Sabraw v. Kaplan

California Court of Appeal Dec 21, 1962 No. Civ. 20055Published

Before: Devine

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Holding. The court held that damages for a pharmacist's salary paid during a construction delay were not recoverable because such costs were not reasonably foreseeable by the contractor at the time the construction contract was formed.

Issues

Whether damages for a pharmacist's salary paid during a construction delay are recoverable as special damages.
Whether the evidence supported the trial court's award for loss of profits and damages.

Disposition. reversed in part and affirmed in part

Quotations verified verbatim against the opinion

“Special damages must fall within the rule of Hadley v. Baxendale, 156 Eng. Rep. 145, that is, they must reasonably be supposed to have been contemplated or foreseeable by the parties when making the contract as the probable result of a breach.”

“We believe that, under the evidence presented, it could not have been within the reasonable contemplation of the parties, Sabraw and Kaplan, or reasonably foreseeable by them, that Kaplan would enter a partnership agreement with a third person”

DEVINE, J.

Plaintiff Sabraw, a contractor, agreed to construct a building for defendant, which was to be used as a retail drugstore, and there is evidence that plaintiff knew of the intended use. The building was to have been completed, according to the agreement, by April 14, 1958, but it was not finished until August 21, 1958, and although the subject of fault was contested in the trial court, it is conceded by plaintiff and cross-defendant, Sabraw, that the trial court’s finding that deprivation of the use of the property for a period of four and a quarter months was the fault of plaintiff, cannot be disturbed. (Parties on both sides are described in the singular, although nominally the parties are plural on both sides.)

Plaintiff sued to foreclose a mechanic’s lien, and obtained judgment, which also is beyond dispute. Defendant cross-complained for loss of profits of the business during the period of delay and for a salary or, drawing account which, he alleged, he had to pay a pharmacist during the idle period. Both parties filed briefs relating to the, allowability .of damages for loss of profits of a business which was established after delayed construction; appellant, the contractor, having been found at fault for the delay, argued that the proper measure of damages would have been the rental value of the building.

[226]

It appears from the statement of the referee, who was appointed hy the court to examine into the profits and losses of the business, that the rent actually paid by the partnership which operated the drugstore to respondent Kaplan was $7,650 for a 16-months’ period, or approximately $480 per month. This monthly rental, extended for a period of four and a quarter months, would be several hundred dollars more than the $1,679.04 which was allowed by the court for “loss of profits and damage,” and, therefore, appellant has not been prejudiced by this part of the award.

The cross-complaint alleges that because of the delay in completing the building, defendant was obligated, for a period of two months, to pay the wages of a pharmacist, although the building could not be used as a drugstore, and that as a result he was damaged in the sum of $1,400. The court awarded $1,330 for payment of the pharmacist for work not done from July 1, 1958, to August 28, 1958, the date of the opening of the drugstore.

Sabraw v. Kaplan

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DEVINE, J.

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