Opinion
No. 2-160 / 01-1297.
Filed June 19, 2002.
Appeal from the Iowa District Court for Winneshiek County, JAMES L. BEEGHLY, Judge.
The sellers of real estate appeal from a judgment for cost of repairs to a septic tank system warranted to be in working condition. AFFIRMED WITH INSTRUCTIONS.
Marion Beatty of Miller, Pearson, Gloe, Burns, Beatty, Cowie Shidler, Decorah, for appellants.
James Garrett of Jacobsen, Bristol, Garrett Swartz, Waukon, for appellees.
Considered by HAYDEN, PETERSON, and SNELL, Senior Judges.
Senior Judges assigned by order pursuant to Iowa Code section 602.9206 (2001).
This case involves the terms of a contract for the sale of real estate by Randall H. Uhl and his wife, Elea E. Uhl, to Charles R. Ware and his wife, Mary Jo Ware. Plaintiffs, Wares, claimed that the sellers, Uhls, breached the terms of an express warranty regarding the plumbing-septic tank system. The trial court held that plaintiffs proved their case and awarded damages of $15,587.35, which included attorney fees of $3,970.19. Upon defendants' appeal, we now affirm.
The scope of review is for correction of errors of law. Iowa R. App. P. 6.4. Iowa Rule of Appellate Procedure 6.14(6)(a) provides that the findings of facts by the trial court are binding on the appellate court if supported by substantial evidence.
The property at issue was serviced by a plumbing-septic system. The Uhls had experienced some problems with the system in the past and disclosed this to the Wares before and at the time of sale. In addition to the contract terms, the Uhls signed documents styled: "A residential property disclosure statement and a disclosure statement for property having an on-site Wastewater Treatment and Disposal System." Plaintiffs claim an express warranty by the sellers to provide a plumbing system "in working condition." Defendants admitted and disclosed a leakage problem in the system that appeared in the area of an oak tree and agreed to repair it as part of the sales agreement. Repairs were made in the system at the oak tree location and were paid for by the sellers. When this repair failed to remedy the leakage problem, two more repairs at other locations were made. These repairs also failed to remedy the problem. Finally, it was determined that because of inadequate absorption of the property, it was necessary to install a sand filter system. This was done by the Wares at considerable expense. The initial anticipated expense to fix the sewage disposal system was six to eight hundred dollars. The various attempts to solve the problem and fix the system escalated the expense, with the final construction of the sand filtration system alone costing $11,617.16. When the sellers Uhl refused to reimburse the Wares for these expenses, this action was commenced.
The sellers defend the action on the ground that the property was sold "as is," subject only to remedying the leakage problem that was disclosed as occurring at the oak tree location. Sellers claim the leakage problem was cured at that spot and paid for by the sellers after the closing of the sale. Other than that, sellers claim the buyers took the property "as is" after the closing. Sellers argue that further problems discovered thereafter were not the sellers' obligation to fix.
The buyers base their claim on the law of express warranty pointing to the various statements made by the sellers as to the sewage system. In paragraph 11(d) of the offer, the seller "warrants that the heating and air conditioning systems, plumbing system, all appliances and all mechanical equipment, included as part of the purchase price, will be in working condition as of either the date of possession or settlement, whichever takes place first, . . . " (emphasis added). An addendum to the offer stated: "The contract is contingent upon approved testing results of the well and septic system." In the disclosure statement regarding wastewater treatment, the Uhls indicated there were known problems with the septic tank/drain fields. They indicated that the on-site wastewater treatment disposal system was installed in 1988. They indicated it was unknown whether there was open drainage at any part of the system. They explained that a spring and a drain field line intersected, causing an above ground leak which was repaired in 1996. The statement further said that the sellers will have a professional company check and repair if necessary at sellers' expense. The residential disclosure statement stated: "[A] natural spring and drainage field intersected. Problem was corrected by owner. Owner will have area inspected and will pay for any recommended changes." The trial court found the facts as outlined above.
When construing a written contract, we are guided by the rule the intent of the parties controls and, except in cases of ambiguity, intent is determined by what the contract itself says. Anderson v. Aspelmeier, Fisch, Power, 461 N.W.2d 598, 600 (Iowa 1990). We may ascertain the meaning and legal effects of a contract by giving the language its common and ordinary meaning. Pappas v. Bever, 219 N.W.2d 720, 721 (Iowa 1974). Whether the two disclosure statements are strictly a part of the sales contract is not determinative; they nevertheless shed light on the intent of the parties.
The contract itself stated that a plumbing system would be provided by the sellers "in working condition." Until the septic system was repaired by installation of a sand filter system which proved to cure the problem, the plumbing system was not in "working condition." The initial repairs claimed by the Uhls to be their only responsibility failed to satisfy the contractual obligation which the Wares reasonably expected to be fulfilled when they purchased the property.
In Ales v. Merrill, 486 N.W.2d 592 (Iowa Ct.App. 1992), this court construed the words "plumbing system," to mean a sewage or septic system. We further held the seller liable when the sales agreement contained a warranty that the septic system would be in working order. The trial court relied on the Ales case in its decision and we agree that it is the applicable law.
The Uhls seek to deflect the effect of the Ales case by argument that the Ales parties closed their transaction knowing that the sewage problem was not fixed. By contrast, the Uhls claim that they and the Wares believed there was a properly working system at the time of closing, thereby cutting off further claims for remedying any other problems with the system.
We do not believe the record supports a finding that the Wares' contractual rights on this issue were terminated at the time of closing. Further, the trial court's findings are supported by substantial evidence as outlined in this opinion.
We affirm the judgment as stated by the trial court. The Wares ask for appellate attorney fees. Paragraph 4(c) of the contract provides for remedies of the parties including that the "party at fault shall pay costs and attorney fees." Appellees may submit an application for appellate attorney fees. Appellants may file a resistance within fifteen days of the filing of appellees' application.
Costs are assessed against appellants.
AFFIRMED WITH INSTRUCTIONS.