TORTS AND WARRANTY
OK BUILDING SUMMIT
18 SEPTEMBER 2013
REED CONFERENCE CENTER IN MIDWEST CITY
The Oklahoma State Home Builders Association (OSHBA)
917 N.E. 63rd St.
Oklahoma City, Oklahoma 73105
Phone: 405.843.5579
Fax: 405.840.3519
PRESENTED BY:
S EAN P AUL R IEGER
A TTORNEY
AT
L AW ▪ A RCHITECT ▪ R EAL E STATE B ROKER
S.P. Rieger, PLLC
136 Thompson Drive, Norman, OK 73069
Phone: 405.329.6070; Fax: 405.329.7103; Email: sp@riegerllc.com
INTRODUCTION
The scope of liability facing builders and construction trades is fairly predictable as the areas of
law that will surface in most disputes. Commonly the lawsuit against a builder, contractor,
subcontractor, or trade will include claims under several categories, such as:
•
•
•
Tort based claims
o Negligence
o Fraud and misrepresentation
Contract based claims
o Breach of contract
o Breach of express warranties
o Breach of implied warranties
Statutory Penalty Based Claims
o Consumer protection acts
This course will expose you to the general characteristics of the various claims that a builder
might face, and the obligations and duties a builder owes to the purchaser and others. With this
knowledge you will have some insight as to how to best protect you from becoming caught up in
legal disputes.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
1
TORT BASED CLAIMS
Negligence
A home builder's duty to construct a house in a workmanlike manner using ordinary care is a
duty imposed by law. The elements of a common law negligence action are:
1. a duty, recognized by law, requiring the defendant to conform to a certain standard of
conduct;
2. a breach of that duty;
3. a causal connection between the defendant's conduct and the resulting injury; and
4. actual loss or damage.
Jones v. Centex Homes, 967 N.E.2d 1199, (Ohio 2012).
• “ all persons must measure their conduct by that of the ordinarily prudent person under
all the circumstances, which include the risk of harm from the natural and probable
consequences of that conduct. … that the duty owed by a builder-vendor is the duty
imposed by law on all persons to exercise ordinary care. … the duty applied even though
the house had been sold “as is” and there had been no express or implied warranties. …
the duty to construct a house in a workmanlike manner using ordinary care is the
baseline standard that home buyers can expect builders to meet. The duty does not
require builders to be perfect, but it does establish a standard of care below which
builders may not fall without being subject to liability, even if a contract with the home
buyer purports to relieve the builder of that duty … a home builder’s duty to construct a
house in a workmanlike manner using ordinary care is a duty imposed by law, and a
home buyer's right to enforce that duty cannot be waived.
Magnolia North POA, Inc. v. Heritage Communities, Inc., 725 S.E.2d 112 (S.C. 2012)
• Although a general contractor is not automatically responsible for the negligence of a
subcontractor, a builder who undertakes to supervise the construction of a building has a
duty to exercise reasonable care.
White v. Collins Bldg., Inc., 704 S.E.2d 307, (N.C. 2011)
• The law imposes upon the builder of a house the general duty of reasonable care in
constructing the house to anyone who may foreseeably be endangered by the builder's
negligence, including a subsequent owner who is not the original purchaser.
Jackson v. City of Seattle, 244 P.3d 425 (Wash. 2010)
• A builder or construction contractor is liable for injury or damage to a third person as a
result of negligent work, even after completion and acceptance of that work, when it was
reasonably foreseeable that a third person would be injured due to that negligence.
Hildebrand v. New Vista Homes II, LLC, 252 P.3d 1159 (Colo. 2010)
• A builder has a duty to use reasonable care and skill in constructing a home, and the
failure to do so constitutes negligence.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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•
A builder can be liable for negligence if it fails to follow the recommendations of its
independent contractors.
Vega v. Eastern Courtyard Associates, 117 Nev. 436, 24 P.3d 219 (Nev. 2001).
• we hold that if (1) a violation of a building code provision adopted by local ordinance is
established, (2) an injured party fits within the class of persons that a particular provision
of a building code was intended to protect, and (3) the injury suffered is of the type the
provision was intended to prevent, the alleged violation constitutes negligence per se.
