_________________________________________ AFFIRMED ON RECONSIDERATION: May 7, 1997 _________________________________________ GSBCA 12584-R KMS DEVELOPMENT CO., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Lee H. Durst, Jose G. Landeros, and Nancy M. Padberg of Durst & Associates, Newport Beach, CA, counsel for Appellant. Robert W. Schlattman, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman) and DeGRAFF. DeGRAFF, Board Judge. In KMS Development Co. v. General Services Administration, GSBCA 12584, 96-2 BCA  28,404, we decided that KMS Development Company (KMS) was entitled to recover $5,911.53 that it spent to restore its office building after the building was damaged by KMS's tenant, the General Services Administration (GSA). In reaching our decision, we held that because GSA did not introduce any evidence concerning the amount by which its actions diminished the market value of KMS's building, KMS was not required to come forward with any such evidence. GSA asks that we reconsider this holding and deny KMS its restoration damages because, in GSA's view, our holding conflicts with Missouri Baptist Hospital v. United States, 555 F.2d 290 (Ct. Cl. 1977). GSA says that the Court of Claims held in Missouri Baptist that a landlord has the burden of proving both the cost of repairs and the amount by which the tenant's actions diminished the market value of the leased property. GSA also says that in other cases decided by the Court of Claims, the Government was obligated to introduce evidence of market value only after the landlord met its burden of going forward first with evidence of market value. GSA says that our decision shifted the burden of proving damages from KMS to GSA, which is contrary to the holding in Missouri Baptist. Discussion After carefully considering GSA's position, we remain convinced that KMS did not have the burden of going forward with evidence of diminished market value in the absence of such evidence first being introduced by GSA. No controlling precedent dictates the outcome of our case and persuasive precedent that addresses the burden of production issue presented here is contrary to GSA's position. We did not shift the burden of proving damages to GSA. Controlling precedent Several Court of Claims decisions discuss the damages to be awarded when the Government breaches a lease by failing to return property in the same condition as when it was leased. None of the court's holdings supports GSA's argument. The holdings in Realty Associates, Inc. v. United States, 138 F.Supp. 875 (Ct. Cl. 1956), Spitzel v. United States, 146 Ct. Cl. 399 (1959), Dodge Street Building Corp. v. United States, 341 F.2d 641 (Ct. Cl. 1965), and San Nicholas v. United States, 617 F.2d 246 (Ct. Cl. 1980), establish that a landlord is entitled to recover the damages that it actually suffers due to a tenant's failure to restore the premises, and the appropriate measure of damages is generally the cost of restoration. Sometimes, however, the cost of restoration is not an accurate measure of actual damages and awarding restoration costs would result in a windfall to a landlord. To guard against a windfall and to ensure that the landlord recovers only its actual damages, if the cost of restoration exceeds the diminution in fair market value caused by the tenant's actions, damages are limited to the diminution in fair market value of the property. We reviewed these four decisions to see if, as GSA says, the Government was obligated to introduce evidence of market value only after the landlord met its burden of going forward first with evidence of market value. In Realty Associates, the court held that the landlord did not prove that it suffered any damage due to the tenant's failure to restore the premises, because the evidence established that the tenant's actions actually increased the market value of the property. The tenant introduced expert testimony concerning the market value of the property. The decision does not mention whether the landlord introduced any evidence of market value. In Spitzel, the court permitted the landlord to recover the amount by which her property had been diminished in value by the tenant's actions. The only evidence of the diminution in market value mentioned in the court's opinion was an affidavit signed by an employee of the tenant. In Dodge Street, the court decided that the landlord did not suffer any damage due to the tenant's failure to restore the premises, because the property was worth more unrestored than it would have been if restored. The tenant introduced the only evidence to establish what the market value of the property would have been if it had been restored. In San Nicholas, both parties presented evidence of diminution in market value and the court awarded the landlord its restoration costs. None of these four decisions suggests, much less holds, that the Government came forward with evidence of market value only after the landlord produced such evidence. Missouri Baptist, the primary case relied upon by GSA in its motion for reconsideration, does not establish that the landlord has the burden of going forward with evidence of diminution in market value in the absence of such evidence being introduced by the tenant. In its opinion, the court began by explaining that it would apply the same rules to a case involving the repair of property as it applied to a case involving restoration of property. The court stated that the cost of repairs is a "convenient way to quantify" a lessor's damage. However, "[w]here the facts indicate that cost of repairs is unrelated to the lessor's actual damage, the rule is not applied." The court held that "repair costs are subjected to a ceiling. That ceiling is the diminution in fair market value attributable to a defendant's breach." 