Opinion ID: 1228810
Heading Depth: 2
Heading Rank: 2

Heading: Lost Profits/Business Opportunity

Text: Finally, the trial court set aside the damage award on the basis that the Murrays' claimed damages were too speculative. At trial and on appeal, the Murrays argued that the jury's award was justified in light of the instruction on damages which stated that the Murrays were entitled to recover any gains prevented which [were] a direct and natural result of the fraud. The Murrays argued that their gains prevented by Hadid's fraud were their lost opportunity to develop the property or sell the contract on the property. Thus, they are arguing that they lost some benefit they would have received if they had acquired the contract on the property. A plaintiff is not required to prove the exact amount of his damages; however, he is required to show sufficient facts and circumstances to permit a jury to make a reasonable estimate of those damages. Manss-Owens Co. v. Owens & Son, 129 Va. 183, 205, 105 S.E. 543, 550 (1921). It is well settled that ... prospective profits are not recoverable in any case if it is uncertain that there would have been any profits.... Sinclair v. Hamilton & Dotson, 164 Va. 203, 211, 178 S.E. 777, 780 (1935). As previously noted, contrary to the Murrays' argument on appeal, evidence at trial indicated that they would not have assigned the contract to anyone. They argued fervently that they would have developed the property themselves and reaped tremendous profits. The Murrays argued that, had they developed the property, they would have made at least as much as the Partnership: $2.7 million from the sale of townhouses it built on the property. They also claimed they would have made the $666,666 builder's fee which was paid directly to the builder, Georgelas and Sons. When an established business is interrupted and sustains loss, evidence of its past profits, and estimates of future profits derived therefrom, are admissible to permit an estimate of damages. Krikorian v. Dailey, 171 Va. 16, 30, 197 S.E. 442, 448 (1938). But where a new business or enterprise is involved, the rule is not applicable for the reason that such a business is a speculative venture, the successful operation of which depends upon future bargains, the status of the market, and too many other contingencies to furnish a safeguard in fixing the measure of damages. (Citations omitted.) Mullen v. Brantley, 213 Va. 765, 768, 195 S.E.2d 696, 700 (1973). Prior to their interest in the Roper property, the Murrays had never built a townhouse development. Their experience in building was limited to large custom homes. Thus, the townhouse development would have constituted a new enterprise dependent upon too many contingencies to safeguard an estimate of damages. The fact that the Partnership and Georgelas and Sons profited from their development of the property gives absolutely no indication of how the Murrays would have fared. The trial court, therefore, correctly ruled that the Murrays' evidence regarding the profits made by the Partnership and the builders fees collected by Georgelas and Sons was speculative, because the Murrays did not prove that they would have performed in the same manner.