Damages

Damages in a lawsuit means the money a court awards the plaintiff due to the defendant’s wrongful action. Different claims yield different damages, but a lot of people start their claim thinking they are entitled to a wide range of damages, some of which may not be available.

The law limits the damages one can recover based upon the type of wrongful action upon which the lawsuit is based. A large part of the limitation is inherited from the common law of England. Some is imposed by statute.

Claims for breach of contract are perhaps the most common cases where the plaintiff thinks he or she will recover a lot more than the law allows.

In a breach of contract case, the non-breaching party is generally entitled to the benefit of his or her bargain. The plaintiff is to be placed in the position the plaintiff would occupy if the defendant did not breach the contract. What does that look like?

Let us use a contract to remodel a house. If the contractor does not perform, the homeowner has a claim for damages calculated as what it cost to hire another contractor LESS the contract amount with the first contractor. That way, the homeowner gets what the homeowner bargained for. If the homeowner paid a deposit to the first contractor, the homeowner would add that to the damages. Under Florida law, the non-breaching party to a contract also gets interest at a formula set by statute or a greater amount if provided in the contract.

What does the homeowner not get? In a breach of contract case, the homeowner generally does not get pain and suffering or stress, damages for inconvenience, personal time or attorney fees. Attorney fees are only available if provided in the contract or if a statute provides for award of attorney fees.

What about lost rent? Lost rent would not be a direct damage from a breach of a remodel contract but would be what is known as consequential damage. Consequential damages are those additional damages which the parties knew would flow from a breach of contract. If the property was a rental home and the contractor is aware the home was being remodeled for a tenant, any rent lost due to the breach (i.e. delayed completion and availability of the home for rent) could be recoverable. 

Florida would also allow recovery of fair rental value if the homeowner was going to occupy, as the failure to perform would deprive the homeowner of use and the value of that use is rental value. Lost rent or use would only be recoverable if the default delayed completion. 

Other consequential damages could be available depending on circumstances. For example, if the homeowner had a contract for sale contingent on completing the remodel, failure of the contractor to perform could lose the sale. If that happened, the contractor could also be responsible for the difference between the lost sale and a subsequent sale for a lesser price, carrying expenses of the property and maybe even lost profit from subsequent investment of sale proceeds. For those damages to be available, the contractor would have to know about the sale and probably even the investment at time of contract. Otherwise, the lost sale would not be a usual and expected outcome of breach of a remodel contract.

If the homeowner has to take time to find another contractor, that time is not an element of recoverable damages. If the homeowner does some of the work that was to be done by the contractor, the homeowner again would find the time spent not recoverable with one exception. Recent cases have allowed recovery when the homeowner is a licensed contractor or has particular expertise in the area for which the homeowner performed and wants to be paid. 

What if the homeowner fails to pay? If the contractor completed the job, the contractor is entitled to total amount due under the contract, less payments actually received. 

If the homeowner defaults before full performance, damages are a bit tricky. The contractor is generally entitled to what the contractor paid to perform plus the profit the contractor would have made with full performance. That means the contractor could get 100% of the profit as if the whole contract was completed even though the contractor only completed part of the job. When the contractor would have lost money on the job, the contractor still gets cost of performance prior to breach or possibly the reasonable value of part performance. 

On the other side of recoverable damages are what is known as torts. Torts are claims that are generally not related to breach of contract. Personal injury is the simplest example of a tort. A tort case does not seek benefit of a bargain, as who would bargain for injury? It seeks to recover for wrongful acts, negligence and in some cases intentional acts (i.e. assault and battery). 

Economic loss is recoverable in a tort case including lost wages, medical expenses and cost to repair property damage. Future lost wages and medical expense are recoverable based on estimates. Pain and suffering are also recoverable, based in part on pain reported by the plaintiff but also on suffering by diminution in quality of life (i.e. the plaintiff can no longer play softball).

The broader scope of damages available in tort actions is intended to restore the injured person to the position he or she would have been in before the injury. Money damages cannot reverse a physical limitation due to injury. Money damages attempt to value a limitation or pain in monetary terms. To that extent, damages in a tort action are similar to breach of contract. They both attempt to place a plaintiff where the plaintiff would be before the wrongful act.

The legislature has added to the damages arena by adopting statutes that provide damages for specific wrongdoing. Many statutes provide in damages that are multiple times actual loss. Persons guilty of deceptive and unfair trade practices face losing actual damages incurred by a consumer plus attorney fees. For bad checks, the defendant can be liable for the amount of the check plus three times that amount plus attorney fees. Civil theft plaintiffs can get three times the value of stolen items plus attorney fees.

Damages that might be awarded depend on the facts. They also depend on how a pleading is drafted. Categorizing a claim is not always simple. That is why analyzing what cause of action can be pursued and what damages obtained in a particular fact situation are the stock in trade of experienced attorneys.