APPEAL from the Circuit Court of Kane County; the Hon. FRED J.
MORELLI, JR., Judge, presiding.
MR. JUSTICE UNVERZAGT DELIVERED THE OPINION OF THE COURT:
The defendants appeal from the judgment of the circuit court of Kane County awarding the plaintiff judgment in the amount of $684.33.
The plaintiff is the owner of a townhouse which he purchased from the defendant, Kirkwood Associates. The contract for the sale of the house carried an express warranty by Kirkwood Associates against defective materials, structural defects and faulty workmanship for a period of one year from the date of sale. The warranty was subject to the following qualifications:
"Builder does not assume responsibility for any secondary or consequential damages caused by any defects."
The plaintiff purchased the townhouse in May of 1979. In August of 1979, rain leaked into the basement of the Colsant home damaging carpet on the basement floor. The plaintiff notified the defendant, Kirkwood Associates, about the leak the following day. A building crew, within three or four days, came and dug up the drain tile and found blockage in the tile which prevented the rain water from draining off. The tile was promptly repaired at no cost to the plaintiff and thereafter no further leakage occurred. However, it cost $684.33 to have the carpet dried out and the pad replaced. The plaintiff demanded that the defendants reimburse him for this expense, which the defendants refused to do, citing the disclaimer of responsibility for consequential damage quoted above. The plaintiff then sued to recover the $684.33 expended for restoring the damaged carpet and recovered judgment in that amount, plus costs.
In this appeal the defendants raise the following issues:
(1) Whether a builder/vendor and a purchaser of a newly constructed residence may contract for a limitation of remedies in the event of a breach of an express warranty or of the implied warranty of habitability, and
(2) Whether in this case there was an effective limitation of remedies.
It is conceded by the defendants that under the principles of Petersen v. Hubschman Construction Co. (1979), 76 Ill.2d 31, there is an implied warranty of habitability on the defendants' part in the sale of the residence in question.
Defendants' contend that they complied with both the implied warranty of habitability as well as their express warranty by promptly repairing the defect and thus making plaintiff's home "habitable."
They further contend that their express warranty did exclude responsibility for secondary or consequential damages. They assert that this exclusion is not an attempted waiver or disclaimer of the implied warranty of habitability, but merely a limitation of remedies, which is a well recognized and judicially sanctioned precaution in contractual relationships.
Defendants further assert that their express warranty fulfilled every legitimate expectation imposed by the Illinois courts> in the implied warranty of habitability. They accept the duty to repair latent defects and they assert they did so in this case. They thus contended they have satisfied both of the objectives of the judicially imposed implied warranty of habitability and the contractual express warranty. Defendants further assert that they are not plaintiff's insurer and are not responsible for reimbursing plaintiff for the entire unpredictable and potentially enormous consequential damages resulting from a defect.
It is the defendants' position that the contractual limitation of remedies excluding consequential damages resulting from a breach of warranty is enforceable.
Plaintiff contends that the defendants are responsible for the latent defect in the drain tile and they are liable for the proximate consequences of their failure to properly install the drain tile. Plaintiff asserts that the cleaning bill for the installed carpet is a proximate consequence of the latent defect, and he contends that the contract disclaimer here is insufficient to adequately apprise a vendee of the limitation of the implied warranty of habitability that he is ostensibly waiving. The defendants conceded at oral argument that the implied warranty of ...