Electro Services, Inc. v. Exide Corp.

• Decision Date: 28 June 1988
• Docket Number: No. 87-3565,87-3565
• Citation: 847 F.2d 1524
• Parties: ELECTRO SERVICES, INC., Plaintiff-Appellee, v. EXIDE CORPORATION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1524

847 F.2d 1524

11 Fed.R.Serv.3d 1160

ELECTRO SERVICES, INC., Plaintiff-Appellee, v. EXIDE CORPORATION, Defendant-Appellant.

No. 87-3565.

United States Court of Appeals Eleventh Circuit.

June 28, 1988.

Griffin B. Bell, King & Spalding, James D. Miller, Perry E. Pearce, Atlanta, Ga., for defendant-appellant.

A. Lamar Matthews, Jr., Williams, Parker, Harrison, Dietz & Getzen, Theodore C. Eastmoore, Sarasota, Fla., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Florida.

Before JOHNSON and HATCHETT, Circuit Judges, and ESCHBACH ^*, Senior Circuit Judge.

JOHNSON, Circuit Judge:

In this diversity case, Electro Services, Inc. (Electro) sued Exide Corporation (Exide) for compensatory and punitive damages allegedly attributable to Exide's defective automotive batteries and Exide's conduct in relation to the batteries' manufacture and sale and this litigation. A jury found for Electro on all seven counts: (1) negligence, (2) breach of warranty, (3) fraud and misrepresentation, (4) scheme to defraud, (5) false advertising, (6) deceptive trade practices/theft, and (7) breach of contract. The jury awarded Electro $750,000 in compensatory damages and $3.5 million in punitive damages.

On May 20, 1987, the United States District Court for the Middle District of Florida entered judgment on the jury's verdict. On June 4, 1987, Exide filed motions for a stay pending disposition of motions for new trial and judgment notwithstanding the verdict (Fed.R.Civ.P. 62(b)), for a new trial or remittitur (Fed.R.Civ.P. 59(a), (e)), and for a judgment notwithstanding the verdict (Fed.R.Civ.P. 50(b)). On July 9, 1987, the district court denied the motions for new trial or remittitur and for judgment notwithstanding the verdict.

On July 29, 1987, Exide filed its notice of appeal. ¹ Exide does not question its liability. Rather, Exide attacks the compensatory and punitive damages awards on four grounds: (1) the district court abused its discretion by permitting one of Electro's witnesses to testify as to the amount of compensatory damages, (2) insufficient evidence supported the jury's award for lost profits, (3) the district court improperly instructed the jury as to punitive damages, and (4) the $3.5 million award for punitive damages violated the Excessive Fines Clause of the Eighth Amendment. We affirm.

I. Testimony Regarding Compensatory Damages

The jury awarded Electro $750,000 in compensatory damages. ² Over objection, the district court permitted Floyd Price, secretary-treasurer and one-third owner of Electro, to testify that Electro suffered losses of $750,000. Exide argues that the district court abused its discretion in permitting this testimony. See Murphy v. City of Flagler Beach, 761 F.2d 622, 626 (11th Cir.1985) ("A trial judge's rulings concerning the admissibility of evidence are reversible only where the appellant can show that the judge abused his broad discretion and that the decision affected the substantial rights of the complaining party."). We disagree.

Florida law guides our analysis:

We recognize the general rule that an owner of property is qualified as such to testify to the value of his property, whereas officers of corporations do not qualify on the same basis. However, if the officer is qualified by virtue of his experience, his management of the affairs of the corporation and his knowledge of relevant value he is also a competent witness as to value.

Mercury Marine Division v. Boat Town U.S.A., Inc., 444 So.2d 88, 90 (Fla.Dist.Ct.App.1984). Exide contends that Price is not a competent witness because he was a full-time attorney and did not participate in the day-to-day operation of Electro. In its brief, however, Electro provides citations to the record to demonstrate that Price's experience, management, and knowledge make him a competent witness. See Brief of Appellee at 3-5, 17. Our independent review of the record convinces us that Price was a competent witness and that the district court did not abuse its discretion in permitting Price to testify as to the amount of compensatory damages.

Exide misplaces its reliance on the testimony of Electro's expert witness, Price's prior deposition testimony, and Price's signing of interrogatories. Exide's contentions are directed at the weight, rather than the admissibility, of Price's testimony. See J & H Auto Trim Co. v. Bellefonte Insurance Co., 677 F.2d 1365, 1369 (11th Cir.1982) ("[A]n owner of property is competent to testify regarding its value. 'The weight of such testimony is, of course, affected by the owner's knowledge of circumstances which affect value, and as an interested witness, it is for the jury to evaluate the credibility of his testimony.' " (quoting Berkshire Mutual Insurance Co. v. Moffett, 378 F.2d 1007, 1011 (5th Cir.1967) (footnote omitted))). Apparently, the jury found Price's testimony credible.

