NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
JAMES JAY FORBES and FAY ANNETTE )
FORBES, )
)
Appellants, )
)
v. ) Case No. 2D17-353
)
)
PRIME GENERAL CONTRACTORS, )
INC., a Florida corporation, )
)
Appellee. )
)
Opinion filed September 7, 2018.
Appeal from the Circuit Court for Lee
County; Alane C. Laboda, Judge.
P. Brandon Perkins and E. Carson Lange
of Rogers Towers P.A., Fort Lauderdale,
for Appellants.
No appearance for Appellee.
SALARIO, Judge.
This is an appeal from a final judgment on a claim for breach of contract.
James and Fay Forbes sued Prime General Contractors, Inc. for breach after Prime
walked off a home construction job. The Forbeses sought damages that included
payments they made to Prime under the contract, payments they made for updated
architectural plans, certain other expenses, and a loss of equity in their home. After a
bench trial, the trial court found that Prime had materially breached its contract with the
Forbeses but declined to award these three items of damage. We reverse the damage
award in the final judgment and remand with instructions to award the Forbeses such
damages as will restore them to the position they enjoyed right before they inked their
contract with Prime. We affirm the judgment in all other respects.
The Forbeses and Prime signed a written contract under which Prime
agreed to renovate the Forbeses' home in accord with plans drawn up by an architect.
In exchange, the Forbeses agreed to pay Prime a total of $276,000 in five separate
draws. Under the draw schedule, the Forbeses were to pay (a) 25% of the contract
price upon signing, (b) 25% upon completion of demolition, (c) 25% upon completion of
the "dry-in" stage of construction,1 (d) 15% after roofing and siding installation, and (e)
the remaining 10% upon completion of the job. The contract provided that "any
alteration or deviation from this agreement must be made in writing and signed by the
Parties." Prime began the job as agreed, and the Forbeses paid the first two contract
draws—totaling $138,000. They also paid an additional $6000 for updated architectural
plans.
Under the contract, the Forbeses should not have had to pay anything
more until the dry-in phase of the project was done. Unfortunately, things hit a snag
before then. Prime said that the cost of the materials it needed to do the job had gone
1The contract defines the "dry-in" stage as "demo, framing rough-in
electric, plumbing and mechanical, roof sheeting and felt and exterior windows and
doors if available."
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up. It told the Forbeses that the work would now cost at least $550,000—almost twice
the original contract price—and demanded that the Forbeses immediately pay the third
draw plus an additional $31,450 for work Prime had already done and for which the
Forbeses had already paid. Prime presented the Forbeses with a written change order
making these adjustments. The Forbeses refused to sign it and told Prime that they
were prepared to move forward at the contract price. Prime refused and walked off the
job, leaving the Forbeses' home unfinished and uninhabitable.
Because they could not live in their home, the Forbeses began renting a
house nearby so that they had somewhere to stay. In the meantime, they looked for
another contractor to finish the work on their home—ultimately talking with five potential
candidates to perform the service—but none was willing to handle the job. After five
months of living in a rental with no luck getting the work on their house finished, the
Forbeses bought a new house and moved into it. They were unable, however, to pay a
mortgage on their new house and another mortgage on the home that Prime left
uninhabitable. So they let the uninhabitable home go into foreclosure. At the time they
contracted with Prime, the Forbeses had about $45,000 in equity in the house. That
equity was lost in the foreclosure.
The Forbeses sued Prime for breach of contract, and the case went to a
bench trial at which the evidence was consistent with the facts related above. The
Forbeses argued that Prime materially breached the contract by demanding payments
to which it was not entitled under the contract and thereafter walking off the job. Prime
contended, among other things, that the Forbeses also failed to perform under the
contract, to which the Forbeses answered that they were entitled to suspend
performance due to Prime's material breach. The Forbeses requested the following
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items of damages: $138,000 in payments made pursuant to their contract with Prime,
$6000 for updated architectural plans, $45,000 of lost equity in their home, $5600 in
rent, and various other expenses incurred in reliance on their contract with Prime. It is
clear from the damages the Forbeses requested that they were asking to be put in the
position they would have occupied had they not contracted with Prime in the first place.
Prime asserted and litigated at trial an affirmative defense that the Forbeses failed to
mitigate their damages.
