Facts
- Tolar Construction, LLC contracted with the Fort Payne Board of Education to expand Wills Valley Elementary School and subcontracted the electrical work to Kean Electric Company, Inc. for a fixed lump sum payable upon completion and acceptance.
- The subcontract set January 18, 2001 as Kean’s completion date; work began with Tolar in June 2000 and Kean in August 2000.
- In November 2000, the Board required a different roof than the one ordered and partially installed, delaying the project for over a month and limiting electrical work.
- Tolar removed the partially completed roof and replaced it; weather delayed roof work into early January 2001, making timely completion by January 18, 2001 impossible.
- Kean continued working past January 18; Tolar later imposed a new deadline (May 14) and, when unmet, directed Kean to stop work.
- Tolar paid Kean $3,000 and hired others to complete the electrical work.
Issues
- Whether the jury’s $89,000 compensatory-damages award to Kean for breach of the subcontract was unsupported by the evidence or excessive, including for failure to account for Tolar’s costs to complete the electrical work after terminating Kean.
- Whether the trial court erred in setting the accrual date for prejudgment interest on Kean’s contract recovery.
Decision
- The Supreme Court of Alabama affirmed the judgment for Kean in all respects.
- The Court upheld the jury’s $89,000 damages award, concluding it was supported by the evidence and not shown to be excessive.
- The Court affirmed the trial court’s selection of the prejudgment-interest accrual date.
Legal Principles
- Expectation damages for wrongful termination from a fixed-price construction subcontract may be proved by evidence of the contract price and the costs the subcontractor would have incurred to complete performance, with adjustments for amounts already paid and any proper offsets.
- A jury verdict is presumed correct, and the presumption is strengthened when the trial court denies a motion for new trial; an appellate court will not reweigh damages where the record provides a reasonable basis for the award.
- When project conditions attributable to others make timely performance impossible, the subcontractor’s missed deadline may not justify termination for default or denial of contract recovery.
- In Alabama contract actions, prejudgment interest runs from the time the amount due is sufficiently definite or reasonably ascertainable; trial courts have discretion in fixing that date absent reversible error.
Conclusion
The Alabama Supreme Court affirmed a jury award for an electrical subcontractor terminated after owner-related delays made timely completion impossible, holding the evidence supported expectation damages and that the trial court did not err in determining when prejudgment interest began to accrue.