Opinion
No. 99-832.
January 12, 2000.
APPEAL FROM CIVIL DISTRICT COURT, PARISH OF AVOYELLES, NO. 98-5255, STATE OF LOUISIANA, HONORABLE KERRY L. SPRUILL, JUDGE.
Michael J. Johnson, Attorney at Law, 7169 Hwy 115, Bunkie, LA 71322, COUNSEL FOR PLAINTIFF/APPELLEE.
Renee Roy, Attorney at Law, P.O. Box 501, Mansura, LA 71350, COUNSEL FOR DEFENDANTS/APPELLANTS
(Court composed of Judge Doucet, C.J.; Judge Peters; Judge Sullivan)
This litigation began as a breach of contract suit filed by Cottonport Building Supply, an Avoyelles Parish corporation, against Karl Gaspard and Elizabeth Guy, also residents of Avoyelles Parish. In its suit, Cottonport Building Supply sought to recover the unpaid balance of a residential building contract entered into between the parties to the litigation. Mr. Gaspard and Ms. Guy answered the suit and reconvened against Cottonport Building Supply, asserting that Cottonport Building Supply breached the contract, causing them monetary damages. After a trial on the merits, the trial court rendered judgment in favor of Cottonport Building Supply and against Mr. Gaspard and Ms. Guy in the amount of $36,354.82. Mr. Gaspard and Ms. Guy appeal the judgment.
Karl Gaspard and Elizabeth Guy (hereinafter sometimes referred to as "homeowners") have resided together for a number of years and are co-owners of immovable property located in Avoyelles Parish. In the first half of 1997, they decided upon a residential house plan and approached Pierre Gauthier, the president of Cottonport Building Supply (hereinafter sometimes referred to as "contractor"), to build the house.
On July 20, 1997 the homeowners and the contractor entered into a contract wherein Cottonport Building Supply agreed to build the residence for the sum of $99,440.00. The contract provided that the homeowners would pay one-third of the contract price upon the pouring of the concrete slab; one-third after the structure was "blacked out;" and one-third upon completion. Subsequent to the initial agreement, the parties increased the contract price to $108,340.00 to compensate for the addition of a carport to the construction plans. This addition had the effect of increasing the three installment payments to approximately $36,000.00 each. Construction commenced in late July of 1997, with Mr. Gauthier informing the homeowners that the residence should be complete in three to four months. This was not to be the case. The construction continued on into the next year, and finally, on March 11, 1998, Mr. Gaspard refused to allow the construction crew access to the property. At that time, the homeowners had paid the contractor a total of $82,000.00 and the residence was still not complete.
Cottonport Building Supply then instituted suit to recover an additional $44,397.75 which it asserted remained due under the contract. The contractor claimed it had performed its obligations pursuant to the contract terms, and it was prevented from completing final construction by the homeowners. In their reconventional demand, the homeowners asserted that poor workmanship and lack of supervision caused them to order the construction crew from the property. They contend that the construction process was so defective as to amount to a breach of the contract by Cottonport Building Supply. They sought as damages the cost of completing the construction (including the cost of repairing the defective workmanship), reimbursement for items they purchased and supplied to the contractor, general damages, and attorney fees.
Although the homeowners contracted with Cottonport Building Supply for the residence construction, all of the work was performed by subcontractors. According to Mr. Gauthier, Cottonport Building Supply normally works with the same subcontractors, and he merely functions as a supervisor. However, because of the long-standing relationship between Cottonport Building Supply and the subcontractors, he seldom found it necessary to visit the job site and only did so when called.
According to Mr. Gauthier, there were no out-of-the ordinary complaints or unusual problems during the construction of the house. However, he did admit that immediately after construction began, Ms. Guy complained that there were no temporary bathroom facilities on the construction site, and this oversight created an unsanitary situation. Mr. Gauthier acknowledged that no portable facility had been provided, and after the complaint, he still did not place one on the premises. Instead, he simply allowed the workers to construct a plywood screen and continue to use the land for the workers to relieve themselves. Other early complaints from the homeowners related primarily to problems associated with the workers not properly keeping the construction site clean. Mr. Gauthier's reaction was simply to instruct the subcontractors to pick up the debris and haul it off.
