Opinion ID: 1598750
Heading Depth: 1
Heading Rank: 3

Heading: Sufficiency of the Evidence to Establish Lost Profits.

Text: Amana claims the Ballards' evidence regarding lost profits was overly speculative, precluding them from recovering such damages. See Hoefer v. Wisconsin Educ. Ass'n Ins. Trust, 470 N.W.2d 336, 341 (Iowa 1991). It claims the Ballards relied exclusively on the testimony of their expert, Dr. Michael Behr. According to Amana, Dr. Behr's economic model was faulty in several particulars. Amana claims he failed to distinguish between lost revenues and lost profits, calculated damages without distinguishing between those associated with ingesting the toxic corn and those associated with purchasing diseased animals, failed to properly define profits, and relied upon improper assumptions when calculating the growth of the swine herd. The Ballards claim precedent indicates it is merely necessary to show a reasonable basis from which damages may be inferred or approximated. See Smith v. Smithway Motor Xpress, Inc., 464 N.W.2d 682, 688 (Iowa 1990) (All that is required to justify an award of damages is that the plaintiff produce the best evidence available and that this evidence afford a reasonable basis for estimating the loss.) (citing Nicholson v. City of Des Moines, 246 Iowa 318, 327, 67 N.W.2d 533, 538 (1954)). They claim Dr. Behr's testimony satisfied this requirement. Dr. Behr is a forensic economist with substantial experience in agribusiness. He received Bachelor of Science and Master of Science degrees from the University of Minnesota in 1957. He received minors in plant industry and animal husbandry. He later received Master of Arts and Doctor of Philosophy degrees from the University of Wisconsin with majors in agricultural economics and a minor in economics. Additionally, following the receipt of his first Master's degree, he spent six years running a farm. Dr. Behr projected a level of revenue associated with 104 breeding sows, the number of sows the Ballards were utilizing at the time their herd ingested the toxic corn. He then subtracted the variable expenses to arrive at expected profits. See King Feature Syndicate v. Courier, 241 Iowa 870, 43 N.W.2d 718 (1950) (lost-profit damages calculated by subtracting variable expenses from revenues). He compared this expected profit level to the actual profits experienced by the Ballards. He based his figures upon documentation provided by the Ballards and farm budgeting data provided by Iowa State University when the Ballards' documentation was lacking. The figures from Iowa State University are an estimation of the costs of feed and other inputs that are required for particular levels of hog production. These figures are extrapolated from actual farm data. Dr. Behr calculated the total loss due to business interruption to be $220,400. We believe Dr. Behr's testimony provided a reasonable basis upon which the jury could determine lost profits. The jury apparently recognized some weaknesses in Dr. Behr's testimony, as it awarded only $75,000 in lost profits compared to Dr. Behr's estimation of $220,400. See Mercy Hosp. v. Hansen, Lind & Meyer, 456 N.W.2d 666, 672 (Iowa 1990) (it is for the jury to determine the weaknesses in an expert's testimony). Because the jury's award is within the evidence, we will not disturb it. See Haumersen v. Ford Motor Co., 257 N.W.2d 7, 16 (Iowa 1977).