FIRST DISTRICT COURT OF APPEAL

STATE OF FLORIDA

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No. 1D17-2897

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KEYSTONE AIRPARK AUTHORITY,

Appellant,

v.

PIPELINE CONTRACTORS, INC., a 

Florida corporation; THE 

HANOVER INSURANCE COMPANY,

a New Hampshire corporation;

and PASSERO ASSOCIATES, LLC,

a Florida limited liability 

company,

Appellees.

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On appeal from the Circuit Court for Clay County.

Don H. Lester, Judge.

January 25, 2019

WOLF, J.

 On consideration of appellee’s motion for clarification and 

appellant’s response, this Court grants the motion, withdraws the 

opinion filed on November 27, 2018, and substitutes the following 

opinion in its place. 

Keystone Airpark Authority, appellant, challenges a partial 

final summary judgment entered in favor of Passero Associates, 
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LLC, appellee. The Airpark argues the trial court erred in 

determining that the damages it sought to repair an airplane 

hangar and taxiways that deteriorated after Passero allegedly 

failed to meet its obligations under a construction contract were 

consequential damages, which were excluded by the parties’ 

contract. We affirm but certify a question of great public 

importance. 

FACTS

The Airpark brought causes of action against Passero, an 

engineering firm, for breach of contract and negligence. The 

Airpark entered into an agreement with a contractor to construct 

airplane hangars and taxiways, and it contracted separately with 

Passero to provide engineering services that included “part-time 

resident engineering and inspection, [and] material testing.” 

Specifically, the contract required Passero to “inspect,” “observe” 

and “monitor” the construction work to ensure compliance with 

the plans and to ascertain the need for correction or rejection of 

the work, including determining the suitability of materials used 

by the contractor: 

Observe the work to determine conformance to the 

contract documents and to ascertain the need for 

correction or rejection of the work. 

. . . .

Arrange for, conduct, or witness field, laboratory or shop 

tests of construction materials as required by the plans 

and specifications. 

Determine the suitability of materials on the site, and 

brought to the site, to be used in construction. 

Interpret the contract plans and specifications and 

monitor the construction activities to maintain 

compliance with the intent. 

Prepare and submit inspection reports of construction 

activity and problems encountered . . . . 
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. . . . 

[M]onitor[] periodic construction activities on the project 

and document[] their observations in a formal project 

record . . . .

The Airpark alleged that the contractor used substandard 

material for stabilization underneath the structures, which 

Passero failed to detect, causing the concrete hangar slabs and 

asphalt taxiways to prematurely deteriorate. The Airpark sought 

to recover from Passero the cost to remove, repair, and replace 

the hangars, taxiways, and underlying subgrade. It sought the 

same relief from the contractor. 

Passero moved for summary judgment, arguing the damages 

the Airpark sought to recover were not a direct result of Passero’s

alleged failure to perform under the contract. Instead, Passero 

argued the need for repair resulted from a combination of 

Passero’s alleged failure to perform construction inspection 

services under the contract and the contractor preparing the 

subgrade improperly. Thus, Passero argued the repair costs were

not direct or general damages, but instead were consequential 

damages, which were excluded by a provision in the parties’ 

contract that stated, “Passero shall have no liability for indirect, 

special, incidental, punitive, or consequential damages of any 

kind.” Passero argued the only direct or general damages that the 

Airpark could seek to recover against Passero were the costs of 

the services provided by Passero. The trial court agreed and 

entered partial final summary judgment in favor of Passero. 

ANALYSIS

The Airpark argues the cost of repair to the hangars and 

taxiways constitutes general damages and not consequential 

damages because those damages were foreseeable. It relies on an 

English case from 1854 called Hadley v. Baxendale, 9 Exch. 341, 

156 Eng. Rep. 145 (1854), which defined the general measure of 

damages as those damages “arising naturally . . . from such 

breach of contract itself, or such as may reasonably be supposed 

to have been in the contemplation of both parties, at the time 

they made the contract.” However, if there were “special 

circumstances” that were “communicated by the plaintiffs to the 
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defendants, and thus known to both parties,” the plaintiff could 

recover for “injury which would ordinarily follow from a breach of 

contract under these special circumstances.” Id.

