Business and Legal Insights

The recent Florida appellate case of Bandklayder Development, LLC v. Sabga,[1] provides an important lesson regarding damages for construction defects – that damages for construction defects must be proven based on costs of repair measured as of the date of the breach, not current repair costs as of the time of trial.  Otherwise, as the plaintiff homeowners learned too late in the Bandklayder case, even a valid claim for construction defects will fail under Florida law.

The Trial Court’s Decision

The Bandklayer case involved a builder, Bandklayder Development, LLC, which constructed and then sold a single-family home to homeowners Joseph and Dunia Sabga in July 2017.  The builder provided a warranty and a commitment to address outstanding construction defects identified during a walkthrough prior to closing.

However, despite the builder’s agreement to complete repairs within 30 days, many defects remained unresolved. After the builder stopped communicating in 2018, the homeowners sent the builder a notice of construction defects under Chapter 558, Florida Statutes, in April 2018, and thereafter filed suit against the builder, asserting claims for breach of contract, violation of the Florida Building Code, and breach of implied warranty.

At trial, the homeowners presented testimony from their construction expert, who calculated the cost of repairs as of the date of his expert report in 2022 as $322,916.36.  The expert also testified that the costs of repair had increased by the date of trial in May 2023, to $435,936.75 due to rising construction costs. The trial court ruled in favor of the homeowners at trial and awarded them damages of $435,936.75 based on the 2023 estimated cost of repair testified to by the homeowners’ expert.

The Appellate Court’s Reversal

However, the builder appealed, and on appeal, the Florida’s Third District Court of Appeal reversed the trial court’s judgment.  The court ruled that the homeowners had failed to present evidence at trial to establish the proper measure of damages, and that as a result, the judgment for the homeowners had to be reversed and judgment had to be entered in favor of the builder. The court’s reasoning centered on the established principle of Florida law that damages in construction defect cases must be assessed as of the date of the breach.  This rule is based on longstanding Florida case law from the Florida Supreme Court’s decision in Grossman Holdings Ltd. v. Hourihan, 414 So. 2d 1037 (Fla. 1982), that “[d]amages for a breach of contract should be measured as of the date of the breach. Fluctuations in value after the breach do not affect the nonbreaching party’s recovery.” (internal citations omitted). 

In applying this rule, the Bandklayer court determined that the date of breach was either the date when the homeowners purchased and took possession of the home with the defects in July 2017, or at the latest, when they sent their Chapter 558 notice of construction defects to the builder in April 2018.  Because the homeowner’s expert did not testify as to the cost of repairs as of either of these dates, the court ruled the homeowners failed to prove an essential element of their case against the builder.  Although recognizing the harshness of the result, the Bandklayer court also ruled that because the failure to present the required evidence was not due to judicial error, the homeowners could not present such evidence on remand after appeal, and instead judgment had to be entered in favor of the builder on the homeowners’ claims.

Key Legal Principle Takeaways:

1. Damages in Construction Defect Cases Are Time-Sensitive:
   Florida courts follow the principle set out in Grossman Holdings Ltd. v. Hourihan, which mandates that damages for defective or unfinished construction must be measured as of the date of the breach. This is intended to ensure that the non-breaching party is restored to the position they would have been in had the contract been performed, without considering post-breach cost fluctuations. 
2. Speculative Damages Are Insufficient:
   The homeowner’s expert in Bandklayer presented repair costs as of 2022 and 2023, years after the breach occurred in 2017 or, at the latest, 2018. This gap introduced uncertainty, as repair costs had risen significantly during that time. The court emphasized that damages must be rooted in concrete evidence tied to the time of the breach, not speculative future costs.
3. The Plaintiff’s Burden of Proof:
   Plaintiffs in construction defect cases must not only prove the existence of defects but also provide evidence to prove their damages accurately as of the required timeframe. The homeowner’s failure to present evidence of repair costs as of the breach date ultimately led to them losing the case even though they had proven the existence of construction defects in their home.

Conclusion

The Bandklayder case serves as a stark reminder that even when construction defects are evident, failing to establish and prove damages as of the correct point in time can be fatal to a claim. For homeowners seeking relief, this underscores the importance of hiring qualified experts and aligning their cost estimates for repairs as of the date of breach, even if current repair costs are also presented.  For contractors and builders, it highlights the importance of holding plaintiff experts to proper legal standards for the timing of repair damages proof, and offers a path to challenge costs of repair which are far removed from the date of breach. 

[1] Bandklayder Dev., LLC v. Sabga, No. 3D23-1906, 2025 WL 15275 (Fla. 3rd DCA Jan. 2, 2025).