Orndorff v. Christiana Community Builders
266 Cal. Rptr. 193, 1990 Cal. App. LEXIS 76, 217 Cal.App.3d 683 (1990)
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Rule of Law:
In a construction defect case, a court may award damages for the cost to repair property even if that cost exceeds the diminution in the property's market value, provided the property owner has a personal reason for making the repairs and the cost is not unreasonable in relation to the property's pre-injury value and the extent of the harm.
Facts:
- In 1977, Gerald and Roberta Orndorff began living in their home, which was built by Christiana Community Builders and Ponderosa Homes.
- The home was constructed on defectively compacted soil, which caused significant damage from fill settlement.
- The Orndorffs expressed a strong personal desire to remain in their home, where they had lived for 11 years, and testified they would use any damage award to make repairs.
- The Orndorffs purchased the home partly because it was located next to an open space easement.
- An expert estimated the cost to properly repair the foundation with a pier system and cover the Orndorffs' relocation expenses would be $243,539.95.
- An appraiser testified that after the recommended repairs, the home's market value would be $238,500.
- The same appraiser testified that without repairs, the home was worth only $67,500, meaning the diminution in value was $171,000.
Procedural Posture:
- On November 14, 1985, Gerald and Roberta Orndorff filed a complaint against Christiana Community Builders and Ponderosa Homes in a trial court.
- The case was tried before a judge without a jury (a bench trial).
- The trial court found that the cost of repair plus relocation expenses was the appropriate measure of damages and awarded the Orndorffs $243,539.95.
- Judgment was entered on June 2, 1988.
- The defendants, Christiana Community Builders and Ponderosa Homes, filed a timely appeal of the trial court's judgment.
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Issue:
Does a court abuse its discretion by awarding damages for the cost to repair a construction defect in a home when that cost exceeds the diminution in the home's market value caused by the defect?
Opinions:
Majority - Benke, Acting P. J.
No. A court does not abuse its discretion by awarding repair costs that exceed diminution in value when there is a personal reason for restoration and the costs are reasonable. The general rule limiting damages to the lesser of repair cost or diminution in value is not absolute. An exception, known as the 'personal reason' exception, applies when an owner has a bona fide desire to repair their property for personal use. Here, the Orndorffs had lived in their home for over a decade, had no desire to leave, and testified they would use the funds for repairs. The court found this sufficient to establish a personal reason. Furthermore, the repair costs must be reasonable in relation to the property's value and the damage sustained. The awarded amount of $243,539.95 was only 2.5% greater than the property's post-repair value of $238,500, and was therefore not unreasonable. The damage was also substantial, having deprived the home of most of its value, which further justifies an award of significant repair costs over a lesser diminution-in-value award.
Analysis:
This case affirms the 'personal reason' exception to the standard measure of damages for real property in California, prioritizing a homeowner's interest in restoring their personal residence over a strict economic calculation. It establishes that damages are not inflexibly capped by diminution in value, granting trial courts discretion to award full repair costs where plaintiffs demonstrate a genuine intent to repair their home. The decision limits this discretion by requiring that repair costs be reasonable in relation to both the property's value and the severity of the damage, preventing disproportionate or excessive awards while still aiming for full and just compensation for the injured party.
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