Ryan Ready Mixed Concrete Corp. v. Coons, 61 N.Y.2d 859 (1984)

A new trial is required when a trial court fails to properly instruct the jury on a potentially dispositive legal precept, such as the Statute of Frauds, regarding a disputed contract term.

Summary

Ryan Ready Mixed Concrete Corp. sued the Coons for breach of an oral contract for house construction. The core dispute involved a potential one-year warranty. The trial court’s jury instructions lacked guidance on the Statute of Frauds regarding this warranty. The jury found for Ryan, but the Court of Appeals reversed, holding that the failure to instruct the jury on the Statute of Frauds regarding the warranty provision necessitated a new trial. The court also emphasized the need for definitive jury instructions concerning the proper measure of damages.

Facts

Ryan and the Coons orally agreed on a $90,000 fee for house construction, a payment schedule, and a completion date. They also agreed on a cost-plus basis for payment. A key point of contention was whether they agreed to a one-year warranty as part of the contract. Also disputed was whether the $90,000 fee was contingent on Ryan completing the house and whether it represented overhead and profit or just net profit. Before construction began, the Coons hired another contractor.

Procedural History

Ryan sued the Coons for breach of contract and won at trial. The Appellate Division affirmed the trial court’s decision in a 3-2 decision. The Coons then appealed to the New York Court of Appeals as of right.

Issue(s)

1. Whether the trial court erred in failing to instruct the jury on the Statute of Frauds concerning the disputed one-year warranty provision.
2. Whether the jury instructions on damages were sufficient, considering the cost-plus nature of the alleged contract and the potential overlap between the contract fee and overhead expenses.

Holding

1. Yes, because the trial court failed to apprise the jury of the legal precept of the Statute of Frauds, which could have determined the enforceability of the oral contract, particularly if the jury found that the parties agreed to a one-year warranty that could not be completed within one year.
2. No, because the jury instructions lacked definitive guidance on calculating damages, especially concerning overhead and anticipated profit under the cost-plus contract, mandating that a new trial include precise instructions on this matter.

Court’s Reasoning

The Court of Appeals reasoned that the trial court must state the law relevant to the facts. The failure to instruct the jury on the Statute of Frauds, given the dispute over the warranty, was a critical error. If the jury had found a one-year warranty existed, the contract would have been unenforceable under the Statute of Frauds because it couldn’t be completed within one year. The court quoted Moore v. New York El. R. R. Co., 130 N.Y. 523 to emphasize the importance of complete and clear jury instructions. The court also addressed the damage calculation, stating that “plaintiff bears the burden of proving the extent of the harm suffered”. The court cited Berley Indus., v City of New York, 45 N.Y.2d 683, 686, and emphasized that while damages may be uncertain, there must be a reasonable connection between proof and the damage determination. The court referenced Rosen v. Equitable Paper Bag Co., 286 N.Y. 410, 418, to explain that the proper measure of damages for a contractor is expectancy damages. The court clarified that overhead expenses are recoverable only if they resulted from the breach. The court further explained that the jury should be instructed to only award the anticipated profit or full contract price less the cost of performance.