Ray v. Strawsma

• Decision Date: 18 June 1987
• Docket Number: No. 74417,74417
• Citation: 359 S.E.2d 376,183 Ga.App. 622
• Parties: RAY et al. v. STRAWSMA.
• Court: Georgia Court of Appeals

Page 376

359 S.E.2d 376

183 Ga.App. 622

RAY et al. v. STRAWSMA.

No. 74417.

Court of Appeals of Georgia.

June 18, 1987.

Rehearing Denied July 10, 1987.

Certiorari Denied Sept. 8, 1987.

Peter J. Rice, Jr., Eatonton, for appellants.

E. Angela Emerson, Milledgeville, for appellee.

BIRDSONG, Chief Judge.

The appellants Anthony and Brenda Ray contracted with the appellee Ron Strawsma (d/b/a Strawsma Construction Company) to build a house. The appellee built the house. The appellants moved into the house and lived in the house. The appellants refused to pay the appellee. This matter was tried before a jury and the jury found against them.

Strawsma Construction Company contended in its suit that the original contract price was $119,600; additions totalled $7,371.53; total contract price thus amounted to $126,971.53. Appellants paid Strawsma $95,000 before disengaging him, leaving a balance owed of $31,971.53, but their cost of completion was $5,148.00, leaving the "alleged balance" due Strawsma of $26,823.53. Appellants counterclaimed for repairs to a security alarm system allegedly damaged by Strawsma or his agents, and for latent defects not discovered or discoverable prior to termination date of the contract. Appellants' expert Clapp testified there were flaws and defects which could not be repaired such as out-of-plumb walls and unlevel floors; this witness testified that for $30,450 he might be able to raise the quality of the house from poor to average. Another witness, Dumas, attempted to testify as to diminution in value resulting from those defects that could not be repaired. The trial court refused to admit Dumas' opinion for the reason that diminution in value resulting in defects which could not reasonably be repaired, is not probative of value because the measure of damages is "the difference in the value of the house as delivered by the plaintiff contractor and the value of the house as it ought to have been finished under the terms of the contract." See Rose Mill Homes v. Michel, 155 Ga.App. 808, 273 S.E.2d 211. Appellants complain of this and other alleged errors. Held:

1. The trial court erred in refusing to allow the witness Dumas to give his opinion of diminution in value resulting from defects which could not reasonably be remedied. It is true that the measure of damages in these cases of alleged breach by the contractor is the difference in the value of the house as completed by the contractor and the value of the house as it ought to have been finished under the terms of the contract. Rose Mill Homes, supra. However, this is the measure of damages; but proof of such value difference is a different matter. This difference in value may be "illustrated" by the reasonable cost of repair of defects (id., p. 808, 273 S.E.2d 211; Hutto v. Shedd, 181 Ga.App. 654, 656, 353 S.E.2d 596); that is, by deducting from the contract price the sum which would be required to complete the house according to the contract. Rose Mill Homes, supra. Thus, the "sum required to make the [building] conform to the specifications fixed by the contract" is generally the measure of damages (different in value as contracted for and as delivered), but the object of such evidence is "to enable the jury to reach a verdict reflecting the difference in value.... 'Value may be shown by the testimony of experts, or by other testimony as to the nature of the injuries sustained and as to the material and labor supplied; and testimony as to the actual cost is admissible, such cost being a circumstance which may be considered by the jury in determining such value, under their right to weigh all the facts and circumstances bearing upon that question, and to form their own judgment on the data in evidence.' [Cits.]" Wilson v. Black, 114 Ga.App. 735, 737-738, 152 S.E.2d 755.

The evidence offered by the defendant homeowners in this case showed that there were defects which could not be reasonably repaired, such as out-of-plumb walls and unlevel floors. The case of Small v. Lee & Bros., 4 Ga.App. 395, 61 S.E. 831, involved a variance from the contract (defect) which could not be repaired. It was complained that the jury charge excluded from the consideration of the jury "what it would take to make the house as built conform to the house as contracted for." Id., p. 396, 61 S.E. 831. We concluded the measure of damages "must necessarily vary with the facts of the particular case and be determined according to these facts." Id., p. 397, 61 S.E. 831. We held: "Where the defects in the house as constructed may be remedied at a reasonable expense, it would be proper, we think, to deduct from the contract price the sum which it would cost to complete it according to the requirements of the plans and specifications. [Cit.] If the contractor has built a structure substantially adapted to the purposes for which it was built, and of which the owner is in the use and enjoyment, but the defects of the structure can not be made to conform strictly to the requirements of the contract, except by an expenditure which would deprive the contractor of adequate compensation for his labor and materials, justice and equity would require the adoption of another measure of damages." Id., p. 397, 61 S.E. 831.

We think this rule is correct whether the house is "substantially adapted" to its purpose and the owner is getting the benefit of it, as in Small v. Lee, or whether it is allegedly "worthless." It has some value, if only for scrap (see Hutto v. Shedd, supra, 181 Ga.App. at p. 656, 353 S.E.2d 596), and that value may obviously be whatever it is worth as a result of the irremediable defects. The owner should not have the benefit of that value, however low, by recovering the entire contract price; the property's value as diminished by irremediable defects should be deducted from the value of the house as it should have been completed according to the contract.

This is not a new rule, nor is it necessarily limited to breach of contract cases. See Georgia-Car. Brick, etc., Co. v. Brown, 153 Ga.App. 747, 756, 266 S.E.2d 531. In Allgood Rd. etc., Church v. Smith, 173 Ga.App. 28, 29, 325 S.E.2d 392, which involved damage to property due to negligence, we said: " 'Questions of value are peculiarly for the determination of the jury, where there is any data in the evidence upon which the jury may legitimately exercise their "own knowledge and ideas." [Cit.]' ... The general rule for the measure of damages involving real property is the diminution of the fair market value of the...