Case Name: J. R. Loftus, Inc., Respondent, v. David R. White et al., Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1994-05-12
Citations: 204 A.D.2d 821
Docket Number: 
Parties: J. R. Loftus, Inc., Respondent, v David R. White et al., Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 204
Pages: 821–825

Head Matter:
J. R. Loftus, Inc., Respondent, v David R. White et al., Appellants.
[611 NYS2d 948]

Opinion:
Crew III, J.
Appeal from a judgment of the Supreme Court (Harris, J.), entered February 22, 1993 in Albany County, upon a verdict rendered in favor of plaintiff.
Plaintiff commenced this action seeking to recover damages for the alleged breach of an oral contract. At trial, plaintiffs president, John Loftus, testified that in October 1986 he and defendants entered into discussions regarding the construction of a house for defendants in the Town of New Scotland, Albany County. Loftus testified that during these initial discussions, defendant David R. White informed him that he could build the house if he were able to obtain the requisite building permit and begin construction in a prompt manner. Loftus thereafter began preparatory work with the building plans, subcontractors and defendants' architect, purchased a water tap for the property and prepared the application for a building permit.
On or about October 11, 1986, Loftus flew to North Carolina to view defendants' residence there, upon which their Albany County home was to be modeled. Loftus testified that on this date, White informed him that he would be the contractor for the project, instructed him to proceed with clearing the land on the building site and asked him to have a written agreement drawn up. It is uncontroverted that as of this date, the parties had agreed upon, inter alia, the fee Loftus was to be paid for constructing the home ($90,000), a general payment schedule and a completion date. Although a firm price had not been established, the parties agreed that the price would be computed on a cost plus basis, and it was anticipated that the home would cost between $600,000 and $650,000. Following this meeting with defendants, Loftus was of the view that the contract was no longer contingent upon obtaining the necessary building permit, although White testified that this indeed remained a contingency. As for the written agreement, it appears that a draft contract was prepared but never executed.
Following his return from North Carolina, Loftus continued to work on the project and persisted in his attempts to obtain a building permit. On or about October 28, 1986 defendants, apparently concerned that such a permit would not be forthcoming, entered into a written contract with Henry Klersy to construct their home. The contract with Klersy did not contain a contingency that he obtain a building permit, as defendants apparently were satisfied with his oral assurances that he would be able to obtain one.
At the conclusion of the trial, the jury returned a special verdict finding that an oral contract existed between plaintiff and defendants, that defendants breached that contract, and that plaintiff was entitled to damages in the amount of $96,221.20 (representing the agreed-upon fee of $90,000 for building the home plus plaintiff's out of pocket expenses) and 50% of court fees. Supreme Court set aside that portion of the award concerning court fees and entered judgment in favor of plaintiff. This appeal by defendants followed.
Defendants' primary contention on appeal is that Supreme Court erred in charging the jury regarding the essential elements of an oral contract. We cannot agree. Supreme Court's charge as a whole adequately conveyed to the jury that it needed to resolve two separate and distinct factual issues: (1) whether the parties indeed had agreed upon all the terms that they deemed essential to the formation of this particular contract, and (2) whether the parties had also agreed upon those terms that would be essential to the formation of any contract in these circumstances. Defendants' contentions that the contract was contingent upon plaintiff obtaining a building permit and that there were numerous factors that they deemed essential to the contract, including the nature and extent of any warranty provided by plaintiff, upon which no agreement had ever been reached, were presented to the jury in a complete and intelligible fashion, and Supreme Court's charge as a whole was fair and balanced.
As to the issue of damages, it is apparent that the $90,000 awarded does not constitute either liquidated damages or an unlawful penalty. Indeed, Supreme Court did not even instruct the jury on the issue of liquidated damages. Rather, the sum awarded represents the proper measure of plaintiffs expectancy damages under the contract. To the extent that the dissent suggests that Supreme Court should have charged the jury regarding the effect that any overhead expense incurred by plaintiff would have upon the amount of damages recoverable, we note that defendants neither requested a charge on this point nor raised this as an issue on appeal. Defendants' remaining contentions have been examined and found to be lacking in merit.
Cardona, P. J. and Casey, J., concur.