Patrick Durkin v. MTown Construction, LLC ( 2019 )

03/13/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
January 16, 2019 Session
PATRICK DURKIN v. MTOWN CONSTRUCTION LLC
Appeal from the Circuit Court for Shelby County
No. CT-004623-16 Rhynette N. Hurd, Judge
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No. W2018-00953-COA-R3-CV
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This is the second appeal from a trial court’s award in a case dealing with damage to real
property. The plaintiff’s home had been damaged by a rainstorm while a construction
company was in the middle of repairing the roof. The trial court entered an award in
favor of the plaintiff for the reasonable costs of repair and remediation in the amount of
$118,926.12 by totaling the damage estimate of the defendant’s insurance adjuster with
the estimates provided by the plaintiff’s experts. While we affirm the trial court’s
method of awarding damages based on the reasonable costs of repair, finding duplication
in its award, we vacate the amount of the trial court’s judgment and remand the case for a
new calculation of damages.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in
part, Vacated in part and Remanded
ARNOLD B. GOLDIN, J., delivered the opinion of the court, in which J. STEVEN STAFFORD,
P.J., W.S., and ROBERT E. LEE DAVIES, SR. J., joined.
Christopher M. Myatt, Memphis, Tennessee, for the appellant, MTown Construction,
LLC.
Clay Culpepper, Memphis, Tennessee, for the appellee, Patrick Durkin.
OPINION
BACKGROUND AND PROCEDURAL HISTORY
Patrick Durkin’s (“Plaintiff”) home was damaged by a rainstorm while MTown
Construction, LLC (“Defendant”) was in the process of removing and replacing the roof.
On August 25, 2016, Defendant’s workers began removing the existing roof from
Plaintiff’s home. About an hour after having removed the existing roof, a heavy
downpour occurred. Defendant’s workers attempted to cover the exposed roof with
tarps,1 but, despite the placement of the tarps, water began to pour into Plaintiff’s home.
The water poured in for over an hour and began to seep through the ventilation system
and out of the light fixtures. Defendant completed the installation of the new roof on
August 27, 2016; however, by this time, the interior ceilings of Plaintiff’s home had
started to collapse.
On August 28, 2016, Plaintiff contacted Defendant’s owner, Michael Ingalsbe,
stating that he needed him to contact Defendant’s insurance company in order to assess
the damage. Mr. Ingalsbe, however, stated that he did not want to file a claim with his
insurance company, assuring Plaintiff that he would handle everything on his own and
ultimately agreeing to meet at Plaintiff’s home to inspect the damage. Eventually, on
August 30, 2016, a storage pod was delivered to Plaintiff’s home, but on September 2,
2016, Mr. Ingalsbe contacted Plaintiff and explained that his crew was unable to handle
the job and that he would, in fact, file a claim with his insurance company. On
September 9, 2016, Robert Rutherford, an adjuster with Cook Claims Services, went to
Plaintiff’s home to assess the damage. Mr. Rutherford inspected every room, ultimately
classifying the damage to Plaintiff’s home as “water damage” and stating in his report
that damage to the plaster ceiling existed in practically every room. Mr. Rutherford,
however, stated that the wooden floors were not damaged and would not need to be
refinished. Despite such classification, Mr. Rutherford did not take any moisture
readings, and his estimate included a cost of only $245.93 for water extraction and
remediation. In total, Mr. Rutherford estimated that the repairs to Plaintiff’s home would
cost $24,678.84.
Believing Mr. Rutherford’s estimate to be too low, Plaintiff obtained two
additional estimates from licensed contractors and an expert in water/mold remediation.2
Drew Hargrave of Capital Construction assessed the damage and prepared a
supplemental estimate to Mr. Rutherford’s, providing for additional repair costs of
$33,455.53.3 At trial, Gage Morefield, also of Capital Construction and Mr. Hargrave’s
superior, was tendered as a residential construction expert and testified that the
supplemental estimate prepared by Mr. Hargrave would make Plaintiff whole.
Accordingly, the Capital Construction estimate, together with Mr. Rutherford’s initial
estimate, provided that it would cost $58,134.37 to perform the necessary repairs and
reconstruction on Plaintiff’s home.
1
Plaintiff’s complaint alleged that the tarps used to cover the exposed roof were threadbare and
covered with holes and were the same tarps that had been used to collect debris, old shingles, and roofing
materials.
2
Plaintiff took particular issue with the fact that, despite Mr. Rutherford’s classification of the
damage as “water damage,” his estimate provided only $245.93 for water extraction and remediation.
