Opinion ID: 1059167
Heading Depth: 1
Heading Rank: 5

Heading: The Breach of Contract and Warranty Claims

Text: The breach of contract and breach of warranty claims, asserted here only against Freemason, may be considered together because under the facts of this case [l]abeling the claim a breach of warranty rather than a breach of contract does not alter the nature of the claim. Waterfront Marine Construction, Inc. v. North End 49ers Sandbridge Bulkhead Groups A, B and C, 251 Va. 417, 435, 468 S.E.2d 894, 904 (1996). The measure of damages under either theory would be the same. Moreover, the measure of damages for breach of contract or breach of warranty is not necessarily limited to the same measure of damages applicable to fraud torts or statutory false advertising. Under certain circumstances, a party seeking to restore the benefit of a bargain or to enforce a warranty is permitted to show that the cost of remedying the breach is the appropriate measure of damages. The cost measure is calculated on the basis of the cost to complete the contract according to its terms or the cost to repair what has been done so that the contract terms are met. The cost measure is appropriate unless the cost to repair would be grossly disproportionate to the results to be obtained, or would involve unreasonable economic waste. Lochaven Co. v. Master Pools by Schertle, Inc., 233 Va. 537, 543, 357 S.E.2d 534, 538 (1987); see also Green v. Burkholder, 208 Va. 768, 771, 160 S.E.2d 765, 768 (1968); Kirk Reid Company v. Fine, 205 Va. 778, 789, 139 S.E.2d 829, 837 (1965). In its August 30, 2002 opinion letter, the trial court concluded that Klaiber and Sienicki have not alleged any actual damages resulting from [Freemason's] alleged breach of contract and that they have suffered no injury from the alleged breach of the statutory warranty. The former conclusion is not supported by the record when viewed in the light favorable to Klaiber and Sienicki; the latter conclusion is a premature determination of a disputed fact. As such, neither can form the basis to support summary judgment in favor of Freemason. It is certainly accurate that their motions for judgment made only a generalized assertion that Klaiber and Sienicki had suffered damages as a result of the alleged breaches of contract and statutory warranty. However, in response to discovery requests, both Klaiber and Sienicki asserted that they remained liable to the purchasers of their respective condominium units for costs to repair the chimneys, fireplaces, and flues. Because repair cost is one form of measure of damage for breach of contract or warranty, this is an adequate factual allegation of injury and damage to survive a motion for summary judgment. Accordingly, we hold that the trial court erred in granting summary judgment in favor of Freemason with respect to the claims for breach of contract and breach of warranty asserted by Klaiber and Sienicki. Our conclusion that summary judgment was not appropriate for the breach of contract and breach of warranty claims requires us to consider a further assignment of error raised by Klaiber and Sienicki with respect to the trial court's ruling that they are barred from seeking damages for the alleged defect in the roof because it was a common element of the condominium. The trial court reasoned that because the roof was a common element, which Klaiber and Sienicki concede, the Condominium Act gave the unit owners' association the exclusive right to sue for the alleged defects. See Code §§ 55-79.53, 55-79.79, and 55-79.80. Klaiber and Sienicki contend that the trial court erred in ruling that the right to sue afforded to a unit owners' association precluded individual unit owners from maintaining private causes of action for defects in common elements. Freemason, though not conceding the issue, contends that when Klaiber and Sienicki sold their condominium units, they were required by the terms of the condominium declaration to transfer all rights in the Association to the new owners. Continuing, Freemason contends that the attempts to retain or be reassigned voting rights in the Association, and by extension an interest in litigating claims relating to common elements, were ineffective. We need not address the merits of the parties respective positions on this issue because subsequent events in the Association's suit against Freemason, of which we take judicial notice, render the point moot. After the trial court ordered severance of the actions of the individual unit owners from that of the Association, the Association proceeded with its suit against Freemason. See Dana v. 313 Freemason, A Condominium Association, Inc., 266 Va. 491, 587 S.E.2d 548 (2003) (today decided). In that suit, the trial court ruled that the Association could proceed only on the claims asserted for the alleged defect in the roof. The Association ultimately prevailed at trial and was awarded a judgment for damages, attorney's fees, and costs against Freemason Associates, Inc. The Association was further permitted to pierce the veil of that corporation in order to recover on that judgment from Dana and Hall. Because we have today affirmed the judgment in that case, it is a matter of record that fair and complete damages for the defect in the roof have been assessed. Thus, because Freemason would be subjected to an impermissible double recovery for the defective roof, the issue of Klaiber's and Sienicki's standing to seek damages for that condition is rendered moot. Accordingly, we hold that on remand, Klaiber and Sienicki will be limited to seeking damages for breach of contract and breach of warranty only with respect to the alleged defects in the chimneys, fireplaces, and flues. We emphasize that our decision today does not address the merits of those claims, but only whether it was proper for the trial court to award summary judgment thereon.