Council of Unit Owners of Sea Colony East v. Carl M. Freeman Associates

Brief Fact Summary.

The purpose of money damages is to make a plaintiff whole not to give them a windfall.

Synopsis of Rule of Law.

Council of Unit Owners of Sea Colony East (plaintiff) sued Carl M. Freeman Associates (defendant) for defective construction.

Facts.

The defendant was involved in the construction of condominiums and the plaintiffs brought suit for defective construction of those condominiums. The plaintiffs argued the cost of repair should be how the trial court was to measure damages and the defendant argued the damages should be measure by how much the condominiums value was diminished because the cost of repair would essentially be demolishing the building.

Issue.

Whether the purpose of money damages is to make a plaintiff whole not to give them a windfall.

Held.

Yes. The purpose of money damages is to make a plaintiff whole not to give them a windfall.

Discussion.

If the cost of repair is great but the diminution in value is not then the plaintiffs may only recover the diminution in value and not the cost of repair because that would lead to economic waste. For example, if the cost of repair of a building would be $300,000 but the property’s value was only diminished by $20,000 then the court will award damages based on the how much the property value was diminished and not the cost of repair, because the disparity between the cost of repair and the diminution in value is so great. Nor can damages be measure by the useful life theory which measures them based how much the defective construction diminished the useful life of the property. Here, that is not applicable because the parties never outlined how long the useful life of the property was.