Although Mr. Gauthier testified that there were no unusual problems, he acknowledged that he spoke to the homeowners two to three times per week concerning complaints and that many of the complaints were valid. He further testified that in each instance, he tried to have the subcontractors address the complaints.
By late February, 1998, the homeowners had paid the contractor the first two $36,000.00 installments and a $10,000.00 advance on the last installment. Still their residence was not complete. On February 24, 1998, the homeowners supplied Mr. Gauthier with a written list of items needing his immediate attention. The text of the letter read as follows:
Dear Mr. Gauthier:
As per our conversation on February 23, 1998, here is a list of uncompleted items that have come to our immediate attention as of date:
1. Front door and back door need to be changed out due to damage.
2. Light in laundry room needs to be installed (present at building site).
3. Light over sink in kitchen needs to be changed out (New light has been provided by us and is present at building site).
4. Light in down-stairs hallway needs to be installed (also present at building site).
5. Base-boards need repainting, and shoe molding needs to be installed except in master bedroom until marble man has completed his job.
6. Remainder of door knobs purchased by us (reimbursement by receipts at end of job) need to be installed.
7. Dead bolt on front and back door need to be installed (Door locks and dead bolts need to be matching keys).
8. Fan blades on fan in kitchen area need to be reversed to white side down and FAN DOES NOT WORK?
9. We[sic] need to meet with electrician about outside lights. We have a few questions.
10. Hand rails and stairway need to be finished by painter to avoid stain or paint getting on carpet we are installing.
11. As discussed with your vinyl installers, shutter's[sic] need to be installed on upstairs bedroom windows on both sides of house.
13.[sic] Towel bars which were purchased by us (reimbursement by receipt at end of job at reasonable and customary charges) need to be installed.
14. Mirrors in bath rooms (3) need to be ordered and installed.
15. Porch railing around house is not completely installed nor is it painted.
16. All outside painting needs to be completed (front and back doors after changed out due to damage, and porch railings).
17. A SHOWER DOOR NEED[sic] TO BE INSTALLED IN MASTER BATHROOM SHOWER (AS SHOWN IN HOUSE PLANS) !!!!
We are both anxious for move in as this job has been extended much longer than initially anticipated. We are also anxious due to unexpected request by you for an additional $10,000.00 in which we paid to you on January 29, 1998. As you recall, this additional payment was not consistent with our original agreement with you. This amount was paid in advance as a curteosy[sic] to you, and now we are asking for your undivided attention and supervision in completing this job.
Also, due to the fact that this house was contracted as a turn-key job, and that we have already spent a total of four (4) full days cleaning up after workers on our own time since the beginning of this building process, we are sure you can understand our concern about the condition of the house at the final move-in date. We expect to be able to move in with no cleaning on our part necessary. We believe this request is not beyond the reasonable and customary standard for a contracted "turn-key" job.
We will keep you apprised[sic] of any additional unfinished items which may come to our attention.
Mr. Gauthier testified that upon receipt of the letter, he contacted the subcontractors responsible for the areas of complaint and requested that they take the appropriate action. He considered the items a "punch list," which he described as the final items needing attention before the contract would be complete. However, before they could complete these items, the homeowners ordered them from the property. The homeowners had a different view of the construction process. Mr. Gaspard testified that the temporary bathroom facility problem was simply the first of a long series of problems improperly or inadequately addressed by the contractor. Placing the plywood screen as a modesty screen simply compounded the already unsanitary situation. This basic oversight on the part of the contractor seemed to set the tone for the future construction process. According to Mr. Gaspard and Ms. Guy, as the construction progressed, they began to find more problems with the quality of the workmanship. However, relating these problems to Mr. Gauthier seldom resulted in a satisfactory response.
Being dissatisfied with the contractor's response to their past complaints as well as the complaints of the February 23 letter, and considering that their home was yet to be complete after eight months of construction, the homeowners sent Cottonport Building Supply a letter dated March 11, 1998, discharging it as contractor. The letter read as follows:
Dear Mr. Gauthier
This letter is to inform you that your services are no longer needed by us. Also, this letter is to serve notice to you, and any one that may be affiliated with you or Cottonport Building Supply, not to enter onto our property for any reason.
