## Facts

- Rich Rosen Construction Company built a single-family residence and sold it to the first purchaser on April 1, 1976.
- The home was later sold to a second owner in 1985; that owner added a room onto a corner of the house.
- James R. and Marjatta A. Hershey rented the home beginning in November 1985, lived there about six months, and purchased it in May 1986 as third owners.
- During the rental period and at purchase, the Hersheys observed no cracking or visible exterior stucco defects.
- Before purchase, Mr. Hershey conducted a walk-around inspection and saw no stucco cracking or defects.
- In April or May 1987, Mr. Hershey noticed minor bulging in the stucco on the southwest side of the house.
- After a heavy rainstorm in August 1987, the Hersheys observed significant stucco bulging and a small hole where stucco had fallen out, along with signs of water intrusion.
- The Hersheys retained a building expert, who concluded the stucco application was poor, violated building codes, and reflected below-average workmanship; the expert also testified properly applied stucco typically lasts 30–50 years.
- The Hersheys requested that Rosen repair the stucco; Rosen refused.
- The Hersheys sued for breach of the implied warranty of habitability and workmanlike construction.

## Issues

1. Whether a “reasonable inspection” required to preserve an implied-warranty claim for a latent defect must include an expert or professional inspection, or whether a lay walk-around inspection can suffice when the defect is not discoverable by an average purchaser.
2. Whether it is unreasonable as a matter of law to extend a builder’s implied warranty to cover a latent stucco defect discovered roughly twelve years after original construction.

## Decision

- The Court of Appeals affirmed summary judgment for the Hersheys.
- The court held the Hersheys satisfied the reasonable-inspection requirement because the implied warranty is defeated only if the defect would have been discoverable by an average purchaser’s inspection, not an expert’s.
- The court held the implied warranty had not expired as a matter of law; whether its duration is reasonable depends on the facts, including the component’s expected life and the reasonableness of imposing liability at the time of breach.
- On this record—latent defect, code violations, and testimony that stucco should last 30–50 years—the court concluded twelve years was not an unreasonable period for the warranty to remain effective.

## Legal Principles

- An implied warranty claim for a latent defect is not barred for lack of “reasonable inspection” unless the defect could have been discovered through an inspection by an average purchaser.
- A purchaser is not required, as a categorical condition of recovery, to hire an expert or professional inspector to satisfy the reasonable-inspection standard.
- The duration of an implied warranty of habitability and workmanlike construction is a fact-dependent inquiry that may consider the expected life of the component in non-defective condition and whether imposing liability is reasonable under the circumstances.
- Latent defects attributable to original faulty construction may support implied-warranty liability for subsequent purchasers within a reasonable period.

## Conclusion

The court held that subsequent purchasers may recover for latent construction defects under the implied warranty of habitability and workmanlike construction when the defect was not discoverable by an average buyer’s inspection, and it declined to impose a fixed temporal cutoff, instead treating the warranty’s duration as a fact-based reasonableness determination informed by the component’s expected service life.


Hershey v. Rich Rosen Constr. Co., 169 Ariz. 110, 817 P.2d 55 (Ct. App. 1991)