n\n<p>The Court also rejected the plaintiff\u2019s argument that warranty of habitability should be governed by tort law because it involves a duty imposed by the courts.&nbsp;<em>Id.<\/em>&nbsp;at \u00b6 23. It reasoned that \u201can implied term in a contract is no less contractual in nature simply because it is implied by the courts . . . .\u201d&nbsp;<em>Id.<\/em>&nbsp;The Court noted that the warranty of habitability can be waived under Illinois law, but individuals are not able to waive duties imposed upon them by the courts.&nbsp;<em>Id.<\/em>&nbsp;If the warranty of habitability was a tort claim, it would \u201craise[] significant practical problems, particularly for subcontractors\u201d given that they \u201cdepend upon contract law and contracts with the general contractor to protect and define their risks and economic expectations.\u201d&nbsp;<em>Id.<\/em>&nbsp;at \u00b6 24. Because a subcontractor\u2019s fees, costs, and liability are controlled by his contracts, turning an implied warranty of habitability claim into a tort would make those contracts pointless.&nbsp;<em>Id.<\/em><\/p>\n\n\n\n<p>The Court\u2019s decision to overrule&nbsp;<em>Minton<\/em>&nbsp;rested on three primary reasons: (1)&nbsp;<em>Minton<\/em>&nbsp;failed to discuss why the economic loss rule did not apply; (2)&nbsp;<em>Minton<\/em>&nbsp;did not address what effect its holding would have on the contractual relationships of subcontractors and general contractors; and (3) there is \u201cno authority for the idea that a tort duty comes into and out of existence depending on whether another entity is bankrupt.\u201d&nbsp;<em>Id.<\/em>&nbsp;at \u00b6 25. In light of the opinion, a home purchaser\u2019s remedy where there is economic loss is now limited to those parties with whom it has a direct contractual relationship.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Thomas Cronin | Construction Law Blog | February 25, 2019 In a recent decision, the Illinois Supreme Court held that a purchaser of a newly constructed home could not assert a claim for breach of the implied warranty of habitability against a subcontractor where the subcontractor had no contractual relationship with the purchaser.&nbsp;Sienna Court Condo.&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/court-limits-reach-implied-warranty-claims\/\">Continue reading <span class=\"screen-reader-text\">Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4,172],"tags":[9895,228,9981],"class_list":["post-895742","post","type-post","status-publish","format-standard","hentry","category-construction-defects","category-construction-law-2","tag-advise-consult","tag-construction-defect-claims","tag-implied-warranty-of-habitability","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Illinois Supreme Court Limits Reach of Implied Warranty Claims Against Contractors - Advise &amp; 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