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Reynolds v. Ryland Group5/8/2000
United States District Court David C. Norton
Heard September 21, 1999
CERTIFIED QUESTION ANSWERED
This Court accepted this certified question in its original jurisdiction to determine if a subsequent purchaser can sue a builder/vendor under the South Carolina Unfair Trade Practices Act (SCUPTA).
FACTS:
Plaintiffs filed an action in the United States District Court for the District of South Carolina-Charleston Division alleging the following cause of action against defendants (Ryland Group): breach of implied warranty, negligence, and violations of the SCUPTA. Plaintiffs are subsequent purchasers of homes built by the defendant. Plaintiffs discovered inter alia cracks in the concrete slabs and alleged that the initial construction and development performed by the defendant is flawed. Defendant challenges the plaintiffs right to assert SCUPTA claims because of the plaintiffs remoteness from the alleged wrongdoing. The implied warranty and negligence claims are still pending before the United States District Court. This Court has agreed to answer the question certified by Judge David C. Norton of the United States District Court for the District of South Carolina- Charleston Division.
CERTIFIED QUESTION
Under South Carolina law, can Plaintiffs in a residential construction defects case sue Defendant builder, seller and developer under the South Carolina Unfair Trade Practices Act if Plaintiffs did not purchase their residences from Defendant but from the original homeowner more than three years after the initial sale?
DISCUSSION
The South Carolina Unfair Trade Practices Act provides that " nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." S.C. Code Ann. § 39-5-20(a) (1985). Under S.C. Code Ann. § 39-5-140(a)(1985),
ny person who suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of an unfair or deceptive method, act or practice declared unlawful by § 39-5-20 may bring an action individually, but not in a representative capacity, to recover actual damages. If the court finds that the use or employment of the unfair or deceptive method, act or practice was a willful or knowing violation of § 39-5-20, the court shall award three times the actual damages sustained and may provide such other relief as it deems necessary or proper. Upon the finding by the court of a violation of this article, the court shall award to the person bringing such action under this section reasonable attorney's fees and costs.
There is no specific provision within the act which limits a cause of action to an immediate purchaser. However, plaintiffs failed to produce any cases directly on point and contend in their brief that Texas law supports the position which they urge this Court to adopt under SCUPTA citing Barrett v. U.S. Brass Corp., 864 S.W.2d 606, (Tex. Ct. App. 1993). In our opinion, plaintiffs' reliance on Barrett is misplaced. Barrett is neither persuasive nor helpful; in fact Barrett was overruled by the Texas Supreme Court in Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996).
The Texas Supreme Court consolidated Barrett v. United States Brass Corp. and several other cases to determine if their legislature intended the upstream suppliers of raw materials and component parts to be liable under Texas' version of SCUPTA, known as DTPA, when none of their alleged misrepresentations reached the consumers. It found that no homeowners in the consolidated cases could recover from the defendant companies und
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