Message Center Management, Inc. v. Shell Oil Products Co.

• Decision Date: 05 October 2004
• Docket Number: (AC 22987).
• Citation: 85 Conn. App. 401,857 A.2d 936
• Court: Connecticut Court of Appeals
• Parties: MESSAGE CENTER MANAGEMENT, INC. v. SHELL OIL PRODUCTS COMPANY

85 Conn. App. 401

857 A.2d 936

MESSAGE CENTER MANAGEMENT, INC. v. SHELL OIL PRODUCTS COMPANY

(AC 22987).

Appellate Court of Connecticut.

Argued April 29, 2004.

Officially released October 5, 2004.

Foti, Dranginis and Dupont, Js.

Allan B. Taylor, for the appellant (plaintiff).

Sheila A. Huddleston, with whom were Lawrence G. Rosenthal and Alexandra M. McHugh and, on the brief, Paul D. Sanson, for the appellee (defendant).

Opinion

DUPONT, J.

The plaintiff, Message Center Management, Inc., appeals from the judgment of the trial court, rendered after the court granted the motion for judgment notwithstanding the verdict filed by the defendant, Shell Oil Products Company, and reduced the jury's award of damages of $1,351,836 for the plaintiff to one dollar. On appeal, the plaintiff claims that the court improperly (1) limited its evidence that supported its claim for damages and (2) set aside the jury verdict as to damages. Thus, the plaintiff seeks a new trial on the issue of damages only, or, in the alternative, judgment in the amount awarded by the jury.¹ We do not agree with the plaintiff as to its first claim, but agree as to the second claim and, accordingly, reverse the judgment and remand the case with direction to reinstate the jury verdict and to render judgment for the plaintiff in the amount of $1,351,836.

The following facts and procedural history are relevant to the plaintiff's appeal. The plaintiff commenced the present action against the defendant in June, 1997. The plaintiff alleged breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq., and sought a declaratory judgment as to the rights of the parties relative to certain disputed matters.² The plaintiff claimed damages of lost profits, damage to its reputation and lost business opportunities. The defendant filed a counterclaim alleging fraudulent misrepresentation due to the plaintiff's failure to perform under the parties' contract, unfair trade practices and breach of contract.³ On appeal, the defendant does not dispute the finding of the jury, and the court's upholding of that finding, that the defendant is liable for breach of contract.

The plaintiff, a Delaware corporation, had one office located in Hartford. It managed properties owned by others, marketing them as potential sites for telecommunications carriers and negotiating leases of the sites as space in which to place telecommunications towers or antennae. It bills and collects rental fees from carriers and receives a percentage of the rental fees paid by the carriers. The plaintiff had been in business since 1989 and, in the mid-1990s, was able to include a new class of consumer services known as personal communication services.

In 1995, the plaintiff identified and approached the defendant as a potential customer, seeking to market the defendant's properties to wireless communications carriers as possible antenna locations pursuant to lease agreements. Three contracts were executed with the defendant as a result. The first was for the management by the plaintiff of 429 properties of the defendant in the New England region (New England agreement). The second was for management of 218 properties in the Southeast Florida region (Florida agreement). The third contract was for the management of the defendant's remaining 3529 properties in the United States (national agreement). The national agreement, entered into in April, 1996, is the subject of the present litigation. This litigation concerns the amount of damages due, if any, for the plaintiff's lost profits arising from a breach of the national agreement.⁴

By May, 1997, the plaintiff had not generated any contracts for the defendant under the national agreement. As a result, on May 20, 1997, the defendant sent notice that it would terminate the national agreement as of December, 1997, on the basis of unsatisfactory performance.

Maria Scotti, a witness whose testimony is at issue, was the office manager for the plaintiff and a director of the corporation. She began work there in 1993. Her experience at the company consisted of working with the Federal Communications Commission on licensing issues, certain knowledge of how the wireless communications technology works, finding locations for telecommunications antennae, negotiating management agreements with property owners and negotiating agreements with telecommunications carriers.

