The Construction Advantage – Issue 10

Michael Bosse

In this tenth issue of the Construction Advantage, Energy attorneys Katherine Joyce and Mary Costigan summarize a big win for one of Bernstein Shur’s clients at the ME Supreme Court, and Mike Bosse reports on a Wyoming case where a contractor was forced to pay damages in excess of the original project cost. We hope that you enjoy this issue, and as always, feel free to contact us with news or additional issues that you would like to see covered.

Wyoming Supreme Court Concludes Contractor to Pay For Damages In Excess of Original Project Cost

By Mike Bosse

An opinion released in a mid-August from the Wyoming Supreme Court concluded that repair damages were appropriate in a residential construction project when the contractor failed to provide an alternative, lower damage value based upon diminution in value of the home during the trial. This case presents a fundamental damage issue of damage identification and calculation that is present in many residential construction disputes.

In Andrews v. Legacy Builders, Andrews entered into a contract with Legacy for the purchase of a single-family residence in Rock Springs, Wyoming for approximately $240,000. As a result of bad soils, the home suffered cracking and separation of drywall, warping of doors, windows frames, and lifting and buckling of the basement floor. At trial, Andrews’ expert testified that installation of a helical piers to stabilize the foundation would cost $111,000, and that repairs were needed to other items of defective work that totaled $199,000. The contractor’s expert testified that he believed that the damages were only in the mid-$40,000 range to repair the residence. The court disagreed with the contractor and awarded over $300,000 to Andrews, which included the $111,000 for repairing the foundation with the piers and the additional $199,000 to repair the defective work. The contractor appealed and argued that the damages should be considered based on the diminution in value of the $240,000 home, not the cost to repair because it was so much higher than the actual value of the home. The Supreme Court of Wyoming concluded that the contractor had the burden at trial to prove the lower damages and never submitted any evidence at trial about what that diminution in value would be. The court held that where the owners of the residence had submitted damage evidence based on cost of repair, it was up to the contractor not only to present its cost of repair estimates, but also to provide diminution in value evidence if it wanted the court to consider it.

This case is important because it serves as a reminder that in many construction cases, both cost to repair and diminution in value will be possible alternate damage calculations. However, anyone going to trial must come armed with the evidence to support either damage calculation, since the court will not do so independently. Here, the contractor, to its detriment, relied only upon cost of repair evidence that the court disagreed with, and was left with no evidence to argue for a lower diminution in value standard.

ME Supreme Court Backs Passadumkeag Windpark LLC

By Katherine Joyce & Mary Costigan

The ME Supreme Judicial Court issued a decision this week that upholds a decision by the Board of Environmental Protection that approved a wind energy project proposed by Passadumkeag Windpark, LLC.

In Passadumkeag Mountain Friends et al. v. Board of Environmental Protection et al., the court upheld the authority of the Board of Environmental Protection to conduct independent fact-finding when considering appeals of permitting decisions by the commissioner. The board’s approval decision had been issued after a careful, independent review of the record evidence, and was notable in that the board reversed the commissioner’s initial decision to deny the permits. Through this ruling, the court reaffirmed its long standing precedent that defers to the board as the final agency decision-maker on behalf of the Department of Environmental Protection. Passadumkeag Windpark, which was represented by attorneys Katherine Joyce and Mary Costigan throughout the permit application process and in the appeals, can now move forward with this important energy project that will bring more clean energy to the state of ME.

We hope that you have found these tips and pointers in the tenth issue of The Construction Advantage helpful to you in your daily business. Each of the attorneys in our Construction Law Practice is available to answer the day to day questions of your business as you work on projects.