## Facts

- Lewis hired Anchorage Asphalt Paving Company to pave seven roads in his Anchorage mobile home park for $57,052.50.
- The paving was completed in April 1970; the roads soon deteriorated.
- Lewis stopped paying after paying $30,000; Anchorage Asphalt sued for the unpaid balance, and Lewis counterclaimed for defective performance.
- Prior appeals fixed the repair-damages formula (excluding excavation/fill beyond the specified subgrade work) and imposed liability on Anchorage Asphalt for failing to warn Lewis of subsurface inadequacy.
- At a 1979 damages trial, Lewis presented evidence that repairs consistent with the court’s prior formula would cost $114,987 at 1979 prices, reflecting substantial inflation since the early 1970s.
- The trial court awarded Lewis $114,987 plus prejudgment interest, and awarded Anchorage Asphalt $27,052.50 (the unpaid contract balance) plus prejudgment interest.

## Issues

1. Whether the trial court erred by valuing repair damages at 1979 (trial-date) costs rather than at the time of breach.
2. Whether Lewis’s alleged failure to maintain the roads required a reduction in damages to avoid unjust enrichment.
3. Whether awarding prejudgment interest on damages valued at 1979 prices produced an impermissible double recovery.

## Decision

- The court affirmed use of 1979 repair-cost valuation because the proper valuation date is flexible and should be chosen to provide full compensation under the circumstances.
- The court rejected the unjust-enrichment/maintenance argument because Anchorage Asphalt did not show that Lewis’s conduct caused additional deterioration or increased the repair costs.
- The court reversed in part on prejudgment interest, holding that prejudgment interest on a current-cost (1979) damages figure constituted double recovery.
- The case was remanded to modify the judgment to eliminate the double recovery created by the prejudgment interest award.

## Legal Principles

- The time for valuing contract damages is not fixed; courts may select the valuation date that best achieves full compensation.
- In defective construction cases, trial-date repair costs may be used when necessary to place the injured party in the position performance would have produced.
- A defendant asserting failure to mitigate (or unjust enrichment based on post-breach conduct) bears the burden to prove causation and the extent of any increased loss.
- When damages are calculated at current (trial-date) prices, awarding prejudgment interest for the period covered by inflationary adjustment can overcompensate and must be adjusted to prevent double recovery.

## Conclusion

The court permitted trial-date valuation of repair damages to ensure full compensation despite inflation, rejected an unsupported mitigation/unjust-enrichment defense, and required correction of the judgment because prejudgment interest on a trial-priced damages award improperly duplicated compensation for the time-related component of loss.


Anchorage Asphalt Paving Co. v. Lewis, 629 P.2d 65 (Alaska 1981)