Award of Nominal Damages and $30K In Legal Fees Is Challenged
In 2017, Crown Wisteria, Inc. and Fiona Madeline Cibana, owners of adjoining townhouses, entered into a license agreement that provided Cibani with limited access to Crown’s property to facilitate Cubani’s planned demolition and renovation work on her property. As a substantial term of that license agreement, Cibani agreed to use high-quality historic brick matching the front facade of her building to rebuild a party wall facing Crown’s rear wall. However, Cibana breached the agreement and chose to use a cheaper brick that was not an exact match.
Crown sued for breach of contract. In its amended complaint, Crown sought damages of no less than: (1) the cost to build a wall on Crown’s own property with matching brick; (2) the value of the loss of Crown’s property that would be occupied by the new wall; and (3) the “diminution in market value to Crown’s property due to Cibana’s breach. Cibana served a discovery demand seeking documentation supporting the damages sought by Crowm. Crown filed a note of issue without having produced any discovery relevant to damages.
At trial, on direct examination, Crown’s representative, Susan Stamell, did not testify at all as to the damages that she sought. On cross-examination, she testified that she sought “removal and replacement of the brick, installing brick that matches in accordance with the agreement” and that she would be satisfied if Cibani replaced the brick instead of paying her money. However, both on redirect and on subsequent questioning by the court, Stamell said it would be a “nightmare” if Cibani replaced the brick. She concluded that she would rather have “the money that [Cibani] saved by not putting up the right brick, the money it would cost [her] to take that brick down and re-put it up.” None of Stamell’s testimony supported her claim for damages as stated in her amended complaint.
Crown also presented testimony by contractor Andrew Liebhaber. He testified that he was asked to prepare a written estimate of the cost to remove the wall from Cibani’s property and rebuild it with matching brick. His estimate was entered into evidence, over Cibani’s objection. It listed the total estimate as $646,000, which included $140,000 for “[p]urchas[ing] new bricks.” The estimate did not state the price per brick or the number of bricks required. Liebhaber testified that his figure for the cost of purchasing new bricks was based on a written estimate provided to him by Stamell. He did not know how Stamell obtained it, he did not recall the cost per brick in the estimate, and it was not entered into evidence. Liebhaber testified that the line item figures in his estimate generally were based on his “knowledge or pricing from previous jobs.”
After the trial, the Court awarded Crown $10 in nominal damages and $30,000 in attorneys’ fees. Crown appealed.
Crown had the burden of proving its damages at trial “with a reasonable certainty”. Testimony based on documents not in evidence or that relied on unsupported assumptions or estimations does not support a damages award. A plaintiff who fails to prove actual damages is entitled to only nominal damages.
Stamell gave no testimony as to damages on her direct examination, and her subsequent discussion of damage was at best inconsistent. The trial court appropriately gave little if any weight to Liebhaber’s testimony. Because he testified as a fact witness and was not qualified as an expert, his opinions were entitled to no weight. His testimony about the contents of the matching brick estimate provided to him by Stamell was hearsay and insufficient to meet Crown’s burden, since that document was not in evidence. Accordingly, the trial court appropriately determined that Crown failed to meet its burden to prove more than the nominal damages the court awarded.
For the first time on appeal, Crown alternatively sought damages in an amount equal to the price of the matching brick that Cibani sourced but did not use. But there was nothing in the trial record that supported the figure proposed by Crown. No evidence was admitted as to the cost of the bricks Cibani used, so it was not possible to determine the difference between that figure and the cost of matching bricks. And there was no competent evidence of the cost of the matching brick.
At trial, Crown sought $307,550.89 in counsel fees. The trial court correctly found that Crown was entitled to counsel fees even though it was entitled to only nominal damages. And the indemnification clause in the parties’ licensing agreement, which provided for payment of counsel fees “as they incur,” applied to Crown’s claim for breach of contract. However, the trial court found that the amount sought by Crown was unreasonable after considering the relevant factors, including the time and labor required, the difficulty of the issues involved, and the skill and effectiveness of counsel.
The appellate court deferred to the trial court’s discretion in awarding reasonable counsel fees and would not disturb such an award absent an abuse of discretion. Here, Crown did not disclose its proposed expert, Mary Jablonski, in a timely way and she was precluded from testifying. Consistent with that ruling, the court appropriately found that Crown was not entitled to recovery for fees arising from Jablonski’s retention and preparation or in connection with the litigation that resulted in her being precluded from testifying. The trial court further appropriately found that fees in connection with Crown’s preliminary injunction and stay applications before the trial court and the appellate court all of which were denied, were not reasonable.
The trial court appropriately determined that Crown failed to demonstrate the reasonableness of fees billed by Darin Wizenberg, a criminal attorney, and another lawyer, who did not participate in the only hearing he attended. Given the relatively simple and straightforward nature of this contract matter, Crown’s counsel failed to demonstrate any reason why he should reasonably have required the assistance of outside counsel. This was is particularly so in light of the trial court’s finding that Wizenberg was a “seasoned attorney specializing in complex litigation.” Furthermore, the trial court appropriately found that Crown’s counsel failed to demonstrate through testimony the reasonableness of items that were blockbilled, and that the bills themselves did not provide adequate information to explain or justify the fees charged. Indeed, the trial court reasonably found that many blockbilled items, including for the fee hearing itself and for filing papers, were “excessive on their face,” given the straightforward nature of this litigation. Accordingly, the trial court’s award of counsel fees was affirmed.