Davencourt at Pilgrims Landing Homeowners Association, Plaintiff and Appellant v. Davencourt at Pilgrims Landing…

Summary

The Utah Supreme Court affirmed in part and reversed in part a district court's rule 12(b)(6) dismissals in a homeowner association's construction-defect suit arising from water intrusion, latent defects, and soil subsidence in a 145-unit planned unit development. It held the economic loss rule remains in force and bars most of the Association's tort claims, but that a developer controlling a homeowners association owes a limited fiduciary duty (adopted from Restatement (Third) of Property: Servitudes sec. 6.20) that is an independent duty outside the rule, reviving the negligence and negligent misrepresentation claims against the Developer and its principal; it declined to recognize building-code or no-negligence-in-construction independent duties. The court announced that Utah now recognizes an implied warranty of workmanlike manner and habitability in new-residence sales, held that quality-of-construction warranties are collateral to the deed under the merger doctrine's collateral rights exception, and held the denial of the Association's motion to amend was an abuse of discretion.