## Facts

- A homeowner’s residence sustained substantial fire damage.
- The homeowner hired a restoration/construction contractor under a contract of approximately $311,156 to rebuild and restore the home.
- After the work was completed, the homeowner identified numerous alleged construction defects and negligent workmanship.
- The homeowner sued the contractor for breach of contract, breach of warranty, negligent construction, and negligence.
- At trial, the homeowner presented evidence estimating the cost to repair the defects and bring the home into the condition contemplated by the contract at approximately $751,632.
- The homeowner did not introduce evidence of the home’s fair market value after the contractor’s work.

## Issues

1. Whether a plaintiff alleging breach of contract and negligent construction must prove the property’s post-work fair market value as a prerequisite to recovering damages.
2. Whether reasonable repair-cost evidence, without post-work fair market value evidence, can be a sufficient measure of damages in a construction-defect case.

## Decision

- The Supreme Court of Georgia affirmed the Court of Appeals and reversed the directed-verdict rationale that required post-work fair market value proof as an absolute prerequisite to recovery.
- The court held that a construction-defect plaintiff is not required in every case to prove post-work fair market value to recover damages.
- The court ruled that reasonable cost-of-repair evidence may support damages, subject to limits against excessive awards relative to probable loss in value.
- The case was remanded for further proceedings consistent with allowing the claim to proceed to the fact-finder.

## Legal Principles

- Contract and tort damages aim to place the injured party, as nearly as possible, in the position that would have existed absent the wrong.
- In defective construction cases, the ordinary measure of damages is the reasonable cost to repair or restore the property to the condition required by the contract.
- Repair-cost damages may be limited where the cost of repair is disproportionate to the probable diminution in value, to avoid economic waste.
- Proof of post-work fair market value is not a universal prerequisite; valuation may be shown through different methods depending on the facts, so long as the fact-finder has sufficient data to assess damages.

## Conclusion

The court rejected a categorical requirement that construction-defect plaintiffs prove post-work fair market value and held that reasonable repair-cost evidence can support an award, subject to the constraint that damages not be clearly disproportionate to probable loss in value.


John Thurmond & Assocs., Inc. v. Kennedy, 284 Ga. 469, 668 S.E.2d 666 (Ga. 2008)