RULE OF HADLEY V. BAXENDALE IS ALIVE & WELL

By Chuck Brower

Property owner Lipshie sued heating oil contractor Taylor for negligence, misrepresentation and breach of contract in the removal of an oil tank, and failure to discover and report to the plaintiff ground contamination that had resulted from a leak in the tank before its removal.

After removal of the tank Lipshie discovered extensive ground contamination which had occurred in the area of the tank, but nevertheless went to contract to sell the property and hired a remediation contractor to remove the polluted soil. When the buyer ultimately backed out of the contract and Lipshie found a second buyer for a lower price, Lipshie sued Taylor for, inter alia, the difference between the original contract price and the amount received from the second buyer.

The trial court agreed with the plaintiff Lipshie and awarded him $132,000 on this claim.

On appeal the defendant claimed in part that the plaintiffs claim was precluded by the rule in Hadley v. Baxendale. Although the Supreme Court reversed on other grounds (see Lipshie v. George M. Taylor & Son, Inc., 265 Conn. 173 (2003) the undersigned feels that the rule of Hadley v. Baxendale would also have justified the result. In our appellate brief, we argued as follows:

3. THE LOSS OF THE BOSTRUM SALE AND AWARDING PLAINTIFF DAMAGES BASED ON A LATER LOWER SALE PRICE WAS OUTSIDE THE CONTEMPLATION OF THE PARTIES AT THE TIME OF THE CONTRACT.

Under the law, "the damages recoverable for breach of contract are such as may fairly and reasonably be considered as arising naturally - that is, according to the usual course of things - from the breach of the contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of its breach." Nowakowski v. Rozbicki, 39 Conn. Supp. 458 (1983); Jacobs v. Thomas, 26 Conn. App. 305 (1991). Essentially, Hadley v. Baxendale, 156 Eng. Rep. 145 (1854) established two rules: ("(1) losses must be of the type usually resulting from the breach of like contracts, or (2) if there are special circumstances, and the damages arise as a result of those special circumstances, recovery can only be allowed if the defaulting party was aware of the special circumstances at the time of entering into the contract.") Id; Hooks Smelting Company v. Planters' Compress Company, 72 Ark. 275 (1904); Globe Refining Company v. Landa Cotton Oil Company, 190 U.S. 540 (1903); Bernhard v. Curtis, 75 Conn. 476 (1903).

Hooks Smelting Company v. Planters' Compress Company, supra, pp. 286-287.

In the instant case, there is no indication that it was brought home to Taylor that the contract for the sale of the house would be lost as a result of breach by Taylor. Taylor was completely ignorant of the existence of the details of the option for the sale of the property. Plaintiff did not discuss the details of the transaction with Taylor. (September 5, 2001 pp. 67-68) Taylor merely believed that Lipshie intended to sell the property (September 6, 2001, p. 70, p. 89). Certainly the plaintiff cannot reasonably argue that the loss of a sale of real estate is the type of loss usually resulting from a contract for the removal of an underground oil tank. As such, it follows that under the principles established in Hadley and still in effect today, the loss of profits on the sale of the property is a loss which is not recoverable by the plaintiff in this action. "The general rule in breach of contract cases is that the award of damages is designed to place the injured party, so far as can be done by money, in the same position as it would have been in had the contract been performed." Torkomian v. Russell, 90 Conn. 481 (1916); Gazo v. City of Stamford, 255 Conn. 245 (2001).

In this case, the loss of profits from the sale of the property cannot be said to have been contemplated by Taylor at the time he agreed to do the work for Lipshie. He was not privy to the contract between Lipshie and Bostrum (September 6, 2001, p. 89), which had not even been entered into in August, 1996, and, therefore, could not foresee the possible rescission of the contract by Bostrum, if indeed that occurred. He was also never told about the details of the option or the contract or that time was of the essence in the removal of the oil tank (September 6, 2001, p. 132). "Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result of the breach when the contract was made..." Hadley v. Baxendale, supra, at 14895. In addition, the assessment of damages must not be too speculative and remote and must bear some resemblance to the contract price. General Motors Corporation v. Martine, 213 Conn. 136 (1989); West Haven Sound Development Corp. v. West Haven, 201 Conn. 305, 320 (1986). Here the court has imposed a financial death sentence on a small oil dealer who was asked to do a $1,500 tank removal. If the plaintiff was worried about the defendant's delay, he could have hired another contractor to do the tank removal in the fall of 1996.