Harbour-Longmire Bldg. Co. v. Carson, 208 P.2d 173 (Okla. 1949)
• Where city building ordinance required handrails to be maintained on stairway in store
building, failure of defendant owner or operator of building to provide stairway with
handrails constituted negligence per se, but question of whether such failure to provide
handrails was proximate or contributing cause of plaintiff customer's injury was question
of fact for jury.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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Fraud
State ex rel. Southwestern Bell Tel. Co. v. Brown, 519 P.2d 491 (Okla. 1974).
• Elements of actionable fraud are:
o that defendant made material misrepresentation,
o that it was false,
o that he made it when he knew it was false, or made it recklessly, without any
knowledge of its truth and as a positive assertion,
o that he made it with intention that it should be acted upon by plaintiff, and
o that plaintiff acted in reliance upon it and thereby suffered injury;
o all such facts should be proven with reasonable degree of certainty.
Knudson v. Weeks 394 F.Supp. 963 (Fed D.C.Okla. 1975).
• In Oklahoma the laws relating to damages for fraud and deceit sound in common law
fraud. One of the essential elements of common law fraud is knowledge on the part of a
person making a representation that the representation is false, or his reckless disregard of
whether it is true or not. … An essential element of such guilt would be knowledge on
the part of Weeks that the house was over the utilities easement. Proof of fraud must be
clear, strong, and convincing. Fraud is never imputed, findings of fraud should never be
sustained on circumstances which only create suspicion of fraud.
Oklahoma Statutes, Title 15. Section 58
Definition of Actual Fraud
• Actual fraud, within the meaning of this chapter, consists in any of the following acts,
committed by a party to the contract, or with his connivance, with intent to deceive
another party thereto, or to induce him to enter into the contract:
o The suggestion, as a fact, of that which is not true, by one who does not believe it
to be true.
o The positive assertion in a manner not warranted by the information of the person
making it, of that which is not true, though he believe it to be true.
o The suppression of that which is true, by one having knowledge or belief of the
fact.
o A promise made without any intention of performing it; or,
o Any other act fitted to deceive.
Oklahoma Statutes, Title 15. Section 59
Definition of Constructive Fraud
• Constructive fraud consists:
o In any breach of duty which, without an actually fraudulent intent, gains an
advantage to the person in fault, or any one claiming under him, by misleading
another to his prejudice, or to the prejudice of any one claiming under him; or,
o In any such act or omission as the law specially declares to be fraudulent, without
respect to actual fraud.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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Joint and Several Liability
Oklahoma Statutes, Title 12. Section 832
Joint Tort-Feasors - Contribution - Indemnity - Exemptions
A.
When two or more persons become jointly or severally liable in tort for the same injury to
person or property or for the same wrongful death, there is a right of contribution among them
even though judgment has not been recovered against all or any of them except as provided in
this section.
B.
The right of contribution exists only in favor of a tort-feasor who has paid more than their
pro rata share of the common liability, and the total recovery is limited to the amount paid by the
tort-feasor in excess of their pro rata share. No tort-feasor is compelled to make contribution
beyond their pro rata share of the entire liability.
C.
There is no right of contribution in favor of any tort-feasor who has intentionally caused
or contributed to the injury or wrongful death.
D.
A tort-feasor who enters into a settlement with a claimant is not entitled to recover
contribution from another tort-feasor whose liability for the injury or wrongful death is not
extinguished by the settlement nor in respect to any amount paid in a settlement which is in
excess of what was reasonable.
E.
A liability insurer which by payment has discharged, in full or in part, the liability of a
tort-feasor and has thereby discharged in full its obligation as insurer, is subrogated to the tortfeasor's right of contribution to the extent of the amount it has paid in excess of the tort-feasor's
pro rata share of the common liability. This provision does not limit or impair any right of
subrogation arising from any other relationship.
F.
This act does not impair any right of indemnity under existing law. When one tort-feasor
is entitled to indemnity from another, the right of the indemnity obligee is for indemnity and not
contribution, and the indemnity obligor is not entitled to contribution from the obligee for any
portion of the indemnity obligation.
…
H.
When a release, covenant not to sue, or a similar agreement is given in good faith to one
of two or more persons liable in tort for the same injury or the same wrongful death:
1.
It does not discharge any other tort-feasor from liability for the injury or wrongful
death unless the other tort-feasor is specifically named; but it reduces the claim against others
to the extent of any amount stipulated by the release or the covenant, or in the amount of the
consideration paid for it, whichever is greater; and
2.
