## Facts

- Gerald and Roberta Orndorff bought and lived in a home built in a subdivision developed by Christiana Community Builders and Ponderosa Homes; they had lived there since 1977 and intended to remain.
- The residence and improvements were built on inadequately compacted fill, causing settlement and structural distress.
- In a bench trial, the builders stipulated the property exhibited distress from fill settlement and was defective.
- The parties disputed the extent of future settlement and the proper method and cost of repair, not the existence of defects.
- The homeowners’ experts supported a pier (caisson) and grade/beam system as necessary to stabilize the home.
- Evidence supported repair costs of about $221,792.68 plus about $21,747 in associated expenses, including relocation during repairs, totaling $243,539.95.
- An appraisal placed the home’s value at about $67,500 in its defective condition and about $238,500 after repair.
- The trial court awarded $243,539.95 (repair plus relocation expenses); the builders appealed, arguing damages should be capped at diminution in value.

## Issues

1. Whether the trial court abused its discretion by awarding the homeowners the reasonable cost of repair and relocation expenses when that amount exceeded the property’s diminution in market value.
2. Under what circumstances, in residential construction defect cases, cost-of-repair damages may exceed diminution in value.

## Decision

- The Court of Appeal affirmed the judgment.
- The trial court had discretion to select cost of repair (and related relocation expenses) as the measure of damages on these facts.
- The homeowners’ intention to stay and repair, the home’s substantial value after repair, and the extent of the damage supported the award.
- The cost of repair was not deemed unreasonable in relation to the post-repair value and the injury shown.

## Legal Principles

- For injury to real property improvements, reasonable cost of repair is a permissible measure of damages and is not automatically limited by diminution in value.
- Cost-of-repair damages may exceed diminution in value when the plaintiff shows a bona fide intention or personal reason to repair and continue using the property.
- Repair costs must be reasonable in relation to the property’s value after repair and the nature and extent of the damage.
- The choice between diminution in value and cost of repair is fact-dependent and committed to the trial court’s discretion when supported by substantial evidence.
- In construction defect actions pleaded under theories such as implied warranty and strict liability, damages may include reasonable amounts necessary to correct the defective condition, including reasonably necessary relocation expenses during repair.

## Conclusion

The appellate court upheld a construction-defect damage award based on the reasonable cost to repair the home and relocate during repairs, holding that such damages may exceed diminution in market value when the owners intend to remain and the repair costs are reasonable relative to the post-repair value and the harm caused.


Orndorff v. Christiana Cmty. Builders, 217 Cal. App. 3d 683, 266 Cal. Rptr. 193 (Ct. App. 1990)