Inside this Issue
- A1 - Homeowner Failed to Mitigate Damages Caused by Contractors Breach of Contract
- A2 - General Contractor not Responsible for Subcontractor’s Site Safety
Article 1
Homeowner Failed to Mitigate Damages Caused by Contractors Breach of Contract
See similar articles: Damages | mitigate | mitigation
Where a homeowner hired a contractor to install a stucco-like exterior to her newly built home, the contractor stopped work after completing only the first of two coats of stucco and the owner hired a new contractor 18 months later to complete the job. The delay caused the first coat to deteriorate and required the new contractor to do two more coats rather than just one. In calculating the damages the court found that Gardner could have reduced her expenses with the new contractor by half ifshe had mitigated. The decision was affirmed on appeal because substantial evidence supported the finding that the Owner failed to mitigate her damages. Ursula Gardner v. Des Moines Stucco, LLC, No. 23-2088, Iowa Court of Appeals (2025).
The relationship between the homeowner and contractor broke down before the installation of the final coat. The contractor emailed the homeowner requesting 90% of the final payment before it would return to install the final coat to complete the project. The homeowner rejected the proposed modification of the contract. The contractor then gave the homeowner two options: modify the contract as it had proposed or end the relationship. The Owner responded by suggesting the contractormay be in breach of their contract and highlighting that if it refused to complete the work she would have “an additional expense to bring[ ] in another contractor.”
With the impasse still unresolved on July 9, 2019, Gardner issued an ultimatum that “if the crew does not return by July 24th to begin completing the project, a district court case will be filed for the amount already received plus any other fees as no company is going to warrant Des Moines Stucco's work.” After filing suit, the owner waited for sixteen months before finally hiring a new contractor to complete the installation of the stucco-like exterior. Because of the condition of the already-applied base coat, the new contractor had to apply two more coats rather than just the one finish coat intended under the original contract between Des Moines Stucco and Gardner. Gardner thus paid the new contractor $52,400—significantlymore than the final payment of $21,594.67 she would have paid under the original contract. This new contractor completed the installation two years after the original contractor left it unfinished.
After a bench trial, the district court found the contractor breached its contract with the homeowner and entered judgment in her favor on her breach of contract claim. But the court awarded the homeowner only $18,861.33 of the $50,060.13 in damages that she requested. The court disagreed with two aspects of her request.
First, the court found that the homeowner failed to mitigate her damages by unreasonably delaying in hiring a newcontractor to complete the project. The court found that her new contractor “had to put two coats on instead of just thefinal coat” because “the cold weather over the winter of 2019 and then the winter of 2020 ruined the work that the contractor had already done.” And it reasoned that she knew the contractor was not coming back to finish the project andher “decision to wait [so] long was not reasonable and undeniably made the project more expensive to complete.” The court found the homeowner could have reduced her expenses with the new contractor by half—from $52,400 to $26,200—if she had mitigated. And it calculated her damage award using that lower number.
In affirming the trail court’s decision, the appellate court explained: “A person asserting breach of contract has a duty to mitigate the damages.” …. This means that the non-breaching party must take reasonable measures to lessen the damages caused by the other party's breach. And “[t]his duty is one of reasonable diligence.” … Yet the breaching party who asserts “inadequate mitigation” has “the burden of pleading and proving” this defense.”
Testimony was presented at trial by both the original contractor and the new contractor. The new contractor— the homeowner’s own witness—testified that he had to apply any extra coat because of the condition of the base coat, which “was not thick enough” and “the mesh was showing through.” And the original contractor’s operations manager with decades of experience testified that in his opinion, no extra coat would have been needed if the finished coat had been applied in the five months after it stopped work on the project before the first winter.
On appeal, the homeowner focuses on the testimony of her new contractor, suggesting that it shows that the extra coat “was due to an inadequate original base coat” and highlighting that he did not testify about the weather causing deterioration. She also argued that the district court should not have credited the testimony of the contractor’s operations manager about the consequences of letting the base coat sit in the elements over two winters.
But the district court found the manager's testimony credible. And as “the trier of fact,” that court … “has the prerogative to determine which evidence is entitled to belief.” And while homeowner was right that the new contractor did not testify about possible deterioration, the court stated that neither did he opine that leaving the base coat exposed to the elements for two winters could not have caused the condition of the base coat that resulted in having to apply an extra coat.
The homeowner also argued her conduct after the contractor’s breach was reasonable because she could not find a new contractor sooner and was still seeking to force the contractor to return through her demands and eventual suit for specific performance. But the district court's contrary finding that her delay was unreasonable is supported by substantial evidence.
