VI. Liability of Various Parties

Liability of Contractor to Second Purchaser

Under Alabama law, a second purchaser of a home cannot bring a claim for defects against the contractor who originally built the home. Boackle v. Bedwell Const. Co., Inc., No. 1980392, 2000 WL 378191 (Ala. April 14, 2000); Wells v. Clower’s Construction Co., 476 So. 2d 105 (Ala. 1985); Wooldridge v. Rowe, 477 So. 2d 296 (Ala. 1985); Lee v. Clark & Associates Real Estate, Inc., 512 So. 2d 42, 45 (Ala. 1987) (disallowing recovery to subsequent purchaser against builder under “any theory” because “we are not inclined to depart from the longstanding role that the doctrine of caveat emptor applies to subsequent purchasers of a house”).

Liability of Contractor for Home Built for Personal Use

The doctrine of caveat emptor (or buyer beware) applies in cases where the seller of a home was also the original builder of the home, if the builder lived in the home before he sold it. O’Connor v. Scott, 533 So.2d 241, 243 (Ala. 1988) (summary judgment as to builder/seller finding caveat emptor applied where builder lived in home for almost two years); Stoner v. Anderson, 701 So. 2d 1140, 1145 n.1 (Ala. Civ. App. 1977) (“Our Supreme Court has held that a house was a ‘used’ residence where a builder had constructed it for his own personal use and had lived in it for almost two years before selling it.”).

Liability of a Developer to Owner

Alabama courts have found that a developer is not liable for a claim of negligence and suppression brought by a residential homeowner who purchased his home from a contractor and had no contractual relationship with the developer. See DeAravjo v. Walker, 589 So.2d 1292 (Ala.1991); Jones v. Whitt, 676 So.2d 313, 316 (Ala. Civ. App. 1995).

Liability of the Seller of Land

Alabama law recognizes no implied warranty of habitability related to the sale of land. Scott v. Gill, 352 So.2d 1143, 1145 (Ala.Civ.App. 1977).

Liability of Contractor for Personal Injuries or Negligent Acts of Third Parties

The Alabama Supreme Court has held that “It is fundamental that generally neither a premises owner nor a general contractor is responsible for the negligent acts of an independent contractor.” Bell v. Sugarwood Homes, Inc., 619 So. 2d 1298, 1301 (Ala. 1993); Clark v. Jackson, 549 So. 2d 85 (Ala. 1989) (“[T]he Alabama cases hold as a general rule that a prime contractor is not liable for the acts of an independent subcontractor whom he has employed.”)(citations omitted); see also, Joseph Land & Co., Inc. v. Gresham, 603 So. 2d 923 (Ala. 1992); Fuller v. Tractor & Equipment Co., Inc., 545 So. 2d 757 (Ala. 1989); General Finance Corp. v. Smith, 505 So. 2d 1045 (Ala. 1987).

In Clark v. Jackson, 549 So. 2d 85 (Ala. 1989) plaintiffs sued their general contractor and a subcontractor who worked on their home. Specifically, the plaintiffs alleged “that [the contractor and subcontractor] had breached their warranties to provide the [plaintiffs] with a house constructed in a good and workmanlike manner and free from defects.” Id. at 86. The court, first stated that “the Alabama cases hold, as a general rule, that a prime contractor is not liable for the acts of an independent subcontractor whom he has employed.” Id. The court, then, in affirming direct verdict for the general contractor, noted that the evidence showed that the cause of the problems were related to the work of the subcontractor electrician. Id.

Liability of Contractor or Subcontractor for Latent Defects in Products

Although Alabama cases do not appear to directly address this issue, authority in other states hold that a contractor is not liable for latent defects in products that he uses “and he is not answerable to the owner for the latent defect or liable for the amount of damage to the building caused by such defect.” 13 Am. Jur. 2d, Building and Construction Contracts §27 (1997); Wood-Hopkins Contracting Co. v. Masonry Contractors, Inc., 235 So. 2d 548 (Fla. Ct. App. 1970) (affirming verdict for builder); 17A C.J.S., Contracts § 515, p.857 (“a builder is not liable for the result of latent defects in material purchased from a reputable dealer”); 61 A.L.R. 3d 792 § 3, Liability of Builder or Subcontractor for Insufficiency of Building Resulting From Latent Defects in Materials Used (1975) (“a builder makes no implied warranty against latent defects in materials which he uses in construction and . . . the builder is not responsible for the insufficiency of a building resulting from such defect where he had no knowledge of the defect, acted in good faith, and exercised reasonable care and skill.”).

