Opinion ID: 1188165
Heading Depth: 2
Heading Rank: 2

Heading: Lost Profits in Montana Livestock Trade

Text: Intervenor claims that the loss of the use of the cattle sales proceeds during the years 1973-1975 not only prevented him from repaying his Zions loan when due but also deprived him of profits which he otherwise would have earned in the Montana livestock trading business. Intervenor introduced evidence to show that he sold a total of 46,500 head of livestock during 1972 and that livestock sales decreased during each of the subsequent three years to a total of only 14,854 head in 1975. Intervenor claimed that this decrease in volume resulted from lack of investment capital caused by the unavailability of the Utah cattle sales proceeds. Intervenor presented expert testimony purporting to project the profits which his livestock business would have produced if he had sold the same number of livestock in each of the years 1973, 1974 and 1975 as they had sold during 1972. On the basis of this testimony, intervenor claimed damages for lost profits from plaintiff, alleging that if plaintiff had not deprived him of the use of his Utah cattle proceeds, intervenor would have maintained a constant volume of livestock sales. Intervenor has failed to establish his right to recover damages for lost profits for several reasons. First, he has presented no evidence showing that his livestock profits actually decreased during the years in question. The only documents in evidence which pertain to intervenor's financial status during those years consist of a series of annual reports allegedly submitted by intervenor to the Packers and Stockyards Administration of the Department of Agriculture. These reports contain only selected information and do not convey a complete picture of intervenor's livestock transactions during those years. Intervenor's testimony added nothing to these documents and intervenor did not make any sort of estimate concerning actual profits or losses during this period. Intervenor also failed to present any evidence indicating that he would have invested the Utah cattle proceeds in additional livestock if such proceeds had been available. Intervenor showed no custom or practice in his business of investing all available capital in livestock during the years preceding the attachment. On the contrary, intervenor's Department of Agriculture reports show an inverse correlation between owner's capital and volume of livestock traded. According to those reports, intervenor's net owner's capital increased during each of the three years for which intervenor claims lost profits even as livestock sales decreased. The reports also show that at the end of each of the three years, intervenor had on hand a quantity of livestock either roughly equal to or greater than that which had been sold during that year. It is clear from these reports that the number of livestock sold during the relevant years did not depend on the total number of livestock acquired during that year or on the total amount of capital available to intervenor. Intervenor has also failed to show the percentage rate of return which he might have anticipated from investment of additional funds in his livestock business. None of intervenor's evidence relates the amount of claimed lost profits in any way to the specific dollar amount which he allegedly would have invested if the attachment had not occurred. Instead, intervenor's entire claim to damages in this area depends on his assertion that the actual number of livestock sold would have remained constant in the absence of interference by plaintiff. Although intervenor testified that livestock sales increased each year from 1955 to 1972, no documentary evidence was presented to that effect. Even the limited information provided by intervenor's Department of Agriculture reports pertains only to the years from 1972 to 1975. Nor did intervenor's expert engage in any analysis of his previous business operations in order to evaluate the likelihood that the business would have maintained a constant sales volume during those years. Thus, intervenor's entire claim of lost profits rests on an assumption unsupported by the record. Even if the trial court assumed that intervenor would have invested all of his Utah cattle proceeds (less fees costs and $50,000 loan money) in livestock, it had no evidence from which to estimate the profits which such an investment would have produced without accepting intervenor's unsubstantiated premise of constant sales volume. Furthermore, even assuming that the amount of intervenor's Utah cattle proceeds was exactly the amount needed to enable him to trade the same number of livestock during each of the years from 1973 to 1975 as in 1972, the trial court had no basis on which to calculate the net profit per head of livestock. Intervenor used in his calculations of damages the profit figure of $8 per head, but this figure was revealed on cross-examination to be a gross figure from which intervenor had deducted no expenses. The trial court recognized the inaccuracy of the $8 figure, awarding intervenor instead a $1.50 net profit for each animal which intervenor claimed he would have sold from 1973 to 1975 if the attachment had not taken place. No evidence in the record supports the $1.50 figure or any other net profit figure; intervenor himself, when questioned by counsel for plaintiff, could give no estimate of what might constitute a reasonable net profit per head of livestock sold. Finally, the difficulty of speculating as to profits which intervenor might have realized during the two-year period in question is increased by the fact that intervenor's business apparently suffered financial setbacks as the result of factors unrelated to plaintiff's actions. Intervenor, his wife and his expert witness all admitted that circumstances apart from the attachment had affected the business negatively between 1973 and 1975. Such circumstances included heavy operating expenses, large debts incurred prior to the attachment date and financial losses suffered in an unspecified business transaction in Montana. The wholly speculative character of intervenor's evidence on the issue of lost profits invalidates any attempt to award damages in this area. This Court summarized the law relating to lost profits damages in Howarth v. Ostergaard, 30 Utah 2d 183, 515 P.2d 442 (1973), as follows: The basic and general rule is that loss of anticipated profits of a business venture involve so many factors of uncertainty that ordinarily profits to be realized in the future are too speculative to base an award of damages thereon. The other side of the coin is that damages to a business or enterprise need only be proved with sufficient certainty that reasonable minds might believe from a preponderance of the evidence that the damages were actually suffered. [Footnotes omitted.] Intervenor has not shown with any degree of certainty the fact of lost profits, causation of such lost profits by plaintiff or the amount of such lost profits. In the absence of the sufficient certainty required by Howarth v. Ostergaard and other Utah cases, [3] this Court can discover no basis on which to permit recovery of alleged lost profits by intervenor.