Second Chance Investments, LLC v. Sabri Properties, LLC, et al.

This is an appeal affirming the district court's dismissal of all claims brought by plaintiff Second Chance Investments, a property development company, against defendant Sabri Properties, a property development, restoration, and general construction services company. Sabri began construction of a home in 2004. Prior to the substantial completion of the home, Sabri executed a purchase agreement with Second Chance. The parties executed a warranty deed conveying the property the day before the certificate of occupancy was issued.

In 2008, a toilet leaked and flooded the house, causing water damage. During the repair of this water damage, several unrelated defects were discovered. Sabri hired a professional engineer to inspect the house and the inspection estimated the repairs would cost more than $740,000. Second Chance brought claims against Sabri and the other defendants, alleging breach of contract, negligence, breach of express warranty, breach of implied warranty of fitness for an intended purpose, and breach of statutory warranty.

The district court dismissed all of Second Chance's claims for the following reasons: (1) Second Chance's breach of contract claim was based on representations made in the purchase agreement, but the parties' subsequent execution of the warranty deed meant it could no longer pursue its rights under the purchase agreement; (2) Sabri owed no duty of care to Second Chance to build the home in a reasonably good and workmanlike manner because that duty is owed to the person with whom the contractor contracted to construct the home and that party was not Second Chance; (3) Second Chance presented no evidence of a breach of warranty; (4) because Sabri and Second Chance had a contract to purchase real estate and not a construction contract, there was no implied warranty of fitness made by Sabri to Second Chance; and (5) Sabri owed no statutory duties because the statute only creates such a warranty for a purchase of the dwelling for the purpose of habitation and not for resale and Second Chance's reason for purchasing the property was "to turn it for a profit."

Chiu v. Timbershore Home Owners' Association

This is an appeal reversing and remanding the district court's dismissal of plaintiff Chiu's negligence and trespass claims. In 2011, Chiu learned from a neighbor that there was evidence of water intrusion into his townhome. He had not lived in the townhome since 1999 and had turned the water supply off. He inspected the property and discovered standing water inside his unit. Chiu spoke with Defendant Timbershore Home Owner's Association's vice president about the problem. The source of the leak turned out to be the water pipe that supplied a neighboring unit but which ran under Chiu's unit. Timbershore did not turn off the water supply to that pipe for two days after Chiu discovered the damage to his unit. Chiu brought claims of negligence and trespass against Timbershore.

The district court dismissed Chiu's claims, stating that Timbershore had no duty to repair the interior of Chiu's unit and that Timbershore did not intentionally trespass upon Chiu's property. The court of appeals reversed and remanded. With respect to Chiu's negligence claim, the appeals court concluded that (1) the declaration governing the relationship between Timbershore and the individual unit owners was silent on the issue of maintenance and repair of individual units; (2) the declaration established an easement over the pipe running under Chiu's in favor of Timbershore which placed on it the common-law duty to maintain and repair the easement and not to misuse the easement; and (3) there are still fact questions about whether Timbershore breached those duties.

With respect to Chiu's trespass claim, the appeals court concluded that the district court erred because it determined that Timbershore did not intentionally "trespass" into Chiu's unit without considering whether the failure to stop water from intruding after it knew there was a problem constitutes intentional trespass. The court of appeals stated that trespass does require intent, but that this intent can come in the form of a failure to remove something from another's property or the continued presence of a thing on another's property.
 

T&R Flooring, LLC v. O'Byrne, et al.

This is a mechanic's lien case where the court of appeals affirmed the district court as to its determination that respondents T&R Flooring, LLC, Boe Electric, Inc., and Mac's Plumbing Service, Inc. had valid mechanic's liens, and reversed and remanded the district court on its determination that respondent Johnson Comfort Systems, Inc., had a valid mechanic's lien.

Minnesota law requires a contractor or subcontractor who has a right to a mechanic's lien on improvements to real property to provide the property owner with written notice of the possibility of a lien being filed against the property. This does not apply, however, when a property owner acts as his own contractor. In this case, none of the subcontractor-respondents gave pre-lien notice, but Mr. O'Byrne acted as both the contractor and the property owner. As such, the liens for T&R, Boe, and Mac's were valid because they were filed within the 120-day period following the completion of the work.