II. Award for Lost Profits

The jury awarded Electro $145,509 for loss of future profits as part of the $750,000 award of compensatory damages. See R22:10. Exide argues that the evidence is insufficient to support any award for lost profits and, if the evidence supports some award, the jury erred in determining the amount it awarded. We disagree.

At trial, the jury heard the testimony of Lanny Tyler, a certified public accountant and an expert witness for Electro, regarding Electro's loss of future profits. Tyler examined 17 commercial accounts and determined when these commercial purchasers bought batteries from Electro and when they stopped buying batteries from Electro. Tyler then determined the average number of batteries purchased per month and, using Electro's financial statements, determined the gross profit percentage on automotive batteries. Tyler then projected the monthly gross profit figure for 60 months and arrived at a figure of $113,039 for lost gross profits. Tyler then used a net profit margin to calculate lost net profits of $100,000 for the 17 commercial accounts.

Tyler stressed in his testimony that he calculated lost profits for commercial accounts only. Tyler stated that his calculation did not include lost profits on individual accounts because, with the thousands of returns, it would be very difficult and very prohibitive timewise to contact all the individuals and calculate a figure. Floyd Price, secretary-treasurer and one-third owner of Electro, testified that "people were madder than you can imagine, and they quit buying from us.... We lost a lot of customers." R7:89. Similarly, Lawrence Anderson, another one-third owner of Electro, testified that many people were bringing batteries back. See R13:187.

We conclude that the evidence supports the jury's award for lost profits. In the landmark case of Twyman v. Roell, 123 Fla. 2, 166 So. 215, 218 (1936), the Florida Supreme Court stated that "[t]he uncertainty which defeats recovery in [lost profit] cases has reference to the cause of the damage rather than the amount of it." Twyman indicates that "uncertainty as to the amount of damages or difficulty in proving the damages will not prevent recovery if it is clear that substantial damages were suffered as a result of the wrong. Inability to give the exact or precise amount of damages does not preclude recovery...." Conner v. Atlas Aircraft Corp., 310 So.2d 352, 354 (Fla.Dist.Ct.App.) (footnote omitted), cert. denied, 322 So.2d 913 (Fla.1975); accord R.A. Jones & Sons v. Holman, 470 So.2d 60, 70 (Fla.Dist.Ct.App.1985), petition for review dismissed, 482 So.2d 348 (Fla.1986); A.O. Smith Harvestore Products, Inc. v. Suber Cattle Co., 416 So.2d 1176, 1178 (Fla.Dist.Ct.App.1982); Adams v. Dreyfus Interstate Development Corp., 352 So.2d 76, 78 (Fla.Dist.Ct.App.1977); National Papaya Co. v. Domain Industries, 592 F.2d 813, 818 (5th Cir.1979) (applying Florida law).

Consequently, "[i]f from proximate estimates of witnesses a satisfactory conclusion can be reached, it is sufficient if there is such certainty as satisfies the mind of a prudent and impartial person." Twyman, 166 So. at 218. "The requisite to ... allowance [for lost profits] is some standard, such as regular market values, or other established data, by reference to which the amount may be satisfactorily ascertained." Id., 166 So. at 217. Generally, "[p]roof of the income and of the expenses of the business for a reasonable time anterior to the interruption charged, or facts of equivalent import, is usually required." New Amsterdam Casualty Co. v. Utility Battery Manufacturing Co., 122 Fla. 718, 166 So. 856, 860 (1936); see National Industries v. Sharon Steel Corp., 781 F.2d 1545, 1547 (11th Cir.1986).

In the present case, it is undisputed that Exide caused Electro to lose profits as a result of "lousy" batteries. Causation of damages thus is not an issue; rather, the amount of damages is the issue. As set forth above, Florida law clearly provides that inability to give the precise amount of damages does not preclude recovery when substantial damages were suffered. Tyler's testimony, based upon Electro's financial records, customer accounts, net profit margin, and sales projections, satisfies the dictates of Florida law and supports the award as it relates to commercial purchasers. See Born v. Goldstein, 450 So.2d 262, 264 (Fla.Dist.Ct.App.), petition for review dismissed, 458 So.2d 272 (Fla.1984); Massey-Ferguson, Inc. v. Santa Rosa Tractor Co., 415 So.2d 865, 867 (Fla.Dist.Ct.App.1982). Similarly, Tyler's testimony regarding Electro's sales figures and determination of a net profit margin, the testimony by Price and Anderson concerning lost customers, and the number of batteries returned provided adequate evidence to satisfy the "reasonable certainty" requirement for lost profits as determined by the jury for individual accounts. Accordingly, we will not disturb the jury's award for lost profits.

III. Punitive Damages Instruction

The district court charged the jury on punitive damages as...