Opinion ID: 3062221
Heading Depth: 3
Heading Rank: 4

Heading: Sufficiency of Evidence of Lost Profits

Text: Head next argues that the damages award to MMS for breach of contract was improper because insufficient evidence supported an award of lost profits. Head raised this issue in its Rule 50(b) motion. We reject the argument. Head asserts that lost profits were improperly awarded because they were based “solely on unsubstantiated and speculative testimony from Mr. Matthews.” Aplt. Br. at 38. In this diversity case we apply Oklahoma substantive law, including Oklahoma’s law of damages. See Speciality Beverages, L.L.C. v. Pabst Brewing Co., 537 F.3d 1165, 1175 (10th Cir. 2008); see also Homoki v. Conversion Servs., Inc., 717 F.3d 388, 398 (5th Cir. 2013) (“The law governing what damages are recoverable is substantive.”). Oklahoma law “allows businesses to recover lost future profits so long as they can demonstrate that those loses are capable of reasonably accurate measurement or estimate.” Specialty 14 Beverages, 537 F.3d at 1178 (internal quotation marks omitted).2 In a breach-of-contract case, the plaintiff must show that “such profits were reasonably certain to have been made by the non-breaching party absent breach.” See Florafax Int’l, Inc. v. GTE Market Res., Inc., 933 P.2d 282, 296 (Okla. 1997). At trial Mr. Matthews testified about how he came up with his initial bid. He said that he expected to make a profit of $600,000 if everything went according to plan. To calculate his actual lost profits, he then subtracted his “anticipated overruns,” which represented “mistakes that you make, things that occur during the project that you—that you have to take the overruns into consideration for penalties.” Aplt. App., Vol. IV at 1327. From what he knew after the contract was terminated, he calculated this amount as $250,000. That left $350,000 in lost profits. Head did not present any evidence to challenge Mr. Matthews’s calculation. This evidence sufficed for the jury to decide that MMS was reasonably certain to make these lost profits. See Sw. Stainless, LP v. Sappington, 582 F.3d 1176, 1186–87 (10th Cir. 2009) (awarding lost profits based on testimony by salesman who prepared bid that profit margin was 15%); see also Fed. R. Evid. 701 advisory committee’s note (2000 Amendments) (“[M]ost courts have permitted the owner or officer of a business to testify to the value or projected profits of the 2 Accordingly, the jury was instructed: “The amount of damages does not have to be proved with mathematical certainty, but there must be a reasonable basis for the award.” Aplt. App., Vol. I at 249. 15 business, without the necessity of qualifying the witness as an accountant, appraiser, or similar expert.”).