Court Opinion

ID: 9926393
Source: CourtListenerOpinion
Date Created: 2024-01-24 17:09:52.490924+00
Date Added: 2024-06-11T09:22:44.311271
License: Public Domain

No. 36                      January 24, 2024          273

           IN THE COURT OF APPEALS OF THE
                   STATE OF OREGON

                        Richard WEINER,
                         individually and
                  dba Sunnyview Labradors and
                  Brad Barcroft, individually and
                    dba Driftcreek Labradors,
                      Plaintiffs-Respondents,
                                 v.
    INTERNATIONAL ANIMAL SEMEN BANK, LLC,
               Defendant-Appellant,
                      and
                        Carrol PLATZ,
                       individually and
         dba International Animal Semen Bank, LLC,
                         Defendants.
                 Clackamas County Circuit Court
                      17CV10328; A174441

   Heather Karabeika, Judge.
   Submitted November 18, 2021.
   Nicholas O. Herman argued the cause for appellant. Also
on the briefs was Lower Columbia Law Group LLC.
   Geordie Duckler argued the cause for respondents. Also
on the brief was Geordie Duckler, P. C.
  Before Shorr, Presiding Judge, Lagesen, Chief Judge,
and Powers, Judge.*
   POWERS, J.
   Reversed and remanded.

______________
   * Lagesen, C. J., vice Sercombe, S. J.
274   Weiner v. Int. Animal Semen Bank, LLC
Cite as 330 Or App 273 (2024)                             275

        POWERS, J.
         Defendant International Animal Semen Bank
(IASB), who was in the business of collecting, storing, and
maintaining canine semen for breeders, appeals from a gen-
eral judgment issued after a jury awarded plaintiffs Richard
Weiner and Brad Barcroft a total of $400,000 in lost profits
as economic damages. On appeal, defendant contends that
the trial court erred in denying its motion for directed ver-
dict because plaintiffs did not present legally sufficient evi-
dence for the jury to consider lost profits. For the reasons
described below, we agree with defendant’s argument and
reverse and remand.
         We review the trial court’s denial of defendant’s
motion for directed verdict for legal error. Miller v. Columbia
County, 282 Or App 348, 349, 385 P3d 1114 (2016), rev den,
361 Or 238 (2017). A court should grant a directed verdict
only when the evidence is insufficient to allow a factfinder
to find the facts necessary to establish each element of the
claim at issue. Id. In reviewing the denial of a motion for a
directed verdict, we consider the evidence in the light most
favorable to the nonmoving party—as well as all reason-
able inferences that may be drawn from that evidence—to
determine if the moving party was entitled to prevail as a
matter of law. See Ballard v. City of Albany, 221 Or App 630,
639, 191 P3d 679 (2008) (outlining standard of review and
explaining that the court cannot weigh conflicting evidence
or evaluate credibility). We describe the facts below in accor-
dance with that standard.
         Plaintiffs Weiner and Barcroft, who are profes-
sional dog breeders specializing in hunting and field dogs,
collect and sell semen from studs as part of their business.
Plaintiffs hired defendant to maintain dog semen in frozen
vials and store them in a facility to preserve the condition
of the semen for future use. After defendant informed plain-
tiffs that it was closing their accounts, plaintiffs agreed
to have the vials stored in a different facility and had the
semen independently tested by another company to ensure
that it was in the same condition as when it was initially col-
lected from the dogs. Following those tests, plaintiffs filed
this action alleging that the semen stored by defendant had
276                      Weiner v. Int. Animal Semen Bank, LLC