If the above request is ignored, we will not hesitate to handle this as criminal trespassing.
As you know, we have asked you on numerous occasions to take care of problems that have transpired in the last six month.
The letter was signed by both Karl Gaspard and Elizabeth Guy.
After ordering the contractor from the premises, the homeowners attempted to complete the home themselves. In the process, they purchased items including flooring, light fixtures, kitchen counter tops, door knobs and stops, doorbells, cabinet pulls, and towel bars which would have otherwise been required under the contract. They also expended an additional $16,510.83 in attempting to complete the house.
The homeowners ultimately retained Philip Beard, an expert structural, civil, and architectural engineer, to inspect the premises. Mr. Beard performed an inspection of the premises on December 29, 1998. At trial he testified that his inspection revealed fifty-eight defects in the construction process. Twenty-five defects were of the "punch list" variety, but the remaining he considered construction defects. According to Mr. Beard, at least twelve of the listed defects constituted violations of the Standard Plumbing Code, and most of the rest did not meet acceptable building standards. Among the construction defects were the improper installation and damage of a bathtub, the potential weakening of a joist by drilling a hole in the joist to run a drain pipe, burial of the sewer line at too low a depth, the failure to provide back flow preventors in the plumbing, improper connection of the air conditioner unit drains, the placing of water and sewer pipes in a common trench, and the improper installation of the sewer vents through the roof. A number of the other construction defects related to the failure of the contractor to build the premises in accordance with the plans and specifications.
As to the punch list items, Mr. Beard testified that while it is common to have some punch list items in the final phase of construction, the number in this case was unusually high, and it was particularly unusual to see so many that related back to early construction. Mr. Beard testified that, in his professional opinion, it would be grounds to dismiss a contractor who "is told to fix something and given adequate time and doesn't fix it." He concluded that all of the defects and punch list items were repairable but some would be so expensive that other solutions not originally desired by the homeowners were required. As an example, he testified that for the whirlpool bath to be constructed in accordance with the original plans, it would have to be disassembled and removed so that the plumbing could be repaired, and then reinstalled. This would require major renovation of the plumbing in the slab and would be cost prohibitive. Therefore, the homeowners will have to accept it as is rather than as anticipated based on their house plans.
Ronald Anthony Domingue, an expert mechanical engineer who inspected the residence on the same day as did Mr. Beard, testified on behalf of the homeowners and basically elaborated on the list of defects described by Mr. Beard. According to Mr. Domingue, there were several areas where electrical junction boxes "were not completely closed and exposed wiring was basically hanging out of the box" and some lights were without cover plates. In his opinion, these punch list items constituted fire hazards. Additionally, the construction defect concerning the lack of back flow preventors constituted a violation of the Louisiana State Plumbing Code and the Southern Building Code because the lack of the preventors allowed for a possible cross contamination of the water supply.
Mr. Domingue also testified that the upstairs toilet was not properly anchored, thus violating the state plumbing code. This defect was significant in that each time the toilet flushed, it caused excess rattling and movement within the drain pipe located in the wall. This noise could be heard in the downstairs rooms adjacent to the wall the drain pipe traversed. Additionally, the improperly installed vent in the upstairs toilet should have been obvious according to Mr. Domingue. The vent was located some twenty feet away from the toilet and was "far in excess of what local codes allow." Additionally, because of its location, Mr. Domingue doubted if the venting would even work. An improperly vented system, according to Mr. Domingue, is a health hazard because it introduces obnoxious odors in the residence as well as explosive methane gas.
Another construction defect pointed out by Mr. Domingue related to the air conditioner unit drains not being properly connected to the sanitary drain. According to Mr. Domingue, this improper connection could cause the introduction of odors or methane gas into the home. This defect also violated the plumbing and building codes. Mr. Domingue commented that the failure to install a hot water heater drain pan constituted a violation of sanitary sewer and public health codes. Another construction defect item commented on by Mr. Domingue was the improper installation of the sewer vents through the roof. He described this as a code violation as the vents were not properly sealed to prevent water from entering the structure. Finally, Mr. Domingue noted that the punch list item concerning the electrical cable not being anchored was a violation of the national electrical code. According to Mr. Domingue, the code provides that the electrical cable be anchored every so often, and it was not done in this case.
