Court Opinion

ID: 9666372
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:12:12.256779+00
Date Added: 2024-06-11T18:15:27.062128
License: Public Domain

DOWD, Judge,
dissenting.
I respectfully dissent.
I disagree with that portion of the majority opinion eliminating Scullin Steel’s lost profit award. Due to the reliance by this court in Scullin I on an erroneous statement in the record, subsequently corrected on remand, I would reinstate the trial court’s original award of lost profits in the amount of $431,208.00.
In Scullin I, 708 S.W.2d 756 (Mo.App.1986), this court remanded in part for a recalculation of lost profits based on evidence in the record of an increase in labor costs for the remaining years of the sales contract. In the original proceeding, the trial court projected lost profits for the term of the sales contract based on direct cost figures for 1980, which included the cost of labor in 1980. Due to evidence in the record that the labor contract was renegotiated for the period 1981-83, we concluded in Scullin I that the direct cost figure should be adjusted to reflect the increased cost of labor. Id. at 765.
The evidence of an increase in labor costs was provided by the deposition testimony of William F. Golus, who had served as Scullin’s Vice President of Manufacturing when the union labor contract was negotiated. In the deposition testimony offered by PACCAR, Golus stated he “believed” the new labor contract took effect in 1981 and that the new contract would have resulted in a $10,000,000.00 increase in labor costs from 1981-83. It was Golus’ testimony that the new labor contract provided for an increase of seventy-five cents per hour in direct labor the first year of the contract, an increase of forty-five cents per hour the second year, and an increase of twenty-five cents per hour in the third year.
In actuality, however, the new labor contract became effective in 1980 and the sharpest increase in the labor contract (seventy-five cents per hour) was experienced that year and was included in the trial court’s original net profit projection. A copy of the new labor contract was appended to Scullin’s Memorandum Suggesting a Proposed Recalculation of Damages in Accordance With the Opinion of the Missouri Court of Appeals. The labor contract *916showed the seventy-five cents per hour increase was effective March 9, 1980.
Scullin filed its memorandum with the appended labor contract pursuant to the trial court’s order on remand requiring the parties to file memoranda of law and to brief the issue of whether further evidence should be allowed in the cause. Both sides submitted documentary evidence not included in the original proceeding. In its Motion to Amend the Order Amending Judgment on Remand, PACCAR included a copy of the 1977 labor contract and a certified copy of the Consumer Price Index. It was in the sound discretion of the trial court to allow the labor contract in the cause in order to show the exact facts and the court properly considered that evidence in determining lost profits. See, Matter of Estate of Viviano, 624 S.W.2d 130, 133 (Mo.App.1981) (whether to allow a party to present further evidence after the evidence is closed is a matter of trial court discretion and failure to allow the introduction of material evidence which might substantially affect the merits of the case would be an abuse of discretion).
In a well-intentioned attempt to comply with the opinion of this court in Scullin I and at the same time to effect a decision fair to both parties, the trial court on remand adopted an apparent compromise between the parties, suggested in their mem-oranda, of a five percent increase in labor costs in 1981. The court then projected lost profits for the remainder of the contract term based on the 1981 figure for direct costs concluding that it was not possible to arrive at a precise measure of predicted costs and profits for 1982 and 1983. The court assumed that adjustments in cost or price would have been made to retain the 1981 level of profits and awarded lost profits in the amount of $240,408.00.
Considering the factual change on remand, the trial court should not have regarded itself bound by our prior decision directing an adjustment in the direct cost figure to reflect an increase in labor costs. We remanded for a recalculation of damages and authorized the trial court to make “adjustments justified by the evidence.” Scullin I, supra, at 765. Further, a previous holding by the court of appeals does not conclude an issue on remand where there is a change in the evidence. Gamble v. Hoffman, 732 S.W.2d 890, 895 (Mo. banc 1987). The actual effective date of the labor contract amounted to a crucial change in the evidence.
In light of the effective date of the labor contract, the original lost profit award of $431,208.00 should have been reinstated. According to PACCAR’s own expert, Scul-lin achieved a 1980 operating profit of $2,700,000.00. The actual effective date of the labor contract shows Scullin was able to achieve this profit despite absorbing the steepest percentage of the labor cost increase. This fact fortifies Scullin’s position that labor costs were offset by increased efficiencies. Direct costs should have been determined by the 1980 figures and the trial court’s acceptance of Scullin’s offsetting efficiencies argument, in calculating net profits for 1982 and 1983, should have been extended to offset any increase in Scullin’s labor costs in 1981.
For the foregoing reasons, I respectfully dissent.