## Facts

- Harley Lewin and related plaintiffs contracted with Harmon Development Corp. to renovate their home in Chappaqua, New York.
- Harmon Levine, the corporation’s president, executed the contract on the company’s behalf; Randy Levine was Harmon Levine’s wife and was also named as a defendant.
- After paying hundreds of thousands of dollars under the contract, the plaintiffs became dissatisfied with the progress and quality of the renovation work.
- The plaintiffs terminated Harmon Development and claimed they hired others to finish the renovation and to fix allegedly improper and poor work.
- The plaintiffs sued, alleging causes of action sounding in breach of contract and also asserting conversion and negligence claims tied to the renovation project and alleged property loss/damage.
- In their complaint, the plaintiffs stated damages as a total sum reflecting the cost to repair the premises to the contract condition and to replace damaged or stolen property.
- The Supreme Court, Westchester County, granted the plaintiffs summary judgment on liability but directed a separate trial on damages after noting that the damages demanded in the complaint differed from the damages sought on the summary judgment motion.
- At the nonjury damages trial, the plaintiffs proved they paid \$300,500 to the defendants under the contract, but they did not present evidence showing what portion of that amount corresponded to work not performed or work performed defectively.
- The trial court awarded \$300,500 in damages, treating the contract payments as the measure of recovery and also finding the plaintiffs did not prove payments to other contractors to complete or fix the work.
- The defendants appealed from the post-trial damages determination.

## Issues

1. In a home-renovation breach of contract case, may plaintiffs recover as damages the entire amount paid to the contractor without proving the cost to complete the work or correct defects, or without showing what portion of the payments related to unperformed or defective work?
2. If plaintiffs establish liability but fail at trial to prove actual damages with a factual basis for a reasonable estimate, must the complaint be dismissed?

## Decision

- The Appellate Division, Second Department, reversed the damages award on the law and the facts.
- The court held that the trial court erred by awarding damages equal to the full amount the plaintiffs paid under the contract.
- The court found the plaintiffs’ proof was insufficient because they did not demonstrate what portion of the \$300,500 was attributable to unperformed work or defective work, and the only testimony about damages was the amount paid.
- The matter was remitted to the Supreme Court, Westchester County, for entry of a judgment dismissing the complaint, with one bill of costs awarded to the defendants.

## Legal Principles

- A party seeking damages bears the burden to prove the extent of the harm, demonstrate actual damages, and provide a factual basis for a reasonable estimate of loss.
- In defective or incomplete construction/renovation disputes, the usual measure of contract damages is the cost to complete the work and to correct defects, not an automatic return of all payments made.
- Proof that a plaintiff paid a certain sum to a contractor, standing alone, does not establish damages unless the plaintiff connects the payments to work not done or work done improperly, or proves completion/correction costs.
- Even after a plaintiff obtains summary judgment on liability, the plaintiff must still prove damages at trial; failure of proof on damages can require dismissal.
- On review of a nonjury trial determination, the Appellate Division has broad authority to make the judgment warranted by the facts.

## Conclusion

Because the plaintiffs proved only that they paid \$300,500 under the renovation contract, and did not prove completion or correction costs or identify what part of the payments reflected unperformed or defective work, the Appellate Division reversed the award and directed dismissal of the complaint for failure to prove actual damages.


Lewin v. Levine, 44 N.Y.S.3d 540 (2017)