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Court properly preserved home habitability claim

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The Indiana Court of Appeals has found that a Clark County case can continue involving claims against a home construction company. The former homeowners allege that the company defectively built their home and that mold and water damage occurred, leading to loss of habitability.

In Arc Construction Management, LLC, and Alan Muncy v. John Zelenak and Cecilia Zelenak, No 10A01-1106-CT-247, the appellate court affirmed a Clark Superior Court’s ruling to not dismiss the case involving a newly constructed home in Floyd County.

John and Cecilia Zelenak bought the home in 2004. Four years later, they filed a complaint against ARC Construction Management that alleged the company breached the contract by not constructing the home in a structurally sound manner and building it contrary to building code. Specifically, the suit alleged the windows and doors weren’t properly installed or were defective, the lintels remain unpainted, one rafter was missing, electrical wires were left exposed, and there was water intrusion that damaged personal property inside. The Zelenaks wanted ARC to cover the losses and pay punitive damages in order to deter similar conduct in the future.

In 2010, the Zelenaks foreclosed on their home and ARC filed a motion to dismiss on grounds that they lacked standing after foreclosing on their ownership. Although the Zelenaks conceded the foreclosure barred most of their claims, they argued that they still had standing to bring a claim concerning the loss of use and enjoyment in the house during their time there due to the water intrusion. The trial court preserved that claim but granted summary judgment in ARC’s favor on the remaining issues, and the court then certified the order for interlocutory appeal.

On appeal, the three-judge panel found that ARC had adequate notice of the implied warranty breach claim because it was alleged in the amended complaint. The court found the Zelenaks have standing because they are alleging damage sustained as a result of ARC’s defective construction, and the panel determined a genuine issue exists for trial on that claim of habitability.

The court also denied a request for attorney fees from the Zelenaks, finding that ARC’s failure to include exhibits in its appendix weren’t so flagrant or significant to warrant those fees.


 

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