In Thomaston Acquisition, LLC
v. Piedmont Construction Group, Inc., Georgia’s Supreme Court addressed the
scope of the “acceptance doctrine” in negligent construction cases. 2019 WL
2332043 (Ga. 2019). Thomaston Acquisition, LLC (“Thomaston”) was the subsequent
purchaser of an apartment complex and, after purchase, it discovered that the
roof and HVAC system had been negligently constructed. Thomaston’s purchase contract
with the seller included an “as is” clause. Thomaston filed suit against
Piedmont Construction Group, Inc. (“Piedmont”), the original contractor who
constructed the complex, alleging negligent construction and breach of
contract/implied warranty.
The issue in the case is whether
Thomaston’s negligent construction claims are barred by the acceptance doctrine
since it was not the original purchaser of the complex. Georgia’s acceptance
doctrine “shields contractors from liability for injuries to third parties
resulting from their work at the moment the work is turned over to and accepted
by the owner.” This law is based off of the rationale that, “by accepting
completed work, presumably after a reasonably careful inspection to identify
any defects, the owner adopts the work as his own, deprives the contractor of
all opportunity to rectify his wrong, bears the immediate duty to make the
premises safe, and is therefore accountable for future injuries.”
The acceptance doctrine does not
bar a third party’s claim for injuries suffered as a result of a defect hidden
from reasonable inspection. However, a requirement of the doctrine is that the
party bringing suit has privity with the contractor. Piedmont argued that
Thomaston does not have privity with it since it was not a party to the
contract for the construction of the apartment complex. The Supreme Court of
Georgia agreed.
Other exceptions to the doctrine
exist where contractors perform work or repairs that are inherently or
intrinsically dangerous, constitute nuisance per se, or are so negligently
defective as to be imminently dangerous to third persons. The Court did not
apply any of the exceptions to save Thomaston’s claims.
The Court stated that, upon the
initial purchaser’s acceptance of the apartment complex, all liability for
readily observable defects shifted from Piedmont to the purchaser. At that
point, Piedmont had no authority to repair or maintain the complex. Upon the
initial owner’s sale to Thomaston, the liability of the original owner did not
shift back to Piedmont. Thomaston’s only remedy was to go after the original
owner, but it was forbidden from doing so under the “as is” clause. The Court
criticized Thomaston for not adequately inspecting the premises prior to
purchase and for signing an “as is” provision.
