Larry Rogers and Elizabeth Snipan v. Kay Dobie

Negligence - Breach of implied warranty of fitness for a particular purpose and
habitability - Misrepresentation - Constructive fraud - Dobie and her ex-husband commissioned the construction of the
house in question in 1986. The couple, who were still married at
the time, hired Don Mallory ("Mallory"), a general contractor, to
build the house for them. During construction, the subcontractor
who laid the foundation loaded fill dirt for the foundation from
the pond located on the property. This accomplished two
objectives in that it enlarged the pond, and it provided
inexpensive dirt for the foundation. Construction on the house
was completed in December, 1986, and the Dobies moved into the
house at that time.

The Dobies lived in the house until 1991 when they listed it
for sale. The appellees first saw the house in February, 1992,
and ultimately made an offer on the house. Before the sale was
final, the appellees hired Kordsmeier, a house inspector, at the
suggestion of the realtor. Kordsmeier inspected the house and met
with the appellees to review his findings with them. Overall,
Kordsmeier found the house to be in good condition. He did note
that he saw an oddity in the laundry room in that Dobies had
attached a vacuum cleaner hose to the washing machine's
water-outlet hose, and ran it to the outside yard through the dryer
vent, instead of the through the in-house plumbing to the septic
system. Kordsmeier noted this on his report and advised the
appellees of this situation. Snipan later asked the real-estate
agent about this situation. In response, the agent apparently told
Snipan that by-passing the plumbing was not unusual. He said that
people using septic tanks often did not run their wash water
through the septic system in order to not overtax the system.

The sale of the house ultimately went through, and the
appellees moved in. Upon moving in, the appellees ran their
washing-machine outlet hose through the outlet drain to the septic
system. Approximately one year later, the appellees began
experiencing problems with the plumbing in the house. Snipan
testified at trial that she first noticed water coming from under
the house one day as she walked towards the back of the house.
She testified that she crawled under the house and found that
water was running from beneath it. She told her husband about her
discovery, but he disregarded her observations.

Thereafter, in May of 1993, the appellees operated several
appliances simultaneously including the dishwasher and clothes
washer, which used the same in-house plumbing outlet pipes.
Snipan testified that when she looked at the side of the house,
she saw water running out of the bricks at approximately three or
four places. Snipan testified that there was water all over the
yard, so she called a repairman to come to the house. Once the
repairman arrived, he ran a water hose down the washing-machine
drain and turned it on. They then saw water running through the
bricks.

Appellees called the builder and an inspector, who found that
the foundation had collapsed under the laundry room crushing the
outlet pipes and causing water to run under the house. Appellees
ultimately had several inspections done. The inspections revealed
that the fill dirt used to create the base for the house's
foundation had retracted because it was wet when it was originally
laid down. As such, the concrete slab foundation no longer
rested on solid ground. The crushed pipes allowed the outlet
water to seep under the house and erode the soil foundation
further exacerbating the problem. Appellees requested estimates
on repair, and these estimates ranged from $132,000 to $190,000 for a
full repair.

On August 30, 1994, Appellees filed their lawsuit against the
Dobies, Kordsmeier, Century 21 and various real-estate agents.
Appellees' claims against Dobie included negligence, breach of
implied warranty of fitness for a particular purpose and
habitability, misrepresentation and constructive fraud. The trial
court dismissed Appellees' claims against the real-estate agents
by an agreed order, and granted summary judgment in favor of
Mallory, the builder of the home, based on the applicable statute
of limitations.

Plaintiff's verdict for $125,250.00

Carl Garner, a civil engineer
with and vice-president of Grubbs, Garner and Hoskyn Engineers, Little Rock Arkansas

Tom Allen, real-estate
structural and mechanical inspector, Arkansas
Frank Moore, vice-president and general manager of Hills of Arkansas, general
contracting firm specializing in concrete foundation repairs and
water-proofing, Arkansas
Reese Michael Pearce, a real-estate appraiser, Arkansas

Unknown

Affirmed by the Supreme Court of Arkansas. See: 339 Ark. ___ (November 18, 1999)___ S.W.3d ___. Reported by kkm.