This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).







Jeffrey S. Iverson,





Chicilo Homes, Inc.,




Filed July 11, 2006


Lansing, Judge


Anoka County District Court

File No. C3-05-321


Jeffrey S. Iverson, 1663 Ivory Avenue North, Lake Elmo, MN 55042(pro se respondent)


Scott J. Koch, St. Anthony-New Brighton-Roseville Legal Clinic, 3101 Old Highway 8, Suite 107, Roseville, MN 55113 (for appellant)


            Considered and decided by Lansing, Presiding Judge; Randall, Judge; and Willis, Judge.

U N P U B L I S H E D   O P I N I O N


            In litigation involving statutory warranties on new-home construction, the district court found that the homeowner’s complaint was filed within the statute of limitations, that the drain field for the septic system failed to comply with the building code, and that the building-code violation caused damages to the homeowner.  The construction corporation appeals each determination.  Because the record supports the district court’s findings that the homeowner’s complaint was timely and that building-code violations in the installation of the septic system’s drain field resulted in damages to the homeowner, we affirm.


            Jeffrey Iverson purchased a new model home from Chicilo Homes, Inc., in July 1999.  In April 2001 Iverson noticed effluent seepage in his yard and notified Chicilo Homes about the problem.  The company sent an inspector to examine the septic system and drain field, which it installed before the sale of the house.  Chicilo Homes’ inspector told Iverson that the system was functioning properly and that the seepage was the result of an abnormally wet spring.  Iverson continued to experience seepage problems in his yard whenever the ground was not frozen.

In August 2002 Iverson learned from the drain-field designer that the drain field had not been installed as designed.  In 2003 Iverson again contacted Chicilo Homes about the problem.  The company informed him that it had already sent an inspector to examine the property, that the drain field was working properly, and that there had never been a problem with the drain field.  In July 2003 Iverson dug up the area around the drain field and discovered that the system was undersized.  In September 2003 Iverson again contacted Chicilo Homes through his attorney.  He also contacted city officials, who wrote a letter stating that the drain field was not installed with sufficient linear footage. 

In August 2004 Iverson filed a complaint in conciliation court, but the court dismissed his claim as barred by the statute of limitations.  Iverson filed a demand for removal, and the district court vacated the conciliation court order and conducted a trial.  Following the court trial, the district court issued an order finding that Iverson brought the action within the two-year statute of limitations, that the drain field for the septic system did not comply with the building code, and that Iverson was entitled to $7,500 in damages.  Chicilo Homes appeals.




            Under Minnesota law the seller of a completed new dwelling warrants to the buyer that the home will be “free from defects caused by faulty installation of plumbing . . . systems due to noncompliance with building standards.”  Minn. Stat. § 327A.02, subd. 1(b) (2004).  The warranty date is the earlier of the date the buyer first occupied the home or the date on which the buyer took title in the home.  Id.§ 327A.01, subd. 8 (2004).  Home-warranty actions based on section 327A.02 must be “brought within two years of the discovery of the breach.”  Id. § 541.051, subd. 4 (2004); Vlahos v. R & I Constr. of Bloomington, Inc., 676 N.W.2d 672, 677 (Minn. 2004). 

The district court determined that the statute of limitations began to run in September 2003 when the city inspector advised Iverson that the drain field did not comply with the building code.  Chicilo Homes contends that the statute of limitations began to run in 2001 when Iverson first noticed the seepage of effluent in his back yard.

            The district court found that Iverson knew or should have known in September 2003 of the builder’s refusal or inability to ensure that the home was free from faulty installation of a plumbing system due to noncompliance with building standards.  The court further found that Iverson reasonably relied on the evaluation of Chicilo Homes’ inspector who told him in April 2001 that the problems resulted from the weather.  Although Iverson learned in 2002 that the drain-field system was not installed as designed, the district court properly noted that “a discrepancy between the design and the installation of the system does not necessarily evidence a defect within a septic system.”  It wasnotuntil September 2003 that Iverson confirmed that a building-code violation actually existed.  Iverson promptly gave notice of the violation to Chicilo Homes.  See Minn. Stat. § 327A.03(a)(2004) (requiring buyer to give seller written notice within six months of discovering defect).  The record supports the district court’s determination that the statute of limitations began to run in 2003, and, therefore, Iverson filed a timely complaint in August 2004.



            Chicilo Homes challenges the sufficiency of the evidence to support the district court’s findings that a building-code violation existed.  We review the district court’s findings in the light most favorable to the district court’s judgment and will uphold the findings unless they are clearly erroneous.  Minn. R. Civ. P. 52.01; Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999).

The record supports the district court’s findings.  As evidence of the building-code violation, Iverson submitted a letter from a city building official.  The letter stated that the system “was not properly sized.”  Chicilo Homes argues that the letter’s statement that the area for the system “may be approximately 80 linea[r] feet short” indicates that the official could not conclusively state that a violation existed.  But this statement follows the affirmative statement that the system was improperly sized.  The reference to eighty feet is simply an estimate of the extent of the violation.  The district court reasonably relied on this letter from the city’s building official, stating that the original system was not in compliance with the requirements of the city’s building code because it was not properly sized.


Consequential damages are fully recoverable for breach of warranty.  Bemidji Sales Barn, Inc. v. Chatfield, 312 Minn. 11, 14-15, 250 N.W.2d 185, 188 (1977).  To recover damages, a claimant must prove a loss to a reasonable, although not absolute, certainty.  Leoni v. Bemis Co., 255 N.W.2d 824, 826 (Minn. 1977).

The presence of effluent in Iverson’s yard demonstrates a problem with the septic system.  Iverson testified that, since moving to the home, he had not performed any landscaping that changed the grade of the land.  See Minn. Stat. § 327A.03(h) (2004) (excluding seller from liability for damage caused by changes in grading not performed by seller).  He continued to have problems after Chicilo Homes’ inspector visited the property in April 2001.  The continuous problems excluded Chicilo Homes’ theory that the seepage was only weather related.  Chicilo Homes did not present any evidence at the contested hearing to suggest an alternative cause of the seepage.  Iverson presented evidence of the cost to remedy the building-code violation.  The costs incurred to install a new drain field and to re-landscape the area around it amounted to $8,033.50.  Because Iverson had not amended his original complaint requesting $7,500, the district court ordered Chicilo Homes to pay Iverson $7,500.