Summary
In Taylor, the parties negotiated a land sale and the seller then agreed to reduce the price by $60,000 in exchange for the buyer's promise to connect the land conveyed to a sewer service.
Summary of this case from Western Insulation v. MooreOpinion
49653 Record No. 931255
September 16, 1994
Present: All the Justices
In this breach of contract action the trial court erred in granting a motion to strike the evidence based on its finding that the plaintiff had failed to establish sufficient evidence of its damages and that ruling is reversed.
Contracts — Breach — Damages — Measure of Damages — Evidence — Motion to Strike — Construction
The parties entered into a written contract for the sale of two parcels of undeveloped land to a developer. The seller retained ownership of two other parcels of undeveloped land adjacent to that being sold. The parties amended their contract to provide that the seller agreed to reduce the purchase price of the transaction in consideration of the buyer's bringing city sewer service from an existing pump station and constructing three sewer "stub-outs" within a year of the closing date on the property. The developer failed to construct the improvements and sold the property to another entity. The seller sought damages for breach of contract for the cost of construction of the sewer line. In a bench trial, the parties stipulated that the buyer did not construct any portion of the sewer system and the only issue raised by the developer was whether the seller had proved its damages. The seller rested its case without introducing estimates of the cost of construction that had been prepared and without presenting witnesses to testify as to the amounts of the estimates. The buyer presented evidence, including testimony of a civil engineer that he had prepared two construction estimates for the developer. He estimated that the total cost of bringing the sewer from the pump station would be $156,450. At the conclusion of all the evidence, the developer renewed its motion to strike, which the trial court granted based on its finding that the seller had not adequately proved its damages. The seller appeals.
1. Since the developer introduced evidence on its own behalf following its motion to strike at the conclusion of the seller's case, it waived its right to rely on that initial motion to strike.
2. Thus, in determining whether the seller's evidence was sufficient to raise an issue of fact for the trial court's determination, all evidence in the record must be viewed in the manner that will give the seller the benefit of all substantial conflict in the evidence and all fair inferences that may be drawn therefrom.
3. Damages need not be established with mathematical certainty, but a plaintiff is required only to furnish evidence of sufficient facts to permit the trial of fact to make and intelligent and probable estimate of the damages sustained.
4. The proper measure of damages in this case is the sum it would cost to bring the sewer system to the property line as specified in the amended contract.
5. The amount of the price reduction of the land sold was not agreed to by the parties as liquidated damages, and the plaintiff remains subject to the rule that a plaintiff has the burden to prove the amount of damages with reasonable certainty.
6. While the plaintiff did not present evidence of damages before it rested its case, evidence relevant to the proper measure of damages was introduced through the developer's witness, who provided the trial court with evidence of the approximate cost to put the seller in the same position as if the contract had been performed.
7. Thus, granting the seller the benefit of all reasonable inferences from the evidence, the trial court erred in granting the motion to strike because the record as a whole provided sufficient evidence of the amount of the seller's damages to raise an issue of fact for the trial court's determination.
8. On remand, the trial court must weight the evidence in the present record and determine the amount of damages, if any, proved by a preponderance of the evidence.
Appeal from a judgment of the Circuit Court of the City of Virginia Beach. Hon. Phillip L. Russo, judge designate presiding.
Reversed and remanded.
Stephen G. Test (James T. Lloyd, Jr.; Clark Stant, on briefs), for appellants.
Barry Randolph Koch (McCardell Inman, on brief), for appellees.
The sole issue in this breach of contract case is whether the trial court erred in granting a motion to strike the evidence based on its conclusion that the plaintiff had failed to establish sufficient evidence of its damages.
In February 1986, the Estate of A.T. Taylor (Taylor) entered into a written contract with Flair Property Associates (Flair) for the sale to Flair of two parcels of undeveloped real property in the City of Virginia Beach. The agreed purchase price was $939,900. Taylor retained ownership of two parcels of undeveloped land adjacent to the property being sold to Flair.
