Erlich v. Menezes

981 P.2d 978 (1999)

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Nature of the Case

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Facts

The Erlichs (P) contracted with John Menezes (D), a licensed general contractor, to build a 'dream house' on their ocean-view lot. Ps moved into their house in December 1990. In February 1991, the rains came and almost as though they were in a Hollywood movie the house leaked like a sieve. There were defects in the roof, exterior stucco, windows, and waterproofing. There were serious errors in the construction of the home's structural components. None of the 20 shear, or load-bearing walls specified in the plans were properly installed. The three turrets on the roof were inadequately connected to the roof beams and, as a result, had begun to collapse. Other connections in the roof framing were also improperly constructed. Three decks were in danger of 'catastrophic collapse' because they had been finished with mortar and ceramic tile, rather than with the light-weight roofing material originally specified. Finally, the foundation of the main beam for the two-story living room was poured by digging a shallow hole, dumping in 'two sacks of dry concrete mix, putting some water in the hole and mixing it up with a shovel. This foundation, which was required to carry a load of 12,000 pounds, could only support about 2,000. The beam is settling, and the surrounding concrete is cracking. Ps sued D. Both Ps testified that they suffered emotional distress as a result of the defective condition of the house and D's invasive and unsuccessful repair attempts. Barry testified he felt 'absolutely sick' and had to be 'carted away in an ambulance' when he learned the full extent of the structural problems. He has a permanent heart condition, known as superventricular tachyarrhythmia, attributable, in part, to excessive stress. Although the condition can be controlled with medication, it has forced him to resign his position as athletic director, department head and track coach. Sandra feared the house would collapse in an earthquake and feared for her daughter's safety. Stickers were placed on her bedroom windows, and alarms and emergency lights installed so rescue crews would find her room first in an emergency. Ps sought recovery on several theories, including breach of contract, fraud, negligent misrepresentation, and negligent construction. Both the breach of contract claim and the negligence claim alleged numerous construction defects. D prevailed on the fraud and negligent misrepresentation claims. The jury found D breached his contract with P by negligently constructing their home and awarded $406,700 as the cost of repairs. Each spouse was awarded $50,000 for emotional distress, and Barry received an additional $50,000 for physical pain and suffering and $15,000 for lost earnings. By a two-to-one majority, the Court of Appeal affirmed the judgment, including the emotional distress award. The majority noted the breach of a contractual duty may support an action in tort. The jury found D was negligent. Since his negligence exposed Ps to 'intolerable living conditions and a constant, justifiable fear about the safety of their home,' the majority decided Ps were properly compensated for their emotional distress. The dissent pointed out that no reported California case has upheld an award of emotional distress damages based upon simple breach of a contract to build a house. Since D's negligence directly caused only economic injury and property damage, Ps were not entitled to recover damages for their emotional distress.