Kishmarton v. William Bailey Construction, Inc.

Ohio Supreme Court
89 Ohio St.3d 1467, 732 N.E.2d 999 (2001)

ELI5:

Rule of Law:

A claim for breach of the implied duty to construct a new home in a workmanlike manner arises from the contract, not tort. Recovery for emotional distress damages in such a breach of contract action is permitted only if the breach also caused bodily harm or if the breach is of such a kind that serious emotional disturbance was a particularly likely result.

Facts:

On July 24, 1991, Donald and Mary Kishmarton contracted with William Bailey Construction, Inc. ('Bailey') to build a new home.
The contract stipulated that Bailey would construct the house in a 'workmanlike manner' for a price of approximately $219,000.
The Kishmartons moved into the house in May 1992.
During the following winter, the Kishmartons discovered significant water leaks through the ceiling and down the walls.
The leaks were caused by improperly installed roof vents that allowed snow into the attic and by ice backups on the roof.
Bailey made several attempts to repair the leaks, but all were unsuccessful.
The water leaks continued unabated for several years, causing ongoing problems for the Kishmartons.

Procedural Posture:

The Kishmartons sued William Bailey Construction, Inc. in the trial court for breach of contract, breach of warranty, and negligence.
Following a trial, the jury awarded the Kishmartons $24,000 in damages, which included $5,000 for property restoration and $19,000 for loss of enjoyment, annoyance, and discomfort.
Bailey, the defendant, appealed to the court of appeals.
The court of appeals affirmed the $19,000 award for loss of enjoyment but reduced the restoration award from $5,000 to $3,725 as being against the manifest weight of the evidence.
Finding its judgment to be in conflict with other appellate districts, the court of appeals certified two legal questions to the Supreme Court of Ohio.
The Supreme Court of Ohio accepted the case on both the certified conflict and a discretionary appeal.

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Issue:

In a breach of contract action against a builder-vendor for failure to construct a new residence in a workmanlike manner, can the vendee recover non-economic damages for loss of enjoyment, annoyance, or discomfort?

Opinions:

Majority - Pfeifer, J.

Yes, but only under limited circumstances. A vendee can recover emotional distress damages for a builder's breach of contract if the breach meets the standard set forth in the Restatement (Second) of Contracts § 353. The court first held that a claim against a builder-vendor for failure to construct a home in a workmanlike manner under a contract for future construction is an action arising 'ex contractu' (from the contract), not 'ex delicto' (from tort). The court then addressed damages, adopting Section 353 of the Restatement, which excludes recovery for emotional disturbance unless the breach also caused bodily harm or the contract or breach was of such a kind that serious emotional disturbance was a particularly likely result. The court reasoned that the Ohio Constitution guarantees a remedy for all injuries, including emotional ones, and that disallowing such damages would unfairly permit a breaching party to avoid the full consequences of their actions. However, the court reversed the specific award to the Kishmartons because the jury had been instructed under tort principles and the record did not support damages under the newly adopted contractual standard.

Dissenting - Douglas, Resnick and F.E. Sweeney, JJ.

Yes. The dissenting judges would have affirmed the court of appeals' decision in all respects, thereby upholding the jury's award of damages for loss of enjoyment, annoyance, and discomfort.

Concurring - Cook, J.

Yes. Justice Cook concurred in the syllabus and the judgment, agreeing with the legal rule established and the final outcome of the case.

Analysis:

This decision significantly alters Ohio contract law by formally adopting the Restatement (Second) of Contracts § 353, thereby carving out an exception to the general rule that emotional distress damages are not recoverable for breach of contract. By classifying a residential construction dispute as a contract claim but allowing for tort-like damages under specific circumstances, the court bridges a gap between contract and tort remedies. This ruling provides a new, albeit difficult, path for plaintiffs to recover for the emotional toll of significant breaches in contracts where personal, non-commercial interests are paramount, such as the construction of a family home. Future cases will likely focus on defining what kind of breach makes 'serious emotional disturbance a particularly likely result.'

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