Builder Liable for Intentional Infliction of Emotional Distress and Consumer Protection Act Violations Based on Verbal Abuse of New Home Purchasers

Lepp v. V.M.S. Realty Trust, 2008 WL 375971 (Mass. App. Div. Feb. 8, 2008)

This is a per curiam decision by the Massachusetts Appellate Division that addresses the liability of homebuilders and vendors.  In Lepp, the purchasers of a newly built home sued the vendor of the home for breach of contract for failure to install the agreed upon insulation.  The purchasers also sued the builder, who was an employee of the vendor, for breach of contract, breach of the implied warranty of good workmanship, intentional infliction of emotional distress and violation of M.G.L. c. 93A — the Massachusetts Consumer Protection Act.  The trial court found for the plaintiffs on all counts in a jury-waived trial and the defendants appealed.

The court upheld the breach of contract claim against the vendor and ruled that the measure of damages would be the cost to replace the improper insulation because the defect was “remediable from a practical standpoint.”  The court rejected the defendants’ argument that damages should be limited to the difference in value between the home as constructed and the home as agreed upon by the contract.

The court reversed the breach of contract judgment against the builder because the builder was not a signatory to the contract, but merely an employee of the vendor.  The court also reversed the finding of a breach of the implied warranty of good workmanship.  Although recognizing that the Supreme Judicial Court had recently reaffirmed and extended the implied warranty of habitability in Berish v. Bornstein, 437 Mass. 252 (2002), the court held that the Supreme Judicial Court had not created an implied warranty of good workmanship.

The findings of intentional infliction of emotional distress and violation of M.G.L. c. 93A were upheld on appeal.  After reviewing the extensive evidence of verbal abuse by the builder against the purchasing couple, particularly the wife, the court noted that a personal injury loss caused by a business entity is a sufficient to establish unfair and deceptive business practices under M.G.L. c. 93A, even if the customer does not lose money or property.