Contract guaranteed the company would buy the homes of laid-off employees for what they’d paid
Ferrero v. Bowater Pulp & Paper Canada Inc., 2005 CarswellBC 1138, 2005 BCSC 675 (B.C. S.C.)
The British Columbia Supreme Court has ruled a company must buy the mobile home of an ex-employee as required by the employment contract.
David Ferrero worked for Bowater Pulp and Paper Canada Inc. in Gold River, B.C. In employment contracts the company used, it guaranteed it would buy the homes of laid-off employees for what they’d paid for it. The policy covered the land and the building to a maximum of $150,000. But the contracts contained a provision stating that mobile homes were excluded from this policy.
In September 1997 Ferrero and his wife purchased a home for $76,770. It was a 1,200 square foot manufactured home covered by a roof which also covered an attached carport and workshop. The home sat on stacks of concrete blocks, with the structure attached to concrete runners by eight steel cables.
In October 1998 Ferrero was told he was being laid off. The company told him it would buy the land but not the house. He tried to sell the home, and rented it for a period of time, but it was ultimately foreclosed on with $37,000 still owing. Ferrero filed an action for breach of contract and punitive damages.
The court found in favour of Ferrero. Since “mobile home” was not defined in the company policy, a common-sense approach was necessary to determine the character of the home.
The mobile home had changed substantially since it was first manufactured. It had been affixed to the foundation, thus making it part of the realty. To put it into shape for moving to another location required removing large parts of it. This would be “a very major undertaking” and relative to the value of the house would be very expensive, said the court.
It said the home is not a “mobile home” under the company’s policy and as such the company was liable for breach of contract.
The remedy for breach of contract is to put the aggrieved party in the position that would have existed had the contract been completed. The court awarded Ferrero $38,430 plus interest and costs. It rejected his request for special and punitive damages because the company’s conduct was not vindictive or malicious.
The British Columbia Supreme Court has ruled a company must buy the mobile home of an ex-employee as required by the employment contract.
David Ferrero worked for Bowater Pulp and Paper Canada Inc. in Gold River, B.C. In employment contracts the company used, it guaranteed it would buy the homes of laid-off employees for what they’d paid for it. The policy covered the land and the building to a maximum of $150,000. But the contracts contained a provision stating that mobile homes were excluded from this policy.
In September 1997 Ferrero and his wife purchased a home for $76,770. It was a 1,200 square foot manufactured home covered by a roof which also covered an attached carport and workshop. The home sat on stacks of concrete blocks, with the structure attached to concrete runners by eight steel cables.
In October 1998 Ferrero was told he was being laid off. The company told him it would buy the land but not the house. He tried to sell the home, and rented it for a period of time, but it was ultimately foreclosed on with $37,000 still owing. Ferrero filed an action for breach of contract and punitive damages.
The court found in favour of Ferrero. Since “mobile home” was not defined in the company policy, a common-sense approach was necessary to determine the character of the home.
The mobile home had changed substantially since it was first manufactured. It had been affixed to the foundation, thus making it part of the realty. To put it into shape for moving to another location required removing large parts of it. This would be “a very major undertaking” and relative to the value of the house would be very expensive, said the court.
It said the home is not a “mobile home” under the company’s policy and as such the company was liable for breach of contract.
The remedy for breach of contract is to put the aggrieved party in the position that would have existed had the contract been completed. The court awarded Ferrero $38,430 plus interest and costs. It rejected his request for special and punitive damages because the company’s conduct was not vindictive or malicious.
