In Wood v. MAK Investment Properties, LLC, the Court of Appeals of Ohio affirmed the lower court’s grant of summary judgment for a construction company on claims brought by homeowners, finding privity of contract was necessary to maintain a negligence action against a subcontractor for remodeling work. 2024 WL 4164066.
Plaintiffs Jason Wood and Charlene Wood (“the Woods”) filed the underlying action against Defendants Hurst Construction, Inc., Hurst Construction, Inc., d.b.a. Hurst Design and Remodeling, and Hurst Design-Build Remodeling (collectively “Hurst Construction”) alleging negligence relating to the remodel of their home prior to their ownership.
The home was previously owned by MAK Investment Properties, inc. (“MAK”). Shortly after purchase, MAK contracted with Hurst Construction, among others, to remodel and renovate the home. The remodel was complete by fall of 2017, and the home was placed for sale thereafter. The home was purchased by the Woods. After purchase, the Woods experienced flooding in the backyard, patio, and lower level of the home, as well as cracks in the drywall, baseboards, and ceilings.
The Woods filed a Complaint in the Cuyahoga County Court of Common Pleas alleging negligence against MAK, Patrick Hurst, Hurst Construction, and other contractors for their failure to perform the remodeling and renovations in a workmanlike manner resulting in substantial and extensive property damage. Hurst Construction moved for summary judgment on the basis it did not owe a duty to the Woods due to the lack of privity of contract. The trial court granted Hurst Construction’s Motion for Summary Judgment, opining its duties were owed to MAK based on the construction agreement, and such duties did not extend to the Woods.
The Woods appealed the trial court’s summary judgment ruling in favor of Hurst Construction. On appeal, the Woods argued they were owed an independent common-law duty by Hurst Construction to perform the renovation in a workmanlike manner. Hurst Construction argued any duty solely arose out of the contract with MAK and, absent privity of contract, there could be no claim of defective workmanship.
The Woods only argued the privity requirement was eliminated as a prerequisite to a negligence action based on the Ohio Supreme Court’s decision in McMillan v. Brune-Harpenau-Torbeck Builders, Inc., 455 N.E.2d 1276 (Ohio 1983). In McMillan, the Ohio Supreme Court determined the duty of a builder-vendor to construct a home in a workmanlike manner runs to subsequent vendees. The Court found, however, that a distinguishing factor between McMillan and Wood was that McMillan dealt with the builder of a new home. The Ohio Supreme Court compared the builder of a new home to manufacturer of a product and found a builder-vendor was in a position to identify latent defects with the home, while a remodeler was not.
The Woods argued that Hurst Construction was a general contractor on the project and therefore in the same position as a builder-vendor. However, the Court of Appeals held the evidence showed Hurst Construction was a subcontractor, and therefore not comparable to the builder-vendor in McMillan. The Court of Appeals declined to extend McMillan’s holding to subcontractors like Hurst Construction. The Court of Appeals found the trial court did not err in granting summary judgment.
Subcontractors in Ohio should take note of the Court of Appeals’s ruling in this matter when faced with a negligence claim by a subsequent homeowner. Privity of contract remains a requirement for such a claim to survive summary judgment against a subcontractor.