Chestnut Creek Construction v. Murphy, E.
Chestnut Creek Construction v. Murphy, E. No. 452 EDA 2016
| Pa. Super. Ct. | May 4, 2017Background
- Chestnut Creek Construction (Builder) and Edward & Maggie Murphy (Owner) entered a 2005 Construction and Land Development Agreement to subdivide a 5.5-acre property into three lots, build two custom homes, and split proceeds after paying costs and a $450,000 lot price to Owner.
- Builder obtained subdivision approvals and paid subdivision and development costs; Owner executed a $3.375M mortgage in 2007 without Builder’s knowledge, later defaulted, and the property was lost in foreclosure.
- Chestnut sued in 2009 for breach of contract and unjust enrichment; default judgment on liability was entered against Murphy for breaching the Agreement by encumbering the property and causing foreclosure.
- After multiple procedural steps (petition to open denied; appeals exhausted), the trial court conducted a bench hearing on damages in June 2015.
- The court awarded Chestnut $87,821.21 for subdivision and related costs but declined to award lost profits, finding profit projections speculative in light of market evidence presented by Murphy.
- Both parties filed post-trial JNOV/new-trial motions; the trial court denied them, and the Superior Court affirmed.
Issues
| Issue | Plaintiff's Argument (Chestnut) | Defendant's Argument (Murphy) | Held |
|---|---|---|---|
| Whether Murphy could introduce evidence that undercut Chestnut’s claimed lost profits at a damages-only proceeding | Chestnut argued Murphy was limited to disputing amount, not liability or causation, under Pa.R.C.P. 1037 and should not be allowed to challenge merits | Murphy argued market-value evidence was relevant to the calculation of damages and to show Chestnut’s lost-profits claims were speculative | Court held Murphy permissibly introduced expert valuation evidence at the damages hearing; evidence went to amount, not relitigation of liability |
| Whether Chestnut was entitled to full claimed damages (including lost profits) because its evidence was unrebutted | Chestnut argued its damages evidence was uncontroverted and supported full recovery | Murphy countered with expert testimony that market conditions made Chestnut’s profit projections speculative and unreliable | Court held lost-profit claims were too speculative; affirmed award only for provable subdivision costs ($87,821.21) |
| Whether the trial court erred in denying Chestnut’s JNOV | Chestnut argued legal error and lack of contrary testimony required JNOV in its favor | Murphy argued factual disputes and credibility determinations foreclosed JNOV; trial court properly weighed evidence | Court applied JNOV standard, found no clear legal error or that evidence compelled a different result; denied JNOV |
| Whether the trial court erred in denying Murphy’s JNOV/new trial challenging the damages award | Murphy argued award was against weight of evidence or otherwise unsupported | Chestnut pointed to detailed testimony and accountant report supporting subdivision-cost award | Court found the award for subdivision costs supported by record and not an abuse of discretion; denied JNOV/new trial |
Key Cases Cited
- Thomas Jefferson Univ. v. Wapner, 903 A.2d 565 (Pa. Super. 2006) (standard for reviewing denial of JNOV)
- Underwood ex rel. Underwood v. Wind, 954 A.2d 1199 (Pa. Super. 2008) (standard for reviewing denial of a new trial)
- Hatwood v. Hosp. of the Univ. of Pennsylvania, 55 A.3d 1229 (Pa. Super. 2012) (calculation of damages is a fact-finder question)
- Newman Dev. Grp. of Pottstown, LLC v. Genuardi’s Family Mkt., Inc., 98 A.3d 645 (Pa. Super. 2014) (deference to fact-finder on damages; verdict must reasonably resemble proven damages)
- Helpin v. Trustees of Univ. of Pennsylvania, 10 A.3d 267 (Pa. 2010) (damages in contract actions must be proved with reasonable certainty)
- Spang & Co. v. U.S. Steel Corp., 545 A.2d 861 (Pa. 1988) (damages not recoverable if too speculative or not susceptible to reasonable certainty)
- Merion Spring Co. v. Muelles Hnos. Garcia Torres, S.A., 462 A.2d 686 (Pa. Super. 1983) (lost profits require sufficient evidence to permit reasonably certain estimate)
- Lambert v. Durallium Products Corporation, 72 A.2d 66 (Pa. 1950) (measure of contract damages is compensation to restore non-breaching party)
- Wilson v. Maryland Cas. Co., 105 A.2d 304 (Pa. 1954) (default judgment operates as an admission of well-pleaded facts)