Jack L. Baker Companies v. Pasley Mfg. & Distributing Co., 51660

• Decision Date: 13 February 1967
• Docket Number: No. 2,No. 51660,51660,2
• Citation: 413 S.W.2d 268
• Parties: The JACK L. BAKER COMPANIES, Inc., Appellant, v. PASLEY MANUFACTURING AND DISTRIBUTING COMPANY and Astor J. P. Leavitt, Respondents
• Court: Missouri Supreme Court

Page 268

413 S.W.2d 268

The JACK L. BAKER COMPANIES, Inc., Appellant, v. PASLEY MANUFACTURING AND DISTRIBUTING COMPANY and Astor J P. Leavitt, Respondents.

No. 51660.

Supreme Court of Missouri, Division No. 2.

Feb. 13, 1967.

Modified on Court's own Motion and Motion for Rehearing and

to Transfer to

Court En Banc Denied March 13, 1967.

Motion for Rehearing and to Transfer to Court En Banc Denied

April 11, 1967.

Charles W. Hess, of Linde, Thomson, VanDyke, Fairchild & Langworthy, Kansas City, for appellant.

William H. Sanders, Dean F. Arnold, David L. West, Kansas City, for respondent, Pasley Mfg. and Distributing Co., caldwell, Blackwell, Sanders & Matheny, Kansas City, of counsel.

Douglas Stripp, James F. Duncan, Kansas City, for respondent, Leavitt, Watson, Ess, Marshall & Enggas, Kansas City, of counsel.

FINCH, Judge.

This is an appeal by plaintiff from a judgment in its favor for $3,000.00 on the basis that the award was inadequate. We have jurisdiction because the difference between the amount of the judgment and what plaintiff seeks exceeds $15,000.00.

Plaintiff was engaged in the steam cleaning and sandblasting business. A high-pressure propane tank trailer owned by defendant Leavitt, which was to be repaired by defendant Pasley, was delivered to plaintiff's shop for steam cleaning preparatory to the repairs thereon by Pasley. The trailer still contained some propane gas. An explosion and fire occurred, resulting in damage to the structures on plaintiff's property. A recital of the evidence pertaining to liability is unnecessary because the only questions on appeal involve the action of the trial court in withdrawing the issue of loss of profits from consideration of the jury and the sufficiency of the court's instructions with reference to the measure of damages.

Plaintiff's petition alleged interruption of its business as a consequence of the damage to its facilities with resultant loss of business. The court permitted plaintiff to offer evidence in support of these allegations but at the conclusion of the testimony instructed the jury that the issue of loss of business was withdrawn and the evidence thereof should not be considered in arriving at its verdict.

The rule in this state with respect to loss of anticipated profits resulting from actionable conduct of another is that they 'are recoverable only when they are made reasonably certain by proof of actual facts which present data for a rational estimate of such profits.' Yaffe v. American Fixture, Inc., Mo., 345 S.W.2d 195, 199. In Tnemec Company, Inc. v. North Kansas City Development Co., Mo., 290 S.W.2d 169, 174, this court stressed that the evidence must be sufficiently definite and certain for the jury to make a reasonably accurate estimate of the loss without resorting to speculation. The court said: 'This court and the courts of appeals of this state have been strict in evaluating the sufficiency of the evidence warranting a recovery of damages for loss of profits. Our courts have refused to permit a jury to speculate, without substantial basis, as to what might be probable or expected profits as an element of damages.'

We have concluded that the evidence of loss of profits offered by plaintiff did not meet the test laid down in the cases in this state and that the trial court correctly withdrew that issue from the jury.

Unquestionably, there was damage to the structures at plaintiff's place of business, but the operation was not shut down as a result of the explosion and fire. The Leavitt truck was steam cleaned the day following the explosion. Plaintiff's president, claiming loss of business, testified that people had called in and told him they thought the business was closed and that was the reason they did not come in after the explosion. However, he did not identify any such people, or testify how frequently this occurred, or make any attempt to enlighten the jury as to the amount of business which he could identify as having been lost in this manner. Baker testified that there were some times when they could not do sandblasting because the roof over that area leaked, but he stated that they were able to take care of all customers who presented themselves for either sandblasting or steam cleaning and that they did not turn away any business.

Plaintiff also offered in evidence the corporate tax returns of the corporation for the years 1962, 1963 and 1964. The corporation had been organized on or about March 1, 1962. Prior to incorporation, the business had been operated on an individual basis. In addition, plaintiff offered in evidence an exhibit which for the year 1963 gave a month by month profit and loss analysis.

The tax return for 1962 (the last ten months of the year) disclosed a net loss for that period of $65.21.

The 1963 tax return shows that the corporation had a net loss for that year of $2,052.31.

The 1964 tax return shows a net profit for the year of $6,884.72. Plaintiff argues that the change from a loss of $65.21 in 1962 to a profit of $6,884.72 for 1964 discloses a trend in the business during that period which would indicate an anticipated profit for 1963 of $3,400.00. This is arrived at as being the median getween the 1962 loss and the 1964 profit. Plaintiff then points out that instead of a $3,400.00 profit in 1963, the company actually had a loss of $2,052.31, and that this was sufficient evidence to support a verdict of $5,452.31 for loss of profits for the year 1963.

We hold that these tax returns did not provide the requisite substantial basis for determining probable lost profits. There is no evidence to show a steady trend from loss to profit from the inception of corporate operations on March 1, 1962, to the year 1964. There was no evidence to show a month by month increase in business in 1962. The tax return gave no breakdown by months and plaintiff did not see fit to introduce a corporate month by month profit and loss analysis as it did with respect to 1963. An examination of the monthly profit and loss figures for the year 1963 discloses a very uneven and erratic performance as regards profits. The company operated in the black during only three of the twelve months of that year. Operating losses of $594.01, $87.77, $182.59, $448.47, $47.39, $180.80, $807.11, $979.47 and $1,996.81 are shown for the months of January, February, March, April, July August, September, October and December of 1963. Operating profits of $978.68, $1,386.47 and $906.96 appear for the months of May, June and November. This certainly does not show a trend from an unprofitable operation in 1962 to a profitable operation in 1963, interrupted only by the explosion and fire in mid October. ¹ The figures show that the corporation operated at a loss in seven of the first nine months, all of which occurred prior to the explosion which took place on October 15, 1963.

Plaintiff's brief contends that the 1963 profit and loss statement shows that the company had a loss of revenue of something over $5,000.00 during November and December of that year. We do not agree. The gross operating revenue of the company during those two months amounted to $14,114.33. The total operating revenue for the year was $90,929.29, so that the operating revenue for the months of November and December was within $1,000.00 of equalling one-sixth of the gross income for the entire year. That would indicate little, if any, deviation in gross receipts for that period in the absence of evidence that income of the business would be greater in November and December than in other portions of the year. There was no evidence offered to so indicate. On the contrary, the profit and loss statement for 1963 indicates that, except for the month of December, the period of greatest gross operating receipts occurred in the late spring and summer months.

Plaintiff also points out that the profit and loss statement shows that the company had a loss for the month of December, 1963, of $1,996.81. This loss, however, cannot be attributed to loss of business from the explosion because the gross receipts for the month are the second largest of any month during the calendar year and the expenses deducted for that month explain why a loss is shown. The company charged off bad debts of $1,133.59 and interest in the amount of $1,297.67 in December. Total...