dropped in quality, and several vials were unaccounted for
after an inventory count.
          Plaintiffs’ claims against defendant were for breach
of bailment and negligence.1 As part of those claims, Weiner
sought $500,000 in general, unspecified economic damages,
and Barcroft sought $300,000 for the same.2 At trial, plain-
tiffs testified about their economic loss resulting from defen-
dant’s actions and each introduced one exhibit to show how
they arrived at their requested amount.
         Weiner testified that he sold puppies bred from his
stud dogs for about $2,500 or $3,000 each. Weiner also tes-
tified that he sold vials of semen for about $3,000 each and
that it takes two vials to impregnate a dog. Weiner later
testified that, after “amortiz[ing] the cost of collection, freez-
ing, storage, everything, plus the value of the semen from
the stud dog that it’s grown from * * * [t]he bill is roughly
$2,500 just to inseminate” a dog.
         Plaintiffs also introduced Exhibit 79, which was
titled “Sunnyview Financial Impact Calculation,” in sup-
port of Weiner’s request for economic damages. Exhibit 79
describes $2,516 as the “[average] [c]ost [p]er [p]uppy,” not-
ing that each breeding produces about eight puppies and
that Weiner had five litters to breed, which totaled $100,624
in “lost litter revenue.” The exhibit also shows that Weiner
had 144 vials in storage with defendant that he planned to
sell for $3,000 each and that he suffered $432,000 in “lost
semen sales revenue.” Together, the exhibit shows a “calcu-
lated [t]otal loss” of $532,624, which Weiner rounded down
to arrive at his prayer of $500,000. After the table showing
the number of puppies from each breeding, the exhibit ends
with a “clarifications” section that explains: “This is [the]
    1
      Plaintiffs also sued defendant for negligent misrepresentation, fraudulent
misrepresentation, and for violations of the Oregon Unlawful Trade Practices
Act. Those claims are not before us, however, because the trial court later dis-
missed those claims and only the breach of bailment and negligence claims pro-
ceeded to the jury. Further, the operative complaint also named Carrol Platz,
who was an employee of IASB, as a codefendant. The trial court dismissed all
claims as to Platz, and he is not a party to this appeal.
    2
      Damages are required elements for a plaintiff to recover for breach of bail-
ment and negligence. Barnes v. Lackner, 93 Or App 439, 442, 762 P2d 1043 (1988)
(breach of bailment); Sloan v. Providence Health Sys.-Oregon, 364 Or 635, 643,
437 P3d 1097 (2019) (negligence).
Cite as 330 Or App 273 (2024)                               277

cost of the puppy only. Does not include” additional costs
for veterinarian services, microchipping, feed, crate, adver-
tising, semen storage, insemination, and “any other cost of
operation.”
         For his part, Barcroft testified that, when this law-
suit started, he sold puppies for $1,500 each, and that he
increased his prices by the time of trial to $2,000 per puppy.
Barcroft explained that most breeding sessions produced
about eight puppies and that his recordkeeping was done
“all together” in that he tracked “gross sales [and] gross
expenses.”
         Plaintiffs introduced Exhibit 50.5, titled “Semen
Storage Tracking Sheet,” in support of Barcroft’s damages.
That exhibit contains a section for “[p]rojected [f]inancial
[i]mpact due to loss of semen viability,” which shows that
Barcroft was unable to perform 13 breedings, which would
have had eight puppies per litter minimum, for a total of
104 puppies that he was unable breed. The exhibit also lists
a $2,500 sale price for each puppy—a higher amount than
Barcroft testified to—and arrives at a total financial impact
of $301,600 from the damaged and lost vials. Barcroft testi-
fied that he arrived at his $300,000 damage request by tak-
ing the number of vials that he had stored with defendant
and multiplying the number of vials by the average eight
puppies per breeding to get the total number of lost puppies.
He then took the total number of lost puppies and multi-
plied that by a $2,500 “validated” sales price, which created
a subtotal of $260,000. He then adjusted that subtotal to
account for the “[f]uture rise in pricing that would happen
over time as the semen would not have degraded” to arrive
at a total request of $300,000 in damages.
         On the third day of trial, after plaintiffs rested their
case, the trial court heard argument on defendant’s written
motion for a directed verdict on all of plaintiffs’ claims. In
that motion, defendant argued that, because both plaintiffs
presented insufficient evidence for the jury to calculate lost
profits as damages without engaging in speculation, the
trial court should enter a directed verdict or withdraw the
issue of lost profits from the jury’s consideration. Plaintiffs
did not file a written response. Plaintiffs’ counsel explained
278                  Weiner v. Int. Animal Semen Bank, LLC

