Legacy Builders, LLC v. Andrews

Summary

The Wyoming Supreme Court addressed damages arising from defective construction of a newly built home, including the appropriate measure of damages for breach of contract and breach of the implied warranty of habitability. The court held that although the plaintiff must prove damages, the defendant bears the burden of presenting evidence that cost-of-repair damages are disproportionate or that an alternative measure should apply. The court affirmed most of the award, reduced future repair damages by 5 percent for unforeseeable roof and truss repairs, and remanded for entry of judgment reflecting total repair damages of $189,498.

Holdings

1. In a breach-of-contract or breach-of-warranty construction case, the plaintiff bears the initial burden of proving damages, but the defendant bears the burden of challenging the reasonableness or disproportionality of the plaintiff's repair-cost method and, when appropriate, presenting evidence supporting an alternative measure based on diminution in value.
2. Where the plaintiff proves repair costs and the defendant presents no evidence of diminution in value or disproportionality, a trial court may use cost of repair to measure damages for breach of the implied warranty of habitability.
3. Consequential and future repair damages may be recovered for breach of a construction contract when foreseeable at the time of contracting and established with reasonable certainty, but damages for unforeseeable items may not be recovered.
4. The district court did not clearly err in finding that expansive soils were a contributing factor in the home's foundation damage.

Questions Presented

1. When repair costs in a homeowners' construction case may be disproportionate to the property's loss in value, which party bears the burden of establishing diminution in value or another lesser measure of damages?
2. Did the district court clearly err by relying on cost estimates for future repairs, including collateral damage from foundation stabilization?
3. Did the district court clearly err in finding that expansive soils contributed to the damage to the home's foundation?

Disposition

reversed_and_remanded