It discharges the tort-feasor to whom it is given from all liability for contribution
to any other tort-feasor.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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Accepted Work Doctrine
Lowe v. Francis Const. Co., 373 P.2d 51 (Okla. 1962)
• Generally, as matter of public policy, builder's liability to third persons for negligent
construction is terminated on acceptance of property by builder's grantee, but where
builder has willfully created condition which he knows to be immediately dangerous to
persons other than his grantee, who will necessarily be exposed to such danger,
considerations of public policy do not require application of general rule.
Schlender v. Andy Jansen Co., 380 P.2d 523 (Okla. 1962)
• After independent contractor has turned over work performed by him, and it has been
accepted by proprietor, contractor incurs no further liability to third persons by reason of
his work, and responsibility, if any, for maintaining or using it in its defective condition is
shifted to proprietor and contractor remains liable, if at all, only to proprietor for breach
of contract.
Leigh v. Wadsworth, 361 P.2d 849 (Okla. 1961)
• Generally, a builder's liability to third persons for negligent construction is terminated
upon acceptance of property by builder's grantee.
Greenwood v. Lyles & Buckner, Inc., 329 P.2d 1063 (Okla. 1958)
• Generally, as a matter of public policy, contractor's liability to third persons for negligent
construction is terminated upon acceptance by contractee; but where contractor has
willfully created condition which he knows to be immediately and certainly dangerous to
persons other than contractee who will necessarily be exposed to such danger,
considerations of public policy do not require application of general rule.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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Insurance Protection
The primary protection provided to builders from the above claims is general liability insurance
coverage. It is important that you have a clear understanding of what your insurance policy
covers and what it does not.
Of course, the best protection is exercising never-ending caution and diligence in the
performance of your work to ensure that your trades and all you are affiliated with are
performing in a good workmanlike and safe manner at all times. In addition, remain current and
educated on the accepted practices of the industry, as you will be judged against them.
Honeywell v. GADA Builders, Inc., 271 P.3d 88, (Okla. Civ. App. 2011)
• A liability insurance policy generally contains two basic duties:
1. the insurer has a duty to defend its insured and
2. a duty to indemnify its insured for damages.
Maxum Indem. Co. v. Jimenez, 318 Ga.App. 669 (Ga.App. 2012).
• Insurance is a matter of contract, and contract disputes are well suited for adjudication by
summary judgment because construction of a contract is ordinarily a matter of law for the
court.
• Construction of an insurance policy is governed by the ordinary rules of contract
construction, and when the terms of the written contract are clear and unambiguous, the
court is to look to the contract alone to find the parties' intent.
• The purpose of comprehensive liability insurance coverage is to provide protection for
personal injury or for property damage caused by the completed product, but not for the
replacement and repair of that product.
• For there to be coverage under a commercial general liability (CGL) policy for faulty
workmanship, there would have to be damage to property other than the work itself and
the insured's liability for such damage would have to arise from negligence, not breach of
contract.
• A claim against an insured for defective workmanship on a construction project may be
set forth as both a breach of contract claim and a tort claim.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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WARRANTY BASED CLAIMS
Jeanguneat v. Jackie Hames Construction Co., 576 P.2d 761 (Okla. 1978).
• When a builder-vendor sells a new home, he impliedly warrants that new home is or will
be completed in workmanlike manner and is or will be reasonably fit for occupancy as
place of abode, in absence of an agreement to contrary, and such implied warranty exists
both when new home being sold is completely constructed and when, at time of sale,
house is being constructed or is to be constructed.
• Under implied warranty of habitability, builder-vendor is not required to construct a
perfect home.
• In determining whether new house is defective, test in action charging that buildervendor has breached implied warranty of habitability is reasonableness, not perfection.
• Duration of liability of builder-vendor for breach of implied warranty of habitability is
determined by standard of reasonableness.
Lucas v. Canadian Valley Area Vocational Tech. School, 824 P.2d 1140 (Okla.Civ.App. 1992)
• When a builder-vendor sells a new home, there is an implied warranty, as a matter of law,
that the home is or will be completed in a workmanlike manner and will be reasonably fit
for occupancy as a place of abode.
McCool v. Hoover Equipment Co., 415 P.2d 954 (Okla. 1966).
