Total Condominium Management v. Lester J. Lambert & Co.

Citation: Total Condominium Management, Inc. v. Lester J. Lambert & Co. 716 P.2d 146 (Colo. App. 1985).

Factual Background
Total Condominium Management Inc. (TCM) manages resort property. Lambert sells computer software. Lambert was to lease a computer software package tailored to fit the needs of TCM for three years. At the end of this period, TCM had the option of purchasing the software. In order for Lambert to tailor the software after installed TCM needed to “load” certain information onto the computer. TCM never loaded the information because of a dispute with an employee and Lambert could not complete its modification. Lambert brought an action against TCM to recover the full amount of the contract and attorney's fees.

Trial Court Proceedings
The trial court held that TCM had breached its contract with Lambert and awarded money damages in the full amount due under the contract but denied attorney's fees to both parties.

Appellate Court Proceedings
TCM contended that the court erred in awarding the full contract price as the measure of Lambert's damages and in failing to require Lambert to pay the attorney's fees of TCM pursuant to the language of the lease agreement. Generally, the measure of damages for breach of contract is that sum which places the non-defaulting party in the position that party would have enjoyed had the breach not occurred. In this case the trial court erred by awarding the full contract price instead of subtracting the costs Lambert had avoided by not performing the rest of its obligations.

The lease also had a provision with regard to attorney's fees that read: “In the event of any court adjudicated litigation, it is the intention of the parties that the total legal fees shall be borne by the prevailing party and punitive damages shall be waived.”

The trial court found, based upon competent evidence, that the language that the attorneys's fees would be borne by the prevailing party was the result of mutual mistake.

The appellate court affirmed that Lambert was not liable for TCM’s attorney's fees but agreed that the full contract price was not the proper measure of damages.