Nora v. Safeco Ins. Co.

• Decision Date: 11 April 1978
• Docket Number: No. 12405,12405
• Citation: 99 Idaho 60,577 P.2d 347
• Parties: Robert C. NORA, Sr., d/b/a Mosell's Trucking, Plaintiff-Respondent, v. SAFECO INSURANCE COMPANY, a corporation, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 347

577 P.2d 347

99 Idaho 60

Robert C. NORA, Sr., d/b/a Mosell's Trucking, Plaintiff-Respondent, v. SAFECO INSURANCE COMPANY, a corporation, Defendant-Appellant.

No. 12405.

Supreme Court of Idaho.

April 11, 1978.

Peter J. Boyd and James D. LaRue of Elam, Burke, Jeppesen, Evans & Boyd, Boise, for defendant-appellant.

Lloyd J. Webb of Webb, Burton, Carlson & Pedersen, Twin Falls, for plaintiff-respondent.

DONALDSON, Justice.

The plaintiff-respondent, Robert C. Nora, is a track buyer, defined by Idaho law as an individual who buys and sells agricultural commodities. He worked in Southern Idaho buying and selling hay and grain. Nora began this business in mid-1974. From 1966 until 1974 he had worked as a trucker, hauling agricultural commodities.

At the time Nora first engaged in the track buying business in 1974, he was not licensed or bonded, a requirement imposed by Idaho law. He testified at trial that he was not aware of these requirements when he started his track buying business. Nora was informed by the State Department of Agriculture in January 1975 of this requirement. He was allowed to continue in his business, with the cooperation of the Department of Agriculture, until he acquired his bond and license.

In early September 1975, Nora contacted Mr. Kenneth Dodds, the defendant-appellant's (Safeco's) agent in Kimberly, Idaho, to acquire a bond. On September 11, 1975, at a meeting in Mr. Dodds' office, Nora was informed by Mr. Dodds personally and by a Mr. Erickson, Safeco's Seattle representative, over the telephone of the requirements he would have to meet to acquire the bond. One requirement was the posting of $10,000 in collateral and the signing of a collateral pledge agreement. At this meeting between Nora and Mr. Dodds, Nora endorsed a times saving certificate in the amount of $10,000 to Safeco as collateral and received the track buyers bond. The collateral pledge agreement was not signed this day because it had to be sent from Seattle. Arrangements were made between Mr. Dodds and Nora to sign this agreement when it arrived. When the agreement arrived a few days later, Nora refused to sign it. Nora questioned a provision in the agreement allowing Safeco to use his collateral to settle claims filed against the bond without his consent or participation. On September 23, 1975, at a meeting between Nora, Mr. Dodds, and Mr. Erickson, Nora proposed a supplemental agreement to eliminate what he saw as a problem in the Safeco agreement. Mr. Erickson told Nora at this time that if they could not settle the collateral pledge agreement problem, the bond would have to be canceled and Nora's collateral would be retained for a reasonable time after the cancellation of the bond in case claims were filed against the bond. Ultimately, the parties could not resolve their differences concerning the form of the collateral pledge agreement. Consequently, the bond was canceled on September 26, 1975. Notice of cancellation was mailed to the Department of Agriculture on September 29, 1975 making the effective date of the cancellation November 29, 1975. Nora's collateral was not returned until March 1976 after he filed suit.

Mr. Erickson and Mr. Dodds testified at trial that Nora indicated at their meetings that he understood that his collateral would be retained for a reasonable time after the cancellation of the bond. Nora testified that he did not understand that his collateral would be retained after the effective cancellation date.

Nora ceased operations of his track buying business after his bond was canceled. Between the notice and effective cancellation dates, he conducted no business and incurred no debts. He did make an attempt to acquire another bond, but was unsuccessful because of his lack of collateral. Nora's attempts to retrieve his collateral from Safeco between the end of November and the time that this suit was filed were also unsuccessful.

