Breach of Implied Warranty Structural Defects Causing Mold

The defendants built a house in 2004. Four years later, the plaintiffs purchased it. Shortly before their purchase, the plaintiffs visited the house several times and had it inspected; neither the plaintiffs nor the home inspector observed mold in the house.

Nonetheless, in June 2009, after living in the house for several months, the plaintiffs discovered mold in a closet. By the fall of 2009, mold was present throughout the house and on the plaintiffs’ belongings, and they were compelled to move into a hotel while they attempted to remedy the problem.

The plaintiffs hired a mold remediation contractor which began the remediation, but after assessing the construction of the house concluded that, unless the structural problems that promoted mold growth were fixed, the mold would return. The plaintiffs then hired a professional engineer to inspect the house. The engineer advised that the structural repairs needed to address the mold problem were “so extreme that it [was] not practical . . . from both a constructability and economic perspective” to make them, and he “recommend[ed] that the [house] be demolished and reconstructed.” Realizing that the mold problem could not be easily remedied, the plaintiffs moved into a rental home.

The plaintiffs asserted claims against the builder for the structural defects resulting mold. They also included a claim under New Hampshire’s Consumer Protection Act (“CPA”).

Jury Verdict 

A New Hampshire Superior Court jury returned a verdict in favor of the plaintiffs for $70,000 on their claim for breach of implied warranty of workmanlike quality.

The Trial Court also awarded the plaintiffs double damages on the CPA claim, plus an award of attorneys fees and costs, or $348,116.74. On appeal, however, the New Hampshire Supreme Court reversed this award.

The Court determined that the transaction at issue was the defendants’ alleged construction of the house with latent structural defects, not any representations that the defendants made to others during or after construction.  The house was completed in 2004 and was purchased by the plaintiffs five years later. Therefore, because the allegedly wrongful transaction (i.e., the construction of the house) occurred more than three years before the plaintiffs “knew or reasonably should have known” of it, the Court concluded that the construction of the house is an exempt transaction pursuant to RSA 358-A:3.

Consult a Construction Law Attorney Early

This case makes it clear that if you consider the possibility of asserting legal claims, consult an attorney specializing in construction law as early as possible. Otherwise, you may forfeit the ability to assert legal claims that may allow the recovery of double damages and attorney’s fees.

Source: Murray v. McNamara, Dkt. No. 2013-630 (March 20, 2015)