Opinion ID: 1532058
Heading Depth: 1
Heading Rank: 8

Heading: Third Count

Text: Under this count the trial judge allowed as consequential damages $1,552,783.20, which is the amount of the deficiency decree obtained by Chemical in the amount of $1,297,952 plus accrued interest. On that subject he said: B. Alleged Consequential Damages. (a) Chemical's deficiency decree. The deficiency decree held by Chemical is part and parcel of the foreclosure proceedings which would not have been instituted had Manufacturers fulfilled its obligation under its letter of commitment and under the Buy-Sell Agreement  Plaintiff would not be saddled with this debt which, since February 23, 1967, has been bearing interest at 6% per annum. As was said in Pennsylvania, etc., Casualty Insurance Co. v. Messenger (supra), `The Court should endeavor to place the injured person, so far as possible, by monetary award, in the position he would have been if the contract had been properly performed.' See also: Wartenbe v. Car-Anth. Mfg. Co., 362 S.W. (2) (Mo.) 54, 56. To do that in this case it is necessary that I require Manufacturers to pay to Plaintiff such a sum as will enable it to liquidate its obligation under the deficiency decree. We adopt that opinion. On the remaining items the trial judge said: (b) Finder's Fee paid Manufacturers for extension, Manufacturers was paid a finder's fee of $24,000 for extending the expiry date from September 7, 1965, to March 7, 1966. There is no causal relationship of any kind between Manufacturers' breach and the payment of this fee. It was not in any way a consequence of that breach, and for that reason this claim is disallowed. (c) Weaver's Finder's Fee of $9,600. In order that Plaintiff might fulfill its obligations to the landowners under the land options, so that the land would not be lost, Weaver agreed to lend and Plaintiff agreed to borrow the sum of $480,000. This transaction took place on September 18, 1963. For placing the mortgage Weaver charged a finder's fee of $9,600. There is no causal relationship whatsoever between Manufacturers' breach and his expense, and it is, therefore, disallowed as an element of damage under this contract. (d) Interest on the $480,000 mortgage. When the Chemical construction mortgage loan was closed in New York on May 1, 1964, the mortgage in the amount of $480,000 was paid off, as was accrued interest in the amount of $18,160. This is disallowed as an element of damage, for the reasons just stated. (e) Merchants' Finder's Fee. As I have already stated, the $72,000 fee paid Merchants for the construction mortgage loan was exactly what Plaintiff would have had to pay Weaver and Manufacturers had the latter's offer been accepted. There is no evidence to support a claim for $2,500 attorneys' fee. The $10,000 paid Monen and another has already been allowed as an element of damage in the claim against Weaver. None of these expenses bear any causal relationship whatsoever to Manufacturers' breach, and for that reason these claims are disallowed. (f) Dr. Merrill's $50,000. When the land for the building site was purchased, Plaintiff agreed to pay Dr. Merrill the sum of $50,000 as `moving costs' over and above the purchase price of his land. Once again, there is no causal relationship whatsoever between this claim and Manufacturers' breach, and, therefore, this claim is disallowed. Except as to Dr. Merrill, we disagree. The attorney's fee mentioned actually was $3,500. This was an oral opinion and the record is complex. Therefore, it is not surprising that there might be an error of $1,000 in the quotation of figures. The attorney's fee is fully set forth on the settlement sheet filed as an exhibit in this proceeding. We note that Weaver Bros. said in submitting the original proposal to Manufacturers: CONSTRUCTION COSTS The attached Marshall and Stevens appraisal gives us a reproduction cost new of the subject building of $7,245,000. This appraisal service has proven extremely reliable in estimating construction costs on garden-type apartments as it takes into account all the myriad costs incidental to construction which become a part of final price. Some of these costs are as follows: 1. Contract extras  can add up to 10% of base contract. 2. Architect's fees  usually approximately 3% of base contract on a building of this size. 3. Engineering fees. 4. Financing charges. 5. Interest on construction loan. 6. Settlement charges. 7. Off-site utility charges. 8. Building permits. 9. Leasing and advertising expenses. It has been determined that St. Paul had no equity in the building and that, therefore, the value of the building could not be recovered. In that case it then follows that if St. Paul is to be placed so far as possible, by monetary award, in the position [it] would have been if the contract had been properly performed, it must be permitted to recover those items which it has been obliged to pay out or for which it is liable that are connected with the erection of the building and which would in the normal course of circumstances have been paid from the loan from Manufacturers. The Manufacturers' loan was to be approximately $1,300,000 more than the contractor's construction cost. Had there been no breach, St. Paul not only would have had this fund from which to make payment, but it anticipated having a business in being to generate revenue for repayment of the loan which would have paid these items. Thus, portions of the construction costs paid by St. Paul or for which it still remains liable are part and parcel of St. Paul's loss directly chargeable to the breach by Manufacturers. The trial judge correctly excluded the claim for the moving costs to be paid Dr. Merrill since that was not a part of construction. However, within the contemplation of the parties under the Hadley v. Baxendale rule would be the $24,000 extension fee paid Manufacturers, the $9,600 fee paid Weaver Bros. on its loan of $480,000, the $3,500 attorney fee previously mentioned, the balance due the architect said to be $108,000, the interest paid on the $480,000 mortgage, and the balance due Mullan Contracting and Real Estate Management Co., Inc., under the construction contract, said to have amounted to $270,627.41. Apparently, from the record this item is drawing interest from April 2, 1968. It would appear proper to allow interest from that date. In making computations allowance must be made for the item of $175,167.40 discussed under the second count which should be credited on the Mullan claim. The original charge of Weaver Bros. was to be $48,000.00 for obtaining the permanent mortgage loan and $48,000.00 for obtaining the construction mortgage loan, a total of $96,000.00. When the contract with Weaver Bros. was rewritten in December of 1963 to eliminate the exclusive agreement with Weaver Bros. for obtention of the construction loan so as to permit St. Paul to obtain the construction loan through Merchants, Weaver Bros. required that its compensation remain at $96,000.00, $48,000.00 which had already been paid and $48,000.00 to be paid later. St. Paul then agreed to pay, and did pay, Merchants $48,000.00 for the construction loan and was also obliged to pay Chemical a $24,000.00 fee, the same amount which Lamon of Manufacturers advised Tinley of Weaver in August, 1963, it would require as a fee for making a construction loan. It is the sum of these items to which Judge Proctor referred as the $72,000 fee paid Merchants for the construction mortgage loan. This $72,000 also is a part of the damage sustained by St. Paul which should be allowed against Manufacturers. The complexity of this case leads us to believe the wisest course of action would be to remand this case for entry of judgment on these items rather than attempting to compute them ourselves.