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Illinois Appellate Court Declines to Extend Buyer’s Right to Seek Redress from Material Suppliers and Design Professionals; Follows Precedent for Construction Subcontractors

By: Jeanne Hoffmann, Capital Member

In Sienna Court Condo. Association v. Champion Aluminum Corp., 2017 IL App (1st) 143364, Illinois’ First District Appellate Court declined to extend the Minton rule to materials suppliers and design professionals, or to curtail its application to other subcontractors involved in construction.

Generally, home buyers seeking redress for construction defects in breach of the implied warranty of habitability are limited to pursuing such claims against the general contractor or builder/vendor from whom they purchased the home. The Minton rule, established in Minton v. Richards Group of Chicago, 116 Ill. App. 3d 852, 452 N.E.2d 835 (1st Dist. 1983), provides that an innocent purchaser who has sustained a loss due to faulty construction and latent defects, but has no recourse against the builder/vendor itself due to that entity’s insolvency, may pursue such claims against a subcontractor who participated in the construction.

In Sienna Court Condo Association the plaintiff purchasers brought action against the property developer, architects, engineering firms, general contractor, material suppliers, and subcontractors, asserting claims for breach of the implied warranty of habitability due to latent defects from the construction. Included in the issues presented on appeal were whether a homeowner’s claim for breach of the implied warranty of habitability may proceed against material suppliers and design professionals, or even against the subcontractors involved in the construction, if the plaintiffs were not entirely “without redress” against the general contractor due to a potential source of recovery from the insolvent general contractor’s insurance or pre-established warranty fund.

The Court readily rejected the notion of extending the Minton rule to design professionals, declining to “expand the extent of the implied warranty of habitability to a new class of defendants who designed, but were not involved in the actual construction of the condominiums at issue.” The Court applied the same reasoning to the materials suppliers: “Based on the same precedent discussed with respect to the design defendants, the implied warranty of habitability does not extend to material suppliers who did not perform any construction. Our precedent is clear that liability is limited to parties who actually “took part in the construction or construction-sale.””

As for the other subcontractors (who performed work responsible for the defects/damages) arguing that the Minton rule should not apply to them in this case because the plaintiffs had “recourse” from the general contractor’s insurance and/or warranty fund, the Court also “decline[d] to deviate from Minton and over 30 years of subsequent precedent from this court, which has consistently held that a home purchaser may proceed against the subcontractor of an insolvent developer/builder or general contractor for breach of the implied warranty of habitability.” “Insolvency” is the determinative test, and the Court saw no reason to depart from this standard based upon the potential recovery from insurance policies or warranty funds “held by an insolvent developer or insolvent general contractor.”

  • by Chris Hoffmann
  • posted at 2:10 PM
  • 06/23/2017