Title: Vickers v. Wichita State University

State: kansas

Issuer: Kansas Supreme Court

Document:

213 Kan. 614 (1974)
518 P.2d 512
THOMAS M. VICKERS, d/b/a THOMAS VICKERS PRODUCTIONS, Appellant,
v.
WICHITA STATE UNIVERSITY, Wichita, Kansas; BRADLEY UNIVERSITY, Peoria, Illinois; CINCINNATI UNIVERSITY, Cincinnati, Ohio; TULSA UNIVERSITY, TULSA, Oklahoma; DRAKE UNIVERSITY, Des Moines, Iowa; NORTH TEXAS STATE UNIVERSITY, Denton, Texas; MEMPHIS STATE UNIVERSITY, MEMPHIS, Tennessee; ST. LOUIS UNIVERSITY, ST. Louis, Missouri; and UNIVERSITY OF LOUISVILLE, LOUISVILLE, Kentucky, Appellees.
No. 47,034

Supreme Court of Kansas.
Opinion filed January 26, 1974.
Thomas C. Triplett, of Martin, Pringle, Schell & Fair, of Wichita, argued the cause and was on the brief for appellant.
John J. Kitchin, of Swanson, Midgley, Eager, Gangwere & Thurlo, of Kansas City, Missouri, and James W. Sargent, of Sargent & Klenda, of Wichita, argued the cause, and William Tinker, Sr., of McDonald, Tinker, Skaer, Quinn and Herrington, of Wichita, was with them on the brief for appellees.
The opinion of the court was delivered by
FATZER, C.J.:
This appeal arises from an action to recover for loss of future profits resulting from breach of a contract. The facts pertinent to the limited issue may be briefly stated.
The defendants, constituting the Missouri Valley Conference, initially contracted with television station KTVH, Channel 12, Wichita, Kansas, for the televising of conference basketball games. *615 KTVH assigned the contract rights to televise the games for the 1966-67 season to plaintiff, Thomas M. Vickers. On July 20, 1967, Vickers executed a contract with defendants to televise the games for the 1967-68 basketball season. The contract set out in detail the parties' rights and obligations, and contained a provision granting Vickers the right of first refusal as to the television rights for the 1969-70 season. Specifically, the provision stated:
A meeting to discuss a contract for the television rights for the 1969-70 season was held in Kansas City, Missouri, on May 29, 1969. Present at that meeting were Vickers, Norvall Neve, Commissioner of the Missouri Valley Conference, and Jack Munley, a television broadcaster for appellant. At that meeting, Vickers requested certain changes in the new contract and at that time was informed by Neve that no other party was interested in the television rights. However, the record indicates there had been some discussion between Neve and Edward Einhorn, president of TVS, Inc. regarding the 1969-70 television rights in the early months of 1969.
A written agreement was prepared and sent to Vickers in June, 1969. That agreement was comparable to the previous contract between Vickers and the Missouri Valley Conference. It granted Vickers the television rights for "9 or 10" games for each of the 1969-70, 1970-71 and 1971-72 seasons. A provision required the contract be executed by June 21, 1969, and returned with a $5,000 prepayment. In addition to the contract, Neve sent Vickers a letter which stated:
Further discussions as to the contract sent to Vickers were held in Wichita, Kansas, on July 1, 1969. At that meeting the parties were unable to reach an agreement regarding proposed changes by Vickers in the contract for the 1969-70, 1970-71 and 1971-72 seasons. Accordingly, no contract was executed by the parties.
Immediately following the meeting between Vickers and Neve, Neve mailed a written contract for the television rights to Edward Einhorn. Einhorn modified and signed the contract on July 15, *616 1969, and returned it to the office of the Commissioner of the Missouri Valley Conference. The modification by Einhorn to the contract was deleted by a subsequent agreement between the parties. The contract between the Missouri Valley Conference and TVS, Inc., while similar in many respects to the contract offered by the appellees to Vickers, contained certain differing provisions many of which were requested by Vickers. A discussion of those differences is not necessary to the disposition of the limited issue before us. It is sufficient to state there were significant differences between the two contracts.
It was stipulated that at no time was a contract with the same terms as those contained in the TVS contract ever offered to Vickers.
An action was commenced for damages based on breach of the contract giving the right of first refusal for any Missouri Valley Conference basketball television plan offered by the Conference for the 1969-70 season to Tom Vickers Productions. Plaintiff based his claim for damages on loss of profits.
During the presentation of plaintiff's case an objection was made to plaintiff's evidence and the objection was sustained. It was suggested by Vickers' counsel that the ruling would preclude the plaintiff from going forward with any further proof in the case. The defendants then moved for a directed verdict which was sustained. The plaintiff has appealed.
Four specifications of error were alleged initially by appellant, however, in view of the fact appellant briefed and argued only one alleged error, he is considered to have abandoned the other grounds. (Scrinopskie v. Arthur Murray, Inc., 195 Kan. 278, 403 P.2d 1001; Vaughan v. Hornaman, 195 Kan. 291, 403 P.2d 948; Intercontinental Leasing, Inc. v. Lehr, 209 Kan. 132, 495 P.2d 900.) The limited issue now before us is whether the district court erred in sustaining defendants' motion for a directed verdict because plaintiff had not conducted a profitable operation for a sufficient period of time to ascertain with reasonable certainty loss of future profits.