Mr. Domingue concluded that all of these items were remedial in nature but needed to be addressed before the home could be occupied. In his opinion, a reasonable time for complying with punch list items is thirty days. However, while the defects can still be addressed, the problem now is that the home is almost complete. As such, the remedial work would requires "ripping out walls and in some cases floors and ceilings in order to get to that equipment now."
Dirk Foster, an engineer and general contractor, had also inspected the premises for the homeowners. Although he did not testify, it was stipulated that if called, he would testify that it would cost an additional $25,433.80 to complete the construction, based on the defects found by Mr. Beard and Mr. Domingue. However, even then, the residence would not be in accordance with the original plans and specifications, given the prohibitive cost of correcting some of the mistakes.
After trial, the trial court concluded that the final contract price was $124,998.82 instead of $108,340.00, and that when the contractor was discharged on March 11, 1998, it had substantially complied with its obligations under the contract. The trial court further found that the exclusive remedy available to the homeowners is found in La.R.S. 9:3141 et seq., the New Home Warranty Act, and their failure to comply with the notice provisions of that Act defeated their action. The trial court then awarded judgment in favor of Cottonport Building Supply and against Mr. Gaspard and Ms. Guy in the amount of $36,354.82, being the difference between $124,998.82 and $82,000.00 less a credit of $6,644.00 to the homeowners for costs of certain repairs. On appeal, Mr. Gaspard and Ms. Guy raise seven assignments of error.
Assignment of Error No. 1.
In their first assignment of error, Mr. Gaspard and Ms. Guy assert that the trial court erred in computing the contract price as $126,397.75 and that the proper contract price is $108,340.00, based upon the initial contract and the agreed to amendment covering the construction cost of a carport. We first note that the final contract price calculated by the trial court was $124,998,82, and not $126,397.75 as suggested by the homeowners. However, we still agree that the trial court erred in calculating the final contract price to be $124,998.82 but disagree with the homeowners' assertion that it is $108,340.00.
The difference between the agreed upon price and that found by the trial court is derived from the testimony of Mr. Gauthier and an exhibit presented by Cottonport Building Supply showing items added to or deducted from the original contract. In this exhibit, Mr. Gauthier began with the agreed-to contract price of $108,340.00, added twenty-six extra items, and subtracted three. In doing so, he calculated an amended contract price of $126,397.75. The trial court then reduced that amount by $1,398.93, being the cost of the items purchased by the homeowners for which they were entitled to reimbursement. In doing so, the trial court set the final contract price at $124,998.82.
As pointed out by the trial court, neither Mr. Gaspard nor Ms. Guy testified that the listed items were not additions or deletions agreed upon. They only testified that the reimbursement items found on the Cottonport Building Supply exhibit had not been previously presented to them. Given Mr. Gaspard and Ms. Guy's failure to contradict the contractor's allegations of contract modification, we cannot say that the trial court's factual decision to believe Mr. Gauthier's testimony on this point is manifestly erroneous or clearly wrong. Thus, we are bound to uphold the trial court's factual finding that the original contract price was modified by agreed upon additions. See Rosell v. ESCO, 549 So.2d 840 (La. 1989). However, there exists a mathematical error in the listings. Cottonport Building Supply's exhibit adjusts the original contract price of $108,340.00 to reach a total of $126,397.75. We find the proper total to be $122,437.75, or $3,960.00 less than that accepted by the trial court. Therefore, to the extent that the mathematical error must be corrected, we find that this assignment of error has merit and conclude that the proper total contract price is $121,038.82.
Assignment of Error No. 2 and No. 3.
Both of these assignments relate to the applicability of the New Home Warranty Act, La.R.S. 9:314 et seq., to the case at hand. In the second assignment, the homeowners assert that the trial court erred in equating the letter of February 24 to the notice required under the New Home Warranty Act. The third assignment asserts that the trial court erred in finding the New Home Warranty Act applicable at all.
