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Construction Law

Paul J. Odum, Esquire

Damages in Plaintiffs' breach of contract claims were properly awarded by the trial court where those damages were based on the costs incurred by Plaintiffs to repair two defective septic systems installed by Defendant, and Plaintiffs had no burden to demonstrate that the cost of repair was less than the diminution in value to the real estate resulting from the defective septic systems. Cason v. King, No. 30183 (Mo. App. S.D., November 18, 2010), Burrell, J.
Defendant appealed a judgment that included $8,400 awarded to Plaintiffs for their costs to repair defective septic systems installed by Defendant on grounds that Plaintiffs produced insufficient evidence to support the damage award.   Specifically, Defendant argued that while Plaintiffs provided evidence of the cost of repair of the systems, proof of damage was insufficient because Plaintiffs adduced no evidence regarding the diminution in land value.  Defendant cited a line of construction defect cases that included language prohibiting a trial court from awarding cost of repair damages until after it hears evidence that the cost of repair is less than the diminution in property value.
The court acknowledged that existing case law does not consistently express the damage rule that a trial court should apply in construction defect cases.  The court included a summary of multiple cases on the subject and analyzed two lines of decisions, one line that required evidence of diminution in value to sustain a damage award, and another line of cases where such evidence was not required.  The court resolved this inconsistency by adopting the rule that in contract claims involving construction defects, a plaintiff may prove damages solely with cost of repair evidence and a plaintiff is not required to produce evidence of diminution in land value except to rebut a defendant's evidence that the cost of repair was disproportionate to the diminution in value of the property. 
It is important to note that the court's decision may only apply to breach of contract cases.  The court points out that some of the cases that led to the confusion concerning proof of damages in construction defect cases were based on theories of negligence, implied warranty and nuisance and there is no indication that the court's decision would apply equally to those theories.

The Missouri Bar Courts Bulletin, 11-Feb