Opinion ID: 4540104
Heading Depth: 2
Heading Rank: 3

Heading: Jury award of damages

Text: To recover for lost profits, Gulf had to offer evidence of what the authorized work was and what profits it lost for being prevented from completion. After the close of evidence on damages, Dow moved for judgment as a matter of law that no evidence of lost profits was provided to the jury. The 8 Case: 19-30395 Document: 00515445934 Page: 9 Date Filed: 06/09/2020 No. 19-30395 district court denied the motion, and the jury awarded $138,758 in lost profits. Dow argues the district court should have granted Dow’s motion. In the alternative, Dow argues the evidence does not support a reasonable inference that Gulf sustained that amount of damage. Louisiana law allows a plaintiff to recover lost profits that are “proven with reasonable certainty and [are not] based on conjecture and speculation.” In re Liljeberg Enters., Inc., 304 F.3d 410, 448 (5th Cir. 2002). “Damages are measured by the loss sustained by the obligee and the profit which he has been deprived.” LA. CIV. CODE ANN. art. 1995. “[T]he plaintiff must show that the loss of profits is more probable than not” and that its claim of lost profits will be supported by more than “mere estimates of loss.” Wasco, Inc. v. Econ. Dev. Unit, Inc., 461 So. 2d 1055, 1057 (La. App. 4 Cir., 10/22/84). An award of damages “by a jury is a determination of fact that is entitled to great deference on review.” Trunk v. Med. Ctr. of La. at New Orleans, 2004-0181, p. 9 (La. 10/19/04), 885 So. 2d 534, 539. What cannot be disputed from this record is that Dow assigned work to Gulf on a daily or, at times, a weekly basis. The evidence at trial included testimony by Dow’s maintenance leader, Chad Naquin, who testified that a computer system would generate work orders that identified which inspections were due. Once a work order was generated, Dow would develop an inspection plan. A Dow planner would then develop a detailed job plan identifying which resources were needed. After jobs were planned, according to Naquin, the jobs would go into Dow’s “scheduling backlog.” At that point, a Dow scheduler would assess available resources and plan jobs for the daily schedule. Once a job was placed on the daily schedule by the scheduler, the Dow work coordinator would discuss the jobs on the schedule with the contractor. After this discussion, Gulf would be permitted to begin working. According to Naquin, these discussions occurred daily and job packages, i.e., actual written 9 Case: 19-30395 Document: 00515445934 Page: 10 Date Filed: 06/09/2020 No. 19-30395 documents, were distributed to Gulf the morning of an inspection. Similarly, Terry Mackie, a Gulf manager, testified that Dow assigned work to Gulf every Monday by distributing a written schedule and a work package, and Gulf was not allowed to provide any inspection jobs without express prior written authorization. A Dow manager testified that Gulf had authorized work that was not completed at the time Gulf left Dow facilities. That is all there is to create a jury question of whether any work was assigned to Gulf during the week of its departure. For our purposes, though, we accept that the testimony just managed to cross the line to give jurors enough to find a breach of contract. Gulf then argues that the following constitutes circumstantial evidence that Dow prevented Gulf from completing this work: Gulf did not depart voluntarily; Dow’s internal emails expressed a desire to get rid of Gulf as soon as possible; the sudden acceleration of Dow’s decision to replace Gulf; a secret meeting held by a Dow manager informing Gulf employees that the Agreement had been terminated; and an unprofessional telephone conversation between a Dow manager and Gulf’s CEO. Even if there are worthwhile inferences to be drawn from the cited evidence, no inference is needed to show that work was assigned on a daily, or, at most, weekly basis. We see no evidence, or even a claim by Gulf, that it was assigned work after all its personnel left the facility, though there certainly is disagreement as to whether Gulf was entitled to more work. We have already rejected that argument and held that Dow had no contractual obligation to continue to assign work during the 90-day termination period. Consequently, there is no basis for jurors to award damages for any week after that first one. We look to the record for whether there is evidence to support any award. During the damages phase of the trial, Gulf presented three witnesses: Nick Massimini, Gulf’s former Chief Financial Officer and owner; Vint 10 Case: 19-30395 Document: 00515445934 Page: 11 Date Filed: 06/09/2020 No. 19-30395 Massimini, Gulf’s former Chief Executive Officer and President; and Michele Avery, Gulf’s accounting expert. None of these witnesses testified as to the profits Gulf lost during September 15–19, 2014. Neither Nick nor Vint Massimini could identify work that Gulf was authorized to complete during that week. Avery testified that she was not provided with any documentation regarding previously authorized work that existed on those dates. Clearly, then, Gulf’s evidence was not based on the profit that would have been earned on specific assigned work that was started but never completed during that final week. Instead, the evidence was an extrapolation from past profits to show what Gulf would have earned on work Dow allegedly had an obligation to assign but never did. Using that understanding of lost profits, Avery testified that Gulf would have earned $221,805 in profits during the 90-day notice period. To reach that amount, Avery examined the historic revenue that was generated by Gulf’s contracts with Dow over a five-year period and then averaged that to a daily amount. She then multiplied that daily amount by a gross profit margin percentage. Avery calculated the lost profits for a 90-day period. Conversely, Dow’s position was that because Gulf provided no evidence of pre-authorized work that Gulf was prevented from completing, Gulf had failed to show there were any lost profits. As a fallback, Dow’s expert accepted the premise that there were lost profits over the 90 days but provided a different lost-profit calculation. If Gulf did experience lost profits during the 90-day notice period, Dow’s evidence was the loss would be $55,710. Instead of using a five-year period, Dow’s expert examined the 12 months immediately prior to the September 2014 notice of termination, then used somewhat different methodology than had Gulf’s expert. The jury awarded Gulf $138,758 in damages. This amount is a precise splitting of the difference between the two parties’ lost-profits calculations. 11 Case: 19-30395 Document: 00515445934 Page: 12 Date Filed: 06/09/2020 No. 19-30395 According to Dow, the jury’s verdict must mean that jurors decided Dow was required to provide Gulf with work throughout the 90-day notice period, despite the district court’s instruction to the contrary, but then the jurors reached a compromise on the amount of damages. That interpretation of the verdict is plausible. What is inescapable is that jurors were at least premising their award on an obligation for Dow to provide additional work for a substantial part of the 90 days. For purposes of our analysis only, we have assumed that Gulf was entitled to damages for the one week in which there is very slight testimony of work having been assigned but not allowed to be completed. The only evidence of how the details of daily or weekly assignments can be known is that Dow used oral and written communication that included the issuing of work orders and job schedules. What Gulf needed to offer were details about any assigned work. That would include evidence of such variables as the nature of the work, the number of employees needed, and the number of days needed to complete the work. In other words, what was needed in some form was evidence relevant to allow a calculation of what Dow would have paid and what Gulf’s expenses would have been, i.e., what Gulf’s profit would have been. Instead, the only evidence was an average from an historic time period, where all those variables were blended. As we explained earlier, the evidence of any assigned work after the notice of termination barely suffices to show liability. For us then to allow the evidence offered of daily-average profits over one or five years to substitute for actual profits for actual assigned work is a bridge too far. We do not “secondguess jurors, so long as there was a legally sufficient evidentiary basis for their verdict.” Goodner v. Hyundai Motor Co., 650 F.3d 1034, 1045 (5th Cir. 2011). There was no such basis here. 12 Case: 19-30395 Document: 00515445934 Page: 13 Date Filed: 06/09/2020 No. 19-30395