Opinion
C.A. No. 98A-11-013-NAB.
Submitted: December 16, 1999.
Decided: January 3, 2000.
Appeal of a Decision of the Court of Common Pleas. Affirmed.
Darryl K. Fountain, Esquire, Wilmington, Delaware, for the Appellant.
Arthur F. DiSabatino, Esquire, Ament, Lynch Carr, Wilmington, Delaware, for the Appellee.
ORDER
Hermann Hanner (Hanner or Appellant) has appealed to this Court a decision of the Court of Common Pleas finding Hanner in breach of a contract between himself and Michael T. Rice (Rice or Appellee) and liable for compensatory damages. Having reviewed the parties' submissions, as well as the record below, the Court concludes that the trial court's decision must be affirmed.
FACTS
On August 25, 1997, the parties entered into a contract in which Hanner agreed to demolish Rice's one-car garage and construct a two-car garage attached to Rice's home located at 14 Karlyn Drive, New Castle, Delaware. The cost of construction was $13,000. Before work began, Rice paid Hanner $6500, half the total cost. Hanner subcontracted the entire project to a Mr. Buster Snow, who tore down the old garage, poured a new concrete slab and footings, and framed three walls. At this point, Rice was unhappy with the way the job was progressing and discharged Hanner by way of letter dated October 23, 1997.
Rice then obtained bids from two other contractors, both of whom found defects in the new concrete slab and the frame construction. Rice hired the contractor who submitted the lower id of $11,500 to correct the defects and complete the job.
Rice subsequently filed suit against Hanner for breach of contract and compensatory damages. In response, Hanner alleged wrongful termination and counterclaimed for $6500, the unpaid cost of the job.
At a bench trial in the Court of Common Pleas on October 5, 1998, Rice testified on his own behalf and presented the testimony of two other contractors who assessed the construction. Hanner testified on his own behalf, and presented the testimony of Filbert Michael Pinder, New Castle County Code Inspector. Hanner's subcontractor, Buster Snow, did not testify.
The evidence fairly showed the following problems. In demolishing the garage, the subcontractor cut into the roof of the house but failed to adequately repair the damage, resulting in a leaky roof. The trash and debris from the demolition of the old garage were not removed from Rice's property. The ditch for the footings was not dug properly and did not pass inspection until the third time. The new concrete slab was neither square nor level, which in turn caused problems with the frame. The top of the frame was not level with the bottom, and the windows were also askew. Last but not least, the garage was framed for a one-car garage, rather than the agreed-upon two-car garage.
On October 23, 1998, the trial court entered judgment in favor of Rice in the amount of $6,932, plus interest and costs. The calculation of damages included the initial payment of $6500, minus $1500 for the value of the slab, plus $1932 for materials. Hanner filed a timely appeal to the Superior Court, pursuant to 10 Del. C. § 1326.
STANDARD OF REVIEW
Appeals of decisions of the Court of Common Pleas to the Superior Court are on the record. This Court is limited to correcting errors of law and determining whether the factual findings are supported by substantial evidence. Substantial evidence is relevant evidence that a reasonable person might accept as adequate to support a conclusion. This Court is not to weigh the evidence, determine questions of credibility or make its own factual findings. Questions of law are reviewed de novo.
Title 10 Del. C. § 1326 (c); Superior Court Civil Rule 72(g).
Shahan v. Landing, Del. Supr., 643 A.2d 1357 (1994).
Oceanport Ind. v. Wilmington Stevedores, Del. Supr., 636 A.2d 892, 899 (1994).
Johnson v. Chrysler Corp., Del. Supr., 213 A.2d 64, 66 (1965).
Wilson v. Sico, Del. Supr., 713 A.2d 923, 924 (1998).
