Coley v. Eudy

276 S.E.2d 462 (1981)

Larry W. COLEY and Judy B. Coley, his wife v. Curtis R. EUDY, Sr. and Elizabeth W. Eudy, his wife.

No. 8019SC658.

Court of Appeals of North Carolina.

April 7, 1981.

*465 Wesley B. Grant by Randell F. Hastings, Concord, for plaintiffs-appellees.

Hartsell, Hartsell & Mills by Fletcher L. Hartsell, Jr., Concord, for defendant-appellant.

ARNOLD, Judge.

The feme defendant presents two questions on this appeal. Her first argument is that the court's instructions to the jury were inaccurate, confusing and contrary to the law. For the reasons and to the extent set forth below, we agree.

At the outset, we note that it appears from the record that the trial court's confusion in instructing the jury regarding plaintiffs' damages resulted from the several interrelated allegations contained in plaintiffs' complaint and from the fact that, since the complaint was filed, plaintiffs had significantly changed their position with regard to the Concord house. A comparative analysis of plaintiffs' complaint, and the evidence adduced at trial, reveals that plaintiffs' allegations as to defendants' fraud, misrepresentation, and breach of express and implied warranties were issues that were not raised by plaintiffs' evidence. This fact was correctly reflected by the issues which the trial court submitted to the jury. Defendant advances the argument that since plaintiffs' evidence did not conform to the allegations in their complaint, plaintiffs should have amended their complaint. We are unable to determine from plaintiffs' inartfully drawn complaint whether plaintiffs intended to allege simple breach of contract. That determination, however, is not essential. G.S. 1A-1, Rule 15(b) clearly states that a failure to amend pleadings to conform to the evidence does not affect the result of the trial of issues not raised by the pleadings. While we agree that it is the better practice to amend the pleadings so that they actually reflect the theory of recovery, Roberts v. Memorial Park, 281 N.C. 48, 187 S.E.2d 721 (1972), failure to do so in the case before us is without real import.

In reviewing the instructions to the jury, however, we find that the trial court, while recognizing that plaintiffs' evidence supported only the breach of contract theory, defined the measure of damages in terms inconsistent with the evidence, and in a manner confusing to the jury.

Generally, a party who is injured by the breach of a contract is entitled to compensation for injuries sustained and is entitled to be placed, as near as possible, in *466 the same position he would have occupied if the contract had been performed. Fulcher v. Nelson, 273 N.C. 221, 159 S.E.2d 519 (1968). See also D. Dobbs, Handbook on the Law of Remedies, § 12.1, p. 786 (1973). In breach of contract cases in which there is a failure by the contractor to construct a house in a workmanlike manner, according to plans and specifications, the damages to the non-breaching party may be measured in one of two ways: if the jury accepts evidence tending to show that the defects could readily be remedied without destruction of any part of the building, the measure of damages would be the cost of labor and materials to make the building conform to the contract; if, on the other hand, the jury accepts evidence showing that, to remedy the deficiencies, a substantial part of what had been done had to be undone, the measure of damages would be the difference in the value of the structure as contracted for and the value of the structure actually built. Robbins v. C. W. Myers Trading Post, Inc., 251 N.C. 663, 111 S.E.2d 884 (1960); see also D. Dobbs, supra, § 12.21, p. 897. In the cases that have followed this method for computing damages, we can find no case in which damages were assessed in this manner where, as in the case at bar, the non-breaching party elected, in effect, to abandon the premises. See, e. g. Patrick v. Mitchell, 44 N.C.App. 357, 260 S.E.2d 809 (1979). For the same principle of damages resulting from breach of warranty, see also Hartley v. Ballou, 286 N.C. 51, 209 S.E.2d 776 (1974), and authorities cited therein. However, such damages under those circumstances may be patently inappropriate.

In the case at bar, the trial court stated:

In this matter the Parties Plaintiff, the Coleys, are entitled to the difference between the fair market price at the time the contract was entered into between the parties and when the parties realized that the contract had been breached, that is, the difference, the fair market value of the premises as compared to the initial purchase price as being the price set forth and fixed by the contract.

Under the facts of this case, these instructions, allowing plaintiffs to recover as damages the difference between plaintiffs' cost and the fair market value, were erroneous. The uncontroverted evidence shows that plaintiffs stopped making mortgage payments on the Concord home; NCNB foreclosed, and, after the foreclosure sale, plaintiffs found themselves indebted to VA for $11,654.58. While the record does not necessarily reflect the exact amount obtained at the foreclosure sale, it would appear that plaintiffs' actual damages were fixed by the deficiency after foreclosure, plus any other damages actually incurred by plaintiffs in their dealings with defendants. In this case there was ample evidence to support such damages.

The homme plaintiff testified concerning plaintiffs' loss of equity in the Rowan County home, the debt they owed to the Veterans Administration due to the Concord home foreclosure, and damages due to their payment of closing costs on the Concord home. Moreover, Plaintiffs' Exhibit No. 13 listed the foregoing alleged damages and revealed a total of $19,631.84, less than one-half the damages awarded by the jury. We conclude, therefore, that, in awarding damages, the jury was misled by the instruction quoted above. We hold that the defendants are entitled to a new trial on the issue of damages.

The feme defendant's second assignment of error, that the judgment as against her was unsupported by competent evidence, is without merit. While we agree with the feme defendant that there was no evidence to support the theory of implied and express warranties, we have noted above that the case eventually was tried on a breach of contract theory. The feme defendant was a party to the contract, and she is liable for damages caused by the breach of that contract.

*467 For the reasons stated above, the feme defendant is entitled to a new trial on the issue of damages.

It is so ordered.

New trial.

WELLS and HILL, JJ., concur.