3
Unlike Mr. Rutherford’s estimate, Mr. Hargrave’s estimate did provide a cost for sanding,
staining, and refinishing the wooden floors.
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Plaintiff also obtained an estimate from Logan Little, the operations manager for
ServiceMaster by Cornerstone and a qualified expert in water and microbial remediation.
During his inspections, Mr. Little found wet materials on the ceilings, walls, and floors,
and water damage and microbial growth throughout the home. Mr. Little’s estimate
called for, among other things, the removal of the drywall, plaster ceilings, and floors in
every room of Plaintiff’s home, for a total of $60,791.75. These procedures, according to
Mr. Little, were “absolutely” necessary before reconstruction efforts could begin and that,
until then, Plaintiff’s home would remain unsafe and uninhabitable.
On November 14, 2016, Plaintiff filed suit against Defendant in the Shelby County
Circuit Court (“the trial court”), alleging negligence and breach of contract. He sought to
recover damages for the construction and remediation costs that would be necessary to
address the water damage throughout the home, the repair of the defective roof, the
displacement costs due to the home being uninhabitable, and other incidental damages.
A bench trial was conducted on May 10 and 11, 2017, during which the trial court heard
testimony from Plaintiff and Messrs. Rutherford, Morefield, Hargrave, and Little. The
trial court found for Plaintiff and ordered the parties to submit post-trial briefs on the
proper measure of damages to Plaintiff’s home. Ultimately, on June 8, 2017, the trial
court entered a judgment for Plaintiff, awarding the following damages: $9,625.00 for
loss of use; $258.93 for storage fees; $7,000.00 for damages relating to repairs necessary
to fix the roof; and $118,500.00 for the damages to Plaintiff’s home resulting from the
extensive water damage. Regarding the water damage, the trial court acknowledged that
Plaintiff had presented evidence regarding the cost to repair the damage, but it instead
elected to award the damages based on the diminished value of the home.4 Defendant
filed its first notice of appeal in this case on June 21, 2017. On appeal, this Court
affirmed in part, reversed in part, and remanded the case to the trial court. See Durkin v.
MTown Constr., LLC, No. W2017-01269-COA-R3-CV, 2018 WL 1304922 (Tenn. Ct.
App. Mar. 13, 2018) (hereinafter Durkin I). Specifically, this Court took issue with what
the trial court had described as a “‘creative’ approach to determining the diminution in
value in the absence of relevant evidence from trial” as well as the fact that the trial
court’s order “did not include any finding with a value or total of the ‘cost of repair’
evidence presented by [Plaintiff].” Id. at *4. Noting that the proper measure of damages
was the reasonable cost of repair, this Court held that “[i]n the absence of any ruling by
the trial court in this case as to the reasonable cost of repair, we remand for the trial court
to make the necessary factual findings and an award of damages based on the reasonable
cost of repair.” Id. at *5-6.
4
The trial court awarded this amount after Plaintiff had testified that the fair market value of his
home was $144,000 the day before the rain event as well as the day after the rain event. The trial court,
however, noted that “the problem with this testimony is that the damages to Plaintiff’s home did not
significantly occur until seventy-two (72) hours after the rain event.” The trial court took judicial notice
that the value of Plaintiff’s home 72 hours after the rain event would have been $0.00. Further, the trial
court found that, in 2016, the value of the land portion of Plaintiff’s property was $25,500. Accordingly,
it reduced $144,000 by $25,500 and awarded Plaintiff $118,500 for the damage to his house.
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On May 8, 2018, the trial court, on remand from this Court, found that Mr.
Rutherford’s initial estimate did not take into consideration microbial remediation or
restoration of the floors, noting that Defendant presented no additional evidence on the
measure of damages. Additionally, the trial court found the testimony of Messrs.
Hargrave, Morefield, and Little to be credible and the estimates recommended by their
reports to be reasonable. Specifically, the trial court found that
the total cost of repair as presented by [Plaintiff’s] expert witnesses to be
reasonable and proper to compensate him for the damage to his home. The
damages include:
 $24,678.84 (Robert Rutherford of Cook Claims)
 $33,455.53 (Capital Construction’s amendment to the Cook Claims
estimate)
 $60,791.75 (ServiceMaster by Cornerstone water/microbial remediation)
The total cost of repair is the sum of these three figures – $118,926.12 –
and should be awarded to the Plaintiff.
Defendant timely filed its second notice of appeal on May 23, 2018.
ISSUES PRESENTED
Defendant raises two issues on appeal, reproduced as follows:
1. Whether the trial court’s findings on costs of remediation were based on
speculation and contingencies.
