Opinion ID: 1282489
Heading Depth: 2
Heading Rank: 4

Heading: Compensatory Damages Supported by Substantial Evidence.

Text: Allendale attacks the award of $24,670,724 in compensatory damages as being unsupported by substantial evidence. While objecting to numerous other problems and errors in the court's calculations and decision, Allendale makes three specific challenges to the award. Allendale first claims error in the trial court's refusal to consider certain receipts by UNC from the sale of borrowed yellowcake. It contends the profit from those sales should have been offset against the business interruption losses caused by the dam failure, thus reflecting no loss of net profits by UNC. The trial court found, on evidence produced by UNC, that the borrowings and sales relied on by Allendale to support its argument were normal business practices of UNC and would have occurred even in the absence of the dam collapse. Consequently, that income would have had no bearing on lost income from UNC's own production. Additionally, the argument of Allendale gives no recognition to UNC's obligation to repay the borrowings. At the time of trial, there was evidence that sales on borrowed uranium had no impact whatever on UNC's losses from the shut-down of production; there also was testimony that the sales of borrowed uranium created no profits for UNC over its liability for repayment, or over the profit ordinarily to be anticipated by UNC in its engagement in this type of business practice common to the industry. UNC makes a further point in refutation of Allendale's contention: The Allendale policy covers loss of production, not loss of sales. In its Adjuster Manual, Allendale rejects the argument it now makes, and instructs its adjusters that with respect to business interruption claims, [t]he insured should never be given the impression that our policy covers loss of sales[;] it covers loss of production. The insureds do not have to prove a loss of sales. If UNC would have made sales on borrowed supplies whether or not its own production had been interrupted, that income is irrelevant to a determination of the covered loss of production. The court's findings regarding UNC's lost net operating profits, resulting from interruption of its own production and its consequent inability to accept bids from willing purchasers, is supported in the evidence and will not be disturbed on appeal. Howard v. Howard, 100 N.M. 105, 666 P.2d 1252 (1983). Allendale next objects to the trial court's finding that UNC could not have made up its loss of production within a one-year period following repair of the damaged property, which Allendale delineates as the reasonable time required by the policy. Without citation to any authority, Allendale argues that the policy provision requiring its insured to make up lost production through the use of any property    obtainable from other sources obligated UNC to buy yellowcake on the open market. Again, Allendale misreads its own policy. It is production which is to be made up, not sales. The argument advanced by Allendale was specifically rejected in Gordon Chem. Co. v. Aetna Casualty & Surety Co., 358 Mass. 632, 266 N.E.2d 653 (1971). We decline to hold that a mineral producer must buy the refined product from other sources to satisfy the make-up of lost production requirement of its business interruption coverage. Finally, Allendale disagrees with the trial court's conclusion that only one day of the long delay in UNC's getting back to full operating capacity was because of government regulation of construction or repair. Any increases in business losses resulting from compliance with law and ordinance requirements are excluded from the policy coverage. There was significant and substantial evidence presented by UNC on the various causes of delay, including the need to investigate the cause of the collapse, development of repair designs, acquisition and testing of repair materials, and inability to repair the dam during the winter months. Although there was some evidence UNC might have restructured portions of the tailings area to permit earlier resumption of milling, there was also evidence that UNC partially resumed operations as early as October, 1979 with modified facilities. But the overall repair delay was complicated by conflicts among the engineers regarding making repairs before design, engineering and construction plans had been fully examined and proven. If those delays occasioned by principles of engineering prudency overlapped the same delay period imposed by standards of a regulatory body that had to be met before production could be restarted, it cannot be said that delay was due only to the law and ordinance regulation of reconstruction and repairs. The trial court's determination regarding the effect of governmental regulation does not fail for lack of substantial evidence. In its generalized attack on the amount of the compensatory damage award, aside from the specific objections addressed above, Allendale contends that the trial court made an error of $519,724 in the award for extraordinary losses. We note that UNC requested a finding of $4,566,902 for that item of damages and of $2,203,719 for carrying costs, based upon exhibits it submitted at trial; Allendale requested a finding of no extraordinary losses or carrying costs; and the trial court awarded damages to UNC of $3,464,240 and $1,859,591, respectively. Allendale's argument is that UNC referred in a footnote in its post-trial brief to a figure of $2,944,516 as the amount of extraordinary expenses, not compensated under the Appalachian policy, to partially make up for lost production or to reduce loss. Allendale says the difference between the amount awarded and the amount discussed in UNC's brief shows the trial court's superficial consideration of the damage issues. The trial court obviously rejected $1,102,662 of UNC's request for a finding of extraordinary loss damages of $4,566,902, and disallowed $344,128 of its requested finding of $2,203,719 for carrying costs and for fixed, ongoing administrative and overhead expenses. Since the evidence could have supported a larger amount of damages in each category of loss and UNC has not appealed the court's reduction of the amounts claimed, we do not see how Allendale has been injured. The footnote reference relied upon by Allendale obviously conflicts with other evidence of loss that was introduced at trial. Precise mathematical certainty of computation is not required when the evidence encompasses the monetary amount allowed. Acme Cigarette Services, Inc. v. Gallegos, 91 N.M. 577, 577 P.2d 885 (Ct.App. 1978). The trial court's award of compensatory damages within the range shown by the evidence is affirmed. See Jackson v. Goad, 73 N.M. 19, 385 P.2d 279 (1963); Wirth v. Commercial Resources, Inc., 96 N.M. 340, 630 P.2d 292 (Ct.App.), cert. denied, 96 N.M. 543, 632 P.2d 1181 (1981).