Court Opinion

ID: 9756387
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:26:25.486858+00
Date Added: 2024-06-11T07:28:20.993157
License: Public Domain

LAURA DENVIR STITH, Chief Justice,
concurring in part and dissenting in part.
I concur in so much of the principal opinion as holds that damages may be recovered for loss of use of the truck while it was being replaced, for the reasonable period that it would take to replace the truck. I disagree that Gateway waited only a reasonable period of time to replace the truck, and I disagree that it proved its lost profits with reasonable certainty, and, so, I dissent from those portions of the opinion that affirm the award of lost profits.
Gateway presented evidence that its foam truck was unusual and required a specialized replacement truck. Replacement of such an unusual truck reasonably might be expected to take extra time and to support an award of lost profits for the reasonable period necessary to replace this unusual item.
Gateway’s evidence was not actually based on evidence that it was so difficult to replace the truck that it could not do so for two years, however. To the contrary, it simply said it did not have the money to replace the truck. This seems surprising in light of Gateway’s claim through its accountant that it was making hundreds of thousands of dollars per year in profits right up to the time that its truck was in the accident with Jokerst. But, had Gateway presented evidence that it needed the other profits to keep the business as a going concern and that it sought loans to purchase a second truck but it was refused, the award of lost profits for the period it took to save the money to modify a truck to Gateway’s purposes might have been supported.
But Gateway did not offer such proof. Rather, the evidence showed that Gateway simply chose not to use its profits from its foam insulation business to replace the damaged truck or to secure a loan for a new truck. Stating that he could not afford the payments on a new ready-to-go truck, the owner said he borrowed a small amount to purchase a used truck and then spent two years fixing it up. Gateway offered no evidence of what the costs of a sufficient loan would have been or any evidence that it made any further attempts to secure a loan. Instead, Gateway used its assets to build up other aspects of its business, including hiring two new employees. After two years, it finally finished building its second truck. It then sought to recover the full amount of profits it believed it would have earned had it used the truck for the prior two years.
This was unreasonable. To justify such a lengthy period of delay in replacing the truck, Gateway should be required to present specific evidence as to why its profits from its existing business could not have been put into building or purchasing the *191second truck and why a loan was not forthcoming. As this Court recently noted, “The goal of awarding damages is to compensate a party for a legally recognized loss ... [and a] party should be fully compensated for its loss, but not recover a windfall.” Ameristar Jet Charter, Inc. v. Dodson Int'l Parts, Inc., 155 S.W.3d 50, 54 (Mo. banc 2005). Unless proof of a reasonable inability to replace the truck for the full two-year period is shown, Gateway effectively is being rewarded by receiving the full profit it would have earned had it been doing work with the truck, with none of the risk and trouble of actually doing that work, for what is apparently an indefinite period, as the Court’s opinion does not seem to set an outside time limit on the length of time for which lost profits can be obtained. Perhaps this is why prior cases have not permitted the recovery of loss of use damages in addition to replacement value: It is susceptible to abuse.
To avoid that danger, it would be appropriate to shift the burden of proof to the party seeking loss of use damages in cases of replacement rather than repair and require that party to show that it could not have further mitigated its damages further during the period for which it seeks loss of use damages. Because loss of use is a new item of damage in a case such as this, I would remand to give Gateway the opportunity to fill in the gaps in its evidence in this regard.
The record also does not support the award of $120,000 in lost profits, even were Gateway entitled to lost profits for the entire two-year period at issue. Gateway presented some evidence of its earnings over the years prior to accident. During most of that period, however, it had only one working truck because one of the trucks was often out for maintenance. To show lost profits, it needed to present evidence of specific business it had to turn away because of the lack of a second truck or at least show a downturn in business it could attribute to servicing fewer customers. This is in keeping with the standard of proof, noted by the principal opinion:
For an award of lost profits damages, a party must produce evidence that provides an adequate basis for estimating the lost ‘profits with reasonable certainty. To create an adequate basis for an award of lost profits, a plaintiff must provide evidence of the income and expenses of the business for a reasonable time before the interruption caused by defendant’s actions, with a consequent establishing of the net profits during the previous period. While an estimate of prospective or anticipated profits must rest upon more than mere speculation, uncertainty as to the amount of profits that would have been made does not prevent a recovery.
Wandersee v. BP Products North America, Inc., 263 S.W.3d 623, 633 (Mo. banc 2008) (emphasis added) (internal citations and quotations omitted).
In this case, evidence of lost profits was not provided by the business owner, but by the business’ accountant. The holding in Parshall v. Buetzer, 195 S.W.3d 515, 522 (Mo.App.2006), and similar cases that a business owner can provide testimony as to the business’ value, therefore, is inapplicable. Gateway’s accountant did not purport to base her testimony on any evidence as to specific lost business, or as to a trend over a reasonable prior period showing profits that then she forecast would continue in light of real world conditions, or anything approaching a traditional method of proving lost profits. Instead, she testified as to the percentage of profits in the construction industry as a whole over the next two years. It had 18-percent profits, she said, so it was reasonable to assume that Gateway also would have had such *192profits. She did not show that Gateway’s profits previously had tracked the profits of the construction industry, however, or that other foam insulators’ profits matched those of the construction industry generally, or show how Gateway’s profits in the past had compared to those of other insulators.
If the accountant’s testimony is sufficient, then in any case alleging lost profits, the plaintiff would be entitled to the industry average of profits, less variable expenses. Respectfully, that is not reasonable proof of lost profits. Rather, it is the definition of speculation.
For these reasons, I dissent from the award of lost profits and the amount thereof.