555 F.2d at 295. The court said that the purpose of imposing this limitation upon damages is to avoid providing plaintiffs with windfall recoveries. The court in Missouri Baptist also held that "plaintiff had the burden of proof in this case to show not only the cost of repairs, but also the diminution in fair market value, so as adequately to prove his true damages." 555 F.2d at 292. It is not surprising that the court held that Missouri Baptist had to introduce evidence of market value in order to prove its true damages because, as the court explained, the facts indicated that the cost of repairs might be unrelated to actual damages. The property in Missouri Baptist was in a deteriorating urban area and subject to vandalism, and the landlord's difficulty in selling or re-leasing the property was due, in part, to factors other than the damage caused by the tenant. In addition, throughout the case, the tenant took the position that the landlord's damages were limited by the diminution in market value caused by the tenant's breach, and the tenant introduced expert testimony in support of its position. In its complaint, the landlord asked for damages equal to the diminution in value of its building, and did not ask for the cost of repairs. The court held that the landlord, who was faced with evidence that its true damages might not be represented accurately by its repair costs, was required to prove diminution in market value in order to prove its actual damages. The holding in our case is in keeping with the holding in Missouri Baptist and other controlling precedent. KMS's complaint asked for its restoration costs, and KMS proved that the cost of restoration amounted to $5,911.53. The cost of restoration is the appropriate way to quantify KMS's damages, unless there is some indication that KMS's restoration costs are unrelated to its actual damages. No facts in our record suggest that KMS's costs of restoration are unrelated to its actual damages. In its prehearing submissions, GSA first asserted that KMS's recovery should be limited to the diminution in market value of KMS's building. GSA represented that it would introduce evidence at the hearing to establish that the diminution in market value did "not exceed" the cost of restoring the premises. Respondent's Proposed Findings of Fact,  10. GSA, however, introduced no evidence of market value. Unlike the plaintiff in Missouri Baptist, KMS was not faced with any evidence suggesting that its true damages might not be represented by its restoration costs. In addition, KMS proved that it spent $5,911.53 to restore the damage caused by GSA, and so there is no possibility of a windfall accruing to KMS if it recovers this amount. Neither Missouri Baptist nor any other controlling case of which we are aware required KMS to present evidence of diminution in market value, in the absence of evidence to suggest that restoration costs might not represent KMS's true damages. Finally, we did not shift the burden of proving damages from KMS to GSA. KMS's burden of proof was satisfied when it presented evidence of its costs of restoration. If GSA wished to argue that KMS's true damages were not accurately measured by the costs of restoration and that KMS's recovery should be limited by the diminution in market value of the property, GSA should have come forward and introduced evidence in support of its argument. The burden would then have shifted to KMS to produce its own evidence concerning diminution in market value. Placing the burden of going forward upon GSA, to produce evidence of diminution in market value if it wished to argue that KMS's recovery should be subject to that ceiling, is not the same as placing the burden upon GSA to prove damages. Cf. Satellite Electric Co. v. Dalton, 105 F.3d 1418 (Fed. Cir. 1997); Mech-Con Corp. v. West, 61 F.3d 883 (Fed. Cir. 1995) (contractor has ultimate burden of proof, but Government has burden of going forward first with evidence to establish limitation upon contractor's recovery). In summary, we found no controlling precedent which holds that KMS was required to produce evidence of diminution in market value in the absence of any evidence to suggest that its costs of restoration did not accurately measure its true damages. If GSA wished to argue that KMS's damages were limited to something less than the cost of restoration, which is generally the measure of damages awarded in these types of cases, then GSA was obligated to come forward with evidence to support its argument. Persuasive precedent Courts in other jurisdictions also use diminution in value as a ceiling upon damages in cases involving damage to real property. Consistently, these courts hold that if a defendant wishes to argue that a plaintiff's damages should be subjected to a diminution in market value ceiling, the defendant has the burden of going forward with evidence in support of its argument. When a homeowner sues a builder for breach of a construction contract, if the builder wants to argue that the cost of correcting its mistake is not an appropriate measure of damages and that the homeowner's recovery should be limited to diminution in value, it is the builder's burden to produce evidence in support of its position. Advanced, Inc. v. Wilks, 711 P.2d 524 (Alaska Sup.Ct. 1985); Shell v. Schmidt, 330 P.2d 817 (Cal.Ct.App. 1958), cert. denied, 359 U.S. 959 (1959). If a homeowner is faced with evidence that the cost to correct a builder's mistake would be an inappropriate measure of damages, the homeowner must present evidence of diminution in value. Witty v. C. Casey Homes, Inc., 430 N.E.2d 191 (Ill.Ct.App. 1981). In cases brought by landowners for tortious damage to real property, in order to subject a plaintiff's damages to a diminution in market value ceiling, the defendant must come forward with evidence to establish the diminution in value. The landowner carries his burden of proof if he establishes the cost of repair or restoration. Jenkins v. Etlinger, 432 N.E.2d 589 (N.Y.Ct.App. 1982); General Outdoor Advertising Co. v. LaSalle Realty Corp., 218 N.E.2d 141 (Ind.Ct.App. 1966); Hartshorn v. Chaddock, 31 N.E. 997 (N.Y.Ct.App. 1892). If the defendant comes forward with evidence and establishes that the diminution in value is less than the cost of repairs, the landowner must counter that evidence in order to support an award in the amount of the cost of repairs. Curtis v. Fruin-Colnon Contracting Co., 253 S.W.2d 158 (Mo.Sup.Ct. 1952). In suits brought by landlords alleging waste, if a defendant wishes to establish that a plaintiff's damages should be limited to diminution in market value and should not be equal to the cost of repairs, the defendant has the burden of producing evidence in support of its position. Three and One Company v. Geilfuss, 504 N.W.2d 393 (Wisc.Ct.App. 1993); Ault v. Dubois, 739 P.2d 1117 (Utah Ct.App. 1987). Similarly, if a defendant wants to establish that a plaintiff's damages should be limited to the cost of repairs and the plaintiff introduces evidence only of the diminution in value, the defendant has the burden of proving that the cost of repairs would be less than the diminution in market value. Jowdy v. Guerin, 457 P.2d 745 (Ariz.Ct.App. 1969). Finally, in cases brought by landlords against tenants for damaging leased property, if the tenant wishes to argue that the court should impose a limitation upon damages that would result in the award of a lesser amount than was proven by the landlord, the tenant must come forward with evidence in support of what it contends is the appropriate limitation upon damages. Fisher Properties, Inc. v. Arden-Mayfair, Inc., 726 P.2d 8 (Wash.Sup.Ct. 1986); Laska v. Steinpreis, 231 N.W.2d 196 (Wis.Sup.Ct. 1975); P.G. Lake, Inc. v. Sheffield, 438 S.W.2d 952 (Tex.Civ.App. 1969). As the Texas Court of Civil Appeals explained: [W]here the contract breaker seeks to avoid the reasonable cost of performance, he must plead and prove facts showing that if the cost of performance rule is applied, such cost would grossly exceed the diminution in value of the plaintiffs' land and would result in awarding plaintiffs a sum in excess of their actual damages, thus allowing the plaintiffs to profit from the breach. This merely follows the general rule that any circumstance which tends to defeat or diminish the damages may be considered in measuring the damages for breach of contract . . . . The minimization of damages is a defensive matter. 438 S.W.2d at 956. The holdings in these state court cases concerning the burden of production are quite consistent and do not conflict with any controlling precedent. We find these holdings persuasive because it would be a waste of trial time to require a plaintiff, as part of its case in chief, to introduce evidence concerning every conceivable limitation upon damages that a defendant might raise. Conclusion The goal in a breach of lease case is to compensate the landlord fully, but fairly, for the tenant's breach. Generally, the appropriate measure of damages is the cost of repairs or restoration. If the landlord establishes its cost of repairs or restoration and the Government wishes to argue that this measure of damages is inappropriate, the Government should come forward with evidence to support its argument. If the landlord's evidence is sufficient to establish its costs of repair or restoration and if the Government introduces no evidence to suggest that the usual measure of damages is improper for some reason, then the landlord has carried its burden of proving its damages and should not be barred from recovering. KMS asked to recover its costs of restoration, which is the usual measure of damages in a case such as this. KMS's evidence was sufficient to establish that it spent $5,911.53 to restore the damage caused by GSA. GSA said in its prehearing submissions that it would establish that KMS's damages should be subjected to a diminution in market value limitation. GSA, however, did not offer any evidence to suggest that the cost of restoration is, for any reason, not a proper measure of damages and did not offer any evidence of market value. The record does not establish either that $5,911.53 is unrelated to KMS's actual damage or that KMS will reap a windfall if it recovers this amount. In the absence of evidence to indicate that KMS's recovery should be limited to something less than its costs of restoration, KMS was not required to come forward with evidence to establish that its recovery should have been limited by the diminution in market value ceiling. Decision We have considered the arguments made by GSA in support of its request that we reconsider our previous decision and deny KMS its restoration damages. On reconsideration, we AFFIRM our previous ruling. _______________________________ MARTHA H. DeGRAFF Board Judge I concur: _________________________________ STEPHEN M. DANIELS Board Judge