When Suing Contractor for Breach of Contract, Evidence of Damages Caused by Breach is Necessary

On June 29, 2015, the Court of Appeals issued a memorandum decision in the case of Chocklett v. Davison (pdf) concerning a breach of contract action brought by a homeowner against a contractor. The homeowner hired the contractor to do a remodel. The relationship deteriorated as the homeowner came to believe the work was untimely and of inadequate quality. She had paid $3,500 but initially sued for $5,000 she claimed that she had to pay another contractor “to clean up his mess and finish the job.” The small claims court entered a judgment for $5,000. Due to the procedural quirks in Marion County, the contractor got to ask for a new trial in the Superior Court. The homeowner upped her demand – initially to $6,000 and, at trial, for $17,375. The trial court entered a judgment this time for $14,453.37. The contractor appealed.

The Court of Appeals reversed the trial court’s decision, holding that the homeowner failed to present evidence of what damages were actually caused by the contractor’s breach of contract.

She explained that their contract was for $8,500.00 that it cost of her $13,578.37 to pay other people to do the work, and that she had already paid Chocklett $3,500.00 but he did not do $3,500.00 worth of work.
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In support of her claim, several checks to various individuals and estimates from other contractors were admitted into evidence. During the hearing, the trial court attempted to clarify Davison’s damages and summarized her request as $3,500.00 plus $13,875.00. She agreed, indicating her contract with Chocklett was for $8,500.00.

However, she did not provide a copy of the contract, so the Court was not able to determine what the scope of the parties’ actual bargain was. Additionally, while the court could not determine the full scope of the bargain, it was convinced that the $13,578.37 the homeowner paid to other contractors included money for services that were not within the scope of the original bargain. The Court noted that “A party’s recovery for breach of contract is limited to the loss actually suffered, and the party may not be placed in a better position than he or she would have enjoyed if the breach had not occurred.” In effect, the trial court’s award – if paid by the contractor – would have had the effect of making the contractor pay for the entire remodel when the homeowner was entitled only to his or her loss if the breach had not occurred.

The take away for homeowners and contractors alike is to have a written agreement, to produce it to the court, and to focus on the loss caused by the breach of the agreement. Do not include as losses those amounts the homeowner would have had to pay even if the contract was honored.

Our firm has represented both homeowners and contractors in home improvement disputes. If you have a similar issue in the Tippecanoe County area, contact us to see if we can be of assistance.