The contractor presented evidence that there were many other stucco contractors around Iowa and that there were about five months between when it stopped work and the weather would get too cold for the work to be completed. There was noevidence the homeowner made any attempt to find a new contractor during this time. And there was no evidence that the contractor she eventually hired would have been unable or unwilling to do the project in the summer or fall of after the original contractor ceased work
Because the court found that the homeowner’s failure to mitigate caused her new contractor to apply two coats instead ofone, a reduction in damages to account for the cost of the extra coat was appropriate. And the court could reasonably estimate that each coat would cost about half of the total cost of two coats. What's more, the contractor presented evidencethat the cost of completing the project—if she had done so in the summer or fall of 2019—would have been about $20,000.So, the amount the court used for an appropriate reduction—more than $6000 higher—was well within the range of evidence supported by the record. Gardner had the chance to introduce her own evidence of the appropriate reduction toattribute to the extra coat. But she did not do so—choosing instead to rest on her argument that she did reasonably mitigateher damages.
In conclusion, the appellate court found that the homeowner did not clear the high bar to show that any of the district court's factual findings about her failure to mitigate damages and the resulting reduction in her damages award are unsupported by substantial evidence. The judgment was, therefore, affirmed.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 28, No. 6 (August 2026).
Copyright 2026, ConstructionRisk, LLC
Article 2
General Contractor not Responsible for Subcontractor’s Site Safety
See similar articles: OSHA Violation | Site Safety | trench collapse
A plumbing subcontractor’s employee was buried in a trench collapse and suffered emotional and physical injury requiring multiple surgeries. He recovered damages from workers compensation as well as from several co-employees of his employer that he sued. He then sued the general contractor on the project (D.R. Horton) for negligence, and a jury held the GC liable for over $20 million in compensatory and punitive damages. That judgment was reversed on appeal, with the court holding that the matter should not have gone to the jury but that the trial judge should have dismissed the case because the GC was not subject to liability in this case for the actions of its subcontractor. The court explained in this lengthy decision that a general contractor ordinarily does not owe a duty of care to the employee of a subcontractor, and that default rule applies here. Because the district court erred in concluding that D.R. Horton owed the subcontractor’s employee a duty of care and allowing the matter to go a jury, the appellate court held D.R. Horton was entitled to judgment notwithstanding the verdict. D.R. Horton, Inc. v. Classic Builders, No. 23-2092, Iowa Supreme Ct., (2026).
The 10 foot deep trench that the laborer was working in had no shoring or trench box to support its walls. Instead, “benching” was used to guard against a cave-in. Benching is a protective measure that cuts stair steps into the side of the trench. The use of benching was problematic in this instance for two reasons. First, OSHA regulations prohibit benching in the type of unstable soil that Royal Plumbing was working with—that is, type “C” soil. Second, the trench was improperly benched notwithstanding the soil type because the benches were too narrow and steep to adequately protect against a trench collapse, as seen in this picture of the trench before the cave-in.
The laborer testified that he knew the trench was unsafe but he complied with his supervisors instruction to continue working in it because he was a new employee and felt obligated to continue.
Analysis by the appellate court. The court first looked at the contract documents between the GC and its subcontractor. A master agreement between the GC and the subcontractor provided that the subcontractor must “fully comply with and implement all government laws (OSHA) pertaining to safety standards.” The scope-of-work contract required that Royal Plumbing “shall utilize OSHA compliant trench protection, as needed, during the installation of thewater and sewer laterals.” It also imposed responsibility on the GC to “[p]rovide regular supervision from the GC JobSuperintendent” and provided that the GC “shall maintain the authority to direct all work, unless otherwise stated, and shall be awarded all final decisions.”
The GC also had a corporate safety manual, titled “Safety & Health Program—North Region.” The manualdetailed the responsibilities of the GC’s full-time safety personnel, including a “Division Regulatory Compliance Administrator” who was tasked with directing employees to enforce safety rules like OSHA regulations on its jobsites.
The court then considered whether the GC owed any duty of care to the subcontractor’s employee. The court stated:
“In this case, the subcontractor performed the trenching, failed to install appropriate safety devices, and directed its own employee to go into the trench and do the work. The general contractor was not present at the job site and did not even learn of the accident until two months later….We have long recognized that a general contractor typically does not owe aduty of care to the employee of a subcontractor…
A passive supervisory role fails to impose responsibility on the general contractor for the details of the work it hires a subcontractor to manage and execute.”
The court cited other case precedent for the principle that:
“Responsibility rests with the subcontractor, given its specialized expertise and control overthe day-to-day operations of its work” … and “The subcontractor, not the general contractor,is usually in the best position to reduce risk and prevent injury to its own employees.”
The court calls this the “no-duty baseline” for the GC. It stated that no duty exists unless an exception to the rule has been proved. In this case, the laborer argued that two exceptions applied, those being that the GC retained control and second being that the trench constituted a peculiar risk. A GC owes a duty when it retains control over the operative details of the subcontractor’s work. And it owes a duty if the nature of the work involves a peculiar risk that ordinary caution cannot mitigate.
