Rivers v. Deane

Appellate Division of the Supreme Court of New York, Fourth Department · 1994 · Contracts

209 A.D.2d 936 (1994)

Updated July 26, 2026

Contractsconstruction contractbreach of contractfaulty constructiondamagescost of repairdiminution in valuetrivial and innocent breach

Facts

Plaintiffs hired defendant to construct an addition to their home. At trial, plaintiffs presented two experts who testified that defendant failed to construct the addition in a good and workmanlike manner and that inadequate structural support rendered the third floor unusable as the intended master bedroom and bathroom. Defendant did not contest those factual findings on appeal. The trial court nevertheless awarded $10,000 in diminution-in-value damages for the inadequate structural support.

Issue

When a contractor's defective construction substantially impairs and makes part of a building unsafe and unusable, is the proper measure of damages diminution in value or the market value of the cost to correct the defective performance? Also, could the trial court sustain a diminution-in-value award where no proof of such diminution was presented?

Rule

In faulty construction cases, the general measure of damages is the market value of the cost to repair or correct the defective construction. The difference-in-value rule applies only where the builder's failure to perform is both trivial and innocent; where the defect is substantial enough to render the building partially unusable and unsafe, damages are measured by the market price of completing or correcting the performance.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Albany, Nora Patel hired Elm Street Renovation to build a second-story studio over her garage. After completion, an engineer found that the floor joists were improperly installed, making the room unsafe for occupancy, and Nora introduced evidence of what a competent contractor would charge to fix the problem, but no evidence of any change in the property's resale value.

If Nora proves breach, what is the proper measure of damages?

Explanation. The general rule in faulty construction cases is that damages are measured by the market value of the cost to repair or correct the defective work. Because the defect is substantial enough to make the room unsafe and unusable, the limited diminution-in-value rule does not apply. Lack of proof of resale-value loss does not bar recovery where cost of repair is the proper measure.