• Where general contractor contracts to perform work for another requiring exercise of
care, skill and knowledge, there is an implied warranty that work which he undertakes
shall be of proper workmanship and reasonable fitness for its intended use.
Miller v. Guy H. James Const. Co., 653 P.2d 221 (Okla. App. 1982).
• Absent open and obvious design defects which should be apparent to prudent contractor
and called to prime contractor's attention, party who furnishes plans and specifications
impliedly warrants them to be fit for their intended use.
• In subcontractor's action against prime contractor to recover cost of repair work to
concrete channel liner, evidence that plans for channel were defective, that plans were
furnished by owner's engineer, that plans were part of subcontractor's contractual
obligation, and that subcontractor fully complied with terms of contract supported finding
that subcontractor was free from negligence and that major contributing cause of damage
was defective plans.
• Risk of loss resulting from defective plans shifts from least culpable party back up
contract chain to either party who created defective plans or first party in chain who
contractually agreed to assume risk.
• Prime contractor was liable to subcontractor for damages arising from defective plans
furnished by owner where prime contractor contracted to assume responsibility for plans
and subcontractor performed work according to plans and specifications.
• In subcontractor's action to recover cost of repair work by enforcing lien against owner,
evidence that owner furnished defective plans and specifications which subcontractor
followed supported judgment for subcontractor.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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STATUTORY PENALTY BASED CLAIMS
Consumer Protection Act
Oklahoma Statutes. Title 15. Section 753
Unlawful Practices
•
A person engages in a practice which is declared to be unlawful under the Oklahoma
Consumer Protection Act when, in the course of the person's business, the person:
1. Represents, knowingly or with reason to know, that the subject of a consumer
transaction is of a particular make or brand, when it is of another;
2. Makes a false or misleading representation, knowingly or with reason to know, as to
the source, sponsorship, approval, or certification of the subject of a consumer
transaction;
3. Makes a false or misleading representation, knowingly or with reason to know, as to
affiliation, connection, association with, or certification by another;
4. Makes a false or misleading representation or designation, knowingly or with reason
to know, of the geographic origin of the subject of a consumer transaction;
5. Makes a false representation, knowingly or with reason to know, as to the
characteristics, ingredients, uses, benefits, alterations, or quantities of the subject of a
consumer transaction or a false representation as to the sponsorship, approval, status,
affiliation or connection of a person therewith;
6. Represents, knowingly or with reason to know, that the subject of a consumer
transaction is original or new if the person knows that it is reconditioned, reclaimed,
used, or secondhand;
7. Represents, knowingly or with reason to know, that the subject of a consumer
transaction is of a particular standard, style or model, if it is of another;
8. Advertises, knowingly or with reason to know, the subject of a consumer transaction
with intent not to sell it as advertised;
9. Advertises, knowingly or with reason to know, the subject of a consumer transaction
with intent not to supply reasonably expected public demand, unless the
advertisement discloses a limitation of quantity;
10. Advertises under the guise of obtaining sales personnel when in fact the purpose is to
sell the subject of a consumer transaction to the sales personnel applicants;
11. Makes false or misleading statements of fact, knowingly or with reason to know,
concerning the price of the subject of a consumer transaction or the reason for,
existence of, or amounts of price reduction;
12. Employs "bait and switch" advertising, which consists of an offer to sell the subject
of a consumer transaction which the seller does not intend to sell, which advertising is
accompanied by one or more of the following practices:
a. refusal to show the subject of a consumer transaction advertised,
b. disparagement of the advertised subject of a consumer transaction or the terms
of sale,
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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c. requiring undisclosed tie-in sales or other undisclosed conditions to be met
prior to selling the advertised subject of a consumer transaction,
d. refusal to take orders for the subject of a consumer transaction advertised for
delivery within a reasonable time,
e. showing or demonstrating defective subject of a consumer transaction which
the seller knows is unusable or impracticable for the purpose set forth in the
advertisement,
f. accepting a deposit for the subject of a consumer transaction and subsequently
charging the buyer for a higher priced item, or
g. willful failure to make deliveries of the subject of a consumer transaction
within a reasonable time or to make a refund therefor upon the request of the
purchaser;
13. Conducts a closing out sale without having first obtained a license as required in the
Oklahoma Consumer Protection Act;
14. Resumes the business for which the closing out sale was conducted within thirty-six
