Harper v. Goodin
| Decision Date | 09 September 1980 |
| Docket Number | No. 1-1279A371,1-1279A371 |
| Citation | 409 N.E.2d 1129 |
| Parties | James B. HARPER, Jean L. Harper, Bert Claspell Heating, Cooling and Electric Inc., Appellants, v. Estel GOODIN, Martha L. Goodin, Appellees. |
| Court | Indiana Appellate Court |
Malcolm G. Montgomery, Evansville, for appellants.
Terry Noffsinger, Evansville, for appellees.
This is an appeal from the Vanderburgh Superior Court by defendants James B. Harper and Jean L. Harper as two appellants (Harpers) from an adverse judgment for breach of contract and punitive damages, and by defendant Bert Claspell Heating, Cooling and Electric, Inc., as the other appellant (Claspell) from an adverse judgment for slander of title and punitive damages. Both judgments were in favor of the plaintiffs-appellees Estel Goodin and Martha L. Goodin (Goodins) after verdicts rendered by a jury.
We affirm in part and reverse in part.
The Goodins, on September 13, 1974, purchased for $34,350 a parcel of real estate from the Harpers containing a residence, newly constructed by the Harpers who built it for the purpose of sale. The sum of $2,500 was held in escrow by a bank to be paid to the Harpers when the Goodins were satisfied that the work was completed. The Goodins occupied the residence on September 24, 1974, and within five or six weeks a controversy arose relative to defects.
Evidence most favorable to the support the judgment disclosed the following major defects: (1) furnace not working properly, (2) defective tile fitting, (3) unlevel floors, and doors that would not close, (4) water problems in the basement and rusty furnace which had fallen, pulling ductwork loose, (5) kitchen sink pulled loose from the wall, (6) defective concrete walk, (7) defective plumbing, (8) defective septic system, and (9) absence of cold air ducts. In addition, there were numerous other lesser defects. The Goodins introduced evidence from professional tradesmen to show that the cost of repairing the defects would be $500-$750 to $4,316. Estel Goodin testified that the house was worth $14,000 less than it would be worth absent the defects.
The Harpers, who had no workmen themselves, had subcontracted the construction to various workmen. The Harpers sent workmen on occasions to repair the defects. Ultimately, when the parties were unable to resolve the dispute, the Harpers offered the Goodins their money back and later offered them $36,000 to rescind the transaction. The Goodins refused for various reasons.
Claspell was a subcontractor employed by the Harpers to do certain mechanical trades within its expertise. Its last work was performed and last materials were furnished sometime prior to the sale on September 13, 1974. In the late fall, Bert Claspell, the president and principal of the corporation, who had, according to the record, at least 15 years experience in the trade, became alarmed that he might not get his money from the Harpers. He told the Goodins that the Harpers had promised him that he would be paid from the $2,500 escrow account. He further demanded payment from the Goodins and said that if he were not paid, he would file a mechanic's lien on the Goodins' property. The Goodins refused, and on January 25, 1975, Claspell filed its mechanic's lien. The Harpers paid Claspell about a week later, but Bert Claspell refused to release the lien even after demand by the Goodins and their attorney. He claimed that he filed the lien and refused to release it upon advice of counsel.
While this case was filed and tried as one action, there are in reality two separate actions. One action was against the Harpers for breach of contract and punitive damages, and the other was against Claspell for slander of title and punitive damages. The jury returned verdicts against the Harpers for $10,000 compensatory damages and $7,500 punitive damages, and against Claspell for $385 compensatory damages and $2,500 punitive damages.
The defendants have preserved and argued on appeal the following alleged errors:
I. The awarding of punitive damages for alleged defective construction.
II. The awarding of excessive compensatory damages for alleged defective construction.
III. The awarding of compensatory damages for alleged slander of title.
IV. The awarding of punitive damages for alleged slander of title.
VI. The giving and reading to the jury of plaintiffs' instruction No. 1 that allegedly misstated the law regarding punitive damages.
Issue I. Punitive damages for defective construction
Under this heading the Harpers allege the trial court committed error in denying their motion for judgment on the evidence regarding punitive damages for breach of contract for the defective construction.
In First Federal Savings and Loan Association of Indianapolis v. Mudgett, (1979) Ind.App., 397 N.E.2d 1002, this court engaged in an extensive review of the Indiana law of punitive damages arising out of breach of contract. We find it unnecessary to repeat that discussion in toto but refer the parties to it and the cases cited therein. Briefly, First Federal Savings and Loan Association of Indianapolis, recited that, as a general rule, punitive damages are not recoverable in contract actions, but two exceptions do exist. The first exception is where the breach is accompanied by conduct which also, independently, establishes the elements of a common law tort such as fraud. The other exception is where a serious wrong, tortious in nature, has been committed in an instance in which the public interest would be served by the deterrent effect punitive damages would have on the conduct of the wrongdoer and parties similarly situated.
The promisor's motive for breaching a contract is generally regarded as irrelevant because the promisee will be compensated for all damages proximately resulting from the promisor's breach. Where the facts surrounding the promisor's breach indicate substandard business conduct, the promisee may also enjoy a limited sense of requital in taking his business elsewhere in the future but he is not entitled to mulct the promisor in punitive damages.
Something more than a state of mind described as heedless disregard of the consequences is required for the imposition of punitive damages in breach of contract cases. Actual malice, or wantonness from which the law can imply malice, must be shown. The word "reprehensible" is used, as where there is conscious and deliberate conduct. Deceit is involved. Negligent conduct or incompetence is insufficient.
The Goodins' position on punitive damages presents an anamoly. While they characterize the house in their brief as "a frightful example of one built below standards," they refused the refund of their money. The evidence disclosed in the Statement Of The Facts fails to meet the sufficiency required for punitive damages in breach of contract cases. In support of punitive damages, the quality of construction was characterized, at best, as "extremely poor workmanship." We find no evidence that the Harpers' conduct could be described as an intentional tort, fraudulent, reprehensible, deceitful, false representation, or oppression commingled in the controversy, as required by our analysis in First Federal Savings and Loan Association of Indianapolis, supra. We therefore reverse the award of punitive damages for defective construction.
Issue II. Excessive compensatory damages for defective construction
The Harpers argue under this section that the award of compensatory damages in the amount of $10,000 is excessive.
Damages recoverable for breach of contract are limited to loss actually suffered. Ogle v. Wright, (1977) Ind.App., 360 N.E.2d 240. The general rule is that the damages awarded must be within the scope of the evidence. Prudential Insurance Company of America v. Executive Estates, Inc., (1977) Ind.App., 369 N.E.2d 1117. This court will not reverse the damage award if it is within the scope of the evidence. Irving v. Ort, (1957) 128 Ind.App. 225, 146 N.E.2d 107.
The evidence given by professional builders disclosed a range of damage estimates from $500 to $4,316. Plaintiff Estel Goodin testified that the house was worth $14,000 less than it would be worth absent the defects. A landowner may testify as to the value of his land. State v. Hamer, (1936) 211 Ind. 570, 199 N.E. 589. A realtor testified that the house could be fixed for $500 to $700, and that as of the date of sale to the Goodins, it was worth from $40,000 to $45,000. Even accepting the argument of the Harpers that the Goodins used the $2,500 escrow account in the repair of the house, the verdict was within the scope of the evidence. Therefore, in accordance with our standard of review, this argument is untenable.
Issues III and IV. Slander of title
Under these arguments, Claspell argues that the jury award of $385 compensatory damages and $2,500 punitive damages in the slander of title action against him is not supported by sufficient evidence.
Slander of title actions are recognized in...
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