Opinion ID: 2622544
Heading Depth: 1
Heading Rank: 4

Heading: The Damages Award Requires Remand.

Text: 1. The perimeter drain system The damages award included $22,192.86 for installing the perimeter drain system. The Beauxs argue that the Jacobs cannot recover the cost of installing the drain system because a permanent pump installed in the deep sump would have sufficiently remedied any wrong. A trial court's determination of damages is a finding of fact which we affirm unless it is clearly erroneous. [12] But we apply our independent judgment in deciding whether the trial court's award of damages is based on an erroneous application of law. [13] Alaska Statute 34.70.090(b) provides that a person who makes a negligent disclosure under AS 34.70 is liable for actual damages suffered because of the negligent disclosure. Actual damages is synonymous with compensatory damages. [14] The general principle underlying the assessment of compensatory damages in tort cases is that an injured person is entitled to be replaced as nearly as possible in the position he [or she] would have occupied had it not been for the defendant's tort. [15] In negligent nondisclosure cases, an appropriate measure of damages is the cost of putting the property in the condition that would bring it into conformity with the value of the property as it was represented. [16] The Beauxs represented to the Jacobs that the house had a sump pump system that would keep the basement dry. They did not represent that the house had a perimeter drain system, and the Jacobs did not expect to purchase a house with a perimeter drain system. Thus, it was error to award damages measured by the cost of a perimeter drain system, given the superior court's finding that using both pumps had prevented water infiltration in the basement in the sixteen years the Beauxs had occupied the house, and given the absence of any finding that a perimeter drain system was needed to remedy the Beauxs' nondisclosure. The superior court should have awarded the Jacobs the cost of installing a functional sump pump system, i.e., installing a permanent pump in the deep sump. [17] In defending the award, the Jacobs refer us to Greg Carpenter's testimony that a permanent pump in the deep sump could not be said with assurance to lower the water table at the perimeter of the foundation of the house. But the cited testimony is Carpenter's evaluation of the adequacy of the mechanical room sump for controlling the groundwater level. He also testified that if it was used diligently, the deep sump would prevent water infiltration. And the trial court's finding that using both sumps had prevented infiltration while the Beauxs occupied the house necessarily forecloses affirming by relying on the Carpenter testimony. Concluding that it was legal error to select the wrong measure of damages, we reverse this part of the damages award and remand for further proceedings. 2. The basement carpet The damages award also included $7,918.70 for the cost of replacing the basement carpet. The Beauxs argue on appeal that the superior court's award is clearly erroneous, because (1) their conduct did not proximately cause the harm to the carpet; and (2) the Jacobs are not entitled to recover the full cost of replacing the depreciated basement carpet with brand new, more expensive Karastan carpet. The Beauxs first argue that they were not responsible for the critical damage to the basement carpet. They observe that an insurance adjuster testified that the recreation room carpet was reusable when he inspected it in August 1995, after the last infiltration episode that can be causally linked to the Beauxs' disclosures. The Beauxs claim that the basement carpet was damaged when an unidentified person accidentally opened the valve of an abandoned water line in the house in October 1995, and when a sewer backup occurred soon thereafter. The Beauxs note that Jack Jacob testified that the sewer backup was kind of the final event for the carpet. The superior court found that the damage directly associated with the final two episodes of flooding in the basement was minimal, and that the damage to the basement floor covering had already been done by the three previous water incursions. The superior court's finding is not clearly erroneous. It is supported by substantial evidence that replacement of the basement carpet was necessary even before the final two episodes of water infiltration, because the carpet was moldy. The Beauxs next argue that it was error to award the full cost of installing new Karastan carpet in the basement. The Beauxs argue that the superior court's award unjustly enriched the Jacobs by exceeding the value of the carpet that was damaged. The Beauxs claim that the Jacobs should have recovered only the depreciated value of the basement carpet at the time the house was sold. [18] Even though the damages award exceeded the depreciated value of the basement carpet when the house was sold, we reject the Beauxs' assertion that the Jacobs were limited to the depreciated value of the carpet. Awarding the full cost of replacing depreciated carpet with new carpet confers a windfall upon the Jacobs. [19] But we noted above the general principle that an injured person is entitled to be replaced as nearly as possible in the position he [or she] would have occupied had it not been for the defendant's tort. [20] Absent evidence of a market source for used carpet of similar useful life, the Jacobs could only be made whole if they recovered the cost of installing new carpet. Nonetheless, the Jacobs were entitled to recover only the cost of replacing the damaged carpet with carpet of like original quality. The appellate record does not clearly establish whether the Karastan carpet was of quality similar to the original quality of the replaced carpet. We therefore remand for findings on the comparative values of the new carpet and the old carpet in its original condition.