within the Deer Lodge Condominiums were defective and that such
knowledge was sufficient to put plaintiffs on notice of their
property damage.
In the discussion foregoing relating to the claim against the
State of Montana, we set out the legal essentials to establish
collateral estoppel. Those legal essentials are met here. There
can be no doubt in this case that the claims for fireplace damages
were included in the Structure case, and settled in the same. In
paragraph V of the amended complaint in the Structure case, we find
the following:
That said engineer and architect also discovered on or
about August 1, 1984, that the fireplaces and the flues
of said fireplaces in the Deer Lodge Condominium
buildings were not installed in accordance with the
Uniform Fire Code and did not have the required clearance
from combustible material to make them safe for operation
and that in some cases combustible insulation had been
installed next to the fireplaces. That the foregoing
enumeration of defects is representative of the defects
but not inclusive of all the defects presently known or
which may be hereafter discovered.
Except for the date of discovery, which affects the
application of the statute of limitations, and not collateral
estoppel, the elements of the unit ownerst claims relating to the
fireplaces rising in the Fire case are fully included in the
pleadings of the Structure case. There can be no dispute about the
identity of issues.
As we said earlier, the other two legs of the collateral
estoppel tripod, a final judgment and identity of parties, are also
present.
The late-revealed possibility that the Fire case is in reality
a subrogation case brought by the insurers does not affect the
applicability of collateral estoppel against their insureds as unit
owners.
2. Breach of Express or Implied Warranties
The District Court determined that Realty was entitled to
summary judgment in its favor because there were no facts showing
the existence of any written contract or express warranty between
the unit owners and Realty, and if the written protective covenants
established an express or implied warranty the claim was
nevertheless barred by any applicable statutes of limitation, 5 5
27-2-207 (I), -202 ( 3 ) , -204 (1) and 27-2-207 (2), MCA. In like
manner, the District Court determined that any implied warranty was
likewise barred by arguably applicable statutes of limitation, 5 5
27-2-207(1), and 27-2-204(1), MCA.
None of the unit owners purchased a condominium unit from
Realty. Nonetheless, the unit owners present an interesting theory
of express warranty. They point out that no specific language is
required to constitute an express warranty, citing Scovil v.
Chilcoat (Okla. 1967), 424 P.2d 87, 91. They contend that Big Sky
of Montana, Inc. warranted that the Deer Lodge Condominiums would
be built in accordance with the National Fire Code; and that Realty
later warranted in 1977 that the units would be repaired in
accordance with the National Fire Code. They then contend that
Realty "had advised the owners that the units had been brought up
to code.
The unit owners base their claim against Big Sky of Montana,
Inc. for express warranty upon the deposition of Bill Martel, the
repair contractor in 1977. He testified that in his contract for
repair, the reconstruction was to be done according to applicable
codes. The unit owners also base claims against Realty upon the
repair contract entered into by Realty with Martel Construction
Company, and Morrison-Maierle, Inc., party of the third part. In
that contract, the scope of the work was to correct defects, to
meet reasonable structural standards, and to meet all applicable
building codes.
The unit owners also rely on the protective covenants recorded
by Big Sky of Montana, Inc. related to the Deer Lodge Condominiums
which require that all construction on the premises comply with the
provisions of the Uniform Building Code, the National Plumbing
Code, and the National Electrical Code. They also rely on the
preliminary declaration for Deer Lodge Condominiums, recorded in
Madison County, which included the paragraph that the condominiums
were subject to the protective covenants already recorded. The
unit owners further maintain that the provisions of the condominium
documents run with the land because state law requires that they
be recorded in order to establish the condominium. Section 70-
23-305 (1), MCA.
The unit owners base their claim of implied warranty of
habitability upon Chandler v. Madison (1982), 197 Mont. 234, 642
P.2d 1028; and also upon Degnan v. Executive Homes, Inc. (1985),