80 A.D.2d 318, 439 N.Y.S.2d 529 (App. Div. 1981)
Until 1972, plaintiffs operated a pig iron manufacturing plant on a 26-acre parcel abutting the Niagara River in Tonawanda. The site contained industrial and office buildings, a 60-ton blast furnace, lifts, hoists, ore-handling equipment, railroad tracks, cranes, diesel locomotives, and other implements accumulated through various industrial operations dating to the 1870s.1
On August 3, 1973, plaintiffs contracted with defendant Harold Schectman, a demolition and excavating contractor. Plaintiffs agreed to convey the buildings, structures, and most equipment in exchange for Schectman’s payment of $275,000 and his promise to remove equipment, demolish structures, and grade the property according to specifications in Exhibit C and Map C1 attached to the contract.2
The contract required Schectman to demolish all improvements, cap the water intake at the pumphouse, and grade and level the property, removing all structures and equipment including foundations, piers, and headwalls to a depth of approximately one foot below the specified grade lines so as to provide a reasonably attractive vacant plot for resale.34
Schectman left walls, foundations, and other structures above the required grade lines. At trial, plaintiffs’ witnesses and exhibits showed the deviations, while Schectman maintained that the contract did not require removal of all subsurface foundations.5 The jury returned a $90,000 verdict for plaintiffs. The resulting judgment of $122,434.60 including interest and costs ran jointly and severally against Schectman and the surety on his performance bond.67 Schectman appealed from the judgment and from the order denying his motion to set aside the verdict.8
Whether the court should have charged the jury that the difference in value of plaintiffs’ property with and without the promised performance was the measure of the damage?9
In construction contract cases the measure of damages for a contractor’s breach is the reasonable cost of completing the promised performance.10 When the contractor has substantially performed in good faith and the cost of completion would involve unreasonable economic waste, courts instead measure damages by the difference in value of the property with and without the promised performance.11
No. The contract required Schectman to remove all foundations, piers, headwalls and other structures to one foot below the specified grade lines. Schectman left walls, foundations and other structures above the required grade lines.12 The jury found that the reasonable cost of completing the required removal work was $90,000.13 Schectman did not substantially perform the contract in good faith; he maintained throughout performance and at trial that the contract did not obligate him to remove subsurface foundations.14
Completion of the work would not have required undoing anything already done in good faith but would have required only the performance that had been promised and left undone.15 The deviations were not trivial.16 Therefore the cost of completion, not any difference in the value of the property, was the proper measure of damages, and the trial court correctly refused to charge the jury on diminution in value.17
The trial court properly denied Schectman’s request to charge the jury that diminution in value was the measure of damages and correctly instructed the jury on the cost of completion.18