(36) months from the expiration date of the closing out sale license;
15. Falsely states, knowingly or with reason to know, that services, replacements or
repairs are needed;
16. Violates any provision of the Oklahoma Health Spa Act;
17. Violates any provision of the Home Repair Fraud Act;
18. Violates any provision of the Consumer Disclosure of Prizes and Gifts Act;
19. Violates any provision of Section 755.1 of this title or Section 1847a of Title 21 of
the Oklahoma Statutes;
20. Commits an unfair or deceptive trade practice as defined in Section 752 of this title;
21. Violates any provision of Section 169.1 of Title 8 of the Oklahoma Statutes in
fraudulently or intentionally failing or refusing to honor the contract to provide
certain cemetery services specified in the contract entered into pursuant to the
Perpetual Care Fund Act;
22. Misrepresents a mail solicitation as an invoice or as a billing statement;
23. Offers to purchase a mineral or royalty interest through an offer that resembles an oil
and gas lease and that the consumer believed was an oil and gas lease;
24. Refuses to honor gift certificates, warranties, or any other merchandise offered by a
person in a consumer transaction executed prior to the closing of the business of the
person without providing a purchaser a means of redeeming such merchandise or
ensuring the warranties offered will be honored by another person;
25. Knowingly causes a charge to be made by any billing method to a consumer for
services which the person knows was not authorized in advance by the consumer;
26. Knowingly causes a charge to be made by any billing method to a consumer for a
product or products which the person knows was not authorized in advance by the
consumer;
27. Violates Section 752A of this title;
28. Makes deceptive use of another’s name in notification or solicitation, as defined in
Section 752 of this title;
29. Falsely states or implies that any person, product or service is recommended or
endorsed by a named third person;
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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CONTRACTS
Digital Design Group, Inc. v. Information Builders, Inc., 24 P.3d 834 (Okla. 2001).
The elements of a claim for breach of contract are:
1. formation of a contract;
2. breach of the contract; and
3. damages as a direct result of the breach.
Kizziar v. Dollar, 268 F.2d 914 (Fed 10th Cir. 1959).
• In Oklahoma, when a contractor and builder has in good faith endeavored to comply with
terms of contract, literal compliance in all details is not essential to recovery, especially
where owner has taken possession of building.
• There is substantial performance of contract to construct building where the builder has
in good faith intended to perform his part of the contract and has done so in the sense that
the building is substantially what is provided for and there are no omissions or deviations
from the general plan which cannot be remedied without difficulty.
• Where there has been substantial performance of building contract, the measure of the
builder's recovery is the amount stipulated in the agreement less the reasonable cost of
remedying defects and omissions to make the building conform to the contract.
• Where contract for construction of building for defendants required plaintiff, the builder,
to install a “5-ply built-up roof” and the roof installed was 4-ply, defendants were entitled
to a deduction in the amount of the reasonable cost of placing an additional ply on the
roof.
• Where contract for construction of building for defendants required plaintiff to provide a
central heating and air-conditioning system “ducted in” and stated that the system was to
be a particular product, or its equal, with an air duct into each room, but did not specify
the size of the unit, and the system installed was equal to such product but was
inadequate to properly cool the building, defendants were entitled to an allowance for
additional cost to provide a central system with sufficient capacity to heat and cool the
building in a reasonable manner and not merely to the additional cost of installation of
window air conditioners to overcome the deficiency, and this was so even though
defendants had approved the use of the particular make of heating and cooling system
which was installed.
• Defendants for whom plaintiff contracted to construct a building were entitled to a
completed building for their contract price, and should be granted an allowance for
necessary cost of completing building as planned if their conduct had not prevented
completion by plaintiff.
• Builder substantially performed contract to construct building for defendants even though
the foundation did not meet the specifications, where the foundation was standard and
adequate for the type of building and there was no particular reason why the
specifications had required a different type of foundation.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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OSHBA Contracts
A good contract can save you a great deal of grief. You should spend significant time and
resources on developing or acquiring contracts that protect your interests. The OSHBA for
example has developed a number of form contracts for various delivery methods of building.
We encourage you to use these or other contracts that fit your particular business and purpose
and protect you well. Some of the more important aspects of a good construction contract are as
follows:
•
Thorough and detailed descriptions of what the builder is providing to the customer.