About a month after the bench trial wrapped, the trial court entered a final
judgment. It found that Prime had materially breached the contract as the Forbeses
argued. However, it awarded the Forbeses as damages only the $5600 in rent they
paid while searching for a new contractor. The trial court explained that "[t]he purpose
of contract damages is to put the injured party in as good a position as that in which full
performance would have put him" and concluded that the Forbeses
failed to offer persuasive or credible evidence at trial of the
difference between the market value of the home had it been
completed, less such part of the contract price that has not
been paid, and the value of the construction that has been
furnished by [Prime] thus far.
The court also found, without elaboration, that the Forbeses "made a financial decision
not to engage in reasonable mitigation efforts" with respect to their damages.
This is the Forbeses' timely appeal of the final judgment. They argue two
points: (1) by looking to place them in the position they would have occupied had Prime
fully performed instead of the position they would have occupied had they never
contracted with Prime, the trial court used an incorrect method of calculating damages;
and (2) the trial court's finding that the Forbeses failed to mitigate their damages is
unsupported by the evidence. We review the first point de novo, see Tubby's Customs,
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Inc. v. Euler,
225 So. 3d 405, 407 (Fla. 2d DCA 2017), and the second for competent
substantial evidence, cf. RNK Family Ltd. P'ship v. Alexander-Mitchell Assocs.,
890 So.
2d 297, 299 (Fla. 2d DCA 2004). See also Craigside, LLC v. GDC View, LLC,
74 So.
3d 1087, 1089 (Fla. 1st DCA 2011) ("While the parties are entitled to de novo review of
the trial court's rulings with respect to the legal effect of the contract, we are bound by
the trial court's findings of fact in a case, like the present one, where competent,
substantial evidence supports the findings."). Both points have merit.
Method of calculating damages. In calculating damages, the trial court
erred by failing to honor the Forbeses' choice to deem the contract totally breached and
recover those damages that would restore them to the position they occupied
immediately before contracting with Prime. When one party to a contract commits a
material breach, the nonbreaching party has the option to treat the breach "as a breach
of the entire contract—in other words, an entire or total breach."2 Hyman v. Cohen, 73
So. 2d 393, 397 (Fla. 1954) (quoting 12 Am. Jur. Contracts § 389); see also 24 Richard
A. Lord, Williston on Contracts § 64:27 (4th ed. 2018). From the perspective of the
nonbreaching party, there are two main consequences of that decision: (1) the
nonbreaching party may suspend his or her own performance of the contract, see
Rector v. Larson's Marine, Inc.,
479 So. 2d 783, 785 (Fla. 2d DCA 1985), and (2) the
nonbreaching party can elect one of two damage remedies in a suit for breach, see City
of Miami Beach v. Carner,
579 So. 2d 248, 251 (Fla. 3d DCA 1991).
When a party seeks damages for a total breach, "[h]e may treat the
contract as void and seek the damages that will restore him to the position he was in
2No one in this appeal has challenged the trial court's finding that Prime
materially breached its contract with the Forbeses.
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immediately prior to entering the contract." Rector,
479 So. 2d at 785; see also McCray
v. Murray,
423 So. 2d 559, 561 (Fla. 1st DCA 1982). Or, in the alternative, he may
instead "affirm the contract, 'insist upon the benefit of his bargain, and seek the
damages that would place him in the position he would have been in had the contract
been completely performed.' " Tubby's Customs, 225 So. 3d at 407 (quoting Citizen's
Prop. Ins. Corp. v. Amat,
198 So. 3d 730, 734 (Fla. 2d DCA 2016)). In the case of a
breached construction contract like Prime's contract with the Forbeses, the benefit-of-
the-bargain remedy is "either the reasonable cost of completion, or the difference
between the value the construction would have had if completed and the value of the
construction that has been thus far performed." Rector,
479 So. 2d at 785 (citing
Grossman Holdings Ltd. v. Hourihan,
414 So. 2d 1037 (Fla. 1982) (adopting section
346(1)(a) of the Restatement (First) of Contracts (Am. Law Inst. 1932), to cases
involving breach of a construction contract)).
Here, the final judgment on its face shows that the trial court believed that
the Forbeses were entitled only to the benefit-of-the-bargain remedy. As reflected in the
language from its final judgment quoted above, the trial court concluded that the
Forbeses were entitled to be put in the position they would have occupied had Prime
fully performed and that they had failed to present evidence to establish the key factors
that go into that remedy in a construction contract case.