In addition, "[I]t is not always in the interest of justice to require the party in breach to pay damages for all of the foreseeable loss that he has caused. There are unusual instances in which it appears from the circumstances either that the parties assumed that one of them would not bear the risk of a particular loss or that, although there was no such assumption, it would be unjust to put the risk on that party. One such circumstance is an extreme disproportion between the loss and the price charged by the party whose liability for that loss is in question." Id. (citing 3 Restatement (Second), Contracts §351 (May 17, 1979)(1981)). Certainly it can be argued that it would be unjust to make Taylor Oil bear the cost of $132,000 in lost profits based on the breach of a contract valued at $1,500.

TESTIMONY OF SUBSEQUENT AND PRIOR CONDITIONS IN PREMISES LIABILITY CASES

By Chuck Brower

Aside from the contributory negligence pitfalls in premises liability cases, adducing evidence as to the conditions which existed at the time of the accident is always problematic. This is because if the conditions are weather related they are therefore transitory, difficult to prove by concrete evidence at the trial, and if the conditions that existed at the time of the plaintiff's injury are probably different before the accident and after the accident, the Court may well exclude the testimony of witnesses who will testify to prior and subsequent conditions.

The undersigned recently represented a plaintiff who was a real estate salesperson who fell on an irregular concrete granite exterior stairway covered with wet leaves, and adjoining a wobbly railing, on November 26, 2001. The claim was that the stairs were irregular dimensionally, thereby being dangerous for the user, that a water condition existed on the property which caused water to flow over the stairs, that the railing provided no support for someone using the stairs, and that the accumulation of water and leaves on the stairs at the time of the accident was there long enough for the defendant to have remedied it.

The plaintiff proposed to call a witness who had looked at the property for purposes of purchasing the same, and who happened to be a contractor/home inspector. The witness had looked at the property approximately 15 months before the fall, and the plaintiff offered to have the witness testify that the time he visited the premises the water runoff condition existed, the railing was unstable and the witness had noticed an irregularity of the granite steps. Plaintiff further offered to have the witness testify that as a result of his observations, he was of the opinion that the condition of the stairs was unreasonably dangerous.

The plaintiff further proposed to call a second expert who was a mechanical engineer who had examined the premises 20 months after the plaintiff's fall, for purposes of testifying to the dimensional irregularity of the granite steps, the effect on the users gait when descending the steps and the further fact that the irregularity rendered the granite stairs unreasonably dangerous on the theory that there had been no significant change in the condition of the granite steps from the accident to the date of the engineer's examination.

Finally, the undersigned proposed to call as a witness, a person who had slipped on and had difficulty navigating the steps at or about the time of the plaintiff's fall.

The defendant moved to preclude both of the plaintiff's experts.

In order to find liability against a defendant on the grounds that the defendant had constructive notice of a particular condition, the jury must find that the defendant had notice of the specific condition which caused the plaintiff's injury and not merely conditions that would be productive of it. Long v. Savin Rock Amusement Co., 141 Conn. 150 (1954). However, the specific condition which caused the plaintiff's injury may be such things as slippery conditions of the defendant's exterior steps, which slope away from the door toward the street, and which exist for as long as six months before the plaintiff's fall; Mack v. LaValley, 55 Conn. App. 150 (1999); the loose surface of the ground where the plaintiff was playing which had evolved over a three-year period, Zarembski v. Three Legs Park, Inc., 177 Conn. 603 (1979); an old rotten board on the ramp which gave way when the plaintiff was walking on it, and which had been exposed to the elements over time, Long, supra, or a dirt and gravel walk with two flagstones which adjoin a gully or depression in the walk, caused largely by rainwater, which flowed from the north bank of the defendant's property across the walk toward the pavement, about which the defendant had received complaints for about five years Schoenfeld v. Meriden, 136 Conn. 346 (1949).

Evidence of prior groundwater or ice conditions at the same location where the plaintiff's accident occurred, may be relevant on the issues of constructive notice to establish a more truncated period than would otherwise be permitted during which the defendant should have discovered the particular conditions that caused the accident Ormsby v. Franco, 255 Conn. 670 (2001).

Evidence of other accidents may also be relevant to prove that the condition or situation which caused the plaintiff's injury was of such a character or nature, that it was unreasonably dangerous to one using ordinary care, provided, that the plaintiff must prove that at the time of the occurrence of the other accident, the circumstances were substantially the same as those under which the plaintiff was injured, and that the use by the other person was substantially similar to that of the plaintiff, Zheutlin v. Sperry and Hutchinson Co., 149 Conn. 364 (1962); Facey v. Merkel, 146 Conn. 129 (1959); Hall v. Burns, 213 Conn. 446 (1990).

