With the first rain, the house leaked heavily from every conceivable location. Walls became saturated and three inches of standing water accumulated in the living room. The contractor's efforts over a period of a few months to find the source of the leaks and repair them were not only ineffective, but they made the house more unlivable as workers used sledge hammers and jackhammers to cut holes in walls and ceilings.

Fearing the worst, Barry and Sandra hired another contractor and a structural engineer to inspect their home. They discovered that the leaks were only the tip of the iceberg. Among other problems, load-bearing walls were improperly installed, turrets on the roof were beginning to fall, three decks were in danger of collapsing, and a foundation that needed to support 12,000 pounds was built to support only 2,000 pounds. When Barry and Sandra sued the contractor, their expert witness testified that instead of describing the deficiencies in the house, it would almost be easier to list what was not wrong with the house.

In most cases, a contract for construction of a house affects only property or financial interests. In the event of breach of the contract, damages for emotional distress, as distinct from repair cost, are the exception not the rule. In Barry and Sandra's case, they recovered damages not only from emotional distress but also for physical pain and suffering and lost earnings suffered by Barry. He was so distraught over the condition of the house that the excessive stress led to a permanent heart condition, with attendant ailments that forced him to cut back on his duties at work.

Two key findings by the court led to the award of such damages. First the contractor's failure to build the home in a workmanlike manner caused the mental anguish. Second, such negligence created a threat of physical injury to Barry and Sandra because the defects in the house could cause it, or parts of it, to collapse.

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