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Trinity Church in Bos. v. John Hancock Mut. Life Ins. Co. - 399 Mass. 43, 502 N.E.2d 532 (1987)

Rule:

Replacement or restoration costs have also been allowed as a measure of damages in other contexts where diminution in market value is unavailable or unsatisfactory as a measure of damages. Where expenditures to restore or to replace to predamage condition are used as the measure of damages, a test of reasonableness is imposed. Not only must the cost of replacement or reconstruction be reasonable, the replacement or reconstruction itself must be reasonably necessary in light of the damage inflicted by a particular defendant. In some cases, to make such a restoration would be an uneconomical and improper way of using the property and might involve a very large and disproportionate expense to relieve from the consequences of a slight injury.

Facts:

Trinity Church was a national historic landmark constructed almost entirely of stone masonry. During the construction of the John Hancock Tower Building in Copley Square, the foundation of the church was undermined by a failure of the excavation system at the Hancock site, producing a spray of cracks up through the masonry walls of the church, which affected the structural integrity of the church. Before the church filed the present petition, the representatives of the Hancock Building agreed to waive assertion of a statute of limitations defense. Church filed its action three days before Hancock’s waiver expired. The Superior Court (Massachusetts) denied Hancock’s motion for a directed verdict, and ruled in favor of the church.

Issue:

Was the church entitled to be compensated for the damages caused by Hancock’s construction?

Answer:

Yes.

Conclusion:

The Court held that the church was entitled to be compensated for the reasonable costs of restoring church to the condition it was in prior to the excavation, as church's method of damage assessment, based upon a percentage of reconstruction cost, was consistent with the depreciated-cost-of-reconstruction standard applicable to special purpose property cases.

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