One of the purposes of the New Home Warranty Act is to provide "clear, concise, and mandatory warranties for the purchasers and occupants of new homes in Louisiana. . . ." La.R.S. 9:3141. The Act "provides the exclusive remedies, warranties, and prescriptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply." La.R.S. 9:3150 (emphasis added). As to the Act's notice requirements, La.R.S. 9:3145 provides that:
Before undertaking any repair himself or instituting any action for breach of warranty, the owner shall give the builder written notice, by registered or certified mail, within one year after knowledge of the defect, advising him of all defects and giving the builder a reasonable opportunity to comply with the provisions of this Chapter. The builder shall give the owner written notice of the requirements of this Chapter at the time of closing.
We need not consider whether the February 24 correspondence was adequate notice pursuant to La.R.S. 9:3145 because we find that the trial court erred in determining that the New Home Warranty Act provided the exclusive remedy available to the homeowners.
We interpret the Act to apply to situations where the complaints arise after completion of construction and not before. It envisions protecting a homeowner after he or she takes possession of the completed structure and is not intended as a substitute for the remedies available for breach of contract. See Thorn v. Caskey, 32,310 (La.App. 2 Cir. 9/22/99); ___ So.2d ___. In this case, the homeowners had yet to occupy the residence at the time of trial. Additionally, the exclusivity provision of La.R.S. 9:3150 excludes "only claims regarding warranties of the builder or defects (redhibitory or otherwise)." Id. at ___. In enacting the New Home Warranty Act, the legislature intended "to protect the owner from faulty workmanship, but not to insure completion of the construction of a home under the terms of the contract between the owner and builder." Id. at ___.
In this case, the homeowners have made a claim for breach of contract under building contract law. A contractor who breaches a contract may be held liable under general contract law regardless of whether the owner may also have a cause of action under the New Home Warranty Act. Id. Thus, we find merit in the homeowners' assignment of error in this regard.
Assignment of Error No. 4.
In this assignment of error, the homeowners assert that the trial court erred in concluding that Cottonport Building Supply had substantially completed the construction of the home when ordered from the property. We also find merit in this assignment of error.
La.Civ. Code art. 2769 sets forth a contractor's liability for failing to comply with a contract. It provides:
If an undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and at the time he has agreed to do it, he shall be liable in damages for the losses that may ensue from his non-compliance with his contract.
Louisiana courts have interpreted the article to mean that each building contract has an implied agreement that the work is to be done in a good workmanlike manner and free from defects in either material or workmanship. Salard v. Jim Walter Homes, Inc., 563 So.2d 1327 (La.App. 3 Cir. 1990). It is from this implied promise of satisfactory performance that the question of substantial compliance with the provisions of the contract arises.
Whether or not the home was substantially completed is a pivotal issue in determining to what damages the contractor and homeowner are entitled.
If there was substantial performance, the contractor is entitled to recover the contract price reduced by the amount necessary to complete the work; if there has not been substantial performance the contractor's recovery is limited to quantum meruit with the owner entitled to costs incurred in completing the work in excess of the contract price.
Ducote v. Arnold, 416 So.2d 180, 182 (La.App. 4 Cir. 1982), writ denied, 421 So.2d 238 (La. 1982). See also Ortego v. Dupont, 611 So.2d 792 (La.App. 3 Cir. 1992); Salard, 563 So.2d 1327; Perrodin v. Southern Siding Co., Inc., 524 So.2d 885 (La.App. 3 Cir. 1988).
There is substantial performance of a construction contract when a thing may be used for its intended purpose, even if there are many defects in workmanship and/or materials. A contractor will be found not to have substantially completed a contract when the thing built is "totally unfit for the purpose for which it was originally intended." Salard, 563 So.2d at 1331, quoting Neel v. O'Quinn, 313 So.2d 286, 291 (La.App. 3 Cir.), writ denied, 319 So.2d 440 (La. 1975). The question of whether or not a construction has been substantially completed is a factual determination in which the court must consider "the extent of the defect or non-performance, the degree to which the purpose of the contract is defeated, the ease of correction and the use or benefit to the owner of the work performed." Salard, 563 So.2d at 1330. Because the question of substantial performance is factual, the trial court's decision that Cottonport Building Supply had substantially completed the home pursuant to the contract is subject to the manifest error standard of review. Stobart v. State, Through Dep't of Transp. and Dev., 617 So.2d 880 (La. 1993); Rosell, 549 So.2d 840.
