Grossman Holdings Ltd. v. Hourihan
| Decision Date | 15 April 1982 |
| Docket Number | No. 60692,60692 |
| Citation | 414 So.2d 1037 |
| Parties | GROSSMAN HOLDINGS LTD., et al., Petitioners, v. George V. HOURIHAN, and Katrina A. Hourihan, Respondents. |
| Court | Florida Supreme Court |
Alan T. Dimond and Rudolph F. Aragon of Greenberg, Traurig, Askew, Hoffman, Lipoff, Quentel & Wolff, Miami, for petitioners.
Wilson E. Hodge, Homestead, for respondents.
Alan S. Becker and Charles R. Morgenstein of Becker, Poliakoff & Streitfeld, Fort Lauderdale, for amicus curiae.
Stephen W. Metz, and Robert M. Rhodes and James C. Hauser of Messer, Rhodes & Vickers, Tallahassee, for Florida Home Builders Ass'n, amicus curiae.
We have for review Hourihan v. Grossman Holdings Ltd., 396 So.2d 753 (Fla.3d DCA 1981), which conflicts with Bayshore Development Co. v. Bonfoey, 75 Fla. 455, 78 So. 507 (1918), and Oven Development Corp. v. Molisky, 278 So.2d 299 (Fla. 1st DCA 1973), regarding the proper measure of damages for breach of a construction contract. We have jurisdiction, article V, section 3(b)(3), Florida Constitution, and disapprove the measure of damages applied by the third district in the instant case.
Late in October 1978 the Hourihans contracted with Grossman Holdings to purchase a house to be built in a planned development. Both the model and the office drawings showed the house with a southeast exposure, and the contract stated that Grossman would construct the house "substantially the same" as in the plans and specifications at the seller's office or as the seller's model. In December a new drawing went on display in the Grossman offices. It showed, among others, the Hourihan's lot and their soon-to-be-built house; unfortunately, the house in the new drawing faced the opposite way from what they expected and wanted.
The Hourihans brought this discrepancy to the attention of Grossman's employees and remonstrated against construction of a mirror image of the house they had contracted for. In spite of the Hourihan's objections, the contractors refused to change their plans and began constructing the house depicted in the December drawing. The Hourihans then sued in circuit court for breach of contract.
After a bench trial, the court found that Grossman had breached its contract. The court refused to award damages, however, finding that specific performance would be economically wasteful and out of proportion to the good to be attained and that the value of the house had increased substantially since the date of the contract. The district court agreed with the trial court's finding that the contract had been breached, but found that it had applied the incorrect measure of damages. Relying on Edgar v. Hosea, 210 So.2d 233 (Fla.3d DCA 1968), the third district held that the unreasonable economic waste doctrine does not apply to residential construction. It further found that Grossman's willful and intentional failure to perform according to the plans and specifications nullified its claim of substantial compliance with the contract. The court found the proper damages to be that amount necessary to reconstruct the dwelling to make it conform to the plans and specifications and remanded for a new trial on damages.
Grossman contends that Bayshore Development and Oven Development state the proper rule for determining the measure of damages for improperly constructed residences. These cases hold that the proper measure of damages is the difference in value between the building as constructed and as it should have been constructed. Grossman claims that subsection 346(1)(a) of the Restatement (First) of Contracts (1932) supports the diminution of value theory and urges this Court to adopt the Restatement as this state's law regarding damages for breach of a construction contract.
Subsection 346(1)(a) 1 of the Restatement provides as follows:
(1) For a breach by one who has contracted to construct a specified product, the other party can get judgment for compensatory damages for all unavoidable harm that the builder had reason to foresee when the contract was made, less such part of the contract price as has not been paid and is not still payable, determined as follows:
(a) For defective or unfinished construction he can get judgment for either
(i) the reasonable cost of construction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste; or
(ii) the difference between the value that the product contracted for would have had and the value of the performance that has been received by the plaintiff, if construction and completion in accordance with the contract would involve unreasonable economic waste.
