Costs to complete and correct construction is the proper measure of damages

In a recent Appellate Court decision the Court oveturned a lower court verdict in favor of homeowners that had sued their contract.  The court also went to the extreme lengths of dismissing the complaint for failure to propertly identify their damages at inquest.

In the case, the Plaintiffs hired Defendants to renovate their residence.  After commencement of the construction, and payment of hundreds of thousands of dollars to the Defendants, Plaintiffs became dissatisfied with the work performed by Defendants and subsequently terminated the contract.  Plaintiffs then hired other contractors to complete the construction and remediate the alleged improper work.  Plaintiff commenced this action, alleging causes of action sounding in, inter alia, breach of contract and negligence, and sought damages in the amount of $216,399.05.

However, when Plaintiffs moved for summary judgment, they sought damages in the amount of $468,768.78.  Due to the discrepancy in the damage amount, an inquest was held on the issue of damages, wherein the Court determined the Plaintiffs were entitled to damages in the amount of $300,500, representing the amount of money paid to the Defendants pursuant to the contract.

On appeal, the Court determined that the lower court erred in awarding damages equal to the monies paid to the Defendants under the contract.  The proper measure of damages was the cost of completion of the construction work and the correction of defects in the Defendants’ work.  Here, the Plaintiffs failed to demonstrate at trial what portion of the $300,500 paid to Defendants was attributed to (a) work that was never done, and/or (b) defective work.  Rather, the Plaintiffs only testified that these payments were made to the Defendants.  As such, the Court determined that proof of payment alone was inadequate to establish the Plaintiffs’ damages and dismissed the complaint.

The case was Lewin v. Levine (2nd Dept. 2017).

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