July 3, 1990
ROWAN HEATING-AIR CONDITIONING-SHEET METAL, INC., APPELLANT
JAMES E. WILLIAMS, ELIZABETH T. JESTER, APPELLEES
Appeal from the Superior Court of the District of Columbia; Hon. Steffen W. Graae, Trial Judge
Withdrawn October 16, 1990; Substituted Opinion Rehearing Granted October 16, 1990,
Terry and Farrell, Associate Judges, and Mack, Senior Judge.
The opinion of the court was delivered by: Per Curiam
This appeal originated in an action for breach of contract brought by appellant, Rowan Heating-Air Conditioning-Sheet Metal, Inc., against appellees, James E. Williams and Elizabeth Jester, and in appellees' counterclaim for negligence, breach of contract, and violation of the District of Columbia Consumer Protection Procedures Act, D.C. Code § 28-3901 et seq. (1981 & 1989 Supp.) ("Consumer Protection Act"). Appellant challenges the trial court's dismissal of its claim and its judgment for appellees in the amount of $15,700.
In the fall of 1985, appellant and appellees entered into a contract pursuant to which appellant was to design and install a heating and air conditioning system in appellees' home. *fn1 The system installed by appellant did not provide adequate heat, and appellees asked appellant to make the necessary adjustments. Appellant made some minor changes, but refused to take further action until appellees had paid the balance they owed under the contract. When payment was not forthcoming, appellant brought the instant lawsuit, and appellees counterclaimed. After a non-jury trial, the court denied appellant relief, and awarded appellees $10,700 on their breach of contract claim as well as $5,000 in punitive damages arising from appellant's violation of the Consumer Protection Act. *fn2 This appeal followed.
Appellant first challenges the trial court's award of $10,700 to appellees for damages arising from appellant's breach of contract. The court based its award on the testimony of Michael Jones, an expert witness for appellees, who maintained that it would cost $10,700 to replace the existing heating and air conditioning unit with a functioning system. Appellant contends that Jones' estimate did not accurately reflect the damages incurred because it considered the cost of replacing the entire duct system, rather than merely the first floor system which appellant claims is the only portion which functions improperly. On the contrary, however, Jones testified that replacement of the entire duct system was necessary in order to ensure that the unit as a whole functioned properly.
In this regard appellant argues that the trial court improperly disregarded the testimony of William Rowan, the owner of appellant company, who maintained that it would cost only $500 to correct the flaws in the system. Appellant contends that because Jones was never questioned about Rowan's testimony, there was no evidence from which the court could conclude that Rowan's repair proposal would be ineffective. It was not necessary, however, for appellees to take affirmative steps to discredit Rowan's damage estimate. It was sufficient for them to introduce independent evidence, in the form of Jones' testimony, that the actual cost of rectifying the faulty heating system was $10,700. See E. Cleary, McCORMICK ON EVIDENCE § 339 (3d ed. 1984). The trial court credited this testimony, and specifically rejected Mr. Rowan's estimate. We will not disturb the findings of the trial court in this respect. See Cahn v. Antioch University, 482 A.2d 120, 128-29 (D.C. 1984).
Appellant next challenges the trial court's computation of the amount of damages due appellees. It argues that the court should have offset appellees' award by the amount they owed appellant under the contract. In fact, the trial court properly held that appellant was not entitled to any recovery because it failed to fulfill its contractual obligations. See George Washington University v. Weintraub, 458 A.2d 43, 47 (D.C. 1983).
We agree with appellant, however, that the trial court did not use the proper standard in computing the amount of appellees' damages. In a breach of contract action, the measure of damages is the amount necessary to place the non-breaching party in the same position he or she would have been in had the contract been performed. Thorne v. White, 103 A.2d 579, 580 (D.C. 1954). Where a party fails to complete a service which it agreed to perform under a contract, the non-breaching party is entitled to receive the amount it costs to complete the service, to the extent that amount exceeds the original contract price. Id. Appellees have thus far paid appellant $2,392.50, and in order to complete the system they will have to spend an additional $10,700. The compensatory damages awarded to appellees should be the total estimated cost of completing the system, which is at least $13,092.50, *fn3 less the original contract price. We remand the case to the trial court for findings of fact and Conclusions of law consistent with this standard.
Finally, appellant contends that the court erred by awarding appellees punitive damages pursuant to the Consumer Protection Act. See D.C. Code § 28-3905(k) (1) (C) (1981). Section 28-3905 (k) (1) provides in pertinent part:
(k) (1) Any consumer who suffers any damages as a result of the use or employment by any person of a trade practice in violation of a law of the District of Columbia . . . may bring an action in the Superior Court of the District of Columbia to recover or obtain . . .
(C) punitive damages.
Id. Appellant argues that punitive damages are not appropriate here because its misrepresentation to appellees was not willful, and because appellees failed to establish any loss as a result of the alleged misrepresentation. *fn4
The trial court found that appellant had misrepresented material facts about the contract in violation of D.C. Code § 28-3904 (e) (1981). With regard to the issue of damages, the court concluded as follows:
Given that there was misrepresentation, shoddy supervision . . . some very half-baked and insincere attempts . . . to try to tinker with the system but not to really resolve it, a continuing failure on the part of to acknowledge that messed up this job, I think that some additional damages are appropriate.
The court went on to conclude that these factors warranted an imposition of punitive damages pursuant to D.C. Code § 28-3905 (k) (1) (C) (1981). *fn5
There is no case law interpreting § 28-3905 (k), but when the section was enacted by the District of Columbia Council, the Committee Report offered the following guidelines for its application:
the standards the courts would use in determining [punitive damages pursuant to § 28-3905 (k) (1) (C)] are the amount of actual damages awarded, the frequency, persistency, and degree of intention of the merchant's unlawful trade practice, and the number of consumers adversely affected.
Report of the Committee on Public Services & Consumer Affairs, Council of the District of Columbia, on Bill 1-187, November 19, 1975, at 23 (Committee Report). Here, the trial court's finding that appellant was guilty of a "continuing" failure to admit to its mistakes, and of an unwillingness to rectify the situation, is sufficient to warrant an award of punitive damages under the standards set forth in the Committee Report.
Accordingly, the trial court's judgment for appellees is affirmed but the case is remanded for recalculation of damages consistent with this opinion. *fn6