The general rule of damages in tort is that the injured party may recover for all detriment caused whether it could have been anticipated or not. (Code of Civ. Proc., § 3333; Hunt Bros. Co. v. San Lorenzo etc. Co. [(1906)] 150 Cal. 51, 56.) The recoverable damages include “special” or “general” damages. (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1601.)

Types of Damages

“General” damages are those that necessarily result from the act complained, and may be proved under the ad damnum clause or general allegation of damage.” (Zvolanek v. Bodger Seeds, Ltd. (1935) 5 Cal.App.2d 106, 108; Treadwell v. Whittier (1889) 80 Cal. 574, 579.)

Unlike general damages, “special” damages are those losses that do not arise directly and inevitably from any similar breach of any similar agreement; instead, they are secondary or derivative losses arising from circumstances that are particular to the contract or to the parties. (Lewis Jorge Const. Management, Inc. v. Pomona Unified School District (2004) 34 Cal.4th 960, 968-969.)

Legal Standard

“Special damages are those that are not deemed to be a necessary or usual result of the wrongful act.” (5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 888) (emphasis added); Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1095.) “A defendant cannot be presumed to be aware of the special damage resulting from his act” (Shook v. Pearson (1950) 99 Cal.App.2d 348, 351.)

To prevent a surprise on the defendant, special damages are recoverable if the special or particular circumstances from which they arise were actually communicated to or known by the breaching party (a subjective test) or were matters of which the breaching party should have been aware at the time of contracting (an objective test). (Lewis Jorge Const. Management, Inc. v. Pomona Unified School District (2004) 34 Cal.4th 969.)

“It is the general rule that the plaintiff must state in his complaint the particular damage which he has sustained, or he will not be permitted to give evidence of it.” (Skaggs v. Wiley, 108 Cal.App. 429, 434, 292 P. 132, 134; Peabody v. Barham, 52 Cal.App.2d 581, 585, 126 P.2d 668; Lejeune v. General Petroleum Co., 128 Cal.App. 404, 418-419, 18 P.2d 429.) A general allegation of the loss of a prospective employment, sale, or profit will not suffice. (Pridonoff v. Balokovich (1951) 36 Cal.2d 788, 791–92.)

When a statement of damages is required but not served, the underlying entry of default is invalid and is subject to set-aside. (Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1521.) To be proper, a statement of damages must include a “breakdown between general and special damages as provided in Code of Civil Procedure section 425.11” because “such information aids a defendant in evaluating the validity of plaintiff’s claims with regard to their provability.” (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1599; Jones v. Interstate Recovery Service (1984) 160 Cal.App.3d 925, 929.)

In other words, “[t]he facts as to special damages must be stated with particularity. The amount of such damages must be stated with particularity. The amount of such damages must be given, and the means of occasioning them must be set forth.” (Shook v. Pearson (1950) 99 Cal.App.3d 348, 352.)

Breach of Contract

“[T]he nature of the contract or the circumstances in which it is made may compel the inference that the defendant should have contemplated the fact that such a loss would be ‘the probable result’ of the defendant’s breach.” (Ash v. North American Title Company (2014) 223 Cal.App.4th 1258, 1269-1270.) “Special damages for breach of contract are limited to losses that were either actually foreseen or were ‘reasonably foreseeable’ when the contract was formed.” (Ash v. North American Title Company (2014) 223 Cal.App.4th 1270.)

“The existing rule requires only reason to foresee, not actual foresight.” (Brandon & Tibbs v. George Kevorkian Accountancy Corp. (1990) 226 Cal.App.3d 442, 458.) “It does not require that the defendant should have had the resulting injury actually in contemplation or should have promised either impliedly or expressly to pay therefor in case of breach.” (Id.)

“Although foreseeability is most often a question of fact for the jury, when there is no room for a reasonable difference of opinion it may be decided as a question of law.” (Hedlund v. Super. Ct. (1983) 34 Cal.3d 695, 705.) “The court will determine what risks were foreseen or foreseeable when the contract was made by viewing the matter in the light of common sense; and the courts will consider the nature and purpose of the contract, and the surrounding circumstances known by the parties to exist at the time, as well as what the breaching party may reasonably be supposed to have assumed consciously.” (Ash v. North American Title Company (2014) 223 Cal.App.4th 1258, 1270).