Corotoman, Inc. v. Central West Virginia Regional Airport Authority
Supreme Court of Appeals of West Virginia, May 21, 2026
Facts
The Airport Authority operates Yeager Airport in Charleston, West Virginia. It decided to remove a large knoll located at the end of the runway. After receiving grants to acquire the affected property, the Authority sought to purchase land from Corotoman. When Corotoman rejected the purchase offer, the parties instead entered into an agreement under which the Airport Authority would remove the knoll. The agreement also contained a clause addressing breach.
The Airport Authority was later found to be in breach for failing to perform the removal properly. The issue on appeal concerned the proper damages. Because the cost to complete the work exceeded $4 million, the district court found that the cost of completion as estimated by the experts would be grossly disproportionate to the actual value of the land. Accordingly, the court awarded Corotoman only diminution-of-value damages (loss in value).
The Fourth Circuit then certified to the West Virginia Supreme Court the question of whether to apply cost-to-complete or diminution-of-value damages.
Holding
The West Virginia Supreme Court held: (1) the gross disproportionality rule may apply in breach-of-construction-contract disputes; (2) gross disproportionality is measured using the diminution-in-value approach, which calculates the difference between the property’s value without the contracted work and its value if the work had been performed; (3) the breaching party bears the burden of invoking and proving gross disproportionality; and (4) if the breaching party fails to prove gross disproportionality, the non-breaching party’s proven measure of damages applies.
👉 Takeaway: In plain English, the cost to complete a project is the measure of damages for a breach of a construction contract, unless the cost is grossly disproportionate to the value of the property. In that case, the loss in value of the property is used as the measure of damages.
