Lawrence W. Cleasby,
Phoenix Auto Body, Inc.; Lawrence Cleasby,
Phoenix Auto Body, Inc.
The defendant, Phoenix Auto Body, Inc., appeals a jury verdict that awarded $38, 500 in damages to the plaintiff, Lawrence W. Cleasby, on his breach of contract claim. We reverse and remand.
The defendant first argues that the superior court erroneously precluded it from introducing evidence showing that the condition of the car after the defendant repaired it was different from the condition of the car at the time of trial. This evidence, the defendant asserts, was relevant to establish the extent of the damages for which it was responsible. The trial court ruled that the defendant was collaterally estopped from introducing this evidence by the finding of the first jury that the defendant breached the parties' contract.
We review a trial court's decision on the admissibility of evidence under an unsustainable exercise of discretion standard. Figlioli v. R.J. Moreau Cos., 151 N.H. 618, 628 (2005). To meet this standard, the defendant must demonstrate that the trial court's ruling was clearly untenable or unreasonable to the prejudice of its case. Id.
"In its most basic formulation, the doctrine of collateral estoppel bars a party to a prior action, or a person in privity with such a party from relitigating any issue or fact actually litigated and determined in the prior action." McNair v. McNair, 151 N.H. 343, 352 (2004) (quotation omitted). Because the issue of the extent of the damage to the car for which the defendant was responsible was not determined in the first trial, collateral estoppel was not a bar to the evidence the defendant sought to introduce.
The first jury found only that the defendant committed a legal wrong by breaching the parties' agreement. The first jury made no findings with respect to damages. Indeed, the parties appear to have recognized this by stipulating, after the first trial, that one of the issues to be tried at the second trial was the extent of damages.
Contrary to the plaintiff's assertions, a finding that a party has breached an agreement is not a finding as to the amount of damages to which the injured party is entitled. While a finding of breach will entitle the injured party to damages, "there are instances in which the breach causes no loss. . . . There are also instances in which loss is caused but recovery for that loss is precluded because it cannot be proved with reasonable certainty . . . . In all these instances the injured party will nevertheless get judgment for nominal damages . . . ." Restatement (Second) of Contracts § 346 comment b at 111 (1981); see also 24 R. Lord Williston on Contracts § 64:8 (4th ed. 2002).
Because the first jury did not determine the extent of damages for which the defendant was responsible, its finding of liability did not preclude the defendant from introducing evidence that it was responsible for only a portion of the damage to the car. Accordingly, it was error for the trial court to rule that the defendant was collaterally estopped by the first jury's verdict from introducing evidence showing that the condition of the car after the defendant repaired it was different from the condition of the car at the time of trial. As the defendant has adequately demonstrated that the trial court's error prejudiced its case, we reverse the trial court on this ground.
We address the defendant's remaining arguments to the extent that they are likely to arise upon retrial. The defendant next asserts that the trial court erroneously failed to instruct the jury that causation was an element of damages. The instruction the defendant requested stated, in pertinent part:
A person who claims damages has the burden of proving that it is more probable than not that the damages he/she seeks were caused as a result of the legal fault of the defendant person, and he/she must show the extent and the amount of those damages.
For each item of loss or harm that plaintiff claims, plaintiff must prove that it is more probable than not, that (1) the plaintiff has (or will have) such a loss or harm and (2) the loss or harm was caused by the legal fault of defendant.
W. Murphy & D. Pope, N.H. Civil Jury Instructions § 9.2 (rev. ed. 2005). The trial court denied the defendant's request for such an instruction on the ground that the first jury had "already determined causation and the extent of the damages."
The trial court instructed the jury as follows with respect to causation:
You must determine the amount of damages to which the plaintiff is entitled as a result of [the defendant]'s failure to fulfill its obligation under the contract. The purpose of any damages award is to put the plaintiff in the same position he would have been in if the defendant had fully performed under the contract. You should compare the position of the plaintiff as a result of the defendant's violation of the agreement to the position the plaintiff would have been in had the defendant fully performed its promises. You may award the plaintiff only those damages which the defendant at the time the contract ...