CACI 4541 Contractor’s Damages for Breach of Construction Contract—Change Orders/Extra Work—Total Cost Recovery
California Civil Jury Instructions CACI
4541 Contractor’s Damages for Breach of Construction Contract—Change Orders/Extra Work—Total Cost Recovery
[Name of plaintiff] claims that [name of defendant] breached the parties’ contract by increasing or changing the scope of the [project/describe construction project, e.g., apartment building] beyond what was required by the contract. [Name of plaintiff], therefore, seeks to recover the total cost of all of [his/her/nonbinary pronoun/its] work on the [project/e.g., apartment building].
In order to recover the total cost of all of [his/her/nonbinary pronoun/its] work, [name of plaintiff] must prove all of the following:
1.That the scope of work under the original contract had been altered by the changes so much that the final project was significantly different from the original project;
2.That because of the scope of the changes, it is not practical to prove the actual additional costs caused by each change demanded by [name of defendant];
3.That [name of plaintiff]’s original bid that was accepted by [name of defendant] was reasonable;
4.That [name of plaintiff]’s actual costs were reasonable; and
5.That [name of plaintiff] was not responsible for incurring the additional costs.
If you find that [name of plaintiff] has established all of the above, determine [name of plaintiff]’s damages by subtracting the contract price from the total cost of [name of plaintiff]’s performance of the work.
Directions for Use
This instruction should be used in an action by the contractor against the owner if the contractor claims that changes demanded by the owner were such that damages must be measured by computing the total cost to the contractor to complete the contract minus the contract price. (Cf. CACI No. 4540, Contractor’s Damages for Breach of Construction Contract—Change Orders/Extra Work.) The difference is then considered to be the costs associated with all of the changes. For an instruction on quantum meruit recovery under the related but different theory of contract abandonment, see CACI No. 4542, Contractor’s Damages for Abandoned Construction Contract—Quantum Meruit Recovery.
For additional instructions on contract damages generally, see CACI No. 350 et seq. in the Contracts series.
Sources and Authority
•“Under [the total-cost] method, damages are determined by ‘subtracting the contract amount from the total cost of performance.’ ” (Amelco Electric v. City of Thousand Oaks (2002) 27 Cal.4th 228, 243 [115 Cal.Rptr.2d 900, 38 P.3d 1120].)
•“Although not favored, the total cost method—along with its subcategory, the modified total cost method—has been recognized in California as an appropriate way of computing damages.” (JMR Construction Corp. v. Environmental Assessment & Remediation Management, Inc. (2015) 243 Cal.App.4th 571, 589 [198 Cal.Rptr.3d 47].)
•“[T]o invoke the total cost method for recovering damages, a contractor must establish ‘(1) the impracticality of proving actual losses directly; (2) [its] bid was reasonable; (3) its actual costs were reasonable; and (4) it was not responsible for the added costs.’ ” (JMR Construction Corp. supra, 243 Cal.App.4th at p. 589].)
•“If some of the contractor’s costs were unreasonable or caused by its own errors or omissions, then those costs are subtracted from the damages to arrive at a modified total cost. ‘If prima facie evidence under this test is established, the trier of fact then applies the same test to determine the amount of total cost or modified total cost damages to which the plaintiff is entitled.’ ” (Dillingham-Ray Wilson v. City of Los Angeles (2010) 182 Cal.App.4th 1396, 1408 [106 Cal.Rptr.3d 691], internal citations omitted.)
•“ ‘The total cost method is not a substitute for proof of causation,’ and ‘should be applied only to the smallest affected portion of the contractual relationship that can be clearly identified.’ As the United States Court of Appeals for the Federal Circuit has stated, ‘Clearly, the “actual cost method” is preferred because it provides the court … with documented underlying expenses, ensuring that the final amount of the equitable adjustment will be just that—equitable—and not a windfall for either the government or the contractor.’ ” (Amelco Electric, supra, 27 Cal.4th at p. 244, internal citations omitted.)
•“We conclude [plaintiff] failed to adduce substantial evidence to warrant instructing the jury on the four-part total cost theory of damages. In particular, [plaintiff] failed to adduce evidence to satisfy at least the fourth element of the four-part test, i.e., that it was not responsible for the added expenses. A corollary of this element of the test is that the contractor must demonstrate the defendant, and not anyone else, is responsible for the additional cost.” (Amelco Electric, supra, 27 Cal.4th at p. 245.)
•“[W]e do not determine whether total cost damages are ever appropriate in a breach of public contract case … .” (Amelco Electric, supra, 27 Cal.4th at p. 242.)