Here, the Airpark argues it was foreseeable that Passero’s 

failure to perform under the contract could have resulted in 

construction defects going undetected, which could later require 

repair. It reasons these damages arose naturally from the breach 

of its contract with Passero and did not involve special 

circumstances about which it would have been required to give 

Passero actual notice. Thus, the Airpark argues these damages 

are general and not special or consequential. 

Foreseeability is not at issue here. Passero does not dispute 

it was foreseeable that if it failed to perform its duties under the 

contract, that could result in the need for repairs. It is thus 

necessary for us to explore the definition of general, special, and 

consequential damages and how the question of foreseeability 

affects the nature of the damages incurred in this case.

“General damages are ‘those damages which naturally and 

necessarily flow or result from the injuries alleged. . . .’” 

Hardwick Properties, Inc. v. Newbern, 711 So. 2d 35, 39 (Fla. 1st 

DCA 1998) (quoting Hutchison v. Tompkins, 259 So. 2d 129, 132 

(Fla. 1972)). General damages “‘may fairly and reasonably be 

considered as arising in the usual course of events from the 

breach of contract itself.’” Id. (quoting Fla. E. Coast Ry. v. Beaver 

St. Fisheries, Inc., 537 So. 2d 1065, 1068 (Fla. 1st DCA 1989)). 

Stated differently, “[g]eneral damages are commonly defined as 

those damages which are the direct, natural, logical and 

necessary consequences of the injury.” Fla. Power Corp. v. Zenith 

Indus. Co., 377 So. 2d 203, 205 (Fla. 2d DCA 1979) (emphasis 

added). 

“In contrast, special damages are not likely to occur in the 

usual course of events, but ‘may reasonably be supposed to have 

been in contemplation of the parties at the time they made the 

contract.’” Hardwick, 711 So. 2d at 40 (quoting Fla. E. Coast Ry., 

537 So. 2d at 1068). They “consist of items of loss which are 

peculiar to the party against whom the breach was committed 

and would not be expected to occur regularly to others in similar 
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circumstances.” Id. (citing Johnson v. Monsanto Co., 303 N.W.2d 

86 (N.D. 1981)). “In other words, ‘general damages are awarded 

only if injury were foreseeable to a reasonable man and . . . 

special damages are awarded only if actual notice were given to 

the carrier of the possibility of injury. Damage is foreseeable by 

the carrier if it is the proximate and usual consequence of the 

carrier’s action.’” Fla. E. Coast Ry., 537 So. 2d at 1068 (quoting 

Hector Martinez & Co. v. S. Pac. Transp. Co., 606 F.2d 106, 109 

(5th Cir. 1979)). 

“[C]onsequential damages ‘do not arise within the scope of the 

immediate buyer-seller transaction, but rather stem from losses 

incurred by the non-breaching party in its dealings, often with 

third parties, which were a proximate result of the breach, and 

which were reasonably foreseeable by the breaching party at the 

time of contracting.’” Hardwick, 711 So. 2d at 40 (emphasis 

added) (quoting Petroleo Brasileiro, S.A., Petrobras v. Ameropan 

Oil Corp., 372 F. Supp. 503, 508 (E.D.N.Y. 1974)). “The 

consequential nature of loss . . . is not based on the damages being 

unforeseeable by the parties. What makes a loss consequential is 

that it stems from relationships with third parties, while still 

reasonably foreseeable at the time of contracting.” Bartram, LLC 

v. Landmark Am. Ins. Co., 864 F. Supp. 2d 1229, 1240 (N.D. Fla. 

2012) (emphasis added) (citing Hardwick Properties, Inc. v. 

Newbern, 711 So. 2d at 40).

We agree with the Airpark that the damages in this case 

were not special damages. The contract required Passero to 

inspect, observe and monitor the construction work, including 

determining the suitability of materials used by the contractor, 

and to report any problems. It cannot be said that repairs 

stemming from improperly inspected and monitored construction 

work are unlikely to occur in the usual course of business. The 

damages in this case were not particular to the Airpark and did 

not involve special circumstances for which the Airpark would 

have been required to give Passero actual notice. Instead, these 

types of damages would be expected to occur to other parties in 

similar circumstances. Thus, they were not special damages. 

However, the cost of repair here did not constitute general 

damages, either, because the damages were not the direct or 
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necessary consequence of Passero’s alleged failure to properly 

inspect, observe, monitor, and report problems with the 

construction work. The contractor could have completed the job 

correctly without Passero performing its duties under the 

contract. Thus, the need for repair did not arise within the scope 

of the immediate transaction between Passero and the Airpark. 

