Elliott v. Normand

Citations: 976 So. 2d 738; 2008 WL 183697Docket: 07-CA-569

Court: Louisiana Court of Appeal; January 21, 2008; Louisiana; State Appellate Court

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In the breach of contract case Dr. Charles Elliott v. Cliff Normand and General Service Supply, Inc., the Court of Appeal of Louisiana addressed an appeal regarding damages after a bench trial, where the trial court ruled in favor of Dr. Elliott. Dr. Elliott had contracted Normand to repair both his 27' Mercruiser Sea Ray boat and a 1988 Volvo automobile. Normand, who assisted Elliott in purchasing the boat, provided an inflated repair estimate to facilitate the sale, ultimately agreeing to a labor rate of $25 per hour plus parts.

Dr. Elliott paid Normand a total of $6,353.67 for the boat repairs and $6,821.33 for the Volvo repairs. Normand initially worked on the boat engines but shifted his focus to the Volvo before returning to the boat in May 1999. After completing the Volvo repairs, Dr. Elliott raised concerns about oil contamination in the water reservoir, but Normand deemed it minor and agreed to address it. However, Dr. Elliott did not follow up with Normand afterward.

Normand claimed to have tested the boat engines thoroughly before reinstallation, finding no issues. After the trial court's judgment, Normand and General Service Supply appealed, not contesting liability but seeking a reduction in damages and the removal of interest from the date of judicial demand. Dr. Elliott responded by seeking an increase in damages. The appellate court decided to vacate in part, amend in part, and affirm the judgment as amended.

Normand assessed the engines as operational, but some controls were not yet connected. Dr. Elliott claimed he wasn't informed by Normand about his reluctance to test the boat. A test run occurred in late 1999, lasting 45 minutes to an hour at 3000 rpm, briefly increasing to 4500 rpm, during which knocking sounds and loss of oil pressure prompted Normand to instruct Dr. Elliott to shut down the engine to prevent further damage. After returning to the shipyard, Normand indicated the need for an inspection to determine the cause of the issues. Dr. Elliott raised concerns about the differing oil pressure readings between the engines, to which Normand replied that such variations were normal. Normand later stated he was not aware of Dr. Elliott's concerns regarding oil pressure but felt confident about the readings.

Following the test, the boat could not be reversed or shifted into neutral, requiring them to drift to the dock. Normand suggested this was a minor adjustment and offered to fix it before another run. Dr. Elliott expressed dissatisfaction and decided to dock the boat at the Municipal Harbor, planning to contact Normand later for repairs. After the test, Dr. Elliott doubted Normand's mechanical skills and did not contact him again until receiving a petition in May 2000. In November 1999, Dr. Elliott sought a second opinion from Gerald Carona, an experienced mechanic specializing in Volvo and Mercruiser engines. Carona found the engines lacked oil pressure and showed signs of internal problems after inspecting and running them at low rpm. He noted dangerous conditions linked to improper installation of the outdrives and indicated incompetence in the previous work performed by Normand. Carona confirmed that both engines had issues, with one showing zero oil pressure, and highlighted the necessity of using a professional facility for engine operation to prevent overheating due to inadequate water supply.

Carona identified significant issues in the engines he inspected, noting hot spots indicating improper water feed, severe internal damage, and the presence of metal debris in the oil pan, which signified bearing failure. He attributed the engines' damage to improper testing by Normand and incorrect installation of oil pumps, which were loose and led to oil pressure loss. Additional findings included rust, water intrusion, and excessive clearance between the cylinder head wall and piston skirt, with damaged seals allowing water leakage into the oil compartment. Carona charged Dr. Elliott $2,502.50 for the 38.5 hours spent inspecting the engines and an additional $2,856 for storage from November 1999 to June 2000, both of which were paid. He estimated the cost to repower the engines at $20,360 and $6,791.57 for repairs on the Volvo engine, which was overheating due to oil entering the turbo area. 

