Opinion ID: 3008740
Heading Depth: 2
Heading Rank: 1

Heading: Lost Profits Award

Text: Patton first argues that Elite did not prove lost profits with reasonable certainty. 2 Due to this failing, Patton maintains that “the District Court was forced to resort to rank speculation in 2 In its brief, Patton argues under separate heading that Elite should be considered a “new business.” The Michigan Supreme Court has clarified, however, that it imposes no special rule for new businesses; rather, the so-called new-business rule “is merely an application of the doctrine that ‘[i]n order to be entitled to a verdict, or a judgment, for damages for breach of contract, the plaintiff must lay a basis for a reasonable estimate of the extent of his harm, measured in money.’” Fera v. Vill. Plaza, Inc., 242 N.W.2d 372, 373–74 (Mich. 1976) (alteration in original) (quoting 5 Corbin on Contracts § 1020). Patton’s “new business” -7- Case Nos. 14-2272/2317, Elite Int’l Enterprise, Inc. v. Norwall Group, Inc., et al. order to award lost profit damages.” Patton identifies three instances of the court’s speculation: (1) using a profit margin of fifty percent when Elite’s tax returns establish a true profit margin of twenty-four percent; (2) attributing Elite’s sales decline to Patton’s breach rather than Elite’s prebreach loss of major customers; and (3) finding that Elite was unable to obtain “sales books” following the breach when in fact Elite simply did not wish to pay for additional printings according to Patton’s routine policy. Although these criticisms of the court’s chosen damages-calculation method have some merit, they fail to show that the court abused its discretion in choosing to award lost profits at all. As the court noted, under Michigan law, “[t]he type of uncertainty which will bar recovery of damages is ‘uncertainty as to the fact of the damage and not as to its amount . . . [since] where it is certain that damage has resulted, mere uncertainty as to the amount will not preclude the right of recovery.’” Bonelli v. Volkswagen of Am., Inc., 421 N.W.2d 213, 226 (Mich. Ct. App. 1988) (emphasis added) (quoting Wolverine Upholstery Co. v. Ammerman, 135 N.W.2d 572, 576 (Mich. Ct. App. 1965)). The evidence, including Elite’s tax returns, supports the court’s finding that Elite ran a profitable business and that its sales declined following the breach. The district court thus did not abuse its discretion in concluding that Elite suffered some lost profits.