After reviewing the record, we must conclude that the trial court was clearly wrong in determining that the subject home was substantially completed when the homeowners ordered the contractor off of their property. According to the uncontradicted testimony of Mr. Beard and Mr. Domingue, at least fifty-eight areas of construction still needed attention when they inspected the premises some nine months after the contractor was ordered off the job. These were not just punch list items requiring minor attention but included potentially dangerous plumbing defects. By the time of their inspection, the homeowners had already spent $16,510.83 toward the completion process, and, according to Mr. Foster, an additional $25,433.80 would be required. Even with that expenditure, the homeowners would not receive what they had bargained for in their contract. Dangers presented by the various building code violations make it unfit for its intended purpose and, therefore, not substantially complete. See Morton Buildings, Inc. v. Redeeming Word of Life Church, Inc., 97-2251 (La.App. 1 Cir. 11/6/98); ___ So.2d ___, writ denied, 99-0687 (La. 4/30/99); ___ So.2d ___.
Additionally, as the experts opined, many of the house defects cannot be corrected without demolishing existing construction thereby making the correction of the defects cost prohibitive. Those parts of the house may never be repaired so as to comply with the contract plans. Louisiana jurisprudence has recognized that a contractor does not substantially comply with the terms of a construction contract where, as in the present case, the defects are so extensive that making repairs requires walls to be "torn out and reinstalled." Riche v. Juban Lumber Co., Inc., 421 So.2d 318, 319 (La.App. 1 Cir. 1982).
Further, the contractor's actions completely defeated the purpose of the contract. Already homeowners, Mr. Gaspard and Ms. Guy did not enter into the construction contract to simply provide a roof over their heads. Rather, this was to be their dream home with the added advantage of living close to Mr. Gaspard's ailing mother. Importantly, the contract was coined by the parties as a "turn key project" in which the homeowners would not be responsible for any aspects of construction. Mr. Gaspard testified that he opted for having little involvement in the construction so he would not have to take time off from his hourly wage job. The ultimate result was something less than the dream home they imagined. Additionally, the "turn key" aspect dissolved almost immediately when the contractor began requesting the homeowners to purchase items for the house with a promise of future reimbursement. Construction lingered on approximately four months longer than the contractor's initial estimate, without any reasonable explanation for the delay. Instead of "turning the key" to find a finished home, the homeowners were forced to miss work and spend countless hours and additional funds.
The homeowners have yet to benefit from the home. At the time of trial, they still had not moved into the new house. Since construction was not completed timely, the homeowners were forced to put off selling their other home since they had nowhere else to live. They were then left with the financial hardship of unexpectedly owning and maintaining two residences at once.
Under the factors set forth in Salard, the only reasonable conclusion that can be drawn from the record's exhaustive descriptions of numerous defects is that the home is totally unfit for the purpose for which it was intended, and therefore, not substantially completed under the terms of the contract. Therefore, we reverse the trial court's judgment in favor of Cottonport Building Supply. Additionally, because Cottonport Building Supply has presented no evidence to suggest that the amount it has already received is less than quantum meriut, we make no award in favor of Cottonport Building Supply in that regard.
Assignment of Error No. 5.
In its reasons for judgment, the trial court did award a $6,644.00 setoff against the contract price awarded to Cottonport Building Supply. It described this amount as the "costs of repair/completion" of the residence. This amount represents the cost of repairing defects which the trial found were violations of applicable building standards. In this assignment of error, the homeowners assert that the trial court erred in limiting their recovery to damages or defects which violated a building code. In limiting the offset to building standards violations, the trial court relied on the language of La.R.S. 9:3144 of the New Home Warranty Act and this court's interpretation of that statute in Sonnier v. Bayou State Mobile Homes, Inc., 96-1458 (La.App. 3 Cir. 4/2/97); 692 So.2d 698, writ denied, 97-1575 (La. 10/3/97); 701 So.2d 201. Having already concluded that the homeowners' remedy lies in building contract law and not under the New Home Warranty Act, we find merit in the homeowners' assignment of error in this regard. The measure of damages is the cost of completion and repairs that exceeds the contract price. Ducote, 416 So.2d 180. These damages are not limited to the cost of repairing building code violations.
