Opinion ID: 1888053
Heading Depth: 2
Heading Rank: 1

Heading: The Trial Judge's Reduction of Damages for Breach of Contract

Text: In a breach of contract action, we determine plaintiff's damages as if the parties had fully performed the contract. [14]
The trial judge deducted $95,880 from the damages award because Reserves overpaid Fresh Cut for incomplete work on water retention ponds. The overpayment resulted from Fresh Cut's failure to line the ponds with clay as the contract between Fresh Cut and Reserves required. Representatives from Obrecht confirmed that Fresh Cut had not lined the ponds correctly and that remedial work would cost $95,880. Reserves disregarded Fresh Cut's failure to perform correctly and paid Fresh Cut anyway. The record supports the trial judge's orderly and logical determination that the ponds did not meet the contractual requirements and that Reserves overpaid for non-conforming work. The trial judge appropriately deducted $95,880 from the damage award.
For similar reasons, the trial judge deducted $103,000 from the award for incomplete work on certain roads. Obrecht's unrebutted testimony demonstrates that (i) Fresh Cut failed to perform the necessary compaction test studies before installing stone on the roadways, (ii) the roads failed inspection, and (iii) it cost $103,000 to remedy the errors. Despite these shortfalls, Reserves paid Fresh Cut as billed. Given this evidence, the trial judge justifiably reduced the damage award by $103,000.
The trial judge deducted $750,000 from the damages award because of a three-party land contract gone awry. Reserves transferred lots, arguably worth $1,500,000, to Christopher Glenn, and in return, Glenn agreed to assume Reserves' payment obligations to Fresh Cut. Glenn only paid Fresh Cut $750,000. A Bankruptcy Court stipulation confirmed that the lots were worth $750,000 eachonly $750,000 reached Fresh Cut. Reserves admits that payment to Glenn did not constitute payment to Fresh Cut. Accordingly, the trial judge justifiably reduced the damage award by $750,000.
The trial judge reduced the damages award by $300,000, or $10,000 for each of Bella Via's 30 lots, and offset an additional $10,000 for Crystal's Lot 6. The Agreement required Reserves to provide a central water source that each lot would tap for geothermal heating and cooling. Remedial measures cost an additional $11,000 per lot. While there is a difference between the actual amount reduced ($10,000) and the testified cost for each lot ($11,000), the trial judge's determination is not clearly erroneous, and is supported by the record.
The trial judge incorrectly reduced $5,461.37 from the damages award. He reasoned that Reserves failed to show that Bella Via or Crystal agreed to pay for Landscape Architectural Services and EBL Engineers. However, paragraph 3(c) of the Agreement clearly obligates the purchaser [Bella Via and Reserves] to obtain and pay for the installation of ... street lights, utilities ... landscaping and other site improvements. [15] EBL Engineers were responsible for the electrical plan, development, and upgrading electrical service for the 71 lots. Landscape Architectural Services was responsible for the planning and installation of the streetlights and other infrastructure that the Agreement required. All payments to EBL and Landscape Architectural Services were part of the Agreement. The record does not support the trial judge's finding that the parties did not agree to pay directly for EBL's and Engineers and Landscape Architectural Services' costs for those services.