that he was just handed the motion in the morning, and he
further declined the trial court’s offer to take a recess to
review it. Plaintiffs argued that the trial court should deny
the motion:
   “[T]here was testimony about the cost of the dog. There was
   testimony about the cost of a vial. There was testimony
   that the vials were lost and that the Plaintiffs sold dogs
   and sold semen, and without the semen and without the
   dogs, they lost money. That’s all the elements you need in
   terms of a directed verdict.
       “I don’t—and obviously, we’ll get to this again, and the
   Court knows this. But [defendant’s] standard is [defendant
   has] to show no evidence. Not weak evidence or insubstan-
   tial evidence. But no evidence at all on damages. And I pre-
   sented through both Plaintiffs plenty of evidence for the
   jury to make a calculation. Not just speculate. It wasn’t
   just the type of case where the Plaintiff says, I lost a lot of
   money but I have no way for you to actually know that, I
   just want the money.
      “This is where actually both Plaintiffs went, took some
   trouble to explain their business practices and to explain
   their expenses, and to explain what it is the value of that
   was lost. So those are lost profits. And they certainly are
   receivable in any of—under any of the claims. So yes, under
   a no evidence standard this would be plenty of evidence for
   damages for both.”
The trial court denied the motion for directed verdict and
alternative motion to withdraw the lost profits from the
jury’s consideration, and later the jury returned a verdict
finding defendant negligent and in breach of bailment as
to both plaintiffs. The jury awarded Weiner $300,000 and
Barcroft $100,000 in economic damages. Defendant timely
appeals.
          On appeal, defendant contends that the trial court
erred in denying its motion for a directed verdict or alterna-
tive motion to strike the claim for lost profits, arguing that
the evidence was legally insufficient for the jury to award lost
profits. Defendant asserts that plaintiffs presented a theory
of lost revenues, not a theory of lost profits, to the jury and
maintains that lost revenues are not legally cognizable dam-
ages. See Cruz Development, Inc. v. Yamalova, 174 Or App
Cite as 330 Or App 273 (2024)                              279

494, 499, 26 P3d 174 (2001) (explaining that a party seeking
lost profits must present evidence that refers “unambigu-
ously to net profits” (internal quotation marks and citation
omitted)). Plaintiffs dispute defendant’s characterization of
their theory for damages by arguing that they did not make
a case of lost revenue or lost profits, but rather were seeking
generalized economic damages. Plaintiffs further argue that
the jury had sufficient evidence to award lost profits.
         A party seeking lost profits as damages “ ‘must estab-
lish with reasonable certainty the existence and amount of
lost profits.’ ” Summa Real Estate Group, Inc. v. Horst, 303
Or App 415, 422, 464 P3d 483 (2020) (quoting Peterson v.
McCavic, 249 Or App 343, 354, 277 P3d 572, rev den, 352
Or 564 (2012)). “Reasonable certainty” is not a demanding
standard; it requires “reasonable probability,” not “abso-
lute certainty.” City of Eugene v. Monaco, 171 Or App 681,
688, 171 P3d 544 (2000), rev den, 332 Or 240 (2001). The
evidence must refer “unambiguously to net profits” because
only net lost profits—not lost revenue—may be recovered.
Cruz Development Inc., 174 Or App at 498. Importantly,
to send the issue of lost profits to the jury, a party must
submit evidence of the expenses that the party would have
incurred to earn the alleged lost revenue. See Summa Real
Estate Group, 303 Or App at 424 (noting that the issue of net
lost profits requires both evidence of lost revenue and lost
expenses incurred to earn that lost revenue).
         Thus, the question on appeal when reviewing the
trial court’s denial of a directed verdict or alternative motion
to strike the issue of lost profits is “whether there was evi-
dence in the record to permit a finding of some net lost prof-
its.” Cruz Development, Inc., 174 Or App at 498 (emphasis
and citation omitted). A plaintiff must present more than
speculative or unverifiable estimates of lost profits. JH
Kelly, LLC v. Quality Plus Services, Inc., 305 Or App 565,
585, 472 P3d 280 (2020); see also Verret v. Leagjeld, 263 Or
112, 115, 501 P2d 780 (1972) (explaining that “the essential
ingredient of proof of lost profits to a reasonable certainty is
supporting data”).
       Two cases illustrate those principles. First, in Cruz
Development, we reversed the trial court’s denial of a motion
280                Weiner v. Int. Animal Semen Bank, LLC

