Contractor must pay for cost to repair home to make it saleable, and diminution of market value
Gerald T. and Jonna Heaton sued their builders after the foundation of their new home shifted twice, during construction, necessitating substantial repairs and modifications. They sued alleging contract violations and negligence, but only the negligence theories went to trial. Ultimately, the jury awarded them more than $70,000.00 in costs to repair and another $200,000.00+ for diminution in market value. The Defendants argued that Heatons should not have been allowed to recover both forms of damages.
The company that poured the walls also argued that it should not be considered negligent with regard to problems with the walls, because it was providing a "product" to the Heaton's builder, a so-called "sophisticated user." The Court noted however, that Great Lakes, the company that poured the walls, recommended that the walls be analyzed by an engineer, and that the builder only built about one house a year for a decade, and had never used poured foundation walls. On this basis, the builder was not properly a "sophisticated user" who relieved Great Lakes of its negligence under the product liability statute. With regard to the damage award, the Court of Appeals concluded that both damage awards were proper, since it required the expenditure of the repair money to make the home safe for occupancy, but the market value remained lower according to the testimony adduced.