Opinion ID: 1612232
Heading Depth: 1
Heading Rank: 32

Heading: Sufficiency of Evidence of Damages

Text: In a breach of contract case, the ultimate objective of a damages award is to put the injured party in the same position the injured party would have occupied if the contract had been performed, that is, to make the injured party whole. Ruble v. Reich, 259 Neb. 658, 611 N.W.2d 844 (2000); Phipps v. Skyview Farms, supra . One injured by a breach of contract is entitled to recover all damages, including the gains prevented as well as the losses sustained, provided the damages are reasonably certain and such as might be expected to follow the breach. Gagne v. Severa, 259 Neb. 884, 612 N.W.2d 500 (2000); Lone Cedar Ranches v. Jandebeur, 246 Neb. 769, 523 N.W.2d 364 (1994). The evidence which Shepherd and Corbet presented in support of their claim for damages consisted primarily of the opinion of Raasch that had it been completed, the Sutherland plant would have had a market value of $30 million as of December 18, 1997. In arriving at this opinion, Raasch utilized an income capitalization method which was based upon Raasch's projections of the plant's income, expenses, and net profits if it had been operating from September 1, 1993, through August 31, 1997. Roles argues that the trial court erred in receiving Raasch's opinions and those of Lockwood because they were based upon an inadequate factual foundation. Roles also contends that there was insufficient evidence of damages to warrant submission to the jury. As Roles notes in his brief, these contentions are inextricably interwoven. Brief for appellant in case No. S-98-782 at 29. We begin our analysis of these issues by reviewing the general rules applicable to opinion testimony by expert witnesses. Neb.Rev.Stat. ง 27-703 (Reissue 1995) states: The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to him at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence. This court has stated that expert testimony should not be received if it appears that the witness is not in possession of such facts as will enable the expert to express a reasonably accurate conclusion, and where the opinion is based on facts shown not to be true, the opinion lacks probative value. Paulsen v. State, 249 Neb. 112, 541 N.W.2d 636 (1996). The opinion must have a sufficient factual basis so that the opinion is not mere conjecture or guess. Id. Our cases distinguish between the circumstance in which an expert's opinion on damages is based either upon a misconception of the applicable law or upon factual assumptions shown to be untrue or wholly unsupported by the record and the circumstance where there is a factual weakness in the underpinnings of an opinion. In the former, the opinion is inadmissible, whereas in the latter, the opinion is admissible and the factual weakness goes to the weight and credibility as determined by the trier of fact. For example, in Sorensen v. Lower Niobrara Nat. Resources Dist., 221 Neb. 180, 376 N.W.2d 539 (1985) (superseded by statute on other grounds), we held that an appraiser's opinion with respect to damages in a condemnation case should not have been admitted because it was formulated on a mis-interpretation of Nebraska law regarding a natural resource district's rights acquired in eminent domain and maximum exercise of such acquired rights. Similarly, in Latek v. K Mart Corp., 224 Neb. 807, 401 N.W.2d 503 (1987), an economist's testimony concerning a plaintiff's decreased earning capacity was properly excluded because it was based upon an assumed permanent 10-percent disability and therefore in direct conflict with uncontroverted medical evidence that the disability was not permanent. In contrast, in Little v. Gillette, 225 Neb. 70, 402 N.W.2d 852 (1987), two expert appraisers testified as to the value of a business, both basing their opinion in part upon expected duration of profits. Rejecting a contention that such opinions were speculative and not based upon facts in evidence, we noted that unlike the circumstance in Latek v. K Mart Corp., supra , the assumptions used by the experts were not proved untrue or to be without any basis in fact and that whether the stated grounds for the assumption were credible was a jury question. Similarly, in Iske v. Metropolitan Utilities Dist., 183 Neb. 34, 157 N.W.2d 887 (1968), we rejected a contention that an expert's opinion regarding the value of real property was inadmissible because he had failed to consider various costs and expenses in his analysis. We noted: The essence of the defendant's complaint is that there were more and other costs reasonably attributable and that they were not taken into consideration as the defendant developed on cross-examination. The difficulty of this argument is almost apparent. It would require the upsetting of every case in which it could be developed that there were some of the multiple and various elements in the cost of developing a subdivision that were not taken into consideration by the expert witness. Our rule, and the sensible rule, is that such matters go to the weight and credibility of an expert's testimony and not to its admissibility. Id. at 45, 157 N.W.2d at 895. Roles' contention that the expert testimony on damages was speculative and therefore inadmissible rests upon two basic arguments: (1) There was an insufficient factual basis to assume that the Sutherland plant would ever have become operational at all because it utilized unproven short steep technology which had never been employed on a commercial scale and (2) Raasch's profit projections were based upon faulty assumptions with respect to production quantities, income, and expenses. Both of these arguments pertain to the fact that the Sutherland plant was a new business which was never completed and operational. We have noted that although in many ... instances lost profits from a new business are too speculative and conjectural to permit recovery of damages, where the evidence is available to furnish a reasonable certain factual basis for computation of probable losses, recovery of lost profits cannot be denied, even though a new business venture is involved. El Fredo Pizza, Inc. v. Roto-Flex Oven Co., 199 Neb. 697, 706, 261 N.W.2d 358, 364 (1978), quoting Earle M. Jorgensen Co. v. Tesmer Manufacturing Co., 10 Ariz. App. 445, 459 P.2d 533 (1969). Because Arizona and Nebraska law agree on this key principle, we utilize Nebraska case law in our analysis, as did the parties in their briefs. We therefore examine whether the record contains an adequate factual basis to provide foundation for Raasch's expert opinion that the Sutherland plant, if completed in 1993, would have been operational and profitable.