But the reason the Forbeses did not produce that evidence was because
they did not seek benefit-of-the-bargain damages. They sought to be put in the position
they would have occupied had they never contracted with Prime. It was clear at trial
that the Forbeses regarded the breach as total; indeed, they were explicit that they were
entitled to suspend their own performance under the contract. And the damages they
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asked the court to award—return of payments made under the contract and the equity
in their home at the time of contracting—were of a type that regarded the contract as
void and attempted to restore the Forbeses to their precontractual situation. Those
damages were inconsistent with an affirmance of the contract and request for damages
approximating full performance. Cf. Sec. & Inv. Corp. of the Palm Beaches v. Droege,
529 So. 2d 799, 802 (Fla. 4th DCA 1988) ("If the two remedies are inconsistent or
mutually exclusive, . . . then the mere choice of one remedy and . . . pursuit of one
remedy to judgment . . . operates as an election."); McCray, 423 So. 2d at 561 (holding
that a trial court did not err in failing to instruct a jury on benefit-of-the-bargain damages
where the evidence supported damages to restore plaintiff to his original condition). In
the final analysis, then, the remedy the Forbeses chose and pursued was not the
remedy the trial court either considered or awarded.
Mitigation of damages. We agree with the Forbeses that the trial court's
finding that they failed to mitigate damages was mistaken. The concept of mitigation is
often used, as it appears to have been in this case, to refer to the doctrine of avoidable
consequences. In contract cases, there is really no "duty to mitigate" because the
claimant "is not compelled to undertake any ameliorative efforts"; rather, he is merely
prevented from recovering damages he "could have reasonably avoided." Sys.
Components Corp. v. Fla. Dep't of Transp.,
14 So. 3d 967, 982 (Fla. 2009) (quoting The
Florida Bar, Florida Civil Practice Damages § 2.43, at 2–30 (6th ed. 2005)); see also
Penton Bus. Media Holdings, LLC v. Orange County,
236 So. 3d 495, 496 (Fla. 5th
DCA 2018). The word "reasonably" is important. See Fla. Std. Jury Instr. (Contract &
Bus.) 504.9 (requiring a jury to consider which damages could have been avoided
through the plaintiff's reasonable efforts). The doctrine of avoidable consequences
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does not allow a trial court to reduce damages "based on what 'could have been
avoided' through Herculean efforts." Sys. Components,
14 So. 3d at 982. It applies
only where a claimant fails to undertake measures to avoid damages that are available
to him without undue effort or expense.
Id.
Here, there is no competent substantial evidence that the Forbeses could
have taken any measure without undue effort or expense to avoid the damages they
sought. When Prime walked off the job, the Forbeses were left with an uninhabitable
home that no other contractor would finish. At that point, the money they paid for
Prime's work and updated plans was sunk; to avoid that loss they would have had to
have been able to finish the home, and there was no evidence that they could have
done that with another contractor at the price at which Prime was contractually required
to do it.
With respect to the lost equity, the Forbeses spent five months living in a
rental property as they searched for someone to finish the renovations. After that
proved futile, they used their remaining resources to buy a new home rather than
continue to make rent payments indefinitely. On the evidence here, had the Forbeses
not bought the new house and instead continued paying rent without end, they still
would have found themselves unable to continue paying the mortgage on the home that
Prime left uninhabitable. This record establishes no course of action available to the
Forbeses without undue effort or expense to avoid their damages. Thus, there was no
competent substantial evidence to support a damage reduction based on the doctrine of
avoidable consequences here. See, e.g., Graybar Elec. Co. v. Stratton of Fla., Inc.,
509
So. 2d 1133, 1134 (Fla. 2d DCA 1987) (reversing a final judgment in which the trial
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court erroneously applied the doctrine of avoidable consequences despite "insufficient
evidence to support the application of that doctrine").
In sum, the trial court's use of the wrong method for calculating damages
together with its erroneous application of the doctrine of avoidable consequences
denied the Forbeses the full amount of damages to which they were entitled. We
reverse the damages award and remand this case to the trial court for entry of an
amended final judgment awarding those damages it finds, after hearing any arguments
the parties decide to make, are necessary to place the Forbeses in the position they
occupied immediately before they contracted with Prime. In all other respects, the final
judgment is affirmed.
Affirmed in part; reversed in part; remanded with instructions.
NORTHCUTT and ROTHSTEIN-YOUAKIM, JJ., Concur.
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