Brief Fact Summary. John L. Ubaldo, (Petitioner), appeals from a judgment awarding damages to Roger and Cynthia Williams (Respondents) for breach of a real estate contract.
Synopsis of Rule of Law. In an action for breach of contract for the sale of real property, the claimant is entitled to the “benefit of the bargain” which equals the difference between the contract price and the fair market value at the time of breach. A claimant is entitled to special damages resulting from the unique needs and characteristics of the parties, if the parties were reasonably aware of those circumstances at the time of contracting.
A monetary award based on a judgmental approximation is proper, provided the evidence establishes facts from which the amount of damages may be determined to a probability.
View Full Point of LawIssue. Whether the damages awarded by the court for real estate taxes and snow removal are permissible.
Held. No. There is no authority for the proposition that the avoidance of tax liability is part of the benefit of the bargain nor is there any indication that Respondents’ costs in repurchasing winter-related equipment and the extra costs of snow removal were within the contemplation of the parties when they signed the contract.
Discussion. The claimant is entitled to the “benefit of the bargain,” which equals the difference between the contract price and the fair market value at the time of the breach. Evidence of appraisers and evidence of the price resulting from a subsequent sale are both probative of a property’s fair market value. Here, the court had only the subsequent sale before it and there is no suggestion that this sale was unreasonable or made in bad faith.
The damages resulting form the property taxes is not permissible. Respondents retained ownership, use, and occupancy of a valuable asset during that time. There is no support for the proposition that the avoidance of tax liability is part of the benefit of the bargain and may be included without considering corresponding financial benefits.
Special damages resulting from the unique needs and characteristics of the parties, if the parties were reasonably aware of those circumstances at the time of contracting are permissible. Here, there is no evidence that Plaintiff was aware of Respondents’ plans to sell their winter equipment and move to a warmer climate after the sale. Therefore the special damages award was improper.