Copenhaver v. Berryman, 1483

CourtCourt of Appeals of Texas. Court of Civil Appeals of Texas
Citation602 S.W.2d 540
Docket NumberNo. 1483,1483
PartiesKent L. COPENHAVER and Earl T. Platt d/b/a Valley Laundry Service v. John W. BERRYMAN, Sr., John W. Berryman, Jr., and Joel William Ellis d/b/a The Village Apartments.
Decision Date12 June 1980

Jeffrey W. Jones, Johnson & Davis, Harlingen, for appellants.

Joel William Ellis, Harlingen, for appellees.

OPINION ON MOTION FOR REHEARING

NYE, Chief Justice.

Appellants filed a motion for rehearing bringing to our attention certain matters that warrant elaboration. Although we adhere to our original determination of this case, in order to respond to appellants' complaints on motion for rehearing in an orderly fashion, we withdraw our original opinion and substitute the following opinion in its place.

Kent L. Copenhaver and Earl T. Platt, d/b/a Valley Laundry Service, filed suit against John W. Berryman, Sr., John W. Berryman, Jr., and Joel William Ellis, d/b/a The Village Apartments, seeking damages for defendants' breach of a written contract between the parties. After a non-jury trial, the trial judge entered a judgment awarding plaintiffs damages in the amount of $3,525.84. The trial judge filed findings of fact and conclusions of law supportive of this judgment. The plaintiffs appeal, contending that the express terms of the contract and the undisputed evidence, entitled them to more damages than were awarded by the trial court.

The defendants own a large apartment complex in Harlingen, Texas. The plaintiffs are in the business of owning and operating laundry facilities which are located in various apartment complexes, condominiums, and trailer parks in several cities in the Rio Grande Valley. In December, 1975, plaintiffs purchased eight washing machines and four driers from Mr. B. O. Hooks, who owned the machines and operated the laundry facility located at the defendants' apartment complex. Thereafter, on January 21, 1976, plaintiffs and defendants executed a contract which is now in question.

The parties operated under the terms of the five-year contract until October, 1976, when defendants, who had purchased their own laundry equipment, desired to terminate the contract. By a letter dated November 10, 1976, defendant Ellis advised plaintiffs that the contract was being terminated as of December 1, 1976. Defendants protested and an exchange of correspondence between the parties ensued. After failing to reach an agreement concerning defendants' expressed intention to terminate the contract, plaintiffs were informed on March 10, 1977, that their laundry equipment had been removed from the premises. The next day, plaintiff Copenhaver drove to the apartment complex and recovered the laundry equipment.

Plaintiffs filed suit, alleging that they had complied with all of the duties pursuant to the contract and that defendants had wrongfully repudiated and breached the contract by removing plaintiffs' equipment and installing other equipment, thus, making it impossible for plaintiffs to continue their operation under the contract. Plaintiffs alleged that they were entitled to conduct the laundry operations for an additional forty-seven months, and by such, would have earned a profit of $13,886.58, after deducting defendants' share of the gross receipts and other operating expenses. Defendants answered, alleging, in part, that plaintiffs had suffered no damages from the removal of their laundry equipment because plaintiffs had placed such equipment into immediate use in other laundry facilities they operated and were earning as much or more now than when the equipment was located in defendants' facilities.

After a non-jury trial, the trial judge entered a judgment awarding plaintiffs damages in the amount of $3,525.84. In support of this judgment, the trial judge entered the following relevant findings of fact: 1) "(T)he Equipment Lease Agreement" executed by the parties was "for the purpose of leasing laundry equipment" by the plaintiffs to the defendants; 2) defendants had breached such agreement on March 10, 1977; 3) plaintiffs suffered damages caused by such breach for the six-month period from March 10, 1977, until September 10, 1977, in the amount of $3,525.84; 4) after September 10, 1977, plaintiffs leased the equipment covered by the agreement to others and received more rental income from the same machines; 5) plaintiffs did not suffer any loss or damage after September 10, 1977, by reason of defendants' breach of the contract in question.

Plaintiffs' appeal is based upon the trial court's failure to award damages for the entire duration of the forty-seven month period remaining under the terms of the contract.

Before addressing the merits of plaintiffs' specific points, however, a brief review of some of the principles relating to damages and mitigation of damages is necessary to gain the proper appellate perspective of the contentions advanced by the respective parties. As a general rule, damages for breach of contract seek to allow the injured party to have just compensation for the damages or loss actually sustained. Stewart v. Basey, 245 S.W.2d 484, 486 (Tex.Sup.1952); Blakeway v. General Electric Credit Corporation, 429 S.W.2d 925, 929 (Tex.Civ.App. Austin 1968, writ ref'd n. r. e.). The burden is upon the complaining party to establish his right to recover compensatory damages by proving he suffered a pecuniary loss as a result of the breach. Stewart v. Basey, 245 S.W.2d 484, 486 (Tex.Sup.1952)- ; Braselton-Watson Builders, Inc. v. Burgess, 567 S.W.2d 24, 28 (Tex.Civ.App. Corpus Christi 1978, writ ref'd n. r. e.).

