Emery v. Caledonia Sand and Gravel Co., Inc.

Brief Fact Summary. A company agreed to restore certain land after removing earthfill from it.  The company failed to restore the land and the property owner suffered losses.

Synopsis of Rule of Law. The goal of compensatory damages is "to put the injured party in as good a position, so far as money damages can put him, as he would have occupied had the defendant fully performed."

Facts. The Plaintiffs, Mr. and Mrs. Emery (the "Plaintiffs"), entered into an agreement with the Defendant, Caledonia Sand and Gravel Co., Inc. (the "Defendant"), for the Defendant to remove earthfill from a certain site on their farm.  The Defendant had an obligation to restore the excavation area after the job was completed.  Because the land was not restored, a hay crop could no longer be sustained on the excavation site.  The Plaintiff's were dissatisfied with the Defendant's restoration job, and sued to recover damages to adequately restore the excavation site, the value of crops that could not be grown and certain other expenses involved in restoring fertility.  The Plaintiff was victorious and the Defendant appealed.

Issue. What is the proper way to calculated damages in this situation?

Held. The court first observed that the appropriate damage calculation involves granting compensation for damages the "the defendant had reason to foresee as a probable result of its breach when the contract was made." Further, "[i]f the injury is one that follows the breach in the usual course of events, there is sufficient reason for the defendant to foresee it; otherwise, it must be shown specifically that the defendant had reason to know the facts and to foresee the injury." 
•    The court then addressed the normal measure of compensatory damages.  The goal of this measure is "to put the injured party in as good a position, so far as money damages can put him, as he would have occupied had the defendant fully performed." The court observed, based on the facts before it, "[a] valuable income-producing asset has been rendered unproductive; the damages awarded constitute a reasonable means of bringing that asset back to life."  Specifically, there is evidence the hay crop could be rejuvenated without the restoration.  There is no evidence of unjust enrichment and the monetary damages award was not disproportionate to the cost of improving the land.  Further, "[i]f the plaintiffs choose to 'pocket' their recovery, they will have foregone the restoration of their land; they will not have been unjustly enriched."

Discussion. This case demonstrates the basic objectives of a damage award.