to strike a party’s claim for lost profits and the subsequent
jury award because there was insufficient evidence of
expenses such that a jury could only calculate lost net prof-
its by engaging in impermissible speculation. 174 Or App
at 499. In that case, a homebuilder sold two lots in a sub-
division to an individual purchaser who planned to develop
duplexes on the lots to rent out as residential properties.
Id. at 496. The purchaser later stopped making payments
on the promissory note after determining that the home-
builder made two misrepresentations about the lots that
caused the purchaser to incur unexpected costs and a loss of
rental income due to the construction delays caused by the
alleged misrepresentations. Id. The homebuilder sued the
purchaser, and the purchaser counterclaimed and sought
damages for the unexpected costs that she incurred and for
the loss of rental profits. Id. at 496-97. The purchaser testi-
fied and submitted exhibits showing that her lost rental rev-
enue totaled $15,900, which was based off her rental income
from other properties that she owned and $13,000 in cost
overruns. Id. at 497. The jury awarded the purchaser lost
profits as damages. Id.
         On appeal, we reversed because the purchaser
did not submit evidence of expenses that she would have
incurred to earn the rental revenue, even though the pur-
chaser’s evidence showed that she anticipated incurring
expenses associated with the business of renting and oper-
ating her properties. Id. at 499. The evidence of lost rental
revenue showed only that the purchaser lost income; how-
ever, the evidence did not provide a way for the jury to cal-
culate her net lost profits because there was no evidence of
expenses to subtract from the income. Id. Thus, because
the jury could calculate lost net profits only by engaging in
“pure speculation,” we concluded that the trial court erred
in failing to strike the claim for lost profits. Id.
         Second, in Summa Real Estate Group, we concluded
that the trial court erred in awarding lost profits when the
plaintiffs submitted only one exhibit showing its expenses.
There, a soured real estate venture between business affili-
ates led to a claim for intentional interference with contract,
economic relations, and prospective business advantage
Cite as 330 Or App 273 (2024)                              281

(IIER). 303 Or App at 417-18. The case proceeded to a bench
trial where the plaintiffs sought $500,000 on their IIER
claim. Id. at 418-19. The plaintiffs supported their request
for damages with a profit and loss statement that contained
the business venture’s “total income” and “total expenses.”
Id. at 419-20. The trial court denied the defendant’s motion
for directed verdict on damages for the IIER claim and
awarded plaintiffs lost profits. Id. at 417, 421. We reversed
the lost profits award because the court’s award did not
deduct expenses from the plaintiff’s lost revenue to arrive at
a proper calculation of lost profits. Id. at 424-25. Thus, the
lost profit award did not reflect net lost profits. Id. at 424.
         Here, plaintiffs’ testimony and exhibits in support
of damages did not demonstrate with reasonable certainty
the amount of their net lost profits. Specifically, plaintiffs’
evidence was ambiguous as to their expenses incurred
during their breeding operation, leaving the jury to imper-
missibly speculate about the amount of net lost profits.
See Cruz Development, Inc., 174 Or App at 498. Among the
pieces of evidence that plaintiffs point to in support of their
claim for lost profits, only Weiner’s testimony and Exhibit
79 demonstrates any expenses incurred by either of the par-
ties as legally required to recover lost profits. Weiner testi-
fied that the “bill” to inseminate a dog “is roughly $2,500”
and Exhibit 79 listed the average cost per puppy as $2,516.
In explaining Exhibit 79 at trial, Weiner testified that
his “guess” about the “cost per puppy of actually having a
puppy” was between $500 and $1,000. As described above,
however, Exhibit 79 also included a “Clarifications” section
that noted that the listed cost of the puppy did not include
various costs, including additional costs for veterinarian
services, microchipping, feed, crate, advertising, semen stor-
age, insemination, and “any other cost of operation.” Thus,
part of the difficulty with plaintiff’s reliance on the evidence
is that Exhibit 79, which does not take into account the cost
of insemination or other costs of the breeding operation, is
at odds with Weiner’s testimony that “[t]he bill” to insemi-
nate a dog is “roughly $2,500.” Even setting that issue aside,
however, Weiner’s testimony about business expenses is fur-
ther complicated by his own testimony in which his “guess”
at the “cost of actually having a puppy” was between $500
282                 Weiner v. Int. Animal Semen Bank, LLC

