Case problem

Camilia and Martin Chung  (“Chung”) owned a retail business that was booming, and they needed additional space.  Since they owned the building in which their retail store was located as well as the vacant lot next door, they decided to build a brick building as an addition to the existing brick building so that they could expand the business.  They contracted with Perez Construction, Inc. (“Perez”), to construct the addition, for a price of $149,000. The contract called for the building to be built per a set of plans prepared by the Chung’s architect, which showed that the two structures were to share a common wall, and the exterior appearance and height of the new building addition were to match those of the existing structure.  

Shortly before completion of the project, however, it was apparent that the roofline of the new building was approximately four inches higher than that of the existing structure. At its own expense Perez modified the ridge caps of the buildings to blend the rooflines. The discrepancy had other consequences, however, including misalignment of the gutters and the windows of the two buildings, which resulted in the building looking unstable from the street when looked at with more than a casual glance even though it was structurally sound, and in an icing problem in the winter.

The Chungs occupied the new structure, but refused to make the last payment of $28,000 promised under the contract. Perez filed a suit to collect the promised $28,000.   The Chungs obtained a bid of $63,000 to correct the 4 inch discrepancy and $19,000 to resolve the icing problem.  They had expert testimony that the value of the property was $45,000 less than if the 4 inch misalignment had not happened.  They had no evidence, however, that the icing problem resulted in any reduction in value, although it did require additional maintenance in the winter.  Perez claimed that at most the change in the value of the property due to the misalignment was under $8,000.  The Chungs counterclaimed for $82,000, the amount it would take to be in full compliance with the architect’s plans.