Opinion ID: 2098943
Heading Depth: 1
Heading Rank: 4

Heading: Blue Cross's Motion for a New Trial Concerning Lost Profits

Text: RIMEC maintains on appeal that the Superior Court erred in granting that portion of Blue Cross's motion for a new trial based on the jury's award of $40,434.48 for lost profits. The trial court ordered a new trial on that issue alone, unless RIMEC accepted a remittitur of the full amount awarded for lost profits. As previously stated, RIMEC's final contract with Blue Cross was set to expire on January 31, 1998. Because Blue Cross terminated the contract on October 31, 1997, RIMEC sought a damage award for the three-month period by which the contract term was shortened. Ms. Booth was the primary witness to testify about RIMEC's claim for lost profits. One of the best ways of establishing reasonably certain future lost profits    is to use the operational history of the enterprise    or a representative portion thereof   . UST Corp. v. General Road Trucking Corp., 783 A.2d 931, 942 (R.I.2001). Lost profits are a function of two variables: (1) the dollar value of the contracts diverted from the plaintiff, and (2) the plaintiffs profit margins if it had obtained or maintained the relevant contract. Long v. Atlantic PBS, Inc., 681 A.2d 249, 252 (R.I.1996). This is consistent with the basic precept of contract law that courts should award such measures of damage as will serve to put the injured party as close as is reasonably possible to the position he would have been in had the contract been fully performed. George v. George F. Berkander, Inc., 92 R.I. 426, 430, 169 A.2d 370, 372 (1961). All damages for lost profits must be established with reasonable certainty, although actual certainty is, logically, not required for recovery of future lost profits. Guzman v. Jan-Pro Cleaning Systems, Inc., 839 A.2d 504, 508 (R.I.2003); Abbey Medical/Abbey Rents, Inc. v. Mignacca, 471 A.2d 189, 195 (R.I.1984). Ms. Booth's lost-profit calculation was a fairly straightforward projection based on RIMEC's 1997 federal tax return. Blue Cross does not seem to fault her general methodology. However, on cross-examination, Blue Cross exposed an error in Ms. Booth's analysis. As explained previously, Ms. Booth's analysis began with RIMEC's net income for 1997 of $68,981. It was her assumption that this number was based exclusively on the net receipts from Blue Cross for January 1997 through October 1997. Ms. Booth acknowledged that if some income included in that amount was attributable to another period, it would render her projection inaccurate. Mr. Koch testified that RIMEC's gross revenue for 1997 included a reconciliation payment of $223,003, paid by Blue Cross in 1998, [7] for past underpayments of monthly capitation fees. [8] This reconciliation payment reflected amounts due for all five years Blue Cross and RIMEC did business together. Specifically, $51,127.99 was attributable to underpayment for services in 1993, $22,806.83 was attributable to 1994, $57,849.72 was attributable to 1995, and $27,189.02 was attributable to 1996. Only $64,029.38 was attributable to work RIMEC performed in 1997. Stated differently, $158,973.56 was unrelated to RIMEC's operations in 1997. If RIMEC's net profit had been adjusted to reflect this figure, RIMEC actually would have reported a net loss of $89,992.56 in 1997. RIMEC's argues that the jury was entitled to base its decision on Ms. Booth's calculation of lost profits despite this error because mathematical certainty is not required when projecting future damages. RIMEC points out that Ms. Booth's estimate was a figure based on a representative portion of RIMEC's operational history, which is a valid basis for predicting lost profits. Further, RIMEC contends assumptions were required and Ms. Booth's opinion rested upon reasonable assumptions. RIMEC also contends that because Blue Cross's wrongful conduct rendered the ascertainment of the precise damages suffered by RIMEC difficult, Blue Cross should not be entitled to complain that RIMEC's damages were not measured as precisely as they otherwise could have been. [W]e accord great weight to a trial justice's decision on a motion for a new trial. Oliveira v. Jacobson, 846 A.2d 822, 826 (R.I.2004). A trial justice acts as a superjuror when ruling on such a motion. Franco v. Latina, 840 A.2d 1110, 1111 (R.I.2004). In this role, the trial justice should review the evidence and exercise his or her independent judgment `in passing upon the weight of the evidence and the credibility of the witnesses.' Id. (quoting Martinelli v. Hopkins, 787 A.2d 1158, 1165 (R.I.2001)). We will not overturn a trial justice's decision in this regard unless the trial justice overlooked or misconceived the evidence or otherwise was clearly wrong. Id. at 1112. We are satisfied that such is not the case under the instant facts. RIMEC alternatively requests a reasonable opportunity to accept the Superior Court's remittitur mandate. [9] Upon remand, we direct that RIMEC be afforded a ten-day period within which to comply with the remittitur mandate. See DeLeo v. Anthony A. Nunes, Inc., 546 A.2d 1344, 1348 (R.I. 1988) (denying the plaintiffs' appeal from a reduced damage award, but allowing the plaintiffs to accept or reject a remittitur mandate). If there is no compliance by RIMEC, a new trial will be held limited to the issue of damages for RIMEC's claim for lost profits. See id.