Opinion ID: 3214350
Heading Depth: 2
Heading Rank: 2

Heading: the trial court has discretion to permit the

Text: USE OF POST-BREACH EVIDENCE TO ESTABLISH AND MEASURE EXPECTATION DAMAGES ¶ 21 Having determined how to establish expectation damages for the breach of an oil and gas lease, we now turn to the question of whether parties may use post-breach evidence to prove such damages. 16 We hold that a trial court has discretion to allow parties to use post-breach evidence to establish and measure their expectation damages. 17 ¶ 22 “[W]here it is necessary to fashion an appropriate award, a court may consider post-breach evidence when determining damages in order to place the non-breaching party in as good a position as [it] would have been had the contract been performed.” Anchor Sav. Bank, FSB, v. United States, 597 F.3d 1356, 1369–70 (Fed. Cir. 2010) (internal quotation marks omitted). Several courts have considered post-breach evidence in the context of awarding expectancy damages when determining a lost profits award. See, e.g., Peck Iron & Metal Co. v. United States, 603 F.2d 171, 175 (U.S. Ct. Cl. 1979) (use of post-breach evidence to determine a general damages claim); Anchor, 597 F.3d at 1370 (use of post-breach evidence to determine a consequential lost profits claim). While we acknowledge the existence of authorities to the contrary, we agree with those cited above and think courts should likewise be able to consider post-breach evidence in establishing and measuring expectation damages for the breach of an oil and gas lease, if they determine it appropriate to do so in the context 16 In our order accepting the certified question, we requested that the parties address the question “in the particular context of the issues pending on appeal before the Tenth Circuit.” Having had the benefit of the parties’ briefing and arguments, we agree with Trans-Western that the certified question fairly implicates the “evidence plaintiffs will be called upon to use in establishing their damages” and, therefore, proceed to provide some guidance on the issue. 17 While Trans-Western has phrased this issue in terms of its use of the best “evidence . . . available at trial,” it appears to us that what is really in dispute is the use of post-breach evidence to establish expectation damages. We focus our analysis accordingly. 14 Cite as: 2016 UT 27 Opinion of the Court of a particular case. This approach is most consistent with our aim of affording district courts wide latitude in fashioning suitable damage awards. See, e.g., Clayton v. Crossroads Equip. Co., 655 P.2d 1125, 1130 (Utah 1982). ¶ 23 Thus, when claiming general damages, parties may be able to use post-breach evidence to help establish the value of a lease at the time of breach. For example, if a landlord breaches a lease by denying the plaintiff possession and then turns around and re-leases the property a few days later, this subsequent lease would be considered post-breach evidence and would likely also be credible evidence of the value of the plaintiff’s lease at the time of the breach. There is no persuasive reason why we should prohibit parties from introducing such evidence to establish their general damages simply because that evidence is post-breach. The same holds true with respect to consequential damages. Indeed, we can readily envision cases in which a plaintiff can and should be able to establish and measure consequential damages that take the form of lost profits with post-breach evidence. 18