Court Opinion

ID: 9547553
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:48:44.239491+00
Date Added: 2024-06-11T15:17:51.083446
License: Public Domain

Ringold, J.
(concurring in part, dissenting in part) — I agree with the majority's opinion except as it relates to Lynnwood Pacific's damages. I would hold that the trial court's judgment was within the scope of the evidence and should be affirmed.
The majority apparently bases the conclusion that the trial court's award of damages was too "speculative" on the assumption that the project would never be built. The testimony cited in support of this proposition does not support the interpretation urged by the majority.2 From the *326record, the findings of fact, and Lynnwood Pacific's choice of damages theory, we must accept the trial court's award of damages based on the anticipated completion of the project. That the trial court made such a finding may be implied from the express findings entered. Whatcom Builders Supply Co. v. H.D. Fowler, Inc., 1 Wn. App. 665, 463 P.2d 232 (1969).
The majority correctly cites Platts v. Arney, 50 Wn.2d 42, 46, 309 P.2d 372 (1957) for the "benefit of the bargain" rule that a plaintiff is entitled to be placed in the position he or she would have been in had the contract been performed. The reversal of the trial court's award seems to assume, however, that there is only one correct way to determine what the "benefit" is. There are actually many possible ways to determine damages in a contract case. It is not the role of this court to decide post hoc what theory the plaintiffs should have elected and the court applied. When the trial court award of damages is within the scope of the evidence, on a legally correct theory, the appellate court should not choose an alternate theory. Cf. Steele v. Queen City Broadcasting Co., 54 Wn.2d 402, 408-09, 341 P.2d 499 (1959).
Damages may encompass, among other things, loss of out-of-pocket expenses, profits for losses or other gains prevented by the breach, expenditures in part performance, expenses of litigation caused by the breach, and interest. See Restatement (Second) of Contracts ch. 16 (1981). Restatement section 348 specifically provides alternatives to loss in value of performance in construction contracts.
At the time of trial Lynnwood Pacific had to present a coherent theory of recovery, selecting damages they believed could be proved. It appears from the record that they had a choice of several possible theories of damages, including: (1) restitution of out-of-pocket costs; (2) assuming that the building would not be completed because of lack of financing and seeking lost profits; or (3) assuming resumption of the project and seeking the increased costs of construction and rentals lost due to the delay in construe*327tion.
Lynnwood Pacific and the trial court adopted the third approach, which was appropriate under the circumstances. See Eastlake Constr. Co. v. Hess, 102 Wn.2d 30, 39, 686 P.2d 465 (1984). This decision should not be reversed absent a showing of legal error or manifest abuse of discretion.
It is not surprising that Lynnwood Pacific did not use the "equity" theory advocated here by the majority. This approach has not previously been used in Washington, and only rarely in other parts of the country.
Additionally, the two cases relied on by the majority do not state that the "equity approach" is the only, or even the best, theory. Rather, in both cases the appellate courts affirmed the trial courts' determination of damages as being within the broad discretion of the court. St. Paul at Chase Corp. v. Manufacturers Life Ins. Co., 262 Md. 192, 278 A.2d 12, cert. denied, 404 U.S. 857 (1971); Sandler v. Lawn-A-Mat Chem. & Equip. Corp., 141 N.J. Super. 437, 358 A.2d 805 (1976). Had the trial court here adopted the "equity" theory, I would have no trouble affirming that award. It is the substitution of an alternate theory on appeal to which I must object. It is not the function of this court to calculate damages. When, as here, the trial court findings are legally correct and are supported by substantial evidence, they should be affirmed.
The trial court determined that a reasonable application of the benefit of the bargain rule justified hypothesizing new financing for the project, and that the project would be completed within cost estimates and occupied by April 1979. The trial court theory was supported by the testimony of a qualified expert. The vagaries of the economic factors probably affecting the loss of expected profits within the time frame considered by the trial court were adequately shown at trial.3 Continental had an opportunity to *328present, and did present, its own expert whom the trial court did not deem credible. The trial judge is in a better position to weigh the evidence and evaluate the credibility of the witnesses than is the appellate court, and the trial court's evaluations should not be upset on review. Steele.
I see no error in the trial court's calculation of damages and would affirm Lynnwood Pacific's judgment against Continental.
Reconsideration denied February 28, 1985.
Review denied by Supreme Court May 10, 1985.

The testimony the majority relies on arose during the direct examination of Brown and Proctor on the items of damage claimed by Lynnwood Pacific. The partners appeared to be stating that they could not build the project, at the original cost, not that they never intended to build:
[Brown] A: My portion of the initial investment, in addition as the others did, I have an obligation on the real estate contract, on the $100,000 loan from Rainier, and also the loss of interest on my money, the loss of income from rentals, and I can't begin to estimate the loss of income my company has suffered due to not having the facility available to us.
Q: The expenses of this lawsuit, your share of that?
A: Legal fees.
Q: Do you have any idea, Mr. Brown, what additional expenses you have to make today if this project were to go forward and you started refinancing with some other organization?
A: I really haven't any idea. I know it is considerably higher and would be impossible for me.
Q: When you say "considerably higher," what are some of the things that would be considerably higher?
A: Well, building costs, interest costs, have all gone up considerably.
Report of Proceedings, at 798.
[Proctor] Q: Now in addition you will suffer costs of increased construction costs. Suffer losses in the form of increased construction costs, is that correct?
A: Yes, no question about the fact this construction cannot be built.
Q: In the form of higher interest rates?
A: That's correct.
Report of Proceedings, at 940.

The trial court award of 30 months' lost rental, due to the period when construction was delayed, was an appropriate part of the damages compensating *328Lynnwood Pacific for the rental lost due to the delay in construction. The majority's award of 25 months of lost rent does not, however, appear to be supported by theory or case law.