Terry v. Panek, 17128

• Decision Date: 02 June 1981
• Docket Number: No. 17128,17128
• Citation: Terry v. Panek, 631 P.2d 896 (Utah 1981)
• Parties: Steve Jay TERRY, Plaintiff and Respondent, v. R. Leland PANEK and Linda K. Panek, Defendants and Appellants.
• Court: Utah Supreme Court

Page 896

631 P.2d 896

Steve Jay TERRY, Plaintiff and Respondent, v.R. Leland PANEK and Linda K. Panek, Defendants and Appellants.

No. 17128.

Supreme Court of Utah.

June 2, 1981.

Matt Biljanic, Midvale, for defendants and appellants.

Heber Grant Ivins, American Fork, for plaintiff and respondent.

OAKS, Justice:

This appeal involves buyers' counterclaim for damages resulting from a seller's alleged breach of contract and fraud in the sale of real property.After hearing buyers' evidence on the counterclaim in a trial before a jury, the trial court dismissed the counterclaim for no cause of action, and buyers have appealed.The issue is the adequacy of buyers' proof of damages.We reverse.

Buyers, husband and wife, entered into an earnest money agreement with seller to purchase a house and 2.99 acres in Fairview, Utah, for $22,500.Buyers paid $20,000 at the time of closing, and executed a personal note for $2,500 due one year thereafter.When buyers defaulted on that note, seller began this action to enforce payment.Buyers counterclaimed, alleging that seller had promised property with two water wells and delivered property with only one well and that seller had falsely represented that the property had two wells.¹In their counterclaim, buyers sought to have their damages for breach of contract and fraud offset against the amount admittedly due on the note.

There was sufficient evidence of breach of contract and fraud to take the case to the jury on both of those issues.²The sufficiency of evidence on the issue of liability is not denied and is not in issue on this appeal.

The issue on this appeal is whether the trial court was correct in concluding that buyers had not presented sufficient evidence upon which the jury could make an award of damages for the absence of one water well.³The only relevant evidence on the issue of damages was buyer Linda Panek's testimony that seller told her that water wells on this property were each worth $3,500.Was that evidence a sufficient basis for an award of damages for breach of contract or fraud?

The measure of damages for breach of contract for the conveyance of land is the difference between the contract price and the market value at the time of the breach.Smith v. Warr, Utah, 564 P.2d 771(1977).The measure of damages for fraud is the difference between the value of property received and the value it would have had if the representations were true.Pace v. Parrish, 122 Utah 141, 247 P.2d 273(1952).On the facts of this case, evidence on the value of one water well would be relevant to either measure of damages.The value of one well would be good evidence of the difference between the market value of the property received (property with one well), and the contract price or value of the property represented (market value of property with two wells).

Seller argues that the dismissal should be affirmed since buyers' evidence of damages was too uncertain.That argument is unpersuasive since the principle seller relies upon ⁴ proscribes uncertainty on the causal connection between the wrong and the damage suffered, not uncertainty on the amount of damages.In Gould v. Mountain States Telephone & Telegraph Co., 6 Utah 2d 187, 193, 309 P.2d 802, 805(1957), this Court stated:

The rule against recovery of uncertain damages is generally directed against uncertainty with respect to cause rather than to measure or extent, so that a party who has broken his contract will not ordinarily be permitted to escape liability because of uncertainty in amount of damage resulting, and the fact that the full extent of damages for breach of contract must be a matter of speculation is not a ground for refusing all damages.⁵

Though an award based on total lack of evidence cannot be sustained, the fact that the evidence upon which a court awards damages is sparse is no reason to deny all recovery for a wrong.For example, in Thornton v. Pasch, 104 Utah 313, 317, 139 P.2d 1002(1943), this Court found that an admission that a construction project would require 1,230 tons of roofing material to cover 2,000 units was sufficient for a jury to determine the damages attributable to a breach of the construction contract.

In this case, buyers' testimony showed that seller had stated in connection with the sale of the property that the wells were worth $3,500 each.As to the issue of damages, it has long been the rule in Utah that a knowledgeable owner is competent to give evidence on the market value of his real property.Williams v. Oldroyd, Utah, 581 P.2d 561(1978);State Road Commission v. Dillree, 25 Utah 2d 184, 478 P.2d 507(1970);Provo River Water Users Ass'n v. Carlson, 103 Utah 93, 133 P.2d 777(1943).⁶The out-of-court admissions of an owner who is a party to the action, Rule 63(7),Rules of Evidence, fit within that rule and are therefore admissible against him on the issue of damages.The issue of fact raised by seller's denial that he made the statement regarding the value of the wells and the weight to be given to that statement (if found to be made) in view of seller's asserted lack of information on the value of wells are matters that can be appropriately evaluated by the trier of fact.

Seller also argues that Linda Panek's own testimony indicated that the buyers had no use for another well and therefore were not damaged by its absence.Even if seller's interpretation of the meaning of buyers' testimony is accurate, this argument would only have merit if it could be shown that the property was no more valuable with a...