Qualities, quantities, product descriptions, materials, dimensions, and every possible
aspect of what a customer might be expecting in a project upon delivery. If it is not
spelled out in writing, then it is anyone’s guess as to which side is telling the truth upon a
later dispute as to what was to be delivered.
•
How much are you charging the customer. Is it cost-plus, are there allowances, or is a
fixed sum? Be very specific as to how you are going to be charging the customer and
when they will be required to pay.
•
Change orders should be addressed. Make sure that the provisions as to change orders
are as you typically manage change orders. Do not write a provision as to change orders
and then not follow it. Often we see change orders done verbally when the contract
requires them to be authorized in writing. If the builder is accustomed to processing
change orders verbally with a follow up email, then draft the contract to allow for that.
•
Time for performance. Provide yourself with ways to account for delays and missed
dates. Weather, labor shortages, material shortages, etc.
•
Spell out the duties of the customer. They may be required to timely provide material
choices, or surveys, or other vital pieces of information. Make sure the contract requires
that of them and puts them in breach if they fail.
•
Warranties. Be very precise and explicit as to what is warrantied and what is not. If
providing a limited warranty (and that is all you should provide), then state as such and
be very clear as to what specifically is covered in the limited warranty. Put standards of
performance to base it upon, such as the NAHB Residential Construction Performance
Guidelines.
•
Disclaimers and limitations on damages. You have the right under contract to disclaim
implied warranties, and to limit damages. You should, always. Draft in clauses that
substantially confine your exposure under the contract.
•
Be careful of what your marketing materials have in them. These are great sources of
information for plaintiff’s attorneys to find fault within.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
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Notice of Opportunity to Repair Act
Oklahoma Statutes. Title 15. Contract Provision Requiring Notice of Construction Defects
A. For the purposes of this section:
1. "Construction defect" means a deficiency in or a deficiency arising out of the design,
specifications, surveying, planning, supervision or observation of construction or
construction of residential improvements that results from any of the following:
a. defective material, products or components used in the construction of
residential improvements,
b. violation of the applicable codes in effect at the time of construction of
residential improvements,
c. failure of the design of residential improvements to meet the applicable
professional standards of care at the time of governmental approval of the design of
residential improvements, or
d. failure to construct residential improvements in accordance with accepted
trade standards for good and workmanlike construction at the time of construction;
2. "Contractor" means a person or entity providing labor, services or materials in the
construction of a new residence or alteration of, repair of, or addition to an existing
residence; and
3. "Residence" means any structure designed and used only for residential purposes,
together with all attached and unattached structures, constructed by the contractor, regardless
of whether the real property upon which the residence is located was purchased from the
contractor. Such term also includes a residence upon which alterations or repairs were
performed by the contractor at the direction of the homeowner.
B. A contract for the construction of a new residence or for an alteration of, repair of, or addition
to an existing residence may include provisions which:
1. Require a homeowner, prior to filing a lawsuit for construction defects, to present to
the contractor a written notice of construction defects; and
2. Allow the contractor to inspect any construction defects and present to the homeowner
a written response which shall include the contractor’s offer to repair defects or compensate
homeowner for such defects within thirty (30) days after receipt of the notice of defects.
If such provisions are included in a contract, the homeowner shall not file a lawsuit against the
contractor until the conditions precedent have been fulfilled. In the event the homeowner files a
lawsuit against the contractor without fulfilling the conditions precedent, the contractor shall be
entitled to a stay of proceedings until such conditions have been fulfilled. If the conditions
precedent have been fulfilled, the homeowner may seek remedies against the contractor as
provided by law.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
13
PROTECTIONS OUTSIDE OF CONTRACT AND INSURANCE
When you have a dispute with a customer or homeowner, go above and beyond in trying to
resolve the dispute outside of court and outside of the involvement of significant legal expense.
Litigation is absurdly expensive and can last for years from a single dispute. Rarely is going to
the courthouse the best option, or the cheapest. Most disputes may be resolved through
settlement, and then an exchange of a full release from both sides. This is usually the best
option.
Structure your business and assets to best protect them. Always operate under a business entity
that provides limited liability protection. These may include the common LLC (Limited
Liability Company), or corporation, or limited partnership, or many other forms. Always be
working under such an entity and be very careful about working outside of it, or mistakenly
signing documents personally.
