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HomeMy WebLinkAbout98-3633 civil termGARY McKEE AND IN THE COURT Of COMMON PLEAS OF ROXANN McKEE, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS COUNTRY SIDE VILLAGE HOMES, INC., DEFENDANT : 98-3633 CIVIL TERM IN RE: MOTION OF DEFENDANT FOR POST-TRIAL RELIEF ORDER OF COURT AND NOW, this. ~.C~ day of March, 2000, the motion of defendant for post- trial relief, IS DENIED. By/,tt~' ~u Edgar B. Bay Y,~t~ Timothy T. Engler, Esquire For Plaintiffs Jonathan H. Rudd, Esquire For Defendant :saa GARY McKEE AND IN THE COURT OF COMMON PLEAS OF ROXANN McKEE, CUMBERLAND COUNTY, PENNSYLVANIA PLAINTIFFS V. COUNTRY SIDE VILLAGE HOMES, INC., DEFENDANT : 98-3633 CIVIL TERM IN RE: MOTION OF DEFENDANT FOR POST-TRIAL RELIEF OPINION AND ORDER OF COURT Bayley, J., March 29, 2000:-- In the latter part of 1996, plaintiffs, Gary and Roxann McKee, purchased a four bedroom doublewide Dutch model manufactured home from defendant, Country Side Village Homes, Inc. The home, in two sections, was delivered to a three and a half acre tract that plaintiffs had purchased for $34,000 in 1992. Defendant excavated and installed a foundation slab on the lot upon which the home was placed on thirty-five concrete block pillars. A non-load bearing cement block wall was constructed around the crawl space. The total cost, not counting the value of the lot, was $59,559, of which the foundation work was $9,180. Plaintiffs moved into the home on December 4, 1996. After the home was constructed plaintiffs' entire property was appraised at $104,000. Plaintiffs filed the within complaint against defendant claiming that the foundation of their home was defective as installed. At trial, they introduced testimony that within a 98-3633 CIVIL TERM few months after they moved into their home severe cracking started to appear in the foundation slab and support pillars. Cracking also appeared in the block wall although that condition is cosmetic. Gregory Lebo, a civil engineer, testified for plaintiffs that there is differential movement throughout the foundation slab that has caused it to fail. He was of the opinion that the dead load of the home was placed on top of the foundation slab before the cement cured, and that the soil underneath the slab was not compacted correctly which contributed to the failure of the slab. He concluded that the slab no longer acts properly as one structural unit. Lebo was of the opinion that the differential movement will continue and that it poses a threat to the structural integrity of the home. Adequately correcting the problem will require removing the home from the foundation and constructing a new foundation properly designed to eliminate the differential settlement. Plaintiffs introduced evidence that the cost necessary to adequately remedy the defects was $15,900, which includes moving the home off the slab, the breakup of the slab and the wall, preparing a new foundation base, pouring a new concrete slab and support pillars, and putting the home on that slab with a new foundation wall. A housing inspector also testified for plaintiffs that the cracking in the slab and the support pillars poses a threat to the structural integrity of the home. Plaintiff, Gary McKee, over objection by defendant, testified that he was of the opinion that no one would buy his home as long as the foundation posed a threat to its -2- 98-3633 CIVIL TERM structural integrity.' On February 2, 2000, a jury entered a verdict in favor of plaintiffs and awarded them $15,900. They awarded defendant $784 on its counterclaim for some ground fill that plaintiffs had delivered to their property subsequent to the completion of the home. Defendant filed a motion for post-trial relief. It claims that plaintiffs failed to offer any evidence as to the reduction of value of their home caused by the alleged deficiencies in the concrete slab and cement block wall. It avers: Plaintiff attempted to get around the Court's ruling on Defendant's objection by asking Gary McKee whether he believed anyone would want to buy the home in its current condition. The Court permitted Gary McKee to answer this question, and Gary McKee testified that no one would want to buy the home in its current condition, and any buyer would want the concrete slab and cement block wall repaired before purchasing the home. Defendant avers that the court erred in allowing this testimony, and even if it was properly admitted, there was insufficient evidence as a matter of law as to the reduction in any value to the home caused by the construction deficiencies such that the jury could balance the possible diminution value with the cost of repairs. Plaintiffs seek a judgment n.o.v, or in the alternative, a new trial based on the following averments: a. The jury's verdict is against the weight of the evidence since ' Defendant presented the testimony of a civil engineer, Daniel Honig. He was of the opinion that the cracks at plaintiffs' home are normal shrinkage cracks and that there is no differential movement in the foundation. However on cross-examination, he acknowledged that he could not assure plaintiffs that there was no structural deficiency in the foundation unless he completed a measurement survey, soil analysis and engineering analysis that would cost approximately $3,500, none of which have been done. -3- 98-3633 CIVIL TERM there was no evidence of the reduction in value of the property with which the jury could balance the costs of repair; b. The jury's verdict shocks the sense of justice since there was no evidence from which it could have found that the cracks in the concrete slab and cement block walls resulted in a reduction in the value of the house by $15,900; c. The trial court committed legal error in allowing the Plaintiff Gary McKee to testify that no buyer would want to buy the house in its current condition, since Gary McKee was not qualified to offer this opinion; and, d. The trial court committed legal error in failing to grant Defendant's motion for a compulsory non-suit and/or motion for a directed verdict. DISCUSSION Defendant maintains that Freeman v. Maple Point, Inc., 393 Pa. Super. 427 (1990), supports its position. In Freeman, the defendant constructed a home for plaintiffs for $95,900. A water problem developed at the property because of the grading of a lot and the soil. Plaintiffs introduced evidence that the cost of correcting the problem would be $50,738. The defendant introduced evidence that the cost would be $10,000 to $12,000. The jury awarded plaintiffs $45,785. The Superior Court of Pennsylvania reversed, stating: In the recent case of Douglass v. Licciardi Construction Co., Inc., 386 Pa. Super. 