ISSUE
On appeal, Hanner does not dispute his liability. Rather, he argues that the trial court erred in finding that Rice could not have mitigated the damages because of the pervasive inadequacies of the construction. Hanner asserts that Rice could have mitigated the damage either by discharging Hanner as soon as problems were observed or by accepting Hanner's assurances about the mistakes and not discharging him at all. For these reasons, Hanner argues that the trial court erred in not including Rice's alleged failure to mitigate in the calculation of damages. Rice argues that the trial court's findings as to mitigation are properly supported by the evidence.DISCUSSION
Under the common law of contracts, the measure of damages has always been tempered by the rule requiring the injured party to minimize, that is, mitigate, the losses, although the party causing the breach must pay for the cost of mitigation. In Delaware, the duty to mitigate exists even in the absence of an express mitigation clause in the contract. However, the duty to mitigate is subject to the rule of reasonableness under the circumstances.
Katz v. Exclusive Auto Leasing, Inc., Del. Super., 282 A.2d 866, 868 (1971).
E.I. du Pont de Nemours Co. v. Allstate, Del. Supr., 686 A.2d 152, 156 (1996) (citing Monsanto Co. v. Aetna Cas. and Surety Co., Del. Super., C. A. No. 88C-JA-118, 1993 WL 563248, Ridgely, P.J. Dec. 9, 1993)).
American General v. Continental Airlines, Del. Ch., 622 A.2d 1, 11 (1992); Lynch v. Vickers Energy Corp., Del. Supr., 429 A.2d 497, 503 (1981), rev'd on other grounds.
In the case at bar, the trial court found as follows:
[T]here was sufficient reason for Rice to discharge Hanner when he saw the poor quality of work being performed. The court further finds and concludes that Rice did what was appropriate in the circumstances and that he could not mitigate damages since the construction was done in such poor fashion that the new contractor . . . was required to dismantle the construction which had been completed and, in essence, begin the construction anew on the slab.
Hanner v. Rice, Del. CCP, C. A. No. 98-05-363, Fraczkowski, J. (Oct. 23, 1998) at 3.
The Court also noted that if Rice had not accepted the new concrete slab in its aberrant condition, the measure of damages against Hanner would have been even greater. The record supports these findings. Rice approached Hanner several times to register his dissatisfaction before discharging him on October 23, 1997. In response to Rice's concerns, Hanner indicated either that the problems would be corrected or that there was no problem: "As [Hanner] went along with the work, I pointed things out to him, and his response was always either, he would correct it, or Buster said that this is the way it's to be done, and so on." Rice also stated that "[m]e and Mr. Hanner sat in my dining room and I went over the different things with him."
Id.
Transcript of Proceedings, May 20, 1999, at 68, subsequently referred to as "Tr. at page no."
Tr. at 69.
Nevertheless, the problems were not corrected. Hanner had told Rice that the work would take three months to complete, which would have been the end of November. Rice discharged Hanner in the third week of October. Having asked Hanner to fix the problems, Rice decided not to stop the job. As he stated at trial, "I wasn't going to wait until I had a building that wasn't up to standard to be completed before I said, Hey, look, I want you to stop."
Tr. at 67.
Mitigation requires reasonable action under the circumstances. "All that is required of the nondefaulting party in measuring his damages is that he act reasonably so as not unduly to enhance the damages caused by the breach. . . . [I]f the court decides that the nondefaulting party has made reasonable efforts to minimize the defendant's damages, the award will not be limited by the doctrine of avoidable consequences.
22 Am. Jur.2d, Damages § 507 (1987).
In this case, Hanner was aware of Rice's dissatisfaction, but did nothing. His inaction is fatal to his argument on appeal to this Court. As the work continued, the problems multiplied. Rice reasonably concluded that the garage, if completed by Hanner (and his subcontractor Snow), would be a costly, unattractive mistake. The Court is satisfied that Rice acted reasonably when he discharged Hanner on October 23, 1997. The trial court's findings are supported by the evidence, and the calculation of damages is both factually and legally sound.
CONCLUSION
For all these reasons, the decision of the Court of Common Pleas must be and hereby is AFFIRMED .
It Is So ORDERED .