Opinion ID: 3212116
Heading Depth: 2
Heading Rank: 2

Heading: Antero Damages

Text: Rubin also seeks damages of $246,000 in lost profits it suffered when the Antero deal was cancelled.10 Rubin argues the link between Rubin’s loss of the Antero purchase agreement and Mr. Morris’s negligence is direct and certain; the fundamental purpose for which he was hired was defeated when Mr. Morris failed to discover the declaration of pooling. Rubin maintains that but for Mr. Morris’s negligence, it would have exercised its contractual right to demand that WVE cure the defect or substitute replacement property. To arrive at the opposite conclusion, Rubin asserts the circuit court misapplied this Court’s analysis in Keister, a case involving very different facts. Finally, Rubin argues the circuit court erred in finding the Antero damages were speculative; it was not claiming unproven lost profits based on a contention that it would have been able to sell the leasehold to a hypothetical purchaser. Instead, Rubin’s loss of profits claim was based on evidence of an actual offer from Antero. 10 This sum includes $216,000 Antero offered to pay Rubin for its right to produce gas from the Marcellus shale underlying the property, plus $30,000.00 as the present value of those overriding royalties. 16 Mr. Morris counters that pursuant to Keister, Rubin is not entitled to recover its claimed Antero damages because it is not Mr. Morris’s fault that Rubin did not acquire the Marcellus Shale rights to the 120-acre tract. Mr. Morris also maintains that Rubin cannot prove its entitlement to the Antero lost profit damages with reasonable certainty because it would be wholly speculative to now conclude that Rubin would have exercised its contractual right of substitution with WVE and acquired property that would have secured such an offer from Antero. 11 In Keister, the plaintiffs were purchasers of real property which purportedly included both the surface and the mineral rights. The plaintiffs filed a negligence action against the attorney, Mr. Talbott, who overlooked a prior out-conveyance of mineral rights during his title search and argued they were entitled to recover the value of the coal under the property or of the profits they could have made from extracting it. 182 W.Va. at 748, 391 S.E.2d at 898. This Court disagreed and held that the plaintiffs failed to make a prima facie showing that the damage they asserted below – loss of the right to the coal underlying their property – was the direct and proximate result of the negligence of the attorney. Id. at 751, 391 S.E.2d at 901. We explained that 11 Mr. Morris also states that Rubin is entitled to no damages because the income generated from the well exceeded the price Rubin paid for the leasehold. See Keister, 182 W.Va. at 749-50, 391 S.E.2d at 899-900 (“damages are ordinarily determined by subtracting the value of the property actually received from the purchase price paid.”). We reject this argument because it overly simplifies the issues at hand and ignores the fact that Rubin faced considerable financial liability for its unauthorized drilling of this well. 17 at the time Mr. Talbott undertook the title search, the grantor, Mrs. Brown, had no title to the coal under her property. Had Mr. Talbott correctly examined the title, his discovery of the prior outconveyance would not have altered that fact. Thus, the plaintiffs were not deprived of the coal rights as a proximate result of Mr. Talbott’s negligence. Consequently, the plaintiffs’ damages for the loss of their bargain, i.e., the failure to acquire ownership of the coal, cannot be charged against Mr. 18 Talbott. What they did lose as a result of his negligence was the opportunity to rescind the purchase contract. Id., at 750, 391 S.E.2d at 900 (emphasis added, footnote omitted). Keister is factually distinguishable from the instant case. Here, Rubin lost more than the opportunity to rescind its purchase agreement with WVE. Relying on Mr. Morris’s faulty title opinion, Rubin lost its valuable contractual right to demand that WVE either cure the title defect to the 120-acre tract (i.e., acquire the leasehold estate) or substitute it with suitable replacement property. Consequently, Rubin has demonstrated that but for Mr. Morris’s negligence, it would have realized the proceeds of Antero’s offer to produce gas from the Marcellus Shale either from the 120-acre tract (had the title defect been cured) or the replacement leasehold. This Court has long held that loss of profits may be recoverable in tort actions. Hardman Trucking, Inc. v. Poling Trucking Co., Inc., 176 W.Va. 575, 579, 346 S.E.2d 551, 555 (1986). Nonetheless, “the loss of profits must be established with reasonable certainty and not be speculative or conjectural in character or amount. Franklin v. Pence, 128 W.Va. 353, 36 S.E.2d 505 (1945).” Melbourne Bros. Constr. Co. v. Pioneer Co., 181 W.Va. 816, 821, 384 S.E.2d 857, 862 (1989); see also Bridgeport Harbour Place I, LLC v. Ganim, 30 A.3d 703, 722 (Conn. App. Ct. 2011) (recognizing damages for lost profits in tort action may be difficult to prove with “exactitude” and finding such damages are recoverable only to extent evidence affords sufficient basis for 19 estimating their amount with reasonable certainty). Application of these principles in a legal malpractice action does not make an attorney an insurer of pie-in-the-sky expectations of the client. Rather, this tenet simply operates to restore the client to the economic position that he or she would be in but for the attorney’s negligence. See e.g., Roberts v. Holland & Hart, 857 P.2d 492, 497 (Colo. App. 1993) (holding claim for lost profits may be recoverable in legal malpractice action when traceable to and direct result of attorney’s negligence); Sterling Radio Stations, Inc. v. Weinstine, 765 N.E.2d 56, 62 (Ill. App. Ct. 2002) (“The legal malpractice action places the plaintiff in the same position he or she would have occupied but for the attorney’s negligence.”). Applying these principles to the instant action, we find that Rubin is entitled to recover the Antero damages because it established these lost profits with reasonable certainty. 12