There is a dispute as to just what was the posture of the case at the time the ruling was made on the admissibility of the evidence and the order directing a verdict. We shall consider the record.
Appellant's counsel was examining a witness in connection with an exhibit purporting to show loss of future profits. Objection was *617 first made by appellees on the basis there had not been a proper foundation laid for questions relating to appellant's exhibit. The objection was overruled.
Later, a further objection by appellees was made and considered out of the presence of the jury. One of appellees' arguments was as follows:
The district court stated:
Counsel for appellant then announced his position as follows:
Following the motion for a directed verdict, the district court concluded as follows:
We conclude, as did the appellant, the district court limited the evidence to a showing of past profits from which future profits might be ascertained. It should be noted that while the litigants are in disagreement as to the exact amount of Vickers' profits and losses, they agree he made a profit on the 1966-67 contract, and incurred losses on the 1967-68 and 1968-69 contracts.
The appellees' argument supports this conclusion. In their brief they argue:
This court follows the general rule that loss of profits resulting from a breach of contract may be recovered as damages when such profits are proved with reasonable certainty, and when they may reasonably be considered to have been within the contemplation of the parties. (Rockey v. Bacon, 205 Kan. 578, 470 P.2d 804; Telegraph Co. v. Crall; 38 Kan. 679, 17 Pac. 309, reh. 39 Kan. 580, 18 Pac. 719.) Recovery for loss of profits caused by a breach of contract depends upon the facts and circumstances of each particular case. (Peterson v. Bachar, 193 Kan. 161, 392 P.2d 853.)
This court first passed on the question in Hoge v. Norton, 22 Kan. 265 [* 374], where it is stated:
In Brown v. Hadley, 43 Kan. 267, 23 Pac. 492, this court had under consideration damages measured by loss of profits caused by breach of a contract to supply dairy cattle. The cattle were never delivered *619 and the business never got underway. In an action for damages it was stated:
The fact that damages cannot be calculated with absolute exactness will not render them so uncertain as to preclude an assessment.
In Gas Co. v. Glass Co., 56 Kan. 614, 44 Pac. 621, this court made a definite distinction between claims for profits derived from a new business and those derived from an established business. In the opinion it was said:
Again, in States v. Durkin, 65 Kan. 101, 68 Pac. 1091, this court denied recovery to a newly formed partnership for losses sustained on certain plumbing contracts. In examining the factual circumstances attending the partnership's business, this court stated:
*620 In Outcault Adv. Co. v. Citizens Nat'l Bank, 118 Kan. 328, 234 Pac. 988, this court said:
Unquestionably, a method of establishing a loss of profits with reasonable certainty is by showing a history of past profitability. Past profitability of a particular business is not, however, the only method of proving lost future profits. The evidence necessary in establishing lost future profits with reasonable certainty "must depend in a large measure upon the circumstances of the particular case...." (Requirements of Certainty of Proof of Lost Profits, 64 Harv. L. Rev. 317, 319.) Absolute certainty in proving loss of future profits is not required. (22 Am.Jur.2d, Damages, § 172.) What is required is that the court or jury be guided by some rational standard. (Brenneman v. Auto-Teria, Inc., 260 Or. 513, 491 P.2d 992; Smith Development Corp. v. Bilow Enterprises, Inc., ___ R.I. ___, 308 A.2d 477; Mechanical Wholesale, Inc. v. Universal-Rundle Corp., 432 F.2d 228 [5th Cir.1970].) As to evidentiary matters a court should approach each case in an individual and pragmatic manner, and require the claimant furnish the best available proof as to the amount of loss that the particular situation admits. (McCormick, Law of Damages, § 29 [1935].) It is the responsibility of a district court to see that speculative and prob-problematical evidence does not reach the jury. (Peterson v. Bachar, supra.)
Strict application of the certainty doctrine would place a new business at a substantial disadvantage. To hold recovery is precluded as a matter of law merely because a business is newly established would encourage those contracting with such a business to breach their contracts. The law is not so deficient. (Hoge v. Norton, supra.)
Certainly the televising of conference basketball games and the selling of advertising in connection therewith is not a new or untried business. There are techniques available in the advertising and television business by which profits can be calculated with reasonable certainty to justify a contractual relationship.
It might well take two or three years to build such an enterprise into a profitable business. It would be manifestly unjust to permit a breach of a contract covering such a business after two or three *621 years promotional operation and thus permit the contractor to take advantage of the promotion without liability because the particular operator could not show a profit during the promotional period.
We conclude the district court erroneously restricted the evidence of plaintiff to past business experience for the purpose of showing loss of profits, and erroneously directed a verdict for defendants because the business in question did not reflect an overall profit during the promotional period.
The judgment is reversed with directions to grant a new trial.