Opinion ID: 199035
Heading Depth: 2
Heading Rank: 3

Heading: Camar's actual loss

Text: 32 The district court determined that the $215 Camar paid for the equipment was its value for purposes of ascertaining Camar's actual loss and that the evidence as to lost profits was too speculative. Within the meaning of the Carmack Amendment, actual loss or injury to the property is ordinarily measured by the reduction in market value at destination or by replacement or repair costs occasioned by the harm. See Fredette v. Allied Van Lines, Inc., 66 F.3d 369, 372 (1st Cir. 1995). The Carmack Amendment incorporates common law principles of damages, see Hector Martinez & Co. v. Southern Pac. Transp. Co., 606 F.2d 106, 108 (5th Cir. 1979), and permits recovery of lost profits unless they are speculative. See Pillsbury Co. v. Illinois Cent. Gulf R. R., 687 F.2d 241, 245-46 (8th Cir. 1982); Hector Martinez, 606 F.2d at 109; Polaroid Corp. v. Schuster's Express, Inc., 484 F.2d 349, 351 (1st Cir. 1973). 33 To establish the dollar value of its loss, Camar submitted exhibits describing each type of lost equipment and comprising the record of its procurement and of Camar's previous sales of similar equipment to foreign buyers. For example, one exhibit includes a statement as follows: 34 This is a bearing turbine, similar to the four lost by Preston Trucking.... On July 21, 1995 Camar sold one of these to the Brazilian Navy for $59,830. If the goods had been delivered and Camar had been able to sell the missing four at that price, Camar would have earned $239,320 on the four bearing turbines Preston lost. 35 Procurement history data, including the identity of the vendor and the price paid by the U.S. government, follow. Next are invoices and other documents reflecting the sale of the allegedly similar equipment to the Brazilian Navy. The other exhibits are similar, except as to two categories of equipment in which the damages calculations are based solely on the procurement history. 36 We agree with the district court that the evidence of past sales on this record is too speculative to form the basis of a damages award greater than the $215 purchase price. Camar's evidence did not identify any prospective purchasers for the lost used equipment at prices like those paid for the previously sold equipment, or, indeed, at any price. In his deposition testimony, Camar's president, James Mercanti, admitted that Camar had no customer for the equipment at the time of the bid or at the time Preston lost the shipment. No evidence of subsequent customer demand was submitted. Nor did Camar submit evidence tending to prove that it lost any customers or good will as a result of Preston's loss of the equipment. 37 Moreover, Camar describes the equipment it previously sold to the foreign navies only as similar to the lost goods, not identical (or even substantially similar). It is unclear whether the same prices paid for the earlier equipment would apply to the lost equipment. The lost equipment, moreover, had been used by the U.S. Navy for nine to sixteen years. There was no evidence of the effects of this use on the lost items, or the extent or nature of this past use. Hence, we cannot know whether the items were in a comparable condition to those previously sold and thus could command comparable prices. 6 The lack of essential information about the equipment's condition is underscored by the DRMS instructions to bidders stating that all property listed [in an invitation to bid] is offered for sale `as is,' and urging bidders to inspect the goods. It is true that the listed equipment was described as being in good condition. Standing alone, however, this statement does not make up for the lack of specifics necessary to compare the value of the lost items to that of the equipment previously sold to the Brazilian Navy. 38 Hence, we think the district court did not err in concluding that [t]he DRMS Notice of Award indicating Camar's purchase price of $215 is the only non-speculative evidence of the market value of the lost equipment. While Camar undoubtedly meant to sell the items profitably, and while there is evidence of past success in making profitable sales of somewhat similar equipment, its evidence fails to provide a reliable basis from which a factfinder could determine the actual value of the missing equipment. The record does not address Camar's failures nor inform us as to what proportion of used equipment purchases resulted in profitable resales. The low price for which Camar obtained the equipment suggests, moreover, that in the eyes of the seller and of other bidders the market for it remained quite questionable and uncertain. 39 Camar argues that Polaroid, 484 F.2d 349, controls the outcome of this case. In that case, Polaroid was allowed to recover the dealer price for a shipment of photographic equipment that was hijacked en route to delivery to a Polaroid warehouse while entrusted to the defendant carrier. The district court had found, based on the plaintiff's affidavits, that the goods were in great demand, with nothing remaining but to unload the goods at the distribution center and to stock and take orders for them. Id. at 350 (internal quotations omitted). Noting that hijacked goods ultimately compete with the manufacturer and that Polaroid was the sole manufacturer of the types of products lost, we held that the plaintiff had established a more than reasonable likelihood that the hijacked goods would have been sold at the claimed market price. Id. at 352. 40 We are not persuaded by Camar's analogy to Polaroid. Here, there is little evidence of regular and consistent market demand for the lost items at a predetermined price, or that Camar's equipment was identical to that previously sold, or was in suitable condition for immediate sale at the prices previously obtained for similar items. In contrast to the new and fungible photographic equipment, it remains an open question whether there were foreign governments who still wished to buy this particular naval equipment at prices comparable to those previously negotiated. Polaroid was permitted to recover lost profits that it was on the verge of earning, id. at 651 (internal quotations omitted); but there is little certainty in the present record that Camar was anywhere close to earning the amounts claimed here. 41 Camar contends that because Preston was responsible for the uncertainty in the value of the equipment, it should bear whatever harm is caused by that uncertainty. It maintains that Preston asked Camar to wait eight months while it searched for the goods, while in the meantime, ninety days after the sale, DRMS purged its computer system of maintenance records. This shows, Camar contends, that it was Preston's fault that Camar was left without evidence as to the condition of the goods. 42 We are not persuaded that the consequences of DRMS's purging of its records can be blamed on Preston's conduct. Preston lost the equipment sometime after October 11, 1995. The record indicates that on November 10, 1995, Preston wrote to Camar: Please be advised that we are currently conducting a thorough investigation in order to locate the missing merchandise. On December 15, Camar stated in a letter to Preston that Preston had indicated that it might take up to 120 days to find the goods. These statements fell short of evidencing a definite assurance by Preston that it would be able to locate the shipment, which both parties by then knew was missing. 43 Camar could prudently have proceeded then and there to gather pertinent information from DRMS, before the ninety days had passed. While Camar doubtless hoped that Preston would eventually find the equipment, it had reason to fear the worst and to take steps to document its claim. Preston's statement was not such as to mislead Camar into taking no steps to obtain the Navy's information relative to the maintenance and condition of the equipment. In any event, Preston's responsibility for the loss of the equipment does not relieve Camar of its obligation to show that there was an ongoing market for the equipment, as discussed supra. Hence, Camar retains the responsibility to produce sufficient evidence of its lost profits with reasonable certainty. See Bigelow v. RKO Radio Pictures, 327 U.S. 251, 264 (1946). 44 Although mathematical precision is not required in calculating lost profits, a damages award must have a rational basis in the evidence. Thermo Electron Corp. v. Schiavone Constr. Co., 958 F.2d 1158, 1166 (1st Cir. 1992) (quoting Jay Edwards, Inc. v. New England Toyota Distrib., Inc., 708 F.2d 814, 819 (1st Cir. 1983)). We cannot conclude, given the absence of more precise evidence as to the condition of the used goods and the current market demand and pricing for them, that a jury could rationally determine the dollar amount of Camar's lost profits in excess of $215. Hence, we affirm the district court's award of damages. 45 Affirmed.