Opinion ID: 1799426
Heading Depth: 2
Heading Rank: 2

Heading: Trial Court Correct in Refusing Money Damages.

Text: We decide first as to whether plaintiff Fenestra was entitled to actual money damages of a compensatory nature. It will be remembered that this portion of Fenestra's claim stems from Gulf's blocking the acquisition of Freeman Industries by suit for injunction begun three days before the instant case, but dismissed during the joint hearing of these two cases. The grounds for dismissal of the suit by Gulf (via G.A.L.C.) against Fenestra was that Freeman Industries was sold to another company and that, therefore, the injunctive suit became moot. Fenestra asserts, however, that it is entitled to compensatory damages because Freeman was a good acquisition, had enjoyed good profits, and also had an excellent future. So, in this joinder of legal and equitable causes in one civil action under GCR 1963, 12, we decide first whether or not Fenestra is entitled to compensatory damages on its cross-appeal. In denying such damages to Fenestra, we record herewith a pertinent part of the trial court's opinion as to that issue: There is evidence in this record that the Freeman operations were profitable and appeared to have a good potential, but in their present status. Changing their status and absorbing them into Fenestra could conceivably alter the picture as to the amount, extent or continued existence of their profitable production. Freeman was an established business but of Freeman and not of Fenestra. Its continued profitable operation was dependent upon the fulfillment of certain requirements and the happening of certain contingencies as set forth in the Heller report. No evidence of cost of operating Freeman, under Fenestra management, was introduced, and it is only reasonable to assume that such costs could be much different under Fenestra's method of operation, which for several years have been sustaining a loss, than they would have been under continued Freeman operation. The loss which is complained of is anticipatory in its nature and while profits were promising they were still dependent upon certain elements of speculation and conjecture, including the ever present general economic factors. The opinion testimony of Fenestra's principal expert witness in relation to this phase, David V. Johnson of the Heller Company, substantiates the element of speculation and contingency involved, and makes it impossible for this Court to determine the existence of damage actually sustained or even to estimate the amount thereof. While the future held promise, it is the opinion of this court that this record does not contain sufficiently competent and convincing proof that the plaintiff has or will have sustained damages as the result of not acquiring Freeman and to what reasonable extent. The court cannot assess damages under such circumstances. (Emphasis supplied.) Under GCR 1963, 859, we do not reverse unless the judgment of the trial court is clearly erroneous. [4] We find that the trial court's judgment as to this issue of compensatory damages is not clearly erroneous and therefore affirm that portion of the judgment for the reasons set forth immediately below. As the trial court states, there was no evidence of the cost of operating Freeman under Fenestra management. The Heller report, referred to above, points up this deficiency in Freeman's records as follows: The company recognizes the need to establish a cost system whereby product line costs can be identified and performance measured. Recent union contract negotiations have highlighted the need for this improved control, but the entire costing job remains to be done. President Leslie, himself, admitted, after enumerating some of the factors both in favor of and against the Freeman acquisition that the matter was a question of business judgment as to which honest men might differ in their conclusions. Again, the Heller report, relied upon so much by Fenestra, clearly placed its qualified approval of the acquisition on the assumption that a number of changes would have to be made, like the expansion of credit facilities, improvements in engineering, tooling, material, marketing methods and controls, and changes in the use of management personnel. From a careful review, therefore, of pertinent evidence, we do not conclude that the trial court was clearly erroneous as to this issue.