Reggie Chambers purchased a triplex from Curtis Carley in 2006. In 2007 Dana Scofield was appointed Carley’s guardian due to his mental condition. Scofield subsequently sued Chambers alleging that Chambers had fraudulently induced Carley to sell the triplex for less than fair market value. The parties entered into a settlement agreement to rescind the sale and restore the parties to the position they would have been in had the sale not occurred. Adjustments were made for the down payment, rents, management, and utilities, taxes and insurance actually paid.
Additionally, Chambers was to be reimbursed for the “fair market cost” of repairs and improvements he made to the triplex. This ill chosen and undefined term became the cause of the litigation. The first appraisal by Keith Halsey, gave Chambers a credit of $25,525 for work performed on the triplex. This was a reduced amount due to poor workmanship, lack of permits, and similar deficiencies. The inclusion of value in addition to cost and the lack of clear instructions led the Superior Court to reject the appraisal.
The parties met off-record to draft rules for a new inspection byWilliam Roberts which would be attended by Judge Christen. Roberts determined the “fair market cost” to be $86,692.29 less $14,016.99 for work done to less-than-workmanlike standards. Judge Christen accepted the $86,692.29 but only reduced it by $5,693.73 for deficient work. No award was made for the profit and overhead normally part of a construction contract. She further declined to award attorneys fees and costs to either parties finding neither was fairly deemed the prevailing party in the case.
The Supreme Court (Christen not participating) affirmed the Superior Court. It pointed out there is little legal precedent defining the term “fair market cost” and no industry standard clearly indicating it includes profit and overhead. As such it would not be interpreted as part of the settlement agreement. It also pointed out that Chambers could have made it an explicit part of the agreement had he intended to be compensated for it. It further stated that it was within the trial court’s discretion to deny attorney’s fees and costs altogether so long as its reasons for doing so are clear in the record.