292, 562 A.2d 913, 915-916 (1989), we stated: Pennsylvania courts, consistently therewith, have generally allowed damages for incomplete or defective performance of a building contract to be measured by the cost of completing the work or correcting the defects by another contractor. See, e.g.: Ecksel v. Orleans Construction Co., 360 Pa. Super. 119, 519 A.2d 1021 (1987); Steinhauerv. Wilson, 336 Pa. Super. 155, 485 A.2d 477 (1984); Brourman v. Bova, 198 Pa. Super. 279, 182 A.2d 245 (1962). It is only where the cost of completing performance or of remedying the defects is clearly disproportionate to the probable -4- 98-3633 CIVIL TERM loss in value to the injured party that damages will be measured by the difference between the market price that the property would have had without the defects and the market price of the property with the defects. Although articulating the rule in a slightly different manner, the Court acknowledged and followed the same principle in Gadbois v. Leb-Co. Builders, Inc., 312 Pa. Super. 144, 458 A.2d 555 (1983). Where the cost of remedying the defects in construction is not clearly disproportionate to the probable loss in value to the injured party, the breaching contractor cannot require that the injured party's damages be measured by the difference between the market price of the property without the defects and the price of the property with the defects. (Emphasis added.) The appellees did not establish what the value of their house would have been had the surface water problem not existed, and its diminished value because of the water problem. The jury entered a verdict based on the cost of correcting the situation as that was the only issue submitted to it. The verdict in the amount of $45,785.00 represented almost 48% of the cost of the house and it is clear in these circumstances that the jury should have had some idea as to the diminution of value in order to avoid a windfall to the appellants. The rule set forth in Doug/ass v. Licciardi Construction Co., Inc., supra, requires that the cost of repairs be clearly disproportionate to the probable loss in value before damages are limited to the loss in value. Therefore, there must be some evidence produced by the plaintiff of the reduction in value, although it need not be shown with exactitude. There must be a balancing between the probable diminution in value, which is often quite nebulous, and the cost of repairs which may be determined with greater accuracy. However, there must be some reasonable basis for determining reduction in value, before a judgment may be made that the cost of repairs is a proper measure of damages, where the required repairs to a new house represent a high percentage of the cost of the house. (Footnotes omitted.) In the case sub judice, the jury was charged that: [t]he measure of damages for a breach of contract in construction of a house containing defects is the difference between the market value of the house as constructed and what the market value of that house would have been if constructed as promised with the qualification that if it is reasonably practical to cure the defects in construction by repair and if the cost of repairs is not clearly disproportionate to the probable loss in value, then the measure of damages is the cost of repairs .... -5- 98-3633 CIVIL TERM [i]t is the plaintiffs' burden to produce some evidence of the reduction in value caused by the alleged construction deficiencies so that you can balance the possible diminution in value with the cost of repairs. And in that regard my recollection, it's for you to determine, is that plaintiff told you that the condition of this foundation and what it is, that he doesn't believe that anybody would even buy the house at this particular point. He is an owner. He can offer you that opinion. It is for you to determine whether that is the case, and my recollection is that defendant and at least one of the witnesses for defendant - by the defendant I mean Mr. Zimmerman because he is Country Side, Inc. - has told you that they don't feel there's any diminution in the value of the house. In any event, that is for you to determine. The testimony presented at trial by defendant that there was no diminution in the value of the house was based on its position that the cracks in the foundation and support pillars were cosmetic and not structural defects that placed the house in jeopardy of collapsing on the foundation slab. When the jury awarded plaintiffs the entire $15,900 that their evidence indicated was necessary to remedy the deficiencies in their home they obviously accepted plaintiffs' evidence that the deficiencies went to the structural integrity of the foundation rather than being merely cosmetic as posited by defendant. Plaintiffs' evidence was that the differential movement in the foundation can cause the foundation slab to fail which would mean that the house which is elevated on concrete blocks could tilt and ultimately could fall onto the slab. Plaintiffs, of course, would be obligated to disclose this problem to any prospective purchasers. On these unique facts we believe that no testimony as to the value of the home was necessary because as a matter of common knowledge the jury would know that the home is not saleable in its current defective condition. In any event, we are satisfied that it was -6- 98-3633 CIVIL TERM proper to allow plaintiff to offer an opinion that no one would buy the home until the structural deficiency in the foundation is corrected. Pennsylvania Rule of Evidence 701 provides: If the witness is not testifying as an expert, the witness' testimony in the form of opinions or inferences is limited to those opinions or inferences which are rationally based on the perception of the witness and helpful to a clear understanding of the witness' testimony or the determination of a fact in issue, (Emphasis added.) It is only where the cost of completing the performance or of remedying the defects is clearly disproportionate to the probable loss in value to the injured party that damages will be measured by a diminution in value. Plaintiffs' home and foundation cost $59,559. We conclude that Plaintiffs' testimony was sufficient and no expert testimony was required for the jury to conclude that a $59,559 manufactured home with a structural defect in a foundation would not reasonably be saleable, and thus the proper measure of damages was the $15,900 cost to repair the defect. The opinion of plaintiff was akin to the opinion of value that an owner of property can testify to in a condemnation proceeding although in such a case there is statutory authority at 26 P.S. Section 1-704. For the foregoing reasons, the following order is entered. ORDER OF COURT AND NOW, this ,~O~,~. day of March, 2000, the motion of defendant for post- trial relief, IS DENIED. -7- Edgar B. Bayley, (' Timothy T. Engler, Esquire For Plaintiffs Jonathan H. Rudd, Esquire For Defendant :saa -8-