Scotti testified as to lost net profits, concluding that the plaintiff would have secured thirty-eight contracts for the defendant within the five year life of the national agreement on the basis of the number of contracts the plaintiff had secured under the New England and Florida agreements. The plaintiff also wanted to show that the "penetration rate" used by Scotti to estimate the amount of lost profits was reasonable because the number of leases obtained by the plaintiff under the New England and Florida agreements would have been substantially greater but for the defendant's alleged interference with the plaintiff's attempts to secure contracts after the defendant issued notice that it would terminate the national agreement. The plaintiff also wanted to use Scotti's testimony to show the alleged efforts by the defendant's employees to sabotage the plaintiff's efforts at obtaining new contracts under the national agreement once the notice to terminate was sent.

The defendant objected to the introduction of Scotti's testimony, and Scotti was subjected to a lengthy two day voir dire as to the admissibility of her testimony. Some of her voir dire testimony eventually was repeated in the presence of the jury. Scotti was allowed to testify as to her opinion of the lost profits that the plaintiff suffered as a result of the defendant's alleged breach. She was not allowed, however, to testify as to any of the allegedly deliberate efforts of the defendant to subvert the plaintiff's ability to effect additional leases in New England and Southeast Florida. Although other experts testified at trial concerning the methods used to estimate lost profits and the reliability of the methods, Scotti presented testimony that gave projected lost profits. She concluded that the plaintiff would have secured thirty-eight contracts for the defendant over five years. Another expert for the plaintiff, Arthur Haut, an accountant and a professor at the Yale University School of Management, testified that he had reviewed the expense assumptions given to him by Scotti and calculated the plaintiff's lost profits at $2,703,672.

At the close of the plaintiff's case, the defendant filed a motion for a directed verdict, claiming that the plaintiff had failed to present sufficient evidence of damages because Scotti was not qualified as an expert to offer such evidence, and her methodologies and data were unreliable. The court reserved decision and at the close of all the evidence, the case was submitted to the jury. The jury answered interrogatories and found in favor of the plaintiff on its breach of contract claim, but did not find either party liable on any of their remaining claims. The jury found the defendant liable to the plaintiff for damages on the breach of contract claim in the amount of $1,351,836, exactly half the sum that was calculated as lost profits by Haut. After the verdict, the defendant filed a motion for judgment notwithstanding the verdict or for remittitur, claiming that the plaintiff was entitled to nominal damages only. The defendant claimed in its motion that (1) Scotti's testimony failed to satisfy the standard for admissibility of expert testimony on lost profits, (2) the plaintiff did not establish a clear history of profitability and (3) the plaintiff did not provide competent evidence concerning expenses relating to its performance under the national agreement.

In a memorandum of decision, the court granted the defendant's motion for judgment notwithstanding the verdict, vacated the damages award and rendered judgment for the plaintiff in the amount of one dollar. The court found Scotti to be unqualified to present expert testimony and, as a result, found that the plaintiff had failed to prove damages, namely, lost profits, to a reasonable certainty.

On appeal, the plaintiff claims that it is entitled to a new trial as to the issue of damages because of the improper exclusion of some of Scotti's testimony or, alternatively, that the court improperly usurped the role of fact finder from the jury by rendering judgment of one dollar for the plaintiff notwithstanding the verdict.

I

The plaintiff claims that the court improperly limited its evidence in support of its claim for damages. Specifically, it claims that the court improperly disallowed testimony by Scotti, which allegedly would have shown that the defendant purposely had interfered with potential agreements that the plaintiff attempted to secure on the defendant's behalf under the New England and Florida agreements. The plaintiff also claims that the court improperly limited the testimony of Gerald Walters, a former director of business development for Omnipoint, a major personal communication services carrier.

"Our standard of review regarding challenges to a trial court's evidentiary rulings is that these rulings will be overturned on appeal only where there was an abuse of discretion and a showing by the [party raising the challenge] of substantial prejudice or injustice. . . . In reviewing claims that the trial court abused its discretion, great weight is given to the trial court's decision and every reasonable presumption is given in favor of its correctness. . . . We will reverse the trial court's ruling only if it could not reasonably conclude as it did." (Internal quotation marks omitted.) Pickel v. Automated Waste Disposal, Inc., 65 Conn. App. 176, 184, 782 A.2d 231 (2001).

The plaintiff alleges...