Court Opinion

ID: 6761855
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:32:26.887951+00
Date Added: 2024-06-11T16:02:36.575651
License: Public Domain

Wright, J.,
concurring in part and dissenting in part. The dynamics of a trial preclude perfection since the price of such a standard is prohibitive. Thus, I can understand the majority’s reluctance to disturb the jury verdict in this case. However, in my view the majority opinion misperceives the commercial process when it places credence in the testimony of plaintiff’s expert witness as it related to compensatory damages.
We have consistently held that the existence and amount of lost profits must be proven with certainty. “In order for a plaintiff to recover lost profits in a breach of contract action, the amount of the lost profits, as well as their existence, must be demonstrated with reasonable certainty.” Gahanna v. Eastgate Properties, Inc. (1988), 36 Ohio St. 3d 65, 521 N.E. 2d 814, syllabus (explaining Charles R. Combs Trucking, Inc. v. International Harvester Co. [1984], 12 Ohio St. 3d 241, 12 OBR 322, 466 N.E. 2d 883). For the reasons that follow, the method of calculation adopted by plaintiff’s expert is so flawed as to require a new trial.
Dr. Zinser failed to properly set forth with any degree of reasonable certainty the amount of lost profit damages. He utilized an economic methodology for proving lost profits which is at war with the legal standard for awarding damages as noted above. The law in this state requires that evidence of lost profits be based .upon an analysis of lost “net” profit after the deduction of all expenses impacting on the profitability of the business in question. Dr. Zinser noted the distinction between the analysis of lost profits based on net profits (i.e., gross sales less cost of goods sold and operating expenses) and the “gross *49operating margin” of profit (gross sales less only the cost of goods sold). I believe the substantive law of Ohio requires testimony using the first, standard. This methodology was ignored in this case, and Zinser’s testimony was keyed to the unrealistic and inaccurate approach arising out of gross profit margins.
A graphic demonstration of the problem presents itself here where the plaintiff’s expert posited a twenty-seven percent profit margin on a hypothetical sales figure of $8,200,000. Zinser’s testimony transformed a company that had never shown even a modest profit into a veritable money machine. Given the state of the whole record I find Dr. Zinser’s testimony fanciful at best, at worst outrageous, andf certainly not within the confines of “reasonable certainty.”
Accordingly, I would grant a new trial on the issue of compensatory damages, with liability not an issue. I concur with Justice Holmes in his analysis of the punitive damages aspect of this case.