## Facts

- Bank of America (BoA) owned property next to Douglas and Kimberly Martin’s home.
- BoA negligently graded its property, altering drainage so that water flowed onto the Martins’ land and flooded the basement of their home.
- The Martins sued BoA for trespass and sought $750,000 in “restoration” damages.
- The requested restoration measure included raising the grade of the Martins’ house, pool, deck, and surrounding grounds by three feet to match adjoining land and reduce future flooding.
- BoA presented evidence that the Martins’ home was worth about $475,000 before the flooding and that the flooding diminished the property’s value by about $25,000.
- BoA also presented evidence that basement waterproofing would cost about $28,000.
- A jury found BoA liable for trespass.
- The trial judge awarded $25,000 in damages based on diminution in market value and rejected the Martins’ requested restoration measure.
- The Martins appealed the damages award.

## Issues

1. In a trespass case involving flooding damage to a residence, may the plaintiff recover reasonable repair or restoration costs, or is recovery limited to diminution in market value?
2. If restoration is an available measure, what limits apply when the claimed restoration cost is far greater than the property’s diminution in value?

## Decision

- The Appellate Division held that the trial court erred by treating diminution in value as the only allowable measure of damages as a matter of law.
- The court vacated the damages award and remanded for a new damages determination that permits consideration of reasonable repair or restoration costs, subject to limits against unreasonable or wasteful awards.
- The liability finding for trespass was not disturbed.

## Legal Principles

- Damages for injury to real property are not confined to diminution in market value in every case; the proper measure depends on the nature of the harm and what is reasonably needed to remedy it.
- When damage to a home is repairable and the owners seek to restore the property’s use and enjoyment, reasonable repair or restoration costs may be an appropriate measure of damages.
- Restoration costs may exceed diminution in value if the amount sought is reasonable in relation to the harm and the remedial benefit, but damages should not be awarded in an amount that results in economic waste.
- In assessing reasonableness and proportionality, courts may consider whether less costly measures would adequately address the injury and prevent recurrence.

## Conclusion

Martin v. Bank of America addresses the proper measure of damages after a jury found BoA liable for trespass based on grading that caused repeated flooding of neighboring residential property; the Appellate Division ruled that the trial court could not cap damages at the $25,000 diminution figure as a matter of law and sent the case back for a new damages determination that allows reasonable repair or restoration damages, while screening out disproportionate, wasteful recovery.


Martin v. Bank of America, 2018 WL 3614171 (2018)