The retained control exception is narrow. It cannot impose a duty unless the general contractor “retains control of the [sub]contractor’s day-to-day operations.” [citation omitted].“The degree of control retained by the employer is thecritical element in determining liability.” [citation omitted]. A general contractor can retain control through contract orthrough conduct, but neither form of the exception applies in this case.
The contract did not retain sufficient control to impose a duty of care. The laborer argued that the retained control exception applies because the GC “retained complete authority” through its contract with the subcontractor, which provided that the GC “shall maintain the authority to direct all work” and “shall be awarded all final decisions.” Caselaw defeats the subcontractor’s argument, concluded the court. A general contractor retainingthe broad contractual right to supervise a subcontractor or make a final decision when they disagree does not trigger the exception.
The court stated:
“Thus, D.R. Horton’s retention of such general rights to “direct all work” and “be awardedall final decisions” under the contract here is insufficient to impose a duty of care. [citation omitted]. (“The generally accepted rule is that retention of the right to inspect work under construction to see that the provisions of the contract are carried out and to stop work ifthey are not insufficient in itself to constitute retention of control of any part of thework within the meaning of the restatement principle.”). “Instead, the contract must give the general contractor control over the specific part of the work that caused the injury.”
“The liability ( ) arises only when the employer retains the right to control themethod, manner, and operative detail of the work; it is not enough that the employermerely retains the right to inspect the work or to make suggestions which need not be followed.”…. protection, as needed, during the installation of the water and sewerlaterals.”…. D.R. Horton’s broad, general rights as a general contractor to “direct all work” did not retain control over the operative details of the specific work that caused [laborer’s]injury.”
During the trial, the laborer relied extensively on the detailed safety-responsibility provisions of D.R. Horton’s corporate safety manual during trial. The court cited case law stating: “The mere existence of a safety program, safety manual, or safety director is insufficient to trigger a duty of care under section 414 [Restatement of Torts].” (citation omitted); explaining that the contractual “right to stop work for safety violations” and require a subcontractor to “comply with the basic safety rules of the particular mill” was insufficient to support a retained control theory of liability), because the manual was never made part of the subcontractor’s contract with the GC in this case.
Based on its analysis of the contract documents, the court concluded:
“In short, D.R. Horton did not retain control over the operative details of Royal Plumbing’s work via contract. The contract’s reservation of general rights for D.R. Horton to direct or supervise Royal Plumbing lacks the specificity required to impose responsibility on D.R. Horton for injuries resulting from the manner in which Royal Plumbing performed its trenching work. Nor did the parties’ agreement expressly impose safety responsibilities on D.R. Horton.”
Next, the court analyzed the conduct of the GC to determine if it retained control so that a duty of care would be imposed. Even where the contract imposes no duty of care, a GC can through its actions in the field exercise such a duty to the extent that it becomes liable. In this case, the court determined that did not happen. The laborer here, said the court, cannot show that the GC, through its conduct, retained control over the operative details of the work. The only actual exercise of control that the laborer showed was that on one occasion, the GC’s supervisor notified the subcontractor that the laborers were not wearing hard hats. That, said the court, was not sufficient to show that the GC retained control of the subcontractor’s conduct.
The laborer testified that the GC was not involved in deciding how the subcontractor’s excavation work was completed. Only the subcontractor dug the trench and directed the employee’s labor inside of it. Because the GC played no role in managing or performing the excavation work that caused the injuries, its conduct did not invoke the retained control exception to impose a duty of care.
Peculiar Risk Exception Rejected by the Court
The court stated that it applies the peculiar risk exception sparingly.
“Such a risk [must be] inherent in the construction of the building because the project was conspicuously,exceptionally, unusually dangerous with the mention or sight of such work immediately causing the reaction ‘DANGER!
Residential excavation work does not constitute a peculiar risk as a matter of law. To invoke the remedies of [the peculiar risk exception], the task must be fraught with danger.” The well established general rule in Iowa is ordinary buildingprojects are not covered.”
A general contractor does not owe a duty of care under Iowa common law every time residential excavation work is performed.
“It cannot be disputed that had [Subcontractor] followed OSHA guidelines and usedshoring or a trench box instead of an improperly constructed bench, the risk of a cave-inwould have been minimal. (citation omitted). “[T]he precautions needed to prevent a trench cave-in are not technically complex and have likely been in use for as long as trenches have been excavated.”). The peculiar risk exception therefore does not impose a duty of care on (the GC). (Laborer’s) negligence claim thus fails as a matter of law.”
Comments: This case demonstrates the importance of having appropriate contract language placing the burden on the subcontractor to maintain safe work by its employees. Even where the contract is well worded, however, the courts may still look at what the prime contractor did in the field to determine whether it may have stepped into responsibility for a subcontractor’s employee. In this case, despite some general language about prime contractor supervisory authority and language about prime contract safety procedures to be followed, the court found this did not rise to the level of creating responsibility and liability.
About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with ConstructionRisk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 28, No. 6 (August 2026).
Copyright 2026, ConstructionRisk, LLC
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