In ruling on the defendant's motions, the Court pointed out in accordance with the rule in Card v. State, 57 Conn. App. 134 (2000), that expert testimony is admissible if the witness has a special skill or knowledge directly applicable to the matter in issue, (2) that the skill or knowledge is not common to the average person, and (3) the testimony would be helpful to the Court or jury in considering the issues. In the case of the witness who had visited the premises a year before the accident, the Court ruled that the observations of the witness did not rise to the level of expert testimony, and that although the witness could testify to his observations of the physical condition of the stairs, the water, and the railing, for purposes of proving constructive notice, the witness could not render an opinion as to whether he felt that the conditions he observed were reasonably safe.

With respect to the witness expert who was offered to testify to the dimensional variations of the granite steps 20 months after the accident, the Court allowed the witness to testify to his calculations of the dimensional variations of the risers and width of the steps, and further to give an opinion as to the "effect" of those dimensional variations which the witness stated would cause the user's gait to be "broken".

With respect to the lay witness who had tripped on the steps at or about the time of the plaintiff's injury, the Court allowed the testimony in accordance with the above cited cases.

Proving copyright infringement under the
"ordinary observer" test with expert and lay witnesses

By Chuck Brower

The Second Circuit, in evaluating copyright infringement claims as to pictorial, graphic and sculptural works copyrightable under 17 USC §102 (5) applies Judge Learned Hand's "ordinary observer" test as set forth in Peter Pan Fabrics v. Martin Weiner Corp, 274 F.2d 487, 489 (2d Cir. 1960).

Judge Hand said that there is substantial similarity between the accused work and the copyright work where "the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them and regard their aesthetic appeal as the same."

Substantial similarity is a necessary element in a copyright infringement case which requires the plaintiff to prove ownership of a copyright, that defendant had access to plaintiff's copyright product and that there are substantial similarities in protectable material between the two works. Even where plaintiff can show access, there is no infringement if the similarities between the works are not sufficient to prove copying. Folio Impressions, Inc. v. Byer California, 937 F.2d 759 (2nd. Circ. 1991).

The First Circuit applies the ordinary observer test by looking at those features of two sculpts as to which the artist exercised discretion, such as pose, posture, and facial expression. Concrete Machinery Co., Inc. v. Classic Lawn Ornaments, Inc., 843, F.2d 600 (1st Circ. 1988).

The Second Circuit has said that in applying the ordinary observer test "good eyes and common sense may be as useful as deep study of reported and unreported cases, which themselves are tied to highly particularized facts." Hamil American, Inc. v. GFI, 193 F.3d 92, 102 (2nd Circ. 1999) It is submitted that expert and lay testimony may be helpful in giving a judge or jury good copyright eyes and common sense and in convincing a trier of fact that substantial similarity as to protectable elements exists.

The author recently had occasion to try Susan Wakeen Doll Company v. Ashton Drake Galleries, 2001 U.S. App. LEXIS 24407, affirmed on appeal, a copyright infringement case in the Federal District Court for the Northern District of Illinois, involving alleged infringement of plaintiff's copyright doll, recently affirmed on appeal by the Seventh Circuit 272 F. 3d 441 (7th Circ. 2001) which employs Judge Hands's ordinary observer test, as set forth in Wildlife Express Corporation v. Carol Wright Sales, Inc., 18 F.3d 502 (7th Circ. 1994) and Ty, Inc. v. GMA Accessories, Inc., 132 F.2d 1167 (7th Circ. 1997).

In Susan Wakeen, we called both expert and lay witnesses to testify to the substantial similarities between the copyright doll and the alleged infringing doll, not to substitute the witnesses observations for the jurors, but to help the jurors apply the ordinary observer test.

In the case of the lay witnesses, we called doll professionals who were able to point out to the jury features of the dolls that they found substantially similar. As people who looked at dolls every day, they were able to explain to the jury what particular features of the dolls made them look substantially similar.

As to the experts, we had skeletal measurements done of the two original sculpts which led to the production of the dolls in question. We also made computerized transparencies of the two heads with which the jury could make overlays to show the identity of the skeletal dimensions. The expert testimony and analysis demonstrated to the jury why the two heads had the same look and feel.

At the end of the case, the jury was better able to employ Judge Hands' ordinary observer test, not because they were no longer ordinary observers, but because they now were better able to know what to observe and how to observe it.