## Facts

- In 1977, prior owners contracted with Brian Dagenais to build a garage on their property.
- In April 1978, within six months of construction, the prior owners sold the property to Elaine and Larry Lempke.
- After the purchase, the Lempkes observed structural problems, including an uneven roof line and bowing roof trusses.
- The Lempkes alleged the condition was a latent defect not discoverable until it became visible from the exterior.
- Concerned about potential roof collapse, the Lempkes asked Dagenais to repair the garage; he initially agreed but did not complete the repairs.
- The Lempkes sued for (1) breach of an implied warranty of workmanlike quality and (2) negligence, seeking economic loss.

## Issues

1. Whether a subsequent purchaser may recover economic loss from a builder for latent defects under an implied warranty of workmanlike quality absent contractual privity.
2. Whether a subsequent purchaser may recover in negligence for purely economic loss caused by latent defects in the structure.

## Decision

- The Supreme Court of New Hampshire reversed the dismissal of the implied-warranty claim and remanded for further proceedings.
- The court held that privity is not required for a subsequent purchaser to sue a builder or contractor for breach of an implied warranty of workmanlike quality for latent defects that (a) become apparent after purchase, (b) were not discoverable by reasonable pre-purchase inspection, and (c) manifest within a reasonable time.
- The court reaffirmed that subsequent purchasers may not recover in tort for purely economic loss caused by latent defects.
- The court overruled prior precedent to the extent it required privity for subsequent purchasers to pursue implied-warranty economic-loss claims.

## Legal Principles

- Implied warranties of workmanlike quality in construction are imposed by law as a matter of public policy and therefore are not dependent on contractual privity.
- Subsequent purchasers may recover economic loss from builders or contractors under an implied warranty for latent defects, subject to limits.
- The implied warranty extends only to latent defects that become apparent after the subsequent purchaser’s acquisition and that would not be found by reasonable inspection before purchase.
- The implied warranty is limited to a reasonable period of time after construction/purchase, accounting for age, wear, and intervening changes.
- The plaintiff must prove the defect was attributable to the defendant’s workmanship; the builder may defend by showing other causes (e.g., wear, age, alterations by prior owners).
- Tort remedies are unavailable for purely economic loss arising from latent defects in the structure itself.

## Conclusion

The court held that a subsequent purchaser may sue a builder for economic loss under an implied warranty of workmanlike quality without privity when a latent defect emerges within a reasonable time and was not discoverable by reasonable inspection, but tort claims for purely economic loss remain barred.


Lempke v. Dagenais, 130 N.H. 782, 547 A.2d 290 (N.H. 1988)