## Facts

- The Walkers contracted with Coronado Landmark, Inc. to build a home in the Coronado Cays development as part of their relocation after Mr. Walker’s retirement.
- Completion timing mattered because the Walkers sought favorable federal tax treatment tied to acquiring and occupying a replacement residence within a specified period after selling their prior home.
- An initial completion date of December 31, 1972 was replaced by a written construction contract dated August 18, 1972 setting an April 1, 1973 completion date.
- The August contract included clauses allowing extensions for specified events (e.g., strikes, material shortages, weather).
- The house was not completed until approximately September 1973.
- The Walkers sued, alleging (1) breach of contract for untimely completion and (2) fraud based on representations about completion and the reasons for delay.
- Mrs. Walker also alleged intentional and negligent infliction of emotional distress arising from the delay and defendants’ conduct.
- After a jury trial, the Walkers recovered compensatory damages for breach of contract and fraud, substantial punitive damages against Coronado Landmark and Signal Landmark, and $400 for Mrs. Walker’s negligent emotional distress claim; the jury rejected intentional infliction.
- The trial court granted nonsuit for Signal Companies, Inc. and Cedric Sanders Corp. on all causes of action, and for Conover on the primary claims.

## Issues

1. Whether substantial evidence supported the jury’s finding of breach of the construction contract despite contractual provisions for excusable delay.
2. Whether substantial evidence supported the fraud verdict based on representations about completion and causes of delay.
3. Whether separate compensatory awards for contract and fraud constituted impermissible double recovery and required modification.
4. Whether the punitive damages awards were supported by the evidence and were excessive.
5. Whether the negligent infliction of emotional distress award to Mrs. Walker could stand on this record.
6. Whether nonsuit was properly granted for Signal Companies, Inc. and Cedric Sanders Corp. due to insufficient proof of alter-ego, agency, or other bases for liability.

## Decision

- The court affirmed the jury’s liability findings for breach of contract and fraud against Coronado Landmark and Signal Landmark, finding substantial evidence supported the verdicts.
- The court modified the compensatory damages by merging overlapping contract and fraud awards into a single compensatory judgment of $8,414.
- The court affirmed punitive damages of $100,000 against Coronado Landmark and $115,000 against Signal Landmark.
- The court affirmed the $400 judgment for Mrs. Walker on negligent infliction of emotional distress and left undisturbed the defense verdict on intentional infliction.
- The court affirmed the nonsuits in favor of Signal Companies, Inc., Cedric Sanders Corp., and Conover.

## Legal Principles

- On appellate review of a jury verdict, evidentiary conflicts are resolved in favor of the judgment and reasonable inferences are drawn to uphold the verdict under the substantial evidence standard.
- A defendant may be liable for construction delay where the factfinder reasonably determines the delay was not excused under contractual delay provisions.
- Fraud may be found where there is evidence of material misrepresentations (or reckless disregard of truth), intent to induce reliance, actual reliance, and resulting damages.
- A plaintiff may not obtain duplicative compensatory recovery for the same injury under different theories (e.g., contract and fraud); overlapping awards may be reduced and merged.
- Punitive damages may be upheld when supported by findings of fraud (or equivalent statutory bases) and when the amount is not disproportionate in light of the defendant’s financial condition and the misconduct shown.
- Nonsuit is proper where evidence is insufficient as a matter of law to impose liability on related entities under alter-ego, agency, or similar doctrines.

## Conclusion

The court largely affirmed a jury verdict arising from late completion of a contracted home, holding that substantial evidence supported breach, fraud, punitive damages, and a modest negligent emotional distress award, while preventing double recovery by merging overlapping compensatory damages and affirming nonsuits for the parent and affiliated entities due to insufficient proof of derivative liability.


Walker v. Signal Cos., Inc., 84 Cal. App. 3d 982 (Ct. App. 1978)