Civil Practice – Res Judicata – Contract – Home Construction – Added Features – Separate Contracts – Breach of Warranty Claim

Harris v. A-1 Builders of NC, Inc. (Lawyers Weekly No. 14-16-0219, 12 pp.) (Rick Elmore, J.) Appealed from Randolph County Superior Court (L. Todd Burke, J.) N.C. App. Unpub.

Holding: In the aftermath of the construction of their home, plaintiffs’ breach of contract and breach of warranty claims are not barred by res judicata based on a prior small claims action for money owed from the defendant-contractor’s faulty construction of two features that were added to plaintiffs’ home by oral agreement.

We affirm the trial court’s denial of the defendant-contractor’s motion for judgment on the pleadings.

The defendant-contractor and the plaintiff-wife entered into a contract for the construction of plaintiffs’ home. The contract required that change orders be in writing.

Nevertheless, the contractor made separate oral agreements to change the home’s stairs from carpeted to hardwood and to add brick columns to the driveway. He accepted separate checks totaling $2,130 for these features.

Plaintiffs discovered that several stairs were cracked and that bricks were falling off the columns. The plaintiff-husband sued the contractor in small claims court for the amounts paid for the hardwood stairs and the brick columns. On appeal to district court, court found the husband had standing to sue, and he was awarded $500 to replace three stairs.

After construction was complete and plaintiffs moved in to the house, they discovered numerous other problems with the house, and they sued for breach of contract and breach of warranties. The contractor moved for judgment on the pleadings on the basis of res judicata. The trial court denied the motion.

While the first (small claims) complaint involved an issue for money owed stemming from an agreement made outside the purview of the purchase contract before plaintiffs occupied the residence, the second complaint directly relates to defendant’s breach of the purchase contract, warranties, and industry standards after plaintiffs’ occupancy. Thus, the claims in the complaints arise from two different causes of action. Accordingly, plaintiffs’ second complaint is not barred by res judicata.

Affirmed.