Gesellschaft Fur Geratebau v. GFG America Gas Detection, Ltd., 70630

• Decision Date: 03 March 1998
• Docket Number: No. 70630,70630
• Citation: 967 S.W.2d 144
• Parties: GESELLSCHAFT FUR GERATEBAU, Plaintiff/Appellant, v. GFG AMERICA GAS DETECTION, LTD., Defendant/Respondent.
• Court: Missouri Court of Appeals

Page 144

967 S.W.2d 144

GESELLSCHAFT FUR GERATEBAU, Plaintiff/Appellant, v. GFG AMERICA GAS DETECTION, LTD., Defendant/Respondent.

No. 70630.

Missouri Court of Appeals,

Eastern District,

Division One.

March 3, 1998.

Motion for Rehearing and/or Transfer to

Supreme Court Denied April 29, 1997.

Application for Transfer Denied

June 16, 1998.

Lawrence B. Wittels, Clayton, for plaintiff/appellant.

Thompson Coburn, Norbert Glassl, Jeffrey H. Kass, St. Louis, for defendant/respondent.

PUDLOWSKI, Judge.

Gesellschaft fur Geratebau (Gesellschaft), a German corporation, appeals the judgment for damages awarded to respondent, Gesellschaft fur Geratebau Gas Detection, Ltd., (GfG America), a Missouri corporation. Gesellschaft alleges the trial court erred in denying its motion for directed verdict or judgment notwithstanding the verdict because GfG America failed to prove damages and causation in its tortious interference claim. Gesellschaft also contends other trial errors. Because we decide GfG America failed to establish sufficient proof of lost profits, we need not address other alleged errors. We affirm the trial court's judgment pertaining to causation and reverse the judgment as to damages.

I. Standard of Review

A directed verdict or a judgment notwithstanding the verdict is a drastic action, and it should only be granted when reasonable persons could not differ on a correct disposition of the case. Seidel v. Gordon A. Gundaker Real Estate Co., 904 S.W.2d 357, 361 (Mo.App. E.D.1995). During review, we view the evidence in the light most favorable to the verdict. Duren v. Kunkel, 814 S.W.2d 935, 936 (Mo. banc 1991). Unless there is a complete lack of evidence to support it, a jury verdict will not be overturned. Miller v. Gillespie, 853 S.W.2d 342, 344 (Mo.App. E.D.1993).

II. Background

In October 1987, GfG America, represented by Christine Bierman (Bierman), and Gesellschaft entered into an exclusive distributorship agreement for the sale and distribution of Gesellschaft gas detection devices in North America. The record reveals that Bierman is a successful salesperson and marketeer in that field. She became interested in Gesellschaft's products and entered into an agreement to exclusively represent Gesellschaft in the United States, Canada, and Mexico as the sole distributor. Bierman incorporated GfG and was the principal shareholder and president.

However, GfG America and Gesellschaft did not have a good relationship. Gesellschaft complained of poor American sales performance while GfG America was frustrated by maintenance and quality problems. Bierman began negotiations to end her relationship with Gesellschaft. In August 1990, a letter from Gesellschaft terminated GfG America's distributorship.

Gesellschaft commenced this lawsuit against GfG America in St. Louis County Circuit Court on February 18, 1994 seeking to recover approximately 145,325 Deutsche Marks for goods sold. GfG America counterclaimed alleging, inter alia, that Gesellschaft tortiously interfered with GfG America's business contracts and relationships with its customers.

After considerable delays, the trial court imposed sanctions on Gesellschaft for failing to participate in discovery in a timely fashion. Pursuant to Supreme Court Rule 61.01, the trial court entered a default judgment against Gesellschaft and in favor of GfG America on the causation claim for tortious interference with business relationships and contracts allegation. ¹ Trial was held solely to determine the damages to GfG America. The trial court restricted Gesellschaft to cross-examination of GfG America's witnesses, and Gesellschaft was not allowed to present its own evidence.

At trial, GfG America attempted to demonstrate the extent to which Gesellschaft's interference with its business reduced actual profits. It presented a document in which Bierman projected GfG America's losses based upon anticipated sales, revenues, expenses and net profit.

Gesellschaft contends that GfG America did not meet the substantial burden of proof required to prove anticipated profits of a commercial business and managed to prove only speculative profits. We agree.

In proving anticipated profits of a commercial business, long standing law is that Missouri appellate courts make:

stringent requirements, refusing to permit speculation as to probable or expected profits, and requiring a substantial basis for such award [citations omitted]. "The general rule is that recovery of anticipated profits of a commercial business is that they are too remote, speculative and too dependent upon changing circumstances to warrant a judgment for their recovery" [citations omitted].

Coonis v. Rogers, 429 S.W.2d 709, 714 (Mo.1968); see also Lowder v. Missouri Baptist College, 752 S.W.2d 425, 428 (Mo.App. E.D.1988). The only exception to the general rule is where the anticipated profits are made certain by actual facts, "with present data for a rational estimate of their amount." Orchard Container Corp. v. Orchard, 601 S.W.2d 299, 305 (Mo.App. E.D.1980). For an established business, anticipated profits might be recovered if the plaintiff makes it reasonably certain by competent proof of the amount of profits. Anderson v. Abernathy, 339 S.W.2d 817, 824 (Mo.1960); Brown v. McIbs, Inc., 722 S.W.2d 337, 341 (Mo.App. E.D.1986). Such facts consist of income and expenses of the business for a reasonable time anterior to its interruption, with a subsequent establishment of net profits during the previous period. Such facts are indispensable. Id.

The documentary evidence presented by GfG America was its 1988 and 1989 profit and loss statements, a projected income statement for the years 1988 thru 1991, and a projected income document for the years 1991 thru 2001. Its oral evidence consisted of the testimony of Bierman...