On appeal from the Superior Court, Law Division, Passaic County.
Michels, Pressler and Trautwein. The opinion of the court was delivered by Pressler, J.A.D.
Plaintiffs Gabriel M. Juliano and Lois A. Juliano, his wife, appeal from a summary judgment dismissing their complaint by which they sought recovery for the property damages allegedly sustained by them as a result of the negligent workmanship of defendants Peter Gaston and John Hook. Defendants were two of the subcontractors who had done work on the new house which plaintiffs had purchased from the builder-vendor, C.A.P. Enterprises, who is not a party to this action. We reverse.
The record before us is sparse, consisting only of the pleadings, a notice of motion for summary judgment unaccompanied by affidavits or certifications, the order for summary judgment, and the transcript of the argument on the motion for summary judgment. If there was any discovery here, we have not been made privy to it. The reason for the inadequacy of the record appears in the introductory statement of the trial judge on the motion for summary judgment. He explained that when the matter had previously been reached for trial, it appeared to him that "the theory of privity of contract would exclude Juliano from the right to such recovery from the subcontractors." In order to avoid the expense of trial the judge then deemed it appropriate first to settle the basic liability question and therefore directed the parties to submit briefs thereon, treating the adjourned trial date as the return date of defendants' summary judgment motion. While the judge's comments on the motion argument refer to stipulated facts, we have not been favored with any such stipulation and are, therefore, forced to rely exclusively on the pleadings and representations made by counsel during the argument.
Insofar as we can reconstruct from this wholly unsatisfactory record, the house in question was built during the year 1977 by C.A.P. Enterprises. In December 1977, when the house was all but completed, C.A.P. Enterprises contracted to sell it to plaintiffs, who took title early in January 1978. Defendant Gaston is alleged to have been the subcontractor, under an oral agreement with C.A.P. Enterprises, who executed the masonry, brick, plaster and waterproofing work. Although it appears that the bulk of his work was completed at least several months before plaintiffs' contract to purchase was executed, at least some additional water-proofing work was done late in 1977 and early in 1978. We do not, however, know whether any of that work was done after plaintiffs took title. It is further alleged that defendant Van Hook was the carpentry subcontractor who performed the framing work for the house. We do not know when this work was completed.
Plaintiffs generally allege that the work of both of these defendants "was done in negligent, unworkmanlike manner, contrary to the standards of the industry and in all respects carelessly and improperly." Plaintiffs further allege that "as the direct and proximate result thereof, plaintiffs' house requires extensive repairs and replacement and plaintiffs have and will be required to expend large sums of money therefor." We do not know, however, what the nature of the negligently performed and defective work was, in what way any defects manifested themselves, or precisely what damages actually flowed therefrom. We do, however, know that prior to the commencement of this action in April 1980 plaintiffs had instituted an action against C.A.P. Enterprises seeking recovery for these damages and complaining of the same negligent workmanship which constitutes the gravamen of this suit against the subcontractors.
We do not know if the action against C.A.P. Enterprises was predicated on a negligence theory, an express warranty, or an implied warranty of workmanship and habitability as articulated by McDonald v. Mianecki, 79 N.J. 275 (1979). In any event,
C.A.P. Enterprises defaulted in that action and plaintiffs submitted their proofs in support of a judgment by default. Although they asserted damages in the amount of $35,000, the same amount sought by the ad damnum clause of this complaint, the court entered judgment in the amount of $25,000. No part of the record of the action by plaintiffs against the C.A.P. Enterprises has been submitted to us. That judgment has not been paid nor is there any likelihood of its ever being paid since C.A.P. Enterprises itself is insolvent and its principal stockholder, who apparently was also a party to the action, has disappeared. Despairing, therefore, of recovery from the builder-vendor, plaintiffs commenced this action against the subcontractors on the theory that they were in any event the ultimately responsible parties.
As we have heretofore indicated, plaintiffs' theory of action against the subcontractors is in negligence. We fail, therefore, to understand the concern of the trial judge with the question of privity. Privity is a concept having relevance only in a contractual situation and is, of course, that concept which, as an historical matter and prior to the evolution of the doctrine of strict liability in tort, limited a consumer's warranty recourse to the party with whom he had directly dealt. The concept of privity would be relevant here only if the theory of plaintiffs' case were predicated on an attempt to extend the principle of McDonald v. Mianecki, supra. McDonald v. Mianecki held that as a matter of law the builder-vendor of a new house warrants to the purchaser thereof both workmanship and habitability. There is, of course, privity between the builder-vendor and the purchaser. The remedy of an implied warranty of workmanship and habitability running from a subcontractor directly to a purchaser with whom he has no contractual relationship would require the elimination of the privity prerequisite. We do not necessarily suggest that the viability of the privity requirement is any less vulnerable in this situation than it has proved to be in transactions involving the purchase of personal property. See Santor v. A & M Karagheusian, Inc., 44 N.J. 52 (1965). Indeed,
the demise of privity as a bar to a warranty action by the purchaser against a subcontractor may well be foreshadowed by the McDonald perception that new house purchasers are entitled to the same degree and panoply of protections as is a purchaser of chattels. The fact, however, remains that this action by these plaintiffs against these subcontractors was neither instituted nor prosecuted on an implied warranty theory but rather on a traditional negligence basis. Privity is hence irrelevant. See Gold Mills, Inc. v. Orbit Processing Corp., 121 N.J. Super. 370 (Law Div.1972). ...