MARBELLA PARK HOMEOWNERS ASSOCIATION, INC., APPELLANT,
v.
MY LAWN SERVICE, INC., APPELLEE
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Marbella Park Homeowners Association appeals a summary judgment awarding My Lawn Service the full contract price for breach of a landscape maintenance contract. The court reverses, holding that damages for breach of a services contract must be calculated as lost profits (contract price minus performance costs), not gross contract payments, and remands for an evidentiary hearing to determine actual costs.
The trial court erred by awarding the full gross contract amount as damages without an evidentiary hearing. Damages for breach of a services contract must be calculated as lost profits (contract price minus performance costs), and the burden is on the non-breaching party to prove its performance costs, typically requiring an evidentiary hearing.
[1] The measure of damages for breach of a services contract is the non-breaching party's lost profits, calculated by subtracting performance costs from the contract price.
[2] The non-breaching party bears the burden of proving lost profits in a breach of contract action.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“The measure of damages for breach of a services contract is the non-breaching party's lost profits. Lost profits are calculated by subtracting the non-breaching party's performance costs from the contract price.”
Establishes the correct legal standard for calculating damages in services contract breach cases, contrary to the trial court's approach of awarding gross contract payments.
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Join FLexlaw to unlock all legal intelligenceMarbella Park contracted with My Lawn Service for yearly landscape maintenance services over five years at $2,750 per visit, twenty-eight times per ye…
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Marbella Park Homeowners’ Association, Inc. (“Marbella Park”) appeals a final summary judgment entered in favor of My Lawn Service, Inc. (“My Lawn”) in a breach of contract action. We reverse, and remand for an evidentiary hearing on damages.
Marbella Park contracted with My Lawn for yearly landscape maintenance for five years. The contract provided for services twenty-eight times per year, at a cost of $2,750.00 per visit. Marbella Park was to pay My Lawn monthly. After My Lawn performed for four months without Marbella Park’s payment, My Lawn sued for breach of contract.
The complaint sought $385,000.00 in damages, which was the full and gross amount due under the five-year contract. Subsequently, My Lawn moved for summary judgment. In support of its motion, My Lawn filed two affidavits, both of which addressed only the contract’s validity. The trial court granted final summary judgment in favor of My Lawn for $355,711.10, which properly included a set-off for partial payments made during litigation. Marbella Park appealed.
Marbella Park asserts that the trial court erred in awarding the full amount of gross payments as damages, without holding an evidentiary hearing. My Lawn contends that the trial court properly determined damages according to the contract. We agree with Marbella Park.
The measure of damages for breach of a services contract is the non-breaching party’s lost profits. Physicians Reference Lab., Inc. v. Daniel Seckinger, M.D. & Assocs., P.A., 501 So.2d 107, 108 (Fla. 3d DCA 1987). Lost profits are calculated by subtracting the non-breaching party’s performance costs from the contract price. 501 So.2d at 109; see also RKR Motors, Inc. v. Associated Uniform Rental & Limn Supply, Inc., 995 So.2d 588 (Fla. 3d DCA 2008).
Further, the burden of proving lost profits is on the non-breaching party. Indian River Colony Club, Inc. v. Schopke *809 Constr. & Eng’g, Inc., 619 So.2d 6 (Fla. 5th DCA 1993). Generally, proof of performance costs necessitates an evidentiary hearing. See, e.g., Berlant v. Nat’l Bank of Fla., 527 So.2d 910 (Fla. 3d DCA 1988).
Here, although the contract price could be easily ascertained, My Lavra failed to produce evidence of its costs and expenses in performing the five-year contract. This evidence is necessary to determine My Lavra’s lost profit.
Accordingly, we reverse the judgment entered below, and remand for an eviden-tiary hearing to determine My Lawn’s lost profits.
Reversed and remanded with instructions.
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DEL Monte Fresh Produce Co. v. NET Results, Inc., 77 So. 3d 667 (Fla. 3d DCA 2011)…contractual services.12 Typically these include an appropriate allocation of overhead as well as any personnel expenses that would have been incurred. RKR Motors, Inc., 995 So. 2d at 593; Marbella Park Homeowners Ass’n, Inc. v. My Lawn Serv., Inc., 12 So. 3d 807, 809 (Fla. 3d DCA 2009) (“Here, although the contract price could easily be ascertained, [the non-breaching party] failed to produce evidence of its costs and expenses in performing the five-year contract.”). In the case at hand, Net Results provid…
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Deauville Hotel Mgmt., LLC v. Atl. Broadband (Miami), LLC, 31 So. 3d 204 (Fla. 3d DCA 2010)…nt paid by Atlantic Broadband to Deauville might affect Atlantic Broadband’s computation of profit under the contract, if that front-end amount is separately claimed and recovered. Marbella Park Homeowners Association, Inc. v. My Lawn Service, Inc., 12 So. 3d 807 (Fla. 3d DCA 2009). For these reasons, the final judgment is reversed and remanded for a trial on all of the damages claims. Deauville asserts that it will be entitled to damage discovery before the trial on damages, but that question is not presen…
Authorities Cited
- Physicians Reference Lab., Inc. v. Daniel Seckinger, M.D. & Assocs., P.A., 501 So. 2d 107 (Fla. 3d DCA 1987)
- Indian River Colony Club, Inc. v. Schopke Constr. & Eng'g, Inc., 619 So. 2d 6 (Fla. 5th DCA 1993)
- RKR Motors, Inc. v. Associated Unif. Rental & Linen Supply, Inc., 995 So. 2d 588 (Fla. 3d DCA 2008)
- Berlant v. Nat'l Bank OF Fla., 527 So. 2d 910 (Fla. 3d DCA 1988)