Damages

People are often confused about what damages are recoverable in a lawsuit. Clients think they will get money for inconvenience, stress, and other non-financial “losses,” but the reality is those types of damages are not recoverable in most cases. This column will briefly explain what damages are generally recoverable in different kinds of lawsuits.

The first step in understanding damages is understanding claims for breach of contract are different from torts. Breach of contract means someone did not do what they agreed to do, and the other party is suing. Torts are pretty much everything else, but most tort lawsuits are based on negligence that causes someone to get hurt (i.e. personal injury).

The non-breaching party in a contract case is entitled to the benefit of the bargain that was contracted. If the painter fails to paint the house and the owner hires another painter, the damages are any extra cost for the second painter. That puts the owner in the position the owner would have been if the first painter performed. The owner is entitled to what the owner contracted for at the cost contracted.

Damage recoverable in contract cases are those which would normally be expected in such cases to place the non-breaching party in same position as if the contract was performed. That means damages do not include recovery for time finding a second painter, stress of not having the house painted, or personal time of the owner. Personal time is not generally recoverable even if the owner ends up painting the house.

Buying or selling something carries similar damages for breach. If a car seller refuses to sell, the buyer can buy another comparable car and sue the seller for any additional cost. If the buyer defaults, the seller sells the car to another and can sue the defaulting buyer for difference in sale price if it sells for less.

Sometimes other damages are recoverable, if within the contemplation of the parties or would naturally seem to flow from breach. A house seller could claim additional property taxes and other “carrying” expenses incurred between date the original contract was supposed to close and closing on ultimate sale. Buyer suing a defaulting seller could similarly recover usual expenses incurred by the buyer for housing that the buyer would not have incurred because of the default.

If the seller or service provider knows there are other damages likely to the buyer from breach, the seller could also face liability for those damages. For example, if equipment is needed to restart manufacturing and the provider fails to deliver, the provider could be liable for all lost business of the seller and not merely extra cost to get the equipment elsewhere. The key is those damages have to be known as likely at time of contract.

Attorney fees are usually not recoverable in contract cases UNLESS the contract provides for fees. By statute, if the contract provides fees are only recoverable by one party, that provision is made bilateral.

Damages in tort cases are not quite so simple as there is usually not a contract involved. However, there can be overlap between a claim for breach of contract and tort when one party is also guilty of fraud. When identical damages are claimed for breach of contract (i.e., the item not as represented) or fraud (the seller knew the item was not as represented), courts limit the damages to those available for breach of contract. Why is that important? It is important because tort claims can include those types of damage not usually available to place a party in position the party would be in if a contract was performed.

Torts include fraud, negligence, assault, slander, and other non-contract claims. Damages in tort actions are recoverable based on what impact the wrongdoer had on the other party. Similar to breach of contract, the injured party can usually recover all of that person’s expenses directly attributable to the wrongdoing.

It is also possible to recover damages in tort over and above financial harm to the injured party. Damages must still be those which one might expect and not those which are truly speculative but can include pain and suffering, stress, personal time, loss of enjoyment of life and even personal inconvenience which would not be recoverable in contract cases.

Suit in tort opens the possibility of getting extra damages over and above those actually suffered by the injured party. When the wrongdoer has been particularly heinous, the injured party may be able to recover punitive damages in addition to other damages.

Punitive damages are recoverable when a defendant’s conduct is particularly reprehensible and are awarded to punish the wrongdoer and to serve as a warning to deter others from similar wrongdoing. Punitives are limited to cases where the defendant’s action has been particularly fraudulent, malicious, violent, oppressive or committed with negligence so extreme as to evidence a wanton disregard of the rights of others. Since primary purpose of punitives is to punish a wrongdoer, punitives are based in part on the defendant’s wealth.

A plaintiff cannot simply ask for punitives. A plaintiff must first provide a Judge with evidence that supports a claim for punitives. If the Judge agrees, the plaintiff amends the complaint to add a request for punitives. Florida Statutes provide limits on punitives in certain types of cases. Only when the fact finder determines the defendant had specific intent to harm the plaintiff and did harm the plaintiff are punitives not limited.

Damages in lawsuits can be very complicated. Good attorneys help clients understand there are limits on what might be recovered.