Absent physical injury, emotional distress damages can be recovered only in limited circumstances involving intentional torts, constitutional violations, and the breach of the covenant of good faith and fair dealing in insurance contracts.
A husband and wife contracted a general contractor to build their "dream house" on their ocean-view lot. After the couple moved in, it rained and they discovered that the house had severe leaks. The couple's effort's to remedy the situation were to no avail. It turned out that the home was structurally unsound, as well, after the home was inspected by another general contractor and a structural engineer. The husband suffered severe emotional distress and developed a permanent heart condition, as a result. A case for breach of contract was filed against the general contractor. At trial, the court awarded emotional distress damages to the couple along with compensatory damages. The case was appealed.
Was it proper for the court to award emotional distress damages?
The court held that emotional distress damages in connection with property damages are not compensable. Nevertheless, the couple was entitled to damages for the defective construction of their house. The court further noted that the available damages for defective construction were limited to the cost of repairing the home or the diminution in value.