Construction Co. Liable for ‘Waterless Pond’

     DES MOINES, Iowa (CN) – A construction company is liable for breach of warranty for building a “waterless pond,” the Iowa Court of Appeals ruled Wednesday, reversing a district court decision.
     The point of contention in the lawsuit was whether defendant Reilly Construction breached an express or implied warranty when it built a pond for landowner Bachelder Inc. that did not retain water.
     Bachelder hired Reilly to build a pond on his property for swimming, fishing and boating in 2009. Reilly finished the pond in 2010 by damming a spring and digging out a depression to catch the water. The pond was supposed to have a maximum of depth of 21 feet.
     Bachelder said the pond served its purpose in the summer of 2010, “when precipitation was well above average.” But by autumn, the water level sank low enough to expose the tires on the pond’s floor, put there as a habitat for fish.
     While doing remedial work, Reilly Construction discovered a porous layer of shale just beneath the surface on the pond’s sides, which was allowing water to seep out.
     In court, experts on both sides testified that the site was not suitable for a pond.
     Although Reilly received about $90,000 for building the pond, it filed a mechanic’s lien for payment of its remedial work. Bachelder refused to pay, claiming Reilly failed to deliver a recreational pond.
     The appellate court agreed.
     “By definition, a pond is ‘a body of water,'” Judge Mary Tabor wrote for the three-judge panel, quoting both the American Heritage College Dictionary and Iowa statutes. “When Reilly agreed to construct a pond on Bachelder’s property, he was expressly warranting the pond would hold water. Otherwise, Reilly would have simply been constructing a dam.”
     Although the parties squabbled over who bore responsibility to ensure the designated site was suitable for a man-made pond, Tabor asserted, “The fact that the designated location on Bachelder’s land was not a suitable place for a pond constituted a breach of Reilly’s warranty that he could build a pond on that site.”
     She added: “Reilly’s miscalculation in not checking the soil conditions before digging, and thereby being unable to achieve the result of a pond that would hold water, constituted a breach of the implied warranty of workmanlike construction.”
     Tabor said the district court’s focus was “misplaced” when it let Reilly off the hook because he “warned” Bachelder the pond might need a supplemental water source. “The key question was not the source of the water for the pond, but the structure’s ability to retain water,” Tabor wrote.
     The case has been remanded to the district court to determine Bachelder’s damages.

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