Court Opinion

ID: 9667591
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:50:18.5986+00
Date Added: 2024-06-11T18:15:39.233162
License: Public Domain

DOGGETT, Justice, concurring and dissenting.
In overturning a judgment for this family business, the majority imposes new obstacles to any commercial enterprise that has wrongfully suffered a loss of profits.1 Today’s opinion abandons our well established rules governing review of legal sufficiency of the evidence and disavows this particular businessperson’s sworn testimony as totally worthless. Although I concur in that part of the judgment affirming liability, I dissent from the court’s decision ensuring that lost profits stay lost.
While covered by a Holt Atherton repair warranty, a part broke on one of the two D-8 Caterpillar bulldozers owned and operated by Roy and Kitty Heine. Instead of providing prompt repairs, Holt Atherton allegedly left them without the use of the bulldozer for about a year. Before granting the Heines a default judgment, the trial court appropriately heard evidence on their unliquidated damages including lost profits. See Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731 (Tex.1984).
Roy calculated lost income to be $200,-200, based on the days the machine was incapacitated and also on “several” lost land clearing contracts, one of which, the O’Connor contract, was open-ended as to the amount of work. He further testified that by charging $80 per hour for bulldozer work, he realized an “immediate profit” of about $30 to $40 per hour. Additionally, he described a job for other of his equipment, which was lost due to customer impatience with the extended delays resulting from breakdown of the bulldozer. His total figure included an adjustment “for the time that there might not have been anything.” Referencing the probable familiarity of experienced business people with approximate costs and profit margins, the trial court inquired as to profits shown on their recent income tax returns. The Heines *87responded that in the year before the breakdown, they reported a profit of about $120,000 by working both dozers full time for six months. As the trier of fact, the trial judge found damages for lost profits in this lesser amount, rather than the larger initial estimate.
On appeal, Holt Atherton urges that this testimony was “too speculative” and constituted no evidence to support a finding of damages for lost profits. In reviewing a no evidence point, we have recently written that consideration must be limited to: only the evidence and inferences tending to support the jury’s finding, viewed most favorably in support of the finding, and disregardpng] all contrary evidence and inferences.
Havner v. E-Z Mart Stores, Inc., 825 S.W.2d 456, 458 (Tex.1992). Only when reasonable minds cannot differ in concluding that the evidence offered lacks probative force will it be held to constitute the legal equivalent of no evidence. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). Recognizing that where “more than a scintilla of evidence [supports] the trial court’s finding, the no evidence challenge fails,” at 84, the majority misapplies the standard and implicitly creates new requirements for what constitutes a “scintilla” in the context of lost profits.
To support a default judgment in Capitol Brick, Inc. v. Fleming Mfg. Co., 722 S.W.2d 399 (Tex.1986), a small business gave evidence of its lost profits arising from loss of use of an inadequately repaired brick-making machine. The court of appeals reversed on other nonevidentiary grounds. In reversing the judgment of the court of appeals, we addressed a previously unconsidered no evidence challenge, finding that “the record reflects more than a scintilla of competent evidence to support the ... lost profits.” Id. at 402. The record there was strikingly similar to that here, as indicated by the writing of the court of appeals on remand, addressing the remaining factual insufficiency challenge:
Sprott [its president] testified that ... Capitol Brick’s mold press which would have produced this particular ten inch brick was idle for 11V2 weeks; that during normal conditions the press would have produced some 1,750,000 bricks; and that these bricks would have sold for $120 per thousand, or some $207,000. Sprott also indicated a 25% net profit figure which translates into lost profits of $51,750. This was the only evidence concerning Capitol Brick’s unliquidated damage claim.
Fleming Mfg. Co. v. Capitol Brick, Inc., 734 S.W.2d 405, 406 (Tex.App. — Austin 1987, writ ref’d n.r.e.).2 Yet today’s opinion burdens businesses by disregarding our prior writing, creating a higher evidentiary standard for small service-oriented companies, and presuming to conduct a factual sufficiency review on a no evidence point of error. The majority considers essentially the same factual questions previously deemed the function of the court of appeals: 3 whether the market demand would have supplied as much work as the Heines estimated, the certainty of specific contract prices, and whether the second bulldozer could have handled the total market demand. At 85.
To negate the award of lost profits, the majority must take something and call it nothing — it must treat the Heines’ sworn testimony, given in response to a series of questions from the trial judge, as devoid of any legal value. This contrived disposition results from the impossibility of a remand to the court of appeals for a factual insufficiency review that Holt Atherton has failed to request.
Denial of relief in this case has ramifications that extend to all commercial litiga*88tion in which profits are an issue. The majority begins by eroding the distinction we have long recognized between uncertainty as to the occurrence of lost profits and uncertainty merely as to their exact amount. The former, but not the latter, is fatal to recovery. See, e.g., Southwest Battery Corp. v. Owen, 131 Tex. 423, 115 S.W.2d 1097, 1099 (Tex.1938).
It then announces new requirements that a party must chose a particular method for measuring lost profits, at 85, and that “[rjecovery of lost profits must be predicated on one complete calculation.” Id. at 85. We have previously declined to construct such inflexible rules that could unfairly bar recovery:
It is impossible to announce with exact certainty any rule measuring the profits the loss for which recovery may be had_ A party who breaks his con-
tract cannot escape liability because it is impossible to state or prove a perfect measure of damages.
Southwest Battery Corp., 115 S.W.2d at 1099; accord White v. Southwestern Bell Tel. Co., 651 S.W.2d 260, 263 (Tex.1983); Davis v. Small Business Inv. Co. of Houston, 535 S.W.2d 740, 743 (Tex.Civ.App.— Texarkana 1976, writ ref’d n.r.e.) (victim must present evidence from which factfinder can reasonably infer that some profit would have been made and reasonably estimate the amount of loss). Similarly, in Pace Corp. v. Jackson, 284 S.W.2d 340, 348 (Tex.1955), this court concluded that measuring lost profits is an inherently imperfect undertaking. See also Pena v. Ludwig, 766 S.W.2d 298, 301 (Tex.App. — Waco 1989, no writ). Small service businesses offering skillful operation of their equipment are entitled to some latitude in measuring inexact lost profits sustained from loss of use. Chemical Exp. Carriers, Inc. v. French, 759 S.W.2d 683, 687-88 (Tex. App. — Corpus Christi 1988, writ denied) (owner’s estimated lost profits for charter company’s disabled airplane legally sufficient). See also Texas Tool Traders, Inc. v. Mosley Machinery Co., 422 S.W.2d 229 (Tex.Civ.App. — Waco 1967, no writ).
The majority’s professed lack of “any basis for determining whether the damages were established with reasonable certainty or were based on pure speculation,” at 84, discounts the Heines’ response to the trial court’s inquiry about how they “calculate[d]” their damages. They referenced hourly charges, lost contracts, cost factors, and down-time adjustments. Estimations, when “given in terms of calculations, [constitute] more than conjecture, speculation or guesswork” and must be evaluated by the finder of fact. Reliance Universal Inc. v. Sparks Industrial Services, 688 S.W.2d 890, 895-96 (Tex.App. — Beaumont 1985, writ ref’d n.r.e.).
Though criticized by the majority for failing to explain “that they had lost out on specific contracts,” at 85, the Heines were not necessarily required to identify specific, measurable, lost contracts because they were an existing business with a history of profitability.4 Such an operation ordinarily encounters lesser evidentiary hurdles to show lost profits already sustained than would a business with little record of past earnings that seeks to show future lost profits. See Barbier v. Barry, 345 S.W.2d 557, 563 (Tex.Civ.App. — Dallas 1961, no writ). Among the methods a party may use to calculate its lost profits is either a history of profitability or the actual existence of lost contracts. Allied Bank West Loop v. C.B.D. Assoc., 728 S.W.2d 49, 54-55 (Tex.App. — Houston [1st Dist.] 1987, writ ref'd n.r.e.).
There is undoubtedly some legal evidence to support the Heines’ lost profits damages. Since there is no factual insufficiency point of error requiring further review by the court of appeals, its judgment should be affirmed.
Justice MAUZY joins in this concurring and dissenting opinion.