Taylor and Flair later amended their contract to provide that Flair would construct a sewer system on the land being conveyed, which would benefit Taylor's retained parcels. The amended contract provided:
Seller [Taylor] agrees to reduce the purchase price by SIXTY THOUSAND DOLLARS ($60,000) in consideration of Buyer's [Flair's] bringing City sewer service from the existing pump station, at the southwest corner of the Derby Run Mobile Trailer Park, down an easement between Harper Square Apartments and Derby Run Mobile Trailer Park and, in addition, Buyer constructing three sewer stub-outs . . . as more specifically set forth in the engineering plans . . . made a part of this Amended Agreement.
In the amended contract, the parties further agreed that Flair would complete this work within 12 months of the October 29, 1986 closing date.
The property was conveyed to Flair pursuant to the amended contract. However, despite several written demands by Taylor, Flair never constructed the improvements and eventually sold the property to another entity. In September 1991, Taylor and its successors in interest filed a motion for judgment against Flair and its general partners, seeking damages for breach of contract for the "cost for construction and installation of the sewer line," plus interest and costs.
In a bench trial, the parties stipulated that Flair did not construct any portion of the sewer system required by the amended contract. The only issue that Flair raised at trial was whether Taylor had proved its damages.
In presenting its case, Taylor placed several documents into evidence, including the contract, the amended contract, and Taylor's written demands for compliance. However, Taylor rested its case without introducing into evidence either of two written engineering estimates reflecting the cost to construct the sewer improvements. Further, none of the witnesses presented by Taylor testified as to the amount of these estimates.
After Taylor concluded its case in chief, Flair moved to strike the evidence, arguing that Taylor had presented "no proof of any damages whatsoever." The trial court overruled the motion and Flair presented evidence on its own behalf.
James R. Fox, a civil engineer previously employed by Talbot Associates, Ltd., testified that he prepared two sewer construction estimates for Flair. In his final written estimate, introduced into evidence by Flair, Fox estimated that the total cost of bringing the sewer from the pump station would be $156,450.
During cross-examination, Taylor's counsel had Fox identify his earlier, less-detailed written estimate for the same job, which put the projected cost of this construction at $63,600. On motion of Taylor's counsel, the trial court received this estimate into evidence.
Fox also testified that his estimates represented "in the area of what we feel the cost should be to install these improvements, and the owner or developer at that time normally would go out and secure two or three bids from various contractors to get an actual cost." He stated that his cost estimates are based on information compiled by Talbot Associates from bids for similar work.
Fox also stated that these estimates incorporated the cost of ten-inch pipe, rather than eight-inch pipe. The larger pipes were required to accommodate the residential apartment construction contemplated by Flair on its own parcel. Fox testified that, if Flair had not intended to develop its property as an apartment complex, less expensive eight-inch sewer pipe suitable for property zoned for business use could have been employed to serve the Taylor parcels.
At the conclusion of all the evidence, Flair renewed its motion to strike. After taking the case under advisement, the trial court granted the motion to strike based on its finding that Taylor had not adequately proved its damages. This appeal followed.
Taylor argues that the trial court erred in striking its evidence and contends that evidence of the $60,000 reduction in purchase price constituted proof of its damages for the work not performed by Flair. Since the amount of this price reduction was agreed to by both parties based on Fox's estimates of the cost to complete the work, and since those estimates were received into evidence, Taylor argues that it sufficiently proved damages in the amount of $60,000.
In response, Flair argues that Taylor was required to prove the actual cost to complete the construction of the sewer system. Flair contends that Taylor did not present sufficient evidence to satisfy this measure of damages.
[1-2] Initially, we review the procedural context in which this issue arises. Since Flair introduced evidence on its own behalf following its motion to strike at the conclusion of Taylor's case, Flair has waived its right to rely on that first motion. Spiegelman v. Birch, 204 Va. 96, 97, 129 S.E.2d 119, 120 (1963); Carroll v. Richardson, 201 Va. 157, 158, 110 S.E.2d 193, 194 (1959); Interstate Veneer Co. v. Edwards, 191 Va. 107, 110, 60 S.E.2d 4, 6 (1950). Thus, in determining whether the trial court erred, we consider all the evidence, instead of only the evidence presented in the plaintiff's case-in-chief. Spiegelman, 204 Va. at 97, 129 S.E.2d at 120; Interstate Veneer Co., 191 Va. at 110, 60 S.E.2d at 6. In doing so, we view the evidence in the manner that will give Taylor " 'the benefit of all substantial conflict in the evidence, and all fair inferences that may be drawn therefrom.' " Hadeed v. Medic-24, Ltd., 237 Va. 277, 280-81, 377 S.E.2d 589, 590 (1989) (quoting Matney v. Cedar Land Farms, Inc., 216 Va. 932, 933-34, 224 S.E.2d 162, 163 (1976)).
