JAMES J. FORBES & FAY ANNETTE FORBES v. PRIME GENERAL CONTRACTORS, INC.
255 So. 3d 448
| Fla. Dist. Ct. App. | 2018Background
- Forbes (James and Fay) contracted with Prime General Contractors to renovate their home for $276,000 paid in five draws; Forbes paid the first two draws ($138,000) and $6,000 for updated architectural plans.
- Prime demanded more money mid-job (claimed material costs rose; presented change order asking for ~ $550,000 total) and walked off when Forbes refused to sign; home left uninhabitable.
- Forbes rented for five months while soliciting replacement contractors (none would finish the job), then bought a new house and let the unfinished home go into foreclosure, losing about $45,000 equity they had at contracting.
- Forbes sued for breach of contract seeking restitution to precontract position (return of payments, architectural plan costs, lost equity) plus rent and other expenses; Prime defended partly on mitigation and contested damages.
- After a bench trial the court found Prime materially breached but awarded only $5,600 rent, rejecting Forbes’s requested restitution and finding Forbes failed to mitigate; Forbes appealed.
Issues
| Issue | Forbes's Argument | Prime's Argument | Held |
|---|---|---|---|
| Proper measure of damages after a material breach | Forbes elected to treat breach as total and sought rescissory damages to restore precontract position (return of payments, plan costs, lost equity) | Contract should be treated as partially performed; damages measured by benefit-of-the-bargain (cost to complete or diminution in value) | Court reversed: trial court used wrong measure; Forbes validly elected rescissory remedy and is entitled to be restored to precontract position |
| Burden/evidence for benefit-of-the-bargain remedy | Forbes did not pursue benefit-of-the-bargain; thus lack of proof on completion costs/value is irrelevant | Trial court relied on Forbes's failure to prove market-value/completion-cost evidence to deny benefit-of-the-bargain damages | Court held trial court misapplied this standard because Forbes sought rescission, not benefit-of-the-bargain |
| Mitigation (avoidable-consequences) defense | Forbes argued they tried reasonably to mitigate (sought other contractors, rented while searching, eventually bought new house when no contractor available) | Prime argued Forbes failed to mitigate and made financial choices that increased damages | Court held there was no competent substantial evidence Forbes could have avoided damages with reasonable efforts; mitigation defense failed |
| Remedy on remand | Forbes seeks full rescissory damages restoring precontract position | Prime seeks affirmation of limited award and mitigation finding | Court remanded for entry of amended judgment awarding damages necessary to restore Forbes to precontract position; affirmed remainder of judgment |
Key Cases Cited
- Tubby’s Customs, Inc. v. Euler, 225 So. 3d 405 (Fla. 2d DCA 2017) (distinguishes rescissory vs. benefit-of-the-bargain remedies)
- Hyman v. Cohen, 73 So. 2d 393 (Fla. 1954) (nonbreaching party may treat material breach as total and elect rescissory remedy)
- Rector v. Larson’s Marine, Inc., 479 So. 2d 783 (Fla. 2d DCA 1985) (nonbreaching party may suspend performance and elect remedies)
- City of Miami Beach v. Carner, 579 So. 2d 248 (Fla. 3d DCA 1991) (explains election between rescission and affirmance with benefit-of-the-bargain damages)
- McCray v. Murray, 423 So. 2d 559 (Fla. 1st DCA 1982) (permitting rescissory relief and explaining inconsistency between remedies)
- Grossman Holdings Ltd. v. Hourihan, 414 So. 2d 1037 (Fla. 1982) (adopts Restatement approach to construction-contract damages for completion or diminution in value)
- Sys. Components Corp. v. Florida Dept. of Transp., 14 So. 3d 967 (Fla. 2009) (avoidance-of-consequences doctrine does not require plaintiff to undertake Herculean efforts)
- Graybar Elec. Co. v. Stratton of Fla., Inc., 509 So. 2d 1133 (Fla. 2d DCA 1987) (reversing application of avoidable-consequences where evidence was insufficient)