Opinion ID: 396160
Heading Depth: 2
Heading Rank: 3

Heading: Lost Sales Prior to the Recall.

Text: 54 The jury awarded $863,201.00 for lost sales of nitrofurantoin before the recall. This figure represents the sale price for the quantities of the drug delivered to Upjohn's customers pursuant to the pre-stocking plan. Rachelle makes two arguments with respect to this element of the damage award. First, it claims that these damages are based on the erroneous assumption that all the pre-stocked quantities of the drug would be resold by the drugstores and hospitals. It points out that Upjohn's customers had the right to return the unused quantities of the drug, and that some had already exercised that right prior to the recall. 55 We agree with the District Court's conclusion that it does not matter whether these lost sales were in fact merely lost prospective sales. The issue is whether there was sufficient evidence to submit the question to the jury. Upjohn's evidence on this claim consisted of the sales invoices for the four months during which the drug was distributed. Rachelle countered with evidence suggesting that Upjohn could not have reasonably expected to sell all of the pre-stocked quantities of the drug. The issue, like all the damage issues in this case, was tried thoroughly by the parties. Apparently, the jury believed the plaintiffs. That is its prerogative. Fera v. Village Plaza, Inc., supra, 396 Mich. at 647, 242 N.W.2d at 375. 56 Rachelle's second argument with respect to this issue is that Upjohn was erroneously permitted to recover the full sales price of the nitrofurantoin it distributed, rather than its net profit from those sales. It is, of course, a fundamental tenet of contract law that the purpose of damages is to compensate the aggrieved party for injury caused by the breach. See McAlpine v. AAMCO Transmissions, 461 F.Supp. 1232, 1281 (D.Mich.1978); Tel-Ex Plaza v. Hardees Restaurants, Inc., 76 Mich.App. 131, 255 N.W.2d 794, lv. denied, 402 Mich. 832 (1977). Upjohn contends that damages in the amount of the full sales price were necessary to achieve this goal. It bases this assertion on the fact that it had credited to its customers the sales price of the nitrofurantoin because of the recall and had incurred all the expenses associated with the distribution of the product. Upjohn further asserts that Rachelle has not refunded the purchase price of the defective nitrofurantoin. Upjohn concludes that the only way for it to recover its profit from these lost sales is to be awarded the full purchase price. 57 Rachelle does not directly contest this argument. It simply states that the standard measure of damages in this situation is net profits, and argues that Upjohn expressly disclaimed at trial its right to recover the full sales price. This latter contention is based on an exchange between the court and counsel for Upjohn. It occurred after the court addressed the jury in response to its request for clarification of the instructions, which pertained to the fourth category of damages-the loss of profits from sales of other Upjohn products. To ensure that the jury considered all of the instructions relating to that category of damages, the trial court reviewed that page in the context of the instructions as a whole. After the jury was excused, the following colloquy took place: 58 Mr. Clark (counsel for Upjohn): I have one point, and I did not pick it up before, and this may be the source of the confusion, I don't know. If you look at page 28, in the last full line, it says, it refers to the lost sales and that should really be profits. We are not claiming lost sales, and that may be it, because in Category 2 we were talking about sales, and I would be perfectly agreeable to having that corrected, and if that's the source of the problem, fine. If it's not, why, the correction will do no harm. 59 The Court: All right. Did you have anything further? 60 Mr. McNally (counsel for Rachelle): I have nothing to say, your Honor. 61 The Court: All right, we will look at that. You might have a point there.... 62 This disclaimer by Upjohn clearly pertained only to the claim of damages for lost profits on related drugs. Counsel was explicitly addressing the reference on page 28 to Upjohn's claimed lost sales on the four other drugs, (emphasis added), and noted that his client sought only the profits from those lost sales. Nothing was done about the misleading instruction because the jury chose to award no damages on that particular issue. 63 Rachelle's contention that Upjohn unequivocably disclaimed the damage award for lost sales of nitrofurantoin prior to the recall is without merit. No such interpretation of the above-quoted statement is reasonable; indeed, we believe that Rachelle's treatment of this issue amounts to a misrepresentation of the record. Rachelle did not object to the trial court's instruction that Upjohn sought damages for lost nitrofurantoin sales. Nor did it specifically object to the use of the phrase lost nitrofurantoin sales on the verdict form submitted to the jury. Finally, no mention of this issue was made in Rachelle's post-trial motion for a judgment notwithstanding the verdict or for a new trial. 64 To conclude, Rachelle has failed to address directly Upjohn's contention that the full invoice price of the recalled nitrofurantoin was the amount necessary to give Upjohn the benefit of its bargain. Even if it had, its failure to raise the issue below would have precluded our consideration of it on appeal. Rule 51, Federal Rules of Civil Procedure. 65 The judgment of the district Court is affirmed.