As a general rule, damages for defective construction, whether those damages are the result of a breach of contract or negligence of the contractor, are determined by measuring the cost of repairing or restoring the damage, unless the cost of repair is disproportionate to the property's probable loss of value. Where demanded by the facts of a case, courts also have determined damages in such cases by measuring the diminution in value of the property after the injury occurred. Frequently, both measures of damages are in evidence and are complementary to the other, inasmuch as proof of the cost of repair because of the defective construction is illustrative of the difference in value claimed as damages, and is more likely to represent the true damage suffered from the failure of a contractor to complete his contract than would the opinion of an expert as to the difference in values.
The homeowner's home was substantially damaged by fire. The corporation was hired to make repairs to the home for an agreed upon contract price of $ 311,156. The homeowner subsequently discovered problems with the construction and initiated an action against the corporation for breach of contract, breach of warranty, negligent construction, and negligence. During trial, the homeowner presented evidence of the cost of repairs for the rework. The corporation argued that evidence of fair market value was necessary regardless of the measure of damages applied. The trial court granted the corporation’s motion for a directed verdict on the ground that the homeowner did not present evidence of the fair market value of his home after the allegedly faulty repairs. The Court of Appeals disagreed and reversed the trial court.
Is evidence of fair market value of the property after the alleged faulty repairs necessary before the homeowner can recover damages?
The supreme court found no authority to support this contention. To the extent language in Ryland Group v. Daley, 245 Ga. App. 496 (537 SE2d 732) (2000) suggested fair market value was the only method, it was disapproved. The record showed that the homeowner elected to prove his damages by presenting evidence, including expert testimony, of the cost to repair the alleged damage to his home caused by the corporation's defective workmanship. Because there was no indication in the record that the court determined cost of repair to be an inappropriate measure of damages and because the homeowner presented some evidence of the cost to repair, the trial court erred in directing a verdict against the homeowner.