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New Law on the Way? Arizona Supreme Court to Review Case Involving Implied Warranty Rights

The Arizona Supreme Court is reviewing the Sullivan v. Pulte Home Corp. decision and heard arguments from the parties. The Arizona Court of Appeals in Sullivan v. Pulte Home Corp., held that the Economic Loss Doctrine does not bar a subsequent purchaser from asserting tort based claims against a builder/developer. As a result, a subsequent purchaser can assert a tort based construction defect claim presumably at any time within two years of discovery of the defect.

The Court of Appeals also held that even when a subsequent homeowner is the successful party of a breach of implied warranty of workmanship or habitability claim, he cannot recover attorneys' fees pursuant to A.R.S. § 12-341.01(A) which provides that the court may award fees to the successful party in "any contested action arising out of a contract, express or implied." The Appellate Court held that because the implied warranty of workmanship and habitability is implied-in-law, not implied-in-fact, A.R.S. § 12-341.01(A) is not applicable to a breach of implied warranty claim.

Look for the Righi Fitch Law Group Legal Alert for a discussion on the Supreme Court's ruling in the Sullivan case and impact on Arizona law.