“Source of Duty,” Tort, and Contract, Oh My!

Here at Construction Law Musings, I have discussed the general rule in Virginia that tort and contract do not mix.  I have also discussed a few narrow exceptions.  A Virginia Supreme Court case from October of 2019 lays out both sides of this issue in one glorious opinion.

In Tingler v. Graystone Homes, Inc., a summary of the facts and lawsuit(s) are as follows:  Water leaks developed after the home was built. Graystone’s post-construction efforts to repair the leaks and remediate mold were unsuccessful. The Tinglers and their children abandoned the home after developing mold-related medical problems.  The Tinglers and their children sued Graystone in tort for personal injury, property damage, and economic loss. In other litigation that will not be discussed in this post, but that is described in the opinion linked above, Belle Meade sued Graystone in contract for property damage and economic losses. George and Crystal Tingler filed a separate complaint alleging the same contract claims.

In regard to the tort claims, the circuit court sustained a demurrer by Graystone Homes based upon the source of duty rule.  The circuit court held that all of the claims arose from Graystone Homes’ allegedly poor contract performance and therefore the tort claims must be dismissed.  Needless to say, the Tinglers appealed this ruling. 

On appeal, the Virginia Supreme Court affirmed the Circuit Court in part and reversed it in part.  After a good discussion of the law relating to such claims and stating the general rule that the source of duty will determine if a claim should sound in tort or contract, the Court divided the allegations by the Tinglers into two categories: construction of the house and post-construction repairs.  The Court determined that most of the allegations by the Tinglers (for “improper” construction or faulty construction) would not have been available to them absent the contract and therefore the allegations relating to the original construction of the home were properly contract and not tort claims.  The Virginia Supreme Court affirmed the ruling of the Circuit Court as to these claims.

However, the Court reversed the circuit court and allowed the claims relating to the post-construction actions by Graystone Homes and allowed these claims to move forward in tort to the extent that Graystone Homes’ attempted repairs, or more properly failed repairs, made the mold situation worse.  In doing so, the Court stated:

These allegations of misfeasance, along with the reasonable inferences therefrom, assert viable claims for negligent repairs because they reasonably suggest that Graystone either increased the level of mold exposure to the home’s inhabitants or extended the duration of the mold’s presence and, by doing either, aggravated preexisting mold-exposure injuries suffered by the Tingler family. Graystone could be liable, if the evidence substantiates these inferences, for this aggravation – but not for any preexisting injuries resulting from conditions created by Graystone’s nonfeasance during the construction phase of the contract[.]

In short, where Graystone Builders’ alleged negligent repairs post-construction made the situation worse and where the Tinglers’ damages arose from the worsened situation, the Court allowed the case to move forward.

This case provides a great overview of the complex intersections of tort and contract (not to mention a good discussion of third party beneficiary law when discussing the contract litigation) and I recommend it as reading for any construction professional or construction attorney.  Of course, consultation with an experienced Virginia construction lawyer will help in the analysis of your particular fact situation to determine where on the spectrum described in Tingler your claim may sit.

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