In Baldwin v. Panetta, a husband and wife retained a general contractor to build a lake house. There were numerous problems on the project involving claims of poor workmanship and inadequate supervision, causing the homeowners to send an email to the general contractor requesting a list of subcontractors, the status of payment to them, and instructing that no work be performed without homeowners’ consent. Upon receipt of the e-mail, the general contractor stopped work and sued for breach of contract and to enforce a lien.

The homeowners counterclaimed for certain damages, including mental anguish. At trial, the general contractor argued the e-mail constituted a stop work order that justified their cessation of work. The circuit court rejected the general contractor’s argument and awarded the homeowners $57,200.17 in damages. The Court of Civil Appeals confirmed the circuit court’s ruling regarding the homeowners’ email, finding that whether a communication is sufficient to constitute rescission of a contract depends on the totality of the circumstances. Citing precedent in Alabama, the court noted that an express recognition in the communication that the parties have continuing obligations under the contract is a significant factor in making the determination. Considering the circuit court’s award of damages for mental anguish, however, the Court of Civil Appeals reversed the award to the homeowners. The court identified the three elements essential to recover compensation for mental anguish arising from the breach of a home-construction contract: (1) The breach must be egregious; (2) the defects must render the home virtually uninhabitable; and (3) the breach must necessarily or reasonably result in mental anguish or suffering. The homeowners’ claim could not satisfy the second element of the claim because their complaints concerned mere aesthetic defects, which did not concern the structural integrity of the home. Examples of defects satisfying the second element would be: persistent leaks in the roof over the plaintiff’s bedroom, cracks in the concrete slab or faulty wiring creating an imminent fire hazard. Baldwin v. Panetta, 2008 WL 4277343 (Ala.Civ.App. Sept. 19, 2008).