. In burdening small businesses like the one involved here, the majority continues an unfortunate trend of insensitivity to the realities of independent business. See Caller-Times Publishing Co. v. Triad Communications, Inc., 826 S.W.2d 576, 580, n. 4 (Tex.1992) (Doggett, J., dissenting) (small business made easy prey for anticompetitive, monopolistic practices); Crim Truck & Tractor Co. v. Navistar Inti Trans. Corp., 823 S.W.2d 591, 597 (Tex.1992) (Mauzy, J., dissenting) (local dealer denied remedy for abuse by a franchisor).

. Similarly, in Texas Gas Explor. v. Broughton Offshore, 790 S.W.2d 781, 789 (Tex.App. — Houston [14th Dist.] 1990, no writ), a party’s uncon-troverted testimony, based on his industry experience, regarding estimated profits from disabled equipment was held to constitute legally sufficient evidence.

. Compare Capitol Brick, 734 S.W.2d at 407, in which the court of appeals on remand examined the factual questions of whether the market demand existed for the estimated production it would have produced if the machine had been working, the certainty of the estimated price, and whether the demand could have been met from existing inventory in determining that evidence presented was factually insufficient.

. Nor were they required to prove their previous profits "remainfed] stable or [grew] to support an award for lost profits in subsequent years.” Martin v. Lou Poliquin Enterprises, Inc., 696 S.W.2d 180, 187 (Tex.App. — Houston [14th Dist.] 1985, writ refd n.r.e.).