Torts and Warranties
Sean Paul Rieger, Attorney, Architect, Broker (Copyright 2013)
14
TIME WINDOW OF RISK
Statute of Limitations
A statute of limitation limits the time allowed for filing a lawsuit on any given matter, and is
based upon a certain amount of time from an established date.
Oklahoma Statutes. Title 12. Section 95; Limitation of Other Actions
A. Civil actions other than for the recovery of real property can only be brought within the
following periods, after the cause of action shall have accrued, and not afterwards:
1. Within five (5) years: An action upon any contract, agreement, or promise in writing;
2. Within three (3) years: An action upon a contract express or implied not in writing; an
action upon a liability created by statute other than a forfeiture or penalty; and an action on a
foreign judgment;
3. Within two (2) years: An action for trespass upon real property; an action for taking,
detaining, or injuring personal property, including actions for the specific recovery of
personal property; an action for injury to the rights of another, not arising on contract, and
not hereinafter enumerated; an action for relief on the ground of fraud - the cause of action in
such case shall not be deemed to have accrued until the discovery of the fraud;
Smith v. Johnston, 591 P.2d 1260 (Okla. 1978).
• Where homeowner's failure to discover allegedly dangerous and defective electrical
wiring was not because of any negligence on homeowner's part and homeowner's
knowledge was not sufficient for him to determine that there was a hazardous condition
arising from hidden defects in electrical wiring and discovery of hazard was
happenstance and where the owner was not neglectful of his rights and did not fail to use
reasonable and proper diligence after discovery of hazard, limitation period of two years
on suit against electrical subcontractors did not begin to run until the homeowner learned
of or, in the exercise of reasonable diligence, should have learned of the harm through
discovery of the hazardous condition caused by hidden defect
Samuel Roberts Noble Foundation, Inc. v. Vick, 840 P.2d 619 (Okla. 1992)
• Rationale behind general rule that completion of construction is accrual date for claim for
breach of contract against general contractor is that there is no breach for defective
performance if defects can be remedied by date of completion.
• Property owner's negligence cause of action against soil engineer accrued either in
August 1984 when problems allegedly began, or early in 1985 when owner admitted that
it had noticed that a slab had moved, causing floor tiles to pop off and doors to stick.
Rother v. La Renovista Estates, Inc., 603 F.Supp. 533 (Fed. W.D. Okla.1984)
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•
In Oklahoma, an action for fraud must be filed within two years of discovery of the fraud
or from such time as the fraud could have been discovered by ordinary diligence;
however, where a confidential relationship exists between the parties at the time of the
fraud, this section is tolled until the defrauded party has actual notice of the fraud.
Brashears v. Sight "N Sound Appliance Centers, Inc., 981 P.2d 1270 (Okla.Civ.App. Div. 1999)
• Three-year limitations period for action upon liability created by statute other than
forfeiture or penalty, rather than one-year limitations period for action upon statute for
penalty, applied to consumers' action under Consumer Protection Act alleging retailer's
use of “bait and switch” advertising, where consumers were suing in their individual
capacities and were seeking only damages
Statute of Repose
Oklahoma Statutes. Title 12. Limitation of Action to Recover Damages Arising from Design,
Planning or Construction of Improvement to Real Property
•
No action in tort to recover damages:
i. for any deficiency in the design, planning, supervision or observation of
construction or construction of an improvement to real property,
ii. for injury to property, real or personal, arising out of any such deficiency, or
iii. for injury to the person or for wrongful death arising out of any such deficiency,
shall be brought against any person owning, leasing, or in possession of such an
improvement or performing or furnishing the design, planning, supervision or
observation of construction or construction of such an improvement more than ten (10)
years after substantial completion of such an improvement.
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CONSULT AN ATTORNEY
The information provided in this seminar and in this outline is only intended to
provide general information to no one in particular, and this information is
absolutely NOT intended, or to be used in any way, to provide legal advice or to
address any fact specific legal issues. You should always consult an attorney
directly for legal advice, as every legal matter can only be addressed after its
unique facts are fully known and considered, and only after the jurisdiction of
the matter is known in order to determine the applicable law therein. Therefore,
Sean Paul Rieger, and S.P. R IEGER PLLC,
PLLC assume absolutely NO liability
whatsoever in connection with the use of the above writings or the information
provided in the seminar. Copyright 2013, Sean Paul Rieger.