Liability of Contractor for Claims under the AEMLD

A plaintiff generally has no claim against a contractor under the Alabama Extended Manufacturers Liability Doctrine. See Rutledge v. Arrow Aluminum Industries, Inc., 733 So. 2d 412 (Ala. Civ. App. 1998) (“[w]ith regard to Rutledge’s AEMLD . . . we conclude that Foshee is not a seller within the meaning of the AEMLD. “).

Liability to Parties with Whom You Had No Contract

One issue in construction law is whether a subcontractor or contractor can bring suit against an owner or architect even if no contract existed between them. The answer depends on whether the suit involves a claim for Breach of Contract or for Negligence.

1. Breach of Contract

   The law in Alabama regarding construction contracts is that one not a party to a contract generally cannot sue for its breach. E. C. Ernst, Inc. v. Manhattan Const. Co. of Texas, 551 F.2d 1026, 1030 (5th Cir. 1977) (applying Alabama law). However, “[t]hird parties may sue on the contract if the provision is intended for their direct, as opposed to incidental, benefit. Id. At least one court applying Alabama law has held that

   [i]n a large construction project each of the individual contracts is inevitably intertwined with many others, all devoted to the general goal of finishing all phases of the project according to the plans and specifications drawn up by the architect and within the time period established under the prime contract. But this interrelationship by itself does not justify imposing third party beneficiary duties, which flow not from the inevitable consequences of a breach but rather from the intent of the contracting parties.

   Id. at 1030 (disallowing a subcontractor to bring a claim against the owner for breach of contract). Additionally, if the contract “specifically states that a third party shall have no legally enforceable rights in the agreement, a court must effectuate the expressed intent by denying the third party any direct remedy.” Federal Mogul Corp. v. Universal Const. Co., 376 So.2d 716, 724 (Ala. Civ. App. 1979); see also, Sheetz, Aiken & Aiken, Inc. v. Louverdrape, Inc. 514 So.2d 797, 803 (Ala. 1987) (affirming motion to dismiss of subcontractor in claim brought by architect); Sheetz, Aiken & Aiken, Inc. v. Spann, Hall, Ritchie, Inc., 512 So.2d 99, 102 (Ala. 1987) (affirming summary judgment and finding that developer had no breach of contract claim against architect with whom it had no contract).

2. Negligence

   A contractor or subcontractor may have a claim against an owner or architect for negligence even though they had no contract with them. See Berkel and Co. Contractors, Inc. v. Providence Hosp., 454 So.2d 496, 501 (Ala. 1984) (claim by subcontractor against architect and court noted that “Alabama courts have rejected the absence of privity of contract as a defense to a negligence action”); see also, Federal Mogul Corp. v. Universal Constr. Co., 376 So.2d 716 (Ala. Civ. App.1979); E.C. Ernst, Inc. v. Manhattan Constr. Co. of Tex., 551 F.2d 1026 (5th Cir.1977), cert. denied, 434 U.S. 1067, 98 S. Ct. 1246, 55 L.Ed.2d 769 (1978) (under Alabama law, an electrical subcontractor on a construction project may proceed on a negligence theory in an action against an architect absent contractual privity between them); Zeigler v. Blount Bros. Constr. Co., 364 So.2d 1163 (Ala. 1978). In deciding whether to impose a duty in a construction context, the trial court should analyze six factors:

   (1) The extent to which the transaction was intended to affect the other person; (2) the foreseeability of harm to him; (3) the degree of certainty that he suffered injury; (4) the closeness of the connection between the defendant’s conduct and the injury; (5) the moral blame attached to such conduct; and (6) the policy of preventing future harm.

   Howe v. Bishop, 446 So.2d 11 (Ala. 1984) (Torbert, C.J., concurring in the result),