2. Whether the costs of repair and remediation awarded to Plaintiff are
duplicative.
STANDARD OF REVIEW
In non-jury cases, appellate courts review the trial court’s factual findings de novo
upon the record, accompanied by a presumption of the correctness of the findings, unless
the preponderance of the evidence is otherwise. See Tenn. R. App. P. 13(d); Armbrister
v. Armbrister, 414 S.W.3d 685, 692 (Tenn. 2013). We review the trial court’s resolution
of questions of law de novo with no presumption of correctness. See Armbrister, 414
S.W.3d at 692. As is relevant here, we review a trial court’s choice of the proper
measure of damages de novo as a question of law. GSB Contractors, Inc. v. Hess, 179
S.W.3d 535, 541 (Tenn. Ct. App. 2005).
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DISCUSSION
Defendant first asserts that the trial court’s award of damages for repair costs and
remediation is speculative and contingent and therefore may not be recovered.
“Speculative damages, however, are only prohibited when the existence of damages is
uncertain, not when the amount of damage is uncertain.” Jennings v. Hayes, 787 S.W.2d
1, 3 (Tenn. Ct. App. 1990) (citing Cummins v. Brodie, 667 S.W.2d 759, 765 (Tenn. Ct.
App. 1983)). Moreover, “[w]hen there is substantial evidence in the record and
reasonable inferences may be drawn from the evidence[,] mathematical certainty is not
required.” Cummins, 667 S.W.2d at 765. The existence of damages in this case is
certain, and we conclude that the trial court’s award of damages was not speculative or
contingent.
According to Defendant, the award of damages is speculative because “Plaintiff
offered no proof that mold or microbial growth was present[.]” This statement, however,
is clearly contradicted by the evidence in the record. Mr. Little, the only remediation
expert presented at trial, testified that, during his inspection of Plaintiff’s home, he found
wet materials on the ceilings, floors, and walls and water damage throughout Plaintiff’s
home. He also testified that he personally observed microbial growth within the house.
As to the extent of the water damage and the ensuing microbial growth, Mr. Little
testified that he classified Plaintiff’s home as “Condition 2” for microbial growth and
“Category 3” for water damage, the protocol for which requires the removal of all the
affected materials that are not part of the structure holding up the home. Defendant
claims that the trial court had found Mr. Little’s testimony “unconvincing,” but this
statement is also not supported by the record. While it did initially express some
hesitation as to the necessity for the estimated amounts provided by Plaintiff’s experts,
the trial court ultimately and explicitly concluded that all of Plaintiff’s experts were
credible and that the estimated amounts in their reports were reasonable.
Additionally, in support of its first argument, Defendant cites to this Court’s ruling
in Durkin I, quoting our decision as follows: “Still, we respectfully decline [Plaintiff’s]
invitation to award him $118,926.12 in damages based on the cost to repair evidence he
presented to the trial court . . . . The proper measure of damages is the reasonable cost of
repair.” Durkin I, 2018 WL 1304922, at *5. Defendant’s quotation, however, is selective
and omits the following language: “[T]he trial court made no finding as to the amount
that it would have awarded if it had utilized the cost of repair analysis.”5 Id. It was on
5
Accordingly, the quotation reads in its entirety as follows:
Still, we respectfully decline [Plaintiff’s] invitation to award him $118,926.12 in
damages based on the cost to repair evidence he presented to the trial court. As noted
above, the trial court made no finding as to the amount that it would have awarded if it
had utilized the cost of repair analysis. The proper measure of damages is the reasonable
cost of repair.
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this basis that we remanded the issue for the trial court “to make the necessary factual
findings and an award of damages based on the reasonable cost of repair.” Id. The trial
court ultimately found Plaintiff’s experts to be credible and their cost-to-repair estimates
to be reasonable. Here, the existence of damages to Plaintiff’s home is certain, and we
therefore conclude that the trial court’s award of damages was not speculative or
contingent.
Next, Defendant asserts that the trial court’s award of damages for repair costs and
remediation is duplicative. After our review of the estimates provided by Messrs.
Rutherford, Hargrave, and Little, we agree with regard to a portion of the trial court’s
award of damages for remediation.
Plaintiff obtained his own estimates from Mr. Hargrave of Capital Construction
and Mr. Little of ServiceMaster by Cornerstone. Mr. Hargrave’s estimate provided that it
would cost $58,134.37 to perform the necessary repairs and reconstruction to Plaintiff’s
home. Part of Mr. Hargrave’s estimate included a line-item listed as “General
Demolition” for $11,713.06. Mr. Morefield, also of Capital Construction and Mr.