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S EAN P AUL R IEGER
Attorney at Law ▪ Architect ▪ Real Estate Broker
136 Thompson Drive, Norman, OK 73069
Phone: 405.329.6070; Fax: 405.329.7103; Email: sp@riegerllc.com
BIOGRAPHY:
EDUCATION:
Graduate:
Undergraduate:
Sean Rieger was raised in Norman, Okla. A fourth generation Normanite, Sean’s ancestors on both sides of
his family came to central Oklahoma in the Land Run of 1889. Sean, his wife Dana, and their three boys live
in Norman. Sean holds Oklahoma licenses as an Attorney, Architect, and real estate Broker. His practice is
focused on providing primarily legal services in the following areas: real estate, zoning, land use,
development, construction, business, property, landlord-tenant, condemnation, business entities, contract,
and related litigation.
University of Oklahoma College of Law; Norman, OK
Juris Doctor with Honors (top 15%), 2000.
Oklahoma Law Review; Note Editor, 1999-00; Note published, 1999; Member 1998-99.
Frank C. Love Memorial Scholarship 1999. (Best written work by a 2nd year student).
Harry Alley-Leroy Allen Prize, 1999. (Best Okla. Law Review Note written in 1999).
Order of Barristers, 2000. (Awarded to top 10 oralists in graduating class of about 200).
National Appellate Moot Court Team; Member 1999-2000.
Philip C. Jessup International Law Moot Court; 1998-99. (4th Place Regional Oralist).
Academic Achievement Award, Spring 2000. (Top student in Trial Techniques).
Board of Advocates Moot Court Competition, 1998. (5th Place of 210 contestants).
Dean’s Honor Roll (five of six semesters); Phi Delta Phi honorary fraternity, Member.
Oklahoma State University School of Architecture; Stillwater, OK
Bachelor of Architecture (Five Year Professional Degree), 1992.
EXPERIENCE:
2004 – present
T HE R I EGER L AW G ROUP ; S. P. R IEGER PLLC;
PLLC Attorney, Manager of Sean’s Norman law firm.
Sean’s clients include a wide swath of builders, developers, small businesses, contractors, banks, landlords,
property owners, and virtually anyone in need of Real Estate, Construction, or Business Law services.
1999 – present
Rieger, L.L.C.; CEO/Manager (small family-owned real estate investment company in Norman).
2001 – 2004
Spradling, Alpern & Gum, L.L.P.; Of Counsel Attorney, in Norman office.
Summer 1999
Hartzog Conger & Cason; Oklahoma City, OK, Law Clerk.
Summers 1998, 99 Spradling, Alpern, Friot & Gum, L.L.P.; Oklahoma City, OK, Law Clerk.
1996 – 1997
RNL Design; Denver, CO, Architect
1993 – 1996
Schaefer Johnson Cox Frey & Associates PA; Wichita, KS, Intern Architect
PROFESSIONAL:
Licensure:
Attorney at Law: State of Oklahoma OBA No. 18817; admitted in Sept. 2000.
Architect: State of Oklahoma No. 4207; transferred from Colorado Feb. 2000.
Real Estate Broker: State of Oklahoma No. 157933; Broker-Assoc., Rieger Realty; Dec. 2010.
Activities:
Builders Association South Central Oklahoma;
National Association of Homebuilders; Member.
Norman Developers Council, Member.
Oklahoma Bar Association, Member.
Speaker and author on legal topics related to real estate and construction law.
COMMUNITY:
Activities, Honors:Governor’s Commendation, Apr. 26, 2012, bestowed by the Honorable OK Governor Mary Fallin
Norman Chamber of Commerce; Chairman of the Board, 2011-12; Exec. Officer 2003-13.
Norman Chamber of Commerce Government Affairs Committee, Chairman, 2008-2011
McFarlin United Methodist Church, Norman, OK, Member, Finance Committee Member, 2012Norman Public Schools Citizen Advisory Council, 2009-2010.
Roosevelt Elementary School Watch Dog, 2008Oklahoma Bar Foundation, Fellow.
Sooner Centurions, 2002- ; as CEO and representative of the Rieger, L.L.C.
Little League baseball coach, City of Norman, 2007-2009.
City of Norman Citizens TIF Committee, 2005, appointed by Mayor Haralson.
Cleveland County Habitat for Humanity: President 2001-02; Board, 1999-2003.
Leadership Norman, 2001-02 Class, Norman Chamber of Commerce.
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