Lurlee, Inc. v. Pernoshal-39 Co.

218 S.E.2d 701, 135 Ga. App. 724, 1975 Ga. App. LEXIS 1798
CourtCourt of Appeals of Georgia
DecidedSeptember 18, 1975
Docket50869
StatusPublished
Cited by8 cases

This text of 218 S.E.2d 701 (Lurlee, Inc. v. Pernoshal-39 Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lurlee, Inc. v. Pernoshal-39 Co., 218 S.E.2d 701, 135 Ga. App. 724, 1975 Ga. App. LEXIS 1798 (Ga. Ct. App. 1975).

Opinion

Marshall, Judge.

This is an appeal by a contractor (Lurlee) from a judgment for damages rendered against it in favor of the owner-builder Pernoshal (an acronym from Perimeter, North and Shallowford), based upon a breach of contract to build fifty apartments.

On or about March 9, 1971, Pernoshal and Lurlee entered into a contract under which Lurlee was to build fifty apartments in a development for a cost not to exceed $630,360, which sum included a 5% contractor fee. These fifty units were to be completed within two hundred calendar days or by September 25, 1971.

It is uncontested that Lurlee commenced construction of the Pernoshal apartments shortly after the execution of this contract. Some fifteen months later on May 30,1972, Lurlee abandoned the construction site and unilaterally abrogated the contract, complaining that Pernoshal had breached the same by refusing to make further payments to Lurlee for work completed. Nothwithstanding the contract price of $630,360.00 and the execution time of two hundred days, Pernoshal continued to make payments for completed work past September 25,1971, and ultimately paid to Lurlee approximately $647,692. At the time the construction site was abandoned, Lurlee had substantially completed work on thirteen of the fifty units called for by the contract.

*725 Initially Lurlee brought this action to foreclose a lien on Pemoshal’s property. However in September, 1972, after the property had lain dormant for some three months with no work being done, the property (consisting of some 4.1 acres and the completed and partially completed apartments) was sold at foreclosure by the construction lender due to default in repayment of the construction loan. Each party alleges the breach of contract by the other. Lurlee claimed damages in the amount of $111,731.92 as balance due for work performed under the contract, and, in an alternative count, the same amount on the theory of quantum meruit. Pernoshal denied the breach of contract and asserted a counterclaim for breach of contract against Lurlee in the amount of $372,000.

Following a convoluted trial lasting some five days and extending to over 800 pages of record and transcript, a jury found for appellee, Pernoshal in the amount of $111,364. During the trial, appellant unsuccessfully moved for a directed verdict, and following the verdict, unsuccessfully moved the trial court for judgment notwithstanding that verdict. After the verdict of the jury was entered as the judgment of the court, appellant Lurlee moved for a new trial, without success, on the general grounds and the alleged harmful erroneous admission of certain evidence. Lurlee now brings this appeal complaining of the refusal to grant its motion for directed verdict, its motion for judgment notwithstanding the verdict and its motion for a new trial. Held:

1. Lurlee seeks a reversal based upon the trial court’s alleged improper rulings in allowing certain opinion testimony to go to the jury, to its alleged prejudice, and in keeping certain probative evidence from the jury. However, the main thrust of its appeal is based upon the alleged error in allowing Pernoshal’s counterclaim to go to the jury on a claim for damages that was remote, speculative, not within the contemplation of the parties, and not supported by the evidence. (Code Ann. §§ 20-1406 and 20-1407). Appellant apparently concedes that the jury’s verdict was based upon a finding that it, Lurlee, breached the contract. However, Lurlee’s contention is that, since the damages are remote, speculative and *726 incapable of specific definition, the breach of contract found would support only nominal damages, but would not support the substantial compensatory damages awarded by the jury. The action being ex contractu, upon proof of a breach thereof, the injured party is entitled to at least nominal damages. But in order to recover substantial, compensatory damages, there must be some evidence of actual damages, and the amount thereof. Milledgeville Water Co. v. Fowler, 129 Ga. 111, 114 (58 SE 643).

In this case Pernoshal alleged damages, among others, based upon defective construction work, cost of completion and lost rents. It offered proof as to the defective construction and cost of completion in the form of sworn testimony of a qualified architectural expert hired by Pernoshal to evaluate and estimate the cost of completing the apartment complex shortly after Lurlee abandoned further work on the project on May 30, 1972. This witness testified that the total additional cost of completing the fifty apartment units as had been contemplated by the contracting parties would cost Pernoshal approximately an additional $120,372. This sum included the correction of defective workmanship.

Lurlee contends in this appeal that since Pernoshal did not expend this $120,372 it has suffered no compensable harm. However, neither of the contracting parties disputes that the original contract provided for the construction of fifty apartments for a sum not to exceed $630,360. Moreover, both Pernoshal and Lurlee agree that as of May 30, 1972, Pernoshal had paid Lurlee in excess of $647,500 for the construction of the same fifty apartments. Apparently, Pernoshal was still willing to continue the contract with Lurlee up until late May, 1972, in order to obtain the completed apartments. Pernoshal was pressing Lurlee to complete the project sufficiently and not later than June 28, 1972, so that the agent of the construction loan lender could make a site inspection indicating a degree of completeness that would not endanger the permanent financing commitment. In order to obtain what it had contracted for with Lurlee and for which it had already expended in excess of $647,500, Pernoshal was still obligated to expend approximately *727 $120,000. Thus the jury logically and rightfully could conclude under such evidence that Pernoshal had been damaged to the extent of $120,000.

As to the loss of rents, the evidence indicated that by March, 1972, some five apartments were available for rental and a total of thirteen were "habitable.” However, because of the "unfinished” condition of these thirteen apartments, only four were actually occupied, one by the resident manager, an employee of Pernoshal. That person’s testimony reflected that two-bedroom apartments were offered for rental at $250 per month. Pernoshal could legitimately claim the loss of rental of nine of the apartments at a monthly rate of $250 for the period from May 30, 1972, the time of abandonment by Lurlee, to September, 1972, when the foreclosure action took place. Thus the jury could properly assess some amount in excess of $6,500 as compensable damages for loss of rental.

2. Other evidence which supports the findings of the jury, was evidence of actual cash loss apparently suffered by Pernoshal. Though the original tract of land owned by Pernoshal involved some 39 acres, only 4.1 acres were utilized in the apartment complex. There was evidence that the property when originally purchased was valued at $14,000 an acre. There was other evidence that at the time of the foreclosure, the same, unimproved land was valued at a minimum of $30,000 an acre.

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Bluebook (online)
218 S.E.2d 701, 135 Ga. App. 724, 1975 Ga. App. LEXIS 1798, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lurlee-inc-v-pernoshal-39-co-gactapp-1975.