Kaiser v. Fishman

• Decision Date: 14 March 1988
• Docket Number: No. 2,No. 1,1,2
• Citation: 138 A.D.2d 456,525 N.Y.S.2d 870
• Parties: Jay A. KAISER, Appellant, v. Jack FISHMAN, Respondent. (Action) Jack FISHMAN, Appellant-Respondent, v. Jay A. KAISER, Respondent-Appellant, et al., Defendants. (Action)
• Court: New York Supreme Court — Appellate Division

Page 870

525 N.Y.S.2d 870

138 A.D.2d 456

Jay A. KAISER, Appellant, v. Jack FISHMAN, Respondent. (Action No. 1)

Jack FISHMAN, Appellant-Respondent, v. Jay A. KAISER, Respondent-Appellant, et al., Defendants.

(Action No. 2)

Supreme Court, Appellate Division,

Second Department.

March 14, 1988.

Norman R. Berkowitz, New York City, for appellant in Action No. 1 and appellant-respondent in Action No. 2.

Richard D. Gaines, New York City, for respondent in Action No. 1 and respondent-appellant in Action No. 2.

Before MOLLEN, P.J., and BRACKEN, SPATT and SULLIVAN, JJ.

MEMORANDUM BY THE COURT.

In consolidated actions, inter alia, to recover damages for breach of contract and breach of warranties (Action No. 1) and to foreclose a mortgage (Action No. 2), (1) Jack Fishman appeals, as limited by his brief, from so much of a judgment of the Supreme Court, Suffolk County (Orgera, J.), entered July 2, 1985, as, after a nonjury trial, inter alia, is in favor of Jay A. Kaiser in the principal sum of $6,721.30, and declared the purchase money mortgage formerly due from Kaiser to Fishman be deemed satisfied, and (2) Kaiser cross-appeals from the same judgment on the ground of inadequacy, and from an order of the same court, dated March 26, 1984, which denied his motion to amend his complaint to add a new cause of action.

ORDERED that the appeal from the order is dismissed, without costs or disbursements; and it is further,

ORDERED that the judgment is reversed, without costs or disbursements, and a new trial is granted solely on the issue of damages, consistent herewith; the findings as to liability are affirmed.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the consolidated action ( see, Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647). The issues raised on appeal from the order are brought up for review and have been considered on the cross appeal from the judgment (CPLR 5501[a][1] ).

The parties entered into a contract pursuant to which Fishman agreed to complete the construction of a dwelling located at Dune Road in Westhampton, and Kaiser agreed to purchase the completed structure for a price of $190,000, which was to be financed in part by a $50,000 purchase money mortgage payable to the defendant. Fishman furnished Kaiser with a set of plans and specifications which were ultimately made part of the contract, and, with the exception of some minor, agreed-upon architectural changes, the contract provided that Fishman would build the dwelling in conformity with the plans. Shortly after the closing date, Kaiser took up residence in the dwelling and began to notice numerous defects in the structure, such as "the house shaked [sic ] excessively", and when people walked up the front steps or through the living room, the house would vibrate. Thereafter, Kaiser reported these and other problems to Fishman, and the parties attempted for some time to work things out on their own. After prolonged efforts failed to resolve the problems, the instant actions were instituted.

The credible evidence adduced at the trial of these consolidated actions established that the dwelling deviated considerably from the original plans and specifications, most notably in that the dwelling was built on 14 pilings rather than 20 pilings as called for in the plans, and that the floor joists on the first and second floors were made of "two by eights" rather than the "two by tens" called for in the plans. Further, it was proven that Fishman was aware of all substitutions and changes which were made on the dwelling. The court found that Fishman was liable for breaching the contract and awarded damages to Kaiser.

On this appeal and cross appeal, both parties challenge, on different grounds, the trial court's determination that the diminution in value, rather than the cost to cure the breach was the applicable measure of damages. Our review of the trial record and the relevant case law reveals that the trial court's determination was erroneous under the particular circumstances of this case. In concluding that the "value" method was the applicable measure of damages in this case, the trial court stated:

"Where the breach of a building contract is so substantial as to render the finished building unusable and unsafe, the measure of damages is the market price to cure the breach, but where the breach does not render the building unusable or unsafe and where the cost to cure is so out of proportion to the good to be attained, the damages are based on the difference between the value of the structure as built and that of the structure if built in accordance with the contract ( Bellizzi v Huntley Estates, 3 N.Y.2d 112, 164 N.Y.S.2d 395 )".

While we agree that these principles of law will generally be applied in circumstances where there has been substantial performance and the cost of completion or repair would be unreasonably wasteful, there are other factors which the...