Johnson v. Healy
Supreme Court of Connecticut, 1978.
176 Conn. 97, 405 A.2d 54.

Facts:

Johnson bought a house from Healy. A few years later it started to fall apart (major displacements in foundation walls and damage to the sewer lines), so Johnson sued for misrepresentation and negligence.

  • Alleged misrepresentation: During negotiations, Johnson asked about the quality of its construction, and Healy told him that it was made of the best material, he built it himself, and there was nothing wrong with it.

History:

  • The lower court ruled in favor of Johnson on the misrepresentation claim ($5,000), but against him on the negligence claim.
  • Both parties appealed.

Side note:

  • The damage to the house was the result of improper work done before Healy bought the lot and built on it.
  • That said, Healy argued it was wrong to make him bear responsibility for a condition of which he had no knowledge of, actual or constructive.

Issue:

Can a seller still be held liable for breach of an express warranty even though he was unaware of the condition?

Holding:

Yes.

Reasoning:

  • In Connecticut law, strict liability for innocent misrepresentation is well established.
  • Healy’s statement that there was “nothing wrong” with the house could reasonably have induced reliance.

The elements of a claim for breach of an express warranty (with respect to a representation regarding a current or past fact) in a non-sale of goods case are:

(1) a representation regarding a current or past fact;

(2) the representation is part of the basis of the bargain (i.e., a reasonable person would conclude that the party making the representation is expressly or impliedly promising to be liable if the representation is false); and

(3) the representation is false.

“The general rule for measurement of damages upon breach of warranty is to award the prevailing party such compensation as will place her in the same position she would have been in had the representation been true (expectation or benefit of the bargain damages).”