Here plaintiffs sought to recover damages measured by loss of profits they sustained due to defendants' breach of the contract. As a general rule, where it is shown that a loss of profit is a natural and probable consequence of the act or omission complained of, and the amount is shown with sufficient certainty, recovery of lost profits is permitted. Anticipated profits, however, cannot be recovered where they are dependent upon uncertain and changing conditions, such as market fluctuations or a change of business, or where there is no evidence from which they may be intelligently estimated. Evidence to establish profits must not be uncertain or speculative. It is not necessary that profits should be susceptible of exact calculation. It is sufficient that there be data from which they may be ascertained with a reasonable degree of certainty and exactness. Riddle v. Lanier, 136 Tex. 130, 145 S.W.2d 1094 (1941); Southwest Battery Corporation v. Owen, 131 Tex. 423, 115 S.W.2d 1097 (1938); General Supply and Equipment Co., Inc. v. Phillips, 490 S.W.2d 913 (Tex.Civ.App. Tyler 1972, writ ref'd n. r. e.). The term, "net profits" is, " 'to a large degree, self-explanatory and implies, generally speaking, what remains in the conduct of a business after deducting from its total receipts all of the expenses incurred in carrying on the business.' " Mangham v. Hall, 564 S.W.2d 465 (Tex.Civ.App. Corpus Christi 1978, writ ref'd n. r. e.); G & W Marine, Inc. v. Morris, 471 S.W.2d 644 (Tex.Civ.App. Beaumont 1971, no writ). See Stapper v. Van Valkenburgh & Vogel, 128 S.W.2d 466, 467 (Tex.Civ.App. Amarillo 1939, writ dism'd judgm. corr.). In the calculation of net profits, allowance should be made for expenditures that the plaintiff would have been compelled to make, and also for the value of the plaintiff's time. 17 Tex.Jur.2d, Damages, § 144 (1960). Generally, loss of profits because of the diminution of "gross receipts" is measured by the loss of "net profits" and not the loss of "gross receipts" except for the actual expenses which would have been incurred had the "gross receipts" been received or fixed with reasonable certainty. Mangham v. Hall, 564 S.W.2d 465, 468 (Tex.Civ.App. Corpus Christi 1978, writ ref'd n. r. e.); Hall v. Brown, 398 S.W.2d 404, 408 (Tex.Civ.App. Waco 1966, no writ); American Const. Co. v. Caswell, 141 S.W. 1013, 1018 (Tex.Civ.App. Austin 1911, no writ); 25 C.J.S. Damages § 90 (1966).

While the defendant is liable for the pecuniary loss sustained by the party injured by the breach, the party so injured must exercise, as a general rule, reasonable efforts in an attempt to minimize his damages. As stated by our Supreme Court in Walker v. Salt Flat Water Co., 128 Tex. 140, 96 S.W.2d 231, 232 (1936):

"Where a party is entitled to the benefits of a contract and can save himself from the damages resulting from its breach at a trifling expense or with reasonable exertions, it is his duty to incur such expense and make such exertions."

Although the injured party has a duty to minimize his loss, the burden of proof as to the extent to which the damages were or could have been mitigated lies with the party who has breached the contract. Houston Chronicle Pub. Co. v. McNair Trucklease, Inc., 519 S.W.2d 924, 929 (Tex.Civ.App. Houston (1st Dist.) 1975, writ ref'd n. r. e.); LTV Aerospace Corporation v. Bateman, 492 S.W.2d 703, 709 (Tex.Civ.App. Tyler 1973, writ ref'd n. r. e.); Polis v. Alford, 273 S.W.2d 79, 80 (Tex.Civ.App. San Antonio 1954, writ ref'd).

Plaintiffs' first ten points of error, which are grouped together for argument and authority purposes, "all relate to the amount of damages which the Court awarded (plaintiffs)." These specific points of error encompass various complaints concerning the trial court's award of damages, including complaints attacking particular findings on legal and factual sufficiency grounds. Appellants, however, briefed (with arguments and authority) only the following points of error:

"FIRST POINT:

The trial court erred in awarding (plaintiffs) damages for, less than the term remaining under the contract at the time of its breach.

EIGHTH POINT:

The trial court erred in construing the contract between the parties . . . as an 'equipment lease agreement' when as a matter of law it was an agreement giving (plaintiffs) the exclusive...

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