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Where plaintiffs have a personal reason to repair and the costs of repair are not unreasonable in light of the damage to the property and the value after repair, costs of repair which exceed the diminution in value may be awarded.
Plaintiff homeowners purchased a home built on defectively compacted soil. They filed a lawsuit against defendant homebuilders, alleging claims for breach of implied warranty, strict liability, and negligence. The trial court awarded plaintiffs $ 243,539 needed to restore the property, even though plaintiffs' appraiser testified the home would be worth $ 238,500 following repairs. On appeal, the defendant claimed that the trial court should not award more than the $ 171,000 diminution in value established by the appraiser.
Did the trial court err in awarding plaintiff the cost needed to repair the property?
The court of appeals affirmed. Normally, the measure of damages in construction cases was the diminution in value or the cost of repair, whichever was less. Awarding the higher cost of repair was appropriate given plaintiffs had a personal interest in repairing a home that was special to them, and the cost was not unreasonable in light of the damage. Strict liability could be imparted to defendants for the mass production of homes because buyers relied upon their skill and expertise in construction. Because the actual cost of repair was not extreme, the court rejected defendants' theory that use of a repair formula would create situations where property owners could recover far more than the value of the property. Awarding the cost of repairing the defect, rather than just the damage caused by the defect, was appropriate because that was the way to prevent future damage.