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Louise Caroline Nursing Home, Inc. v. Dix Constr. Corp. - 362 Mass. 306, 285 N.E.2d 904 (1972)

Rule:

A judge, or an auditor, or a master designated by a judge to hear a matter, has broad discretion to determine whether an expert witness has a proper basis, in terms of adequate information and preparation, to render an opinion on the matter in dispute.

Facts:

Louise Caroline Nursing Home, Inc. (Nursing Home) sought damages from Dix Construction Corp. (Dix) for breach of a contract to build a nursing home, and from Reliance Insurance Company (Reliance), for its default on a surety bond guaranteeing performance by Dix. The case was referred to an auditor for hearing pursuant to a stipulation of the parties that his findings of fact would be final. After hearing the parties, the auditor filed a report in which he found generally: (i) that the Nursing Home had fulfilled all of its contractual obligations to Dix; (ii) that Dix had committed a breach of its contractual obligations to the Nursing Home by failing, without justification, to complete the contract within the time agreed; and (iii) that Reliance committed a breach of its obligations as surety by failing to take any action when Dix defaulted. However, the auditor also found that the Nursing Home suffered no compensable damages in that the cost to complete the nursing home was within the contract price. The Nursing Home filed a number of objections to the auditor’s report, and thereafter, filed a motion to recommit the case to the auditor for correction of alleged errors.

Issue:

Did the Nursing Home suffer compensable damages?

Answer:

No.

Conclusion:

In overruling the Nursing Home's exceptions, the Court found that the auditor's exclusion of the testimony of one of the Nursing Home's expert witnesses was a proper exercise of his discretion and was not error. The Court also agreed with the auditor's assessment of damages as the amount of the reasonable cost of completing the contract and repairing the defective performance less such part of the contract price as had not been paid, finding that the auditor was correct in applying the "cost of completion" measure of damages that excluded any separate recovery for lost benefits of the bargain. Finally, the Nursing Home failed to carry its burden to prove other elements of damage for delay in construction and interest.

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