The testimony is that the homeowners have already spent $16,510.83 and will incur $25,433.80 additional expenses to complete the home. This is a total of $41,944.63. The total contract price was $121,038.82, of which $82,000.00 had already been paid. The cost of completion that exceeds the contract price is $2,905.81, and we cast Cottonport Building Supply in judgment for that amount.
Assignment of Error No. 6.
The homeowners also claim that the trial court erred in failing to award them damages for their nonpecuniary loss of intellectual gratification. The authority for awarding such damages is found in La.Civ. Code art. 1998 which provides:
Damages for nonpecuniary loss may be recovered when the contract, because of its nature, is intended to gratify a nonpecuniary interest and, because of the circumstances surrounding the formation or the nonperformance of the contract, the obligor knew, or should have known, that his failure to perform would cause that kind of loss.
Regardless of the nature of the contract, these damages may be recovered also when the obligor intended, through his failure, to aggrieve the feelings of the obligee.
In interpreting La.Civ. Code art. 1998, the supreme court stated in Young v. Ford Motor Co., Inc., 595 So.2d 1123, 1133 (La. 1992):
[U]nder Article 1998 . . . if it can be established that the obligee intended — and if the nature of the contract supports this contention — to gratify a significant nonpecuniary interest by way of the contract, and that the obligor either knew or should have known that failure to perform would cause nonpecuniary loss to the obligee, then the requirements for recovery of nonpecuniary damages are satisfied.
The enactment of La.Civ. Code art. 1998 in 1984 constituted a change in the law. In order to recover damages for nonpecuniary loss it was no longer necessary to establish that the nonpecuniary loss was the principal object of the contract as had been the case under the prior law. Rather, the nonpecuniary interest served by the contract must be simply "significant." Thus, while the principal object of a contract for the construction of a home may be to provide shelter, the agreement may also be intended to serve other significant nonpecuniary interests. Stonecipher v. Mitchell, 26,575 (La.App. 2 Cir. 5/10/95); 655 So.2d 1381.
The determination of whether a contract is intended to gratify a significant pecuniary interest is a factual inquiry. Taylor v. Burton, 97-1348 (La.App. 3 Cir. 3/6/98; 708 So.2d 531, citing Stonecipher, 655 So.2d 1381. See also Melancon v. Sunshine Construction, Inc., 97-1167 (La.App. 1 Cir. 5/15/98); 712 So.2d 1011. Generally, such a factual inquiry would be subject to a manifest analysis. Rosell, 549 So.2d 840. However, in this case, by concluding that the New Home Warranty Act provided the homeowners with their only remedy, the trial court never reached the nonpecuniary damage issue. As such, we must perform a de novo review as to this issue.
In the present case, the record reveals Mr. Gaspard and Ms. Guy intended that the contract gratify certain nonpecuniary interests. In fact, much more than just finding a place to live motivated them to contract to build a new house. According to Mr. Gaspard, he purchased the home in order to more easily care for his ailing mother who lived just one-half mile away. Importantly, Mr. Gaspard and Ms. Guy already owned a home. Mr. Gaspard testified that the new house was to be their dream home on forty acres of land in the country. To this end, they had an architect custom design the home to their tastes. The homeowners specified that the master bathroom have a therapeutic Whirlpool bathtub in order to alleviate Ms. Guy's pain from numerous back surgeries. In order to not miss work, they contracted for the construction job to be a "turn key" project which required little involvement on their part. Both homeowners testified that they looked forward to moving into the home within three to four months of the start of construction as promised by the contractor.
Instead of occupying their dream home in three to four months, Mr. Gaspard and Ms. Guy were still waiting to move in seven months later. The actual construction deviated extensively from their custom designed plans. In particular, the whirlpool bathtub was installed incorrectly and cannot be repaired without making major structural changes. As is, Ms. Guy must painfully climb a large step stool with her bad back in order to access the bathtub. Instead of receiving a turnkey residence, the homeowners were required to expend numerous personal hours and much energy in building and repairing the home.
Mr. Gaspard stated that the construction problems negatively affected his family relationships because of the extra time he was obligated to spend with the created problems. He found himself paying the related costs for two homes instead of the anticipated dream home, and the homeowners lost a potential sale for their original home in December because of the delayed construction. The extra expenses incurred prevented Mr. Gaspard from purchasing his daughter a car for her sixteenth birthday as he had planned. Further, he testified that his mind became so preoccupied with the problems of his home that it affected his work. Ms. Guy related similar testimony and stated that she was concerned about the safety of her family because the home could not pass the health inspector's test. Mr. Gaspard testified that his dream home turned out to be a "real eye sore."