Damages need not be established with mathematical certainty. Rather, a plaintiff is required only to furnish evidence of sufficient facts to permit the trier of fact to make an intelligent and probable estimate of the damages sustained. Bulala v. Boyd, 239 Va. 218, 232-33, 389 S.E.2d 670, 677 (1990); Thomas P. Harkins, Inc. v. Reynolds Assocs., 221 Va. 1128, 1131-32, 277 S.E.2d 222, 224 (1981); Gwaltney v. Reed, 196 Va. 505, 507-08, 84 S.E.2d 501, 502 (1954).
As Flair has acknowledged, both on brief and in oral argument, the proper measure of damages in this case is the sum that would put Taylor in the same position, as far as money can do it, as if the contract had been performed. Bryant v. Peckinpaugh, 241 Va. 172, 178, 400 S.E.2d 201, 205 (1991); United Va. Bank v. Dick Herriman Ford, Inc., 215 Va. 373, 375, 210 S.E.2d 158, 160 (1974). Here, that sum would be the cost to bring the sewer system to the property line as specified in the amended contract.
We reject Taylor's contention that evidence of the $60,000 price reduction, of itself, constituted sufficient proof of its damages. This argument effectively asks us to treat the price reduction as a provision for liquidated damages. Although parties to a contract may agree in advance to an amount of liquidated damages, which will be enforced if it does not constitute a penalty, 301 Dahlgren Ltd. Partnership v. Board of Supervisors, 240 Va. 200, 202-03, 396 S.E.2d 651, 653 (1990), Taylor and Flair made no such provision here. Therefore, Taylor remains subject to the well-established rule that a plaintiff has the burden to prove the amount of damages with reasonable certainty. See Dillingham v. Hall, 235 Va. 1, 3-4, 365 S.E.2d 738, 739 (1988).
While Taylor did not present evidence of damages before it rested its case, evidence relevant to the proper measure of damages was introduced through Flair's witness, Fox. Fox's testimony, and his written estimates of the cost of construction, provided the trial court with evidence of the cost to put Taylor in the same position as if the contract had been performed.
This evidence concerning the cost of the sewer system was uncontroverted except for testimony suggesting that smaller pipe might be used at less expense. Thus, granting Taylor the benefit of all reasonable inferences from the evidence, as we must in this procedural context, we conclude that the trial court erred in granting the motion to strike. The record as a whole provided sufficient evidence of the amount of Taylor's damages to raise an issue of fact for the trial court's determination.
We note, however, that Flair's argument concerning the size and cost of the sewer pipe is relevant to the weight ultimately to be given the evidence on remand of this case. Therefore, Fox's testimony that eight-inch pipe could be used, as well as the absence of any evidence indicating what reduction in cost could be expected as a result of this change, are facts that the trial court must weigh together with all the other evidence presented.
Also, Flair's additional argument, that the sewer improvements could be made at a lower cost by bringing service to the Taylor property from another location, need not be examined here. While we note that Flair presented no evidence of an actual substitute route, or of the cost of using such a route, we do not consider the merits of the argument because it, too, is an attack on the weight ultimately to be given the evidence, rather than its legal sufficiency on the motion to strike. On remand, the trial court must weigh the evidence in the present record and determine the amount of damages, if any, proved by a preponderance of the evidence.
For these reasons, we will reverse the trial court's judgment and remand the case for further proceedings in accordance with the principles expressed in this opinion. Reversed and remanded.
We do not consider Taylor's argument that the trial court erred in admitting certain parol evidence, since this issue was not raised by separate assignment of error and is not within the scope of the error assigned here. See Rule 5:17 (c).