Brown v. All Pro Contracting Inc.

Background

Patrick Brown and Laura Benanti alleged that they hired All Pro Contracting on October 7, 2015, to renovate several rooms in their New York apartment. The contract listed a total price of $100,000. The plaintiffs alleged that All Pro performed defective work, including installing unsuitable bathroom sheetrock, failing to install required bathroom materials and ventilation, and performing unsafe electrical work. They also alleged that other parts of the renovation were incomplete or defective.

The plaintiffs alleged that they paid All Pro $101,750, including the contract price and change orders. They later paid another contractor $51,583.47 for remediation and submitted an estimate of $51,500 to $60,500 for additional work. They sought $112,083.47 in compensatory damages, along with interest, costs, and disbursements.

Procedural History

The plaintiffs filed the action on November 5, 2019, and served All Pro through its authorized agent in the New York Secretary of State’s office on November 20, 2019. All Pro did not appear, answer, or respond to the plaintiffs’ motion. The Clerk entered a certificate of default on April 25, 2020. The plaintiffs then moved for a default judgment, which the court decided without a hearing.

Liability

A default judgment is a judgment entered when a defendant fails to participate in the case. Although a default admits well-pleaded allegations concerning liability, the court must still determine whether those allegations establish a legal claim. The plaintiffs asserted breach of contract, promissory estoppel, and unjust enrichment. Because the complaint alleged liability for promissory estoppel and unjust enrichment only as alternative theories, the court did not address those claims after finding liability on the breach-of-contract claim.

Applying New York law, the court found that the complaint alleged an agreement, the plaintiffs’ performance, All Pro’s breach, and resulting damages. The court therefore concluded that All Pro was liable for breach of contract based on its failure to complete the renovation according to the agreement and its defective workmanship.

Damages and Interest

The court explained that a default does not admit the amount of damages. Plaintiffs must provide evidence supporting the requested amount, and the court must determine damages with reasonable certainty. Because the plaintiffs submitted payment records, a description of the remediation work, and a contractor’s estimate, the court found that a separate damages hearing was unnecessary.

For deficient construction, New York law generally measures damages by the reasonable cost of completing or correcting the work when the defects are remediable. The court found that measure appropriate here. But it declined to award more than the price of the breached contract because the estimate did not establish that every proposed repair was necessary and the estimated remediation cost exceeded the contract price. The court limited compensatory damages to $101,750.

The court also awarded prejudgment interest under New York law at nine percent per year from January 15, 2016, which it identified as the date of All Pro’s breach. It awarded an additional $562.40 for costs and disbursements.

Disposition

Judge Ronnie Abrams granted the plaintiffs’ motion for default judgment. The court ordered All Pro to pay $101,750 in damages, nine-percent interest from January 15, 2016, and $562.40 in costs and disbursements. The Clerk was directed to enter judgment and close the case, and all motions were terminated.