Erlich V. Menezes

Erlich v. Menezes, 21 Cal. 4th 543, 981 P.2d 978, 87 Cal. Rptr. 2d 886; (Ca. 1999).

Procedural Posture: On appeal from Court of Appeal judgment in favor of the Erlichs.

Facts: Barry and Sandra Erlich contracted with John Menezes, a licensed general contractor, to build a home. The Erlichs moved into their home in December 1990 and began to experience troubles in February of 1991. The troubles first arose from several leaks in the house after the occurrence of rain. Menezes' several attempts to stop the leaks proved ineffectual and caused further damage to the home.

An inspection of the home by another general contractor and a structural engineer confirmed major defects in the home. Problems ranged from the roof, three decks, foundation, and included serious errors in the construction of the home's structural components.

Both Erlichs testified that they suffered emotional distress as a result of the defective condition of the house and Menezes' unsuccessful repair attempts. The Erlichs testified to fear for their lives and their daughter's safety if the home was to collapse. Barry Erlich claimed physical distress as well because he suffered from a permanent heart condition, partially attributable to excessive stress.

Issue #1: Is a negligent breach of a contract sufficient to uphold tort damages?

Summary of Rule(s) used in Argument #1:

A breach of contract becomes tortious when (1) the breach is accompanied by a traditional common law tort, such as fraud or conversion; (2) the means used to breach the contract are tortuous, involving, deceit, or undue coercion; or (3) one party intentionally breaches the contract intending or knowing that such a breach will cause severe, unmitigable harm in the form of mental anguish, personal hardship or substantial consequential damages.

Analysis #1:

Contract law and tort law are two different areas of law. Contract law is created to enforce the intentions of the parties to the agreement; tort law is primarily designed to vindicate social policy. Contract damages are generally limited to those within the contemplation of the parties when the contract was entered into or at least foreseeable by them at that time; consequential damages beyond the expectation of the parties are not recoverable.

In this case, the jury concluded Menezes did not act intentionally; nor was he guilty of fraud or misrepresentation. The negligent construction of the Erlichs home did not cause physical injury. Mr. Erlich's heart disease flowed from emotional distress and was not directly caused from the negligent construction. It is rarely the case that a large construction project becomes completed on time and with perfection. Therefore, this type of endeavor should not be thought of as a stress free undertaking. Menezes breach of contract did not satisfy any of the requirements for this breach to become tortious.

Conclusion #1: No.

Issue #2: Should emotional distress be a recoverable damage for a breach of contract case?

Rule(s)