Instead, the need for repair stemmed from loss incurred by the 

Airpark in its dealings with a third party – the contractor. While 

these damages “were reasonably foreseeable,” they are 

consequential and not general or direct damages. 

The parties agree there is no case law directly on point 

involving damages stemming from the failure to inspect and 

monitor construction work; however, we find this case is 

analogous to others that have found the cost to repair or replace 

property damaged following deficient inspections or other 

services constituted consequential damages. See Urling v. Helms 

Exterminators, Inc., 468 So. 2d 451, 454 (Fla. 1st DCA 1985) 

(finding the cost to repair extensive termite damage to a home 

purchased after a termite inspection company erroneously 

certified that the home was free of damage constituted 

consequential damages, whereas the cost of the termite 

inspection constituted actual damages); Rollins, Inc. v. Heller, 

454 So. 2d 580, 585 (Fla. 3d DCA 1984) (finding where a home 

was burglarized following the installation of a deficient security 

system, the actual damages constituted the cost of the defective 

system, not the value of the items stolen during the burglary). 

See also Mosteller Mansion, LLC v. Mactec Eng’g & Consulting of 

Georgia, Inc., 661 S.E.2d 788, n.2 (N.C. Ct. App. 2008) (finding a 

builder’s claim for damages to repair and recondition soil after an 

engineering firm erroneously conducted soil testing were 

consequential and indirect damages because they “do not flow 

directly and immediately from any action of” the engineering 

firm); Fed. Reserve Bank of Richmond v. Wright, 392 F. Supp. 

1126, 1131 (E.D. Va. 1975) (finding a property owner’s cost to 

correct structural defects that resulted from defective plans 

prepared by an architect constituted indirect damages); 

McCloskey & Co., Inc. v. Wright, 363 F. Supp. 223, 226 n. 1, 230 

(E.D. Va. 1973) (finding the cost to repair a leaking roof caused 

by an architect’s defective plans constituted consequential or 

incidental damages); Richmond Redevelopment & Hous. Auth. v. 
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Laburnum Const. Corp., 80 S.E.2d 574, 579-80 (1954), superseded 

by statute on other grounds (finding damages caused by the

explosion of a faulty gas line were consequential).

We acknowledge the case at hand is distinguishable because 

here, the contract between the Airpark and Passero expressly 

required Passero to inspect, observe, and monitor the 

construction work and to determine the suitability of the 

materials used by the contractor. Thus, we certify the following 

question as one of great public importance: 

WHERE A CONTRACT EXPRESSLY REQUIRES A PARTY TO 

INSPECT, MONITOR, AND OBSERVE CONSTRUCTION WORK 

AND TO DETERMINE THE SUITABILITY OF MATERIALS USED 

IN THE CONSTRUCTION, BUT THE PARTY FAILS TO DO SO

AND INFERIOR MATERIALS ARE USED, ARE THE COSTS TO

REPAIR DAMAGE CAUSED BY THE USE OF THE IMPROPER 

MATERIALS GENERAL, SPECIAL, OR CONSEQUENTIAL 

DAMAGES?

Finally, we reject the Airpark’s argument that all limitations 

on liability for special or consequential damages in contracts 

involving professional service corporations such as Passero 

should be declared void pursuant to public policy. There is no 

public policy that would prohibit sophisticated parties such as 

Passero and the Airpark, which is a governmental entity, from 

negotiating a contract that limits liability for consequential 

damages. Thus, we AFFIRM but CERTIFY a question of great 

public importance.

LEWIS, J., concurs; ROWE, J., concurs in part and dissents in part 

with opinion.

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ROWE, J., concurring in part, and dissenting in part.

I concur in affirmance of the partial final summary judgment 

appealed. However, I dissent from the decision to certify a 

question to the supreme court.
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James J. Taylor Jr. and Katelyn J. Taylor of Taylor Law Firm, 

P.A., Keystone Heights, for Appellant.

Curtis L. Brown and Mark T. Snelson of Wright, Fulford, 

Moorhead & Brown, P.A., Altamonte Springs, for Passero 

Associates, LLC, Appellee. 

John E. Oramas of Oramas & Associates, P.A., Miami, Amici 

Curiae in support of Appellee, Passero Associates, LLC.