The comment on subsection 346(1)(a) states:
The purpose of money damages is to put the injured party in as good a position as that in which full performance would have put him; but this does not mean that he is to be put in the same specific physical position. Satisfaction for his harm is made either by giving him a sum of money sufficient to produce the physical product contracted for or by giving him the exchange value that that product would have had if it had been constructed. In very many cases it makes little difference whether the measure of recovery is based upon the value of the promised product as a whole or upon the cost of procuring and constructing it piecemeal. There are numerous cases, however, in which the value of the finished product is much less than the cost of producing it after the breach has occurred. Sometimes defects in a complete structure cannot be physically remedied without tearing down and rebuilding, at a cost that would be imprudent and unreasonable. The law does not require damages to be measured by a method requiring such economic waste. If no such waste is involved, the cost of remedying the defect is the amount awarded as compensation for failure to render the promised performance.
Subsection 346(1)(a), therefore, is designed to restore the injured party to the condition he would have been in if the contract had been performed. This aim corresponds with...
To continue reading
Request your trial
-
In re Standard Jury Instructions—Contract & Business Cases
...in accordance with the contract, measured at the time of the breach.SOURCES AND AUTHORITIES FOR 504.5 1. In Grossman Holdings Ltd. v. Hourihan, 414 So.2d 1037, 1039 (Fla.1982), the Florida Supreme Court adopted Section 346 of the Restatement (First) of Contracts (1932), which provides, in r......
-
Sharick v. SOUTHEASTERN UNIVERSITY OF HEALTH SCIENCES, INC.
...been performed.'" (quoting Campbell v. Rawls, 381 So.2d 744, 746 (Fla. 1st DCA 1980), cited with approval in Grossman Holdings, Ltd. v. Hourihan, 414 So.2d 1037, 1039 (Fla.1982)). Even before Sharick has had the opportunity to present his evidence, the dissent finds that his damages for fut......
-
Citibank v. Dalessio
...waste measure of damages was correctly applied by the jury as an alternative measure of damages.”); see Grossman Holdings Ltd. v. Hourihan, 414 So.2d 1037, 1038–1039 (Fla.1982) (discussing the application of the economic waste doctrine to the measure of damages in a breach of contract case)......
-
Perera v. Diolife LLC
...4th DCA 1985) (stating that damages generally "should be measured as of the date of the breach" (quoting Grossman Holdings Ltd. v. Hourihan , 414 So.2d 1037, 1040 (Fla. 1982) )). His text message bragging about the increased value of the company does not change the fact that he did not rece......
-
Dissecting Contract Breach Terminology, Warranties, and Remedies: Part One
...Fox Creek Constr., Inc. v. Opie’s Landscaping, LLC, 587 S.W.3d 746, 750–51 (Mo. Ct. App. 1999); c.f. Grossman Holdings Ltd. v. Hourihan, 414 So. 2d 1037, 1037 (Fla. 1982) (stating measure of damages in a total breach scheme is the difference between the value of completion and the value of ......
-
If Wishes Were Horses: the Economic-waste Doctrine in Construction Litigation
...(owner entitled to equivalent roof, not more expensive roof). 52. See notes 35-49 supra and text. 53. Comment, supra n. 4, at 193. 54. 414 So.2d 1037 (Fla. 1982). 55. Id. at 1038. 56. Arguably, the economic-waste doctrine was inapplicable because of the builder's willful and intentional bre......
-
Two, Three, or Four Prongs? The Contractual Defense of Unilateral Mistake in Florida.
...or from the Florida Supreme Court, although cases implicitly recognizing this exist). See, e.g., Grossman Holdings, Ltd. v. Hourihan, 414 So. 2d 1037 (Fla. (49) See, e.g., Perera, 274 So. 3d at 1124. (50) Degge v. First State Bank of Eustis, 199 So. 564, 565 (Fla. 1941). (51) Planned Parent......
-
Avoiding Economic Waste in Contract Damages: Myths, Misunderstanding, and Malcontent
...v. Harbour Painting, Inc., No. CV040568832S, 2005 WL 2981697 (Conn. Super. Ct. Oct. 20, 2005); Grossman Holdings, Ltd. v. Hourihan, 414 So. 2d 1037, 1039-40 (Fla. 1982); Brown v. Holland, No. CL 93936, 2005 WL 2861973 (Iowa Dist. Ct. Mar. 28, 2005); State ex rel. Stovall v. Reliance Ins. Co......