Regarding legal interest, the court determined that interest should not accrue from the date of judicial demand for damages related to a breach of a repair contract, aligning with La.R.S. 13:4203. The judgment awarding such interest was vacated, and the parties agreed on this interpretation. Additionally, under Louisiana Civil Code articles 1994 and 1995, an obligor is liable for damages resulting from nonperformance or defective performance, measured by the obligee's loss and lost profits.

An obligor in good faith is liable only for foreseeable damages at the time of contract formation, according to La. C.C. art. 1996. The appellate review standard for damage awards in breach of contract cases is whether the trial court abused its discretion (Hernandez v. Martinez). In this case, the trial judge awarded Dr. Elliott the repair costs for the car and the replacement costs for the boat engines, along with storage fees. Normand argued that the only foreseeable damages should be limited to the repair amounts, whereas Dr. Elliott contended that the judge abused his discretion by not awarding all foreseeable damages. Normand also claimed the award should be reduced because Dr. Elliott did not allow him the opportunity to correct any initial issues.

Dr. Elliott believed Normand caused significant damage, making it unreasonable to return the items for repairs. Testimony from Carona supported Dr. Elliott's view of Normand's incompetence. The trial judge ruled that Dr. Elliott's actions did not worsen the existing damage and favored Carona's testimony over Normand's regarding the causes of damage. The court grants substantial deference to trial courts in factual findings and credibility assessments.

The judge did not find manifest error in denying the limitation of Dr. Elliott's damages based on his failure to provide Normand a chance to repair. Given the circumstances, Dr. Elliott was not obligated to return the boat or car for repairs to maintain his claim for foreseeable damages. Dr. Elliott sought an increase in his damage award by $13,643.33 for refurbishing the boat, having spent approximately $20,000 on maintenance to enhance its value. Normand acknowledged some refurbishing work but was unaware of the extent of Dr. Elliott's efforts. There was no evidence of a specified timeframe for completing the boat repairs.

The trial court ruled that Dr. Elliott was not entitled to damages for refurbishing the boat, as the amount sought was deemed not a foreseeable object of the repair contract. The appellate court will not overturn factual findings unless there is manifest error. Dr. Elliott requested an additional $4,953.60 for loss of use and boat slip costs, asserting he maintained a slip at Municipal Yacht Harbor due to difficulty in obtaining another. However, the trial judge found these costs were not part of the repair agreement, particularly since Dr. Elliott could not insure the boat without motors and had to store it at a dry dock due to space constraints at his home.

Regarding Carona's inspection costs of $2,502.50, the trial judge initially denied these damages, but it was determined that the inspection was necessary to identify issues with the boat engines. Consequently, the judgment was amended to include this amount. Conversely, the judge's decision to award $2,856.00 for Carona's storage costs was deemed an abuse of discretion, as Dr. Elliott had not stored the boat there until May 2000, despite paying for storage from November 1999 to June 2000. Under La.C.C. art. 2002, Dr. Elliott had a duty to mitigate damages, which he failed to do for the storage costs, thus exposing Normand to further liability for costs that were not foreseeable at the time of the contract.

Only the 30-day storage fees incurred by Dr. Elliott related to Carona's inspection were deemed foreseeable damages, leading to a determination that the trial judge erred by awarding storage fees beyond this period. Consequently, the judgment is amended to reflect a storage fee of $360, calculated at $12 per day for 30 days. Regarding repair costs, the trial judge awarded damages for the car repair but omitted reimbursement for the boat repair. The court finds that Dr. Elliott is entitled to $6,353.67 for parts and labor paid to Normand for the boat repair, as Normand did not fulfill the repair obligation. The judge's award of $20,000 for new engines was deemed excessive and not foreseeable, as Dr. Elliott only paid $6,353.67 out of a $6,985.47 total charge. This case parallels Davidge v. H. H Const. Co., where damages were reduced due to an award exceeding the value of the original item. Additionally, Dr. Elliott's request for $307.82 for a car inspection was denied since he had already received an estimate from Carona. The final decree vacates the interest award from the date of judicial demand, reduces the boat damage award to $6,353.67, adjusts the boat storage amount to $360, and includes an additional $2,502.50 for the inspection fee paid to Carona. All other aspects of the trial court’s judgment are affirmed, with costs of the appeal borne by each party.