and $1,000. In short, the evidence on the costs of the opera-
tion is ambiguous evidence at best, which is insufficient to
support the issue of lost profits going to the jury because it
would have to speculate to make a factual finding on any
lost profits. Moreover, even assuming that Weiner’s testi-
mony and Exhibit 79 presented the jury with sufficient evi-
dence of business expenses, Weiner’s own calculations for
his requested money award impermissibly added the “[l]ost
[l]itter [r]evenue” and “[l]ost [s]emen [s]ales [r]evenue.” Thus,
Weiner’s total lost revenue did not take into account any
of his expenses to arrive at a net profit loss amount. See
Summa Real Estate Group, 303 Or App at 424-25 (conclud-
ing that the award of lost profit damages was inadequate
because it did not deduct expenses from revenue); see also
Buck v. Mueller, 221 Or 271, 284, 351 P2d 61 (1960) (in com-
puting lost profits, the plaintiff should have deducted the
value of his and his wife’s labor from the business’s income).
Accordingly, the trial court erred in denying defendant’s
motion for directed verdict as to Weiner because there was
insufficient evidence to allow the jury to calculate net lost
profits without engaging in speculation.
         The evidence in support of Barcroft’s lost damages
is similarly insufficient. Barcroft’s testimony dealt with
the sales price of puppies, and he further explained that
he arrived at his damages request by multiplying the esti-
mated number of puppies that he would have bred if he used
the semen vials defendant damaged or lost by the average
sales price of $2,500, and then adjusted the amount for infla-
tion. Barcroft presented no evidence of the expenses that he
incurred in the breeding process, which the jury needed to
calculate net lost profits without engaging in speculation.
Accordingly, the trial court also erred in denying defen-
dant’s motion for directed verdict as to Barcroft’s lost profit
damages.
         In sum, the trial court erred by denying defen-
dant’s motion as to lost profits for both plaintiffs. That error
requires reversal because the jury was instructed on loss
profits, and there is some likelihood—given the evidence,
the instructions as a whole, and the parties’ argument—
that the jury’s award was based in part on a determination
Cite as 330 Or App 273 (2024)                            283

that plaintiffs suffered lost profits. Thus, we remand for a
new trial because defendants’ entitlement to a directed ver-
dict on lost profits—or withdrawal of the issue of lost prof-
its—does not entitle them to a directed verdict on plaintiffs’
claims. Plaintiffs sought economic damages in addition to
lost profits—viz., damages for the value of the vials that
defendants damaged or lost—and presented some evidence
that would allow a factfinder to find in their favor on those
damages. Because the jury’s verdict does not allocate the
damages award between those potentially awarded for lost
profits and those potentially awarded for the value of the
damaged or lost vials, we must remand for a new trial on
the damages to which plaintiff is entitled based on the dam-
age and loss of the vials, excluding damages for lost profits.
         For the foregoing reasons, the trial court erred in
denying defendant’s motion for directed verdict or alter-
native motion to withdraw the issue of lost profits because
there was insufficient evidence for the jury to calculate lost
profits, which formed the basis of damages for both the
breach of bailment and negligence claims.
        Reversed and remanded.