Hargrave’s superior, testified that this amount was a “flow through” based on a
remediation estimate prepared by ServiceMaster by Capital, an affiliate of Capital
Construction.6 Accordingly, Mr. Hargrave’s estimate provided for $11,713.06 in
remediation costs. Mr. Little’s estimate, on the other hand, covered solely estimated
remediation expenses, providing that it would cost $60,791.75 to perform the necessary
work. Our review of Mr. Hargrave’s and Mr. Little’s estimates reveals an overlap and a
duplication of costs for the performance of the same remediation work. For example,
both estimates include costs for the removal of all plaster ceilings, for the removal of the
attic insulation, and for the removal and bagging of wet insulation.7 Similarly, both
estimates include costs for certain equipment, such as dumpsters, HEPA filters, and
negative air fans. We are of the opinion that, by including in its award of damages the
total costs for remediation from Mr. Hargrave’s and Mr. Little’s estimates, the trial court
awarded Plaintiff duplicative damages for the same remediation work. Such duplication
of damages is improper and the award should be reduced by the $11,713.06 in duplicative
remediation costs.
Our review of the estimates provided by Messrs. Rutherford, Hargrave, and Little
also revealed a discrepancy concerning the trial court’s award of damages for the costs of
removing and/or refinishing the wooden floors in Plaintiff’s home. Defendant argues that
the trial court erred in awarding Plaintiff costs for both. We agree.
Id. at *5.
6
ServiceMaster by Capital and ServiceMaster by Cornerstone are two separate entities.
7
While both Mr. Hargrave’s and Mr. Little’s estimates provide for the removal of the plaster
ceilings, Mr. Little’s estimate also provides for the removal of the drywall, the baseboards, and the trim in
rooms of Plaintiff’s home.
-6-
Mr. Rutherford’s estimate did not include a cost for the repair of the wooden
floors, and Mr. Rutherford himself testified that the wooden floors were not damaged and
would not need to be refinished. Mr. Hargrave’s estimate, on the other hand, did include
a cost for sanding, staining, and refinishing the wooden floors. Mr. Little’s estimate did
not include a cost for sanding, staining, and refinishing the wooden floors, but it did
include a cost for the complete removal of the floors. Plaintiff argues that, “[a]lthough
the floors that are removed may not be refinished, if new wood floors are installed, they
would have to be sanded and finished.” Plaintiff’s argument, however, neglects the
glaring fact that there is no proof in the record regarding an award of costs for the
replacement of the wooden floors. Moreover, Plaintiff even testified that he does not
need the wooden floors replaced but instead needs them sanded, restained, and
refinished.8 Plaintiff’s counsel articulated his client’s desire on numerous occasions, as
well. During opening arguments, Plaintiff’s counsel stated:
My client will tell you he’s not here to receive a brand new house. What he
wants is his home back. He wants his home back in a habitable safe
condition. His floors in his home, as Your Honor may imagine, from
Cooper-Young district were old hard wood floors but they were in good
shape. He’s not asking for them to be replaced. He needs them to be
sanded and restained.
During closing arguments, Plaintiff’s counsel reiterated the same: “Again, my client is
not asking for brand new floors. He’s fine with his floors. But you have heavy one to
two-inch thick plaster falling on top of it, it needs to be sanded and restained.”
Considering the above testimony, we are of the opinion that, without any proof in the
record as to the replacement of the wooden floors, the trial court erred in awarding
Plaintiff the cost for the removal of the current floors, which is included in Mr. Little’s
estimate. The award should also be reduced by the cost for removal of the current floors
contained in Mr. Little’s estimate.
While we agree with the trial court’s award of damages in this case based on the
8
Plaintiff provided the following testimony regarding the wooden floors in his home:
Q: You’re not seeking damages relating to the paint and the termite; correct?
A: Correct. I am not.
Q: You just want your house floors sanded and restained?
A: Yes, I do.
....
Q: Do any of the floors in your home require replacement or can they be
refinished?
A: They can be refinished.
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reasonable costs of repair, due to duplication in the award, we vacate the amount of the
judgment and remand with instructions for the trial court to recalculate its award of
damages in accordance with this opinion.
CONCLUSION
For the foregoing reasons, we affirm the trial court’s method of awarding damages
based on the reasonable costs of repairs, vacate the trial court’s damage award, and
remand the case for further proceedings consistent with this opinion.
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ARNOLD B. GOLDIN, JUDGE
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