Because many parts of the house were custom-designed for the homeowners, the nature of the contract itself lends support to the conclusion that it was intended to gratify some significant nonpecuniary interests. Moreover, the law is now well settled that nonpecuniary damages are recoverable when there is a breach of a contract to build a home. See Taylor, 708 So.2d 531; Mayerhofer v. Three R's, Inc., 597 So.2d 151 (La.App. 3 Cir.), writ denied, 600 So.2d 680 (La. 1992).
The testimony does not reveal whether or not the homeowners informed the Mr. Gauthier or any other person associated with Cottonport Building Supply that they were building the new home in part to be near Mr. Gaspard's mother. However, the record does indicate that Mr. Gauthier knew the plans were custom-designed for Mr. Gaspard and Ms. Guy and that the job was to be a turn key project. Also, Ms. Guy testified that she informed Mr. Gauthier that they wanted the Whirlpool bathtub as a source of therapy for her because she has "two small bars in [her] back." Most importantly, Mr. Gauthier testified that he informed the homeowners their house would be ready in three to four months. Because he is in the business of building homes, he should have known that the new homeowners were certain to suffer nonpecuniary damages if their home is defective and far from complete more than three months after expected completion.
We must conclude that the trial court was clearly wrong in not awarding nonpecuniary damages. Based on our review of the record, we award nonpecuniary damages in the amount of $7,500.00 each to Mr. Gaspard and Ms. Guy.
Assignment of Error No. 7.
In their final assignment of error, the homeowners assert that the trial court erred in not assessing expert witness fees for the testimony of Mr. Beard and Mr. Domingue and the stipulated testimony of Mr. Foster. The judgment rendered by the trial court assesses the cost of the litigation to the homeowners but does not specify an amount for the testimony of the experts.
Expert witnesses are allowed "additional compensation, to be fixed by the court, with reference to the value of time employed and the degree of learning or skill required." La.R.S. 13:3666(A). The method of calculating the extra compensation is set forth in La.R.S. 13:3666(B)(1) and (2) which provide:
(B) The court shall determine the amount of the fees of said expert witnesses which are to be taxed as costs to be paid by the party cast in judgment either:
(1) From the testimony of the expert relative to his time rendered and the cost of his services adduced upon the trial of the cause, outside the presence of the jury, the court shall determine the amount thereof and include same.
(2) By rule to show cause brought by the party in whose favor a judgment is rendered against the party cast in judgment for the purpose of determining the amount of the expert fees to be paid by the party cast in judgment, which rule upon being made absolute by the trial court shall form a part of the final judgment in the cause.
(Emphasis added.)
The record contains no testimony concerning the amount charged by the experts who testified. However, the trial court need not rely solely upon the amount charged, the statement of the expert as to what his services are worth, or even the agreement concerning fees between the expert and the one for whom he testifies in establishing the court ordered fee. Antis v. Miller, 613 So.2d 1034 (La.App. 3 Cir. 1993). Instead, the trial court should consider the reasonableness of the preparatory work performed by the expert, whether preparatory work actually assisted in presentation of the testimony, and whether the conclusions of the expert were useful to the court. Id. We remand this matter for the trial court to set the expert witness fees in accordance with La.R.S. 13:3666.
DISPOSITION
The judgment of the trial court is reversed, and judgment is rendered herein dismissing the demands of Cottonport Building Supply. Judgment is further rendered herein in favor of Karl Gaspard and Elizabeth Guy and against Cottonport Building Supply in the amount of $2,905.81, representing the difference between the cost of completion and the contract price, and in the amount of $7,500.00 each, representing nonpecuniary damages, together with legal interest from date of judicial demand until paid in full. The matter is remanded to the trial court for the setting of expert witness fees in accordance with La.R.S. 13:3666. All costs of the proceedings below and of this appeal are taxed against Cottonport Building Supply.
REVERSED, RENDERED IN PART, AND REMANDED.