Opinion ID: 3011059
Heading Depth: 3
Heading Rank: 2

Heading: Pre-March 8, 1994 Lost Profits

Text: Cooper argues that although Amana did not actually succeed in terminating the franchise until March 8, 1994, Cooper's uncertain status before that date caused a decline in its profits during the November 1991 to March 1994 7 period. The District Court appears to have acknowledged this point. See App. at 319 (statement of the District Court that I can't believe that . . . [Amana's counsel] would have for a moment attempted to argue in his opening that the jury's verdict in the first trial established Mr. Cooper suffered no harm from Amana's conduct during the period from mid-1991 to March 8th, 1994). Lost profits would not be accounted for in a valuation of the franchise as of March 8, 1994 because that value represents only the lost future profits of the business: that is, the present value of the profits Cooper would have earned after March 8, 1994, had its franchise not been unlawfully terminated. See Cooper I, 63 F.3d at 278. Thus, Cooper contends the pre-March 8, 1994 lost profits must be included in the damages calculation in order to make it whole. In response, Amana argues that because Westfield identifies only one measure of damages (fair market value of the franchise at the time of termination), it implicitly forbids other measures, such as lost profits prior to termination. We find no support for Amana's argument, either in Westfield or elsewhere in New Jersey law. The franchisee in Westfield was a gasoline station owner whose business was not affected by uncertainty surrounding his franchise status. Consequently, the fair market value at the date of his franchise's termination was a complete and comprehensive measure of the harm he suffered. There is no reason to believe Westfield precludes lost-profit damages in a case where attempted termination of the franchise itself causes a substantial decline in business. In fact, Westfield's reference to the legislative intent to make franchisees economically whole supports the inclusion of lost profits. 432 A.2d at 58 (awarding attorney's fees); see also Winer Motors, Inc. v. Jaguar Rover Triumph, Inc., 506 A.2d 817, 823 (N.J. Super. Ct. 1986) (holding that under Connecticut franchise law, an award for improper termination should have two components, the losses provable to that date, and the future damages based upon the reasonably anticipated net future profits of the dealership, and noting that there is little difference between the law of New Jersey and Connecticut on this subject). Here, Cooper advances the plausible claim that retailers were aware of Cooper's ongoing litigation with 8 Amana and consequently did not know whether they could count on Cooper for long-term sales and warranty service on Amana products. As a result, at least some retailers may have chosen to reduce or eliminate their dealings with Cooper even before the date of actual termination. Although we express no opinion on the extent of Cooper's lost profits, or even their existence, we believe it was error to preclude Cooper from presenting evidence on the issue. This component of damages was not expressly commanded by Cooper I or Westfield, but it is undeniably a part of the loss suffered by Cooper as a result of Amana's unlawful termination of its franchise. Inclusion of lost profits during this period is the logical result of shifting the valuation date from November 1991 to March 1994. Accordingly, we will reverse and remand for a new trial on this issue.