Tillman v. Howell

• Decision Date: 30 March 1994
• Docket Number: Nos. 92-0259,92-2005,s. 92-0259
• Citation: 634 So.2d 268
• Parties: 19 Fla. L. Weekly D710 Norman L. TILLMAN and Judith A. Tillman, his wife, Appellants/Cross-Appellees, v. Michael J. HOWELL and Linda Howell, his wife, Appellees/Cross-Appellants.
• Court: Florida District Court of Appeals

Page 268

634 So.2d 268

19 Fla. L. Weekly D710

Norman L. TILLMAN and Judith A. Tillman, his wife Appellants/Cross-Appellees, v. Michael J. HOWELL and Linda Howell, his wife Appellees/Cross-Appellants.

Nos. 92-0259, 92-2005.

District Court of Appeal of Florida Fourth District.

March 30, 1994.

George P. Ord, Alley, Mass, Rogers & Lindsay, P.A., Palm Beach, for appellants, cross-appellees.

Richard A. Kupfer, Richard A. Kupfer, P.A., West Palm Beach, and Popkin & Shirpin, P.A., Boca Raton, for appellees, cross-appellants.

HERSEY, Judge.

Norman and Judith Tillman appeal from a final judgment of foreclosure of their mortgage held by Michael and Linda Howell. The Howells appeal from a final judgment for damages awarded to the Tillmans.

The Tillmans negotiated with the Howells to purchase a home being constructed by Michael Howell's construction company, Audobon Homes. The transaction was consummated, and, because closing took place before completion of construction, the Tillmans gave the Howells a promissory note in the amount of $110,000.00 secured by a mortgage on the premises. The purpose of this note was to ensure satisfactory completion of construction. The balance ($443,000.00) of the total purchase price of $553,000.00 was paid at closing.

The Tillmans moved in and began to encounter problems which they attributed to construction defects. They filed suit. During the pendency of that litigation, the house flooded, which was allegedly caused by leakage from an improperly connected water pipe. During the course of the repairs necessitated by that flooding, a second flood occurred when a carpenter installing the new baseboard accidentally drove a nail into a pipe.

When the note and mortgage came due, the Tillmans, because of the problems they had encountered, refused to pay the balance. Consequently, the Howells filed their foreclosure action.

The two cases were consolidated and tried together. Following the rehearing process, the following awards were made in an amended final judgment: In the foreclosure action, the Howells were awarded the principal sum of $110,000.00 together with interest in the amount of $42,229.84 for a total of $152,229.84; In the damages action, the Tillmans were awarded damages in the amount of $62,614.27 together with an amount of $22,000.00 for constructive eviction, resulting in a total award of $84,614.27.

The court then held that the Tillmans were entitled to have their award set off against the Howells' judgment, reducing their ultimate liability to $67,615.57 with interest from the date of the final judgment, August 15, 1991. Foreclosure was ordered. Orders were also entered on the respective parties' motions for attorneys' fees and costs.

During the trial process the court ruled that the Tillmans could not recover damages caused by the second flooding from the Howells because those damages resulted from an unforeseeable, independent intervening cause. As noted earlier, in February of 1989 the Tillmans experienced flooding problems due to an improperly soldered pipe connection. The flooding caused significant damage to some of the hardwood floors and cabinets. Near the end of the repair process, the trim carpenter, while nailing a baseboard, drove a nail through another water pipe which caused further flooding and further damage.

The Tillmans argue that the carpenter's negligence was foreseeable. They contend that the improperly soldered pipe necessitated repairs, and, as part of that particular repair process, they incurred additional damages. The Tillmans cite cases which hold that a negligent party is not absolved of liability when his/her conduct sets a chain of events causing injury in motion. See, e.g., Gibson v. Avis Rent-a-Car System, Inc., 386 So.2d 520 (Fla.1980). They also cite several cases which hold a tortfeasor liable for injuries the plaintiff incurs as a result of intervening medical malpractice. See, e.g., Stuart v. Hertz Co., 351 So.2d 703 (Fla.1977).

The Howells maintain that the question of what is an independent, intervening cause is a question for the fact finder, and that the cases cited by the Tillmans merely support sending the question to the fact finder instead of deciding the proximate cause issue as a matter of law. Secondarily, the Howells complain that the Tillmans did not give them a chance to fix the floor, and rather hired their own coterie of workers to repair the damage. They also argue that after the first flood the Tillmans replaced the floor with a much more expensive one, and therefore the Howells believe they should not now have to pay that much more for the damages.

We agree with the result reached by the trial court and advocated on appeal by the Howells, but not for the stated reasons. See Applegate v. Barnett Bank of Tallahassee, 377 So.2d 1150 (Fla.1979). The Tillmans' action is based upon breach of contract. In a case involving unfinished construction, the supreme court, in Grossman Holdings Ltd. v. Hourihan, 414 So.2d 1037 (Fla.1982), adopted subsection 346(1)(a) of the Restatement (First) of Contracts (1932) as the law of Florida in measuring damages in an action for breach of contract. That subsection provides:

(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.

While Grossman involved a suit by an owner against a contractor for unfinished construction, the rationale has been applied to causes of action involving construction defects as well. See Tree Const. Corp. v. Caplinger, 446 So.2d 245 (Fla. 4th DCA 1984); see also Andalora v. Lindenberger, 576 So.2d 354 (Fla. 4th DCA 1991).

As early as 1854, as explained in Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854), the damages recoverable for breach of contract have been limited to:

those which are the natural and proximate result of the breach, or which, in the ordinary course of events, would naturally result from a breach, and can reasonably be said to have been foreseen or contemplated by the parties at the time when they made the contract as a probable or natural result of a breach....

(Citation and footnotes omitted.) Further it is said that "damages which do not arise naturally from a breach of the contract, or which were not within the reasonable contemplation of the parties at the time the contract was made, are not recoverable." Williams v. Atlantic Coast Line R. Co. 56 Fla. 735, 48 So. 209, 211 (Fla.1908), citing Brock v. Gale, 14 Fla. 523 (Fla.1874).

In essence it may be said that under present Florida law one liable for the tort of negligence must answer for all of the natural, direct and proximate consequences of his tortious conduct, whereas one who breaches a contract is answerable only for damages that were or reasonably should have been in the contemplation of the contracting parties. Application of that principle to this issue on appeal requires an affirmance.

In sorting out the conflicting damage claims, the trial court determined that prejudgment interest should be added to the amount due on the promissory note before offsetting that figure against the Tillmans' damages for construction defects. This was error. The purpose of the note and mortgage was to ensure satisfactory completion of construction. To the extent that performance was less than satisfactory and the structure defective, there was a failure of consideration. The amount due on the promissory note should have been reduced by the construction damages before computation of an amount for prejudgment interest. See Konover v. Hochman, 439 So.2d 994 (Fla. 4th DCA 1983). See also, semble, Manning v. Clark, 89 So.2d 339 (Fla.1956). As to this point on appeal we reverse.

The trial court refused to permit the Tillmans to recover prejudgment interest because it was not pled. The cases cited in support of that holding all predate Argonaut Ins. Co. v. May Plumbing Co., 474 So.2d 212 (Fla.1985), the landmark case on this subject. Prejudgment interest is an element of damages, not a cost or a fee, and its entitlement follows any award for liquidated damages. We have discussed but have never before clearly ruled on this issue. See Napp v. Carman, 576 So.2d 361 (Fla. 4th DCA 1991); Otis Elevator Co. v. Scott, 551 So.2d 489 (Fla. 4th DCA 1989), disapproved on other grounds, 572 So.2d 902 (Fla.1990). We do so now and hold that it...