Nora filed this action on December 19, 1976 alleging Safeco had unlawfully retained the time certificate (his collateral) and that as a result of Safeco's action his credit standing had been damaged and he had lost customers and general business profits. Safeco answered denying it had unlawfully retained the collateral and set forth as an affirmative defense that it had been willing to release the collateral following the expiration of a reasonable time after the bond was canceled. The case went to trial and at the end of Nora's case Safeco moved for a directed verdict which the district court denied. After the conclusion of the trial, a jury awarded Nora a judgment in the amount of $52,000. The judgment was entered on August 12, 1976. Safeco thereafter moved in the alternative for a motion for remittitur, motion for judgment n. o. v., or motion for new trial. These motions were denied. Safeco is appealing the August 12 judgment.

Nora was allowed to testify at trial as to his projected volume of business and profit margins in the 1975-76 season had he been able to conduct his track buying business. Safeco objected to this testimony contending that it was speculative and lacking in foundation. Nora was also allowed to elicit testimony from Mr. Glen Capps, an experienced track buyer. Capps gave testimony indicating his volume of business and profit margins in previous years. Safeco objected to this testimony contending that it lacked proper foundation and that it allowed the jury to draw unfair comparisons between the business of Capps and of Nora. Safeco argued that the comparison was unfair because of the differences in business experience between Capps and Nora.

On appeal, Safeco assigns four errors by the district court which can be summarized as follows:

(1) The district court erred by receiving the testimony of Nora and Capps in the first instance and even with this testimony, there was insufficient evidence to sustain the damage claim and verdict; thus the district court erred by denying Safeco's motion for a directed verdict.

(2) The district court erred by refusing two of Safeco's proposed instructions concerning liability.

I

Safeco contends that it was error to allow Nora to testify concerning his projected volume of business and profit margins for the 1975-76 season because the testimony was speculative in nature and lacking in foundation. Nora gave testimony indicating his volume of business and profit margins in the 1974-75 season. Nora's testimony, substantiated by business records, indicated that he had moved 1,481 tons of hay and 7,800 cwt of grain in the 1974-75 season, grossing $122,681.69 in total sales with $104,488.30 in production costs. Thus Nora's net profit for the 1974-75 season was $18,193.39. Nora was then allowed to give an opinion as to the amount of business he expected to do and the amount of profit he expected to realize in 1975-76 had he been bonded and licensed as a track buyer. Nora's testimony indicated that he would have moved a total of 6,000 tons of hay and 2,500 tons of grain in 1975-76, for a net profit of $86,800. His projections of expected volumes of business and profit margins were based on his previous years experience and on his personal knowledge of the market. Nora's personal knowledge of the market was based on contacts he had made with buyers and sellers of hay and grain.

The district court properly allowed this evidence to be introduced. It was not too speculative to be inadmissible as proof of lost future earnings. Nora's testimony concerning his previous volume of business and profit margins was substantiated by business records. His testimony concerning projected volumes of business was substantiated by some sixteen witnesses who were called to testify that they would have done business with Nora had he been able to conduct his track buying business. This testimony was also substantiated by the witness Glen Capps, who testified that the market trading of hay and grain was very active, indicating that ample commodities were available for trading. Nora's testimony concerning his projected profit margins for 1975-76 was substantiated in two ways. First, Nora's business records from the previous year showed the amount of profit Nora could have realized per ton of hay and grain moved. Second, the witness Glen Capps stated that Nora could expect a net profit of $70,500 if he moved the 6,000 tons of hay and 2,500 tons of grain in 1975-76. This Court has stated " * * * that in cases of 'tortious interference with an established business that damages for loss of anticipated earnings or profits must be shown with reasonable certainty.' (citations omitted) The purpose of the 'reasonable certainty' rule is to avoid making compensatory damages awards for lost profits which are fabricated or based on mere conjecture or speculation. (citations omitted)" Jolley v. Puregro Co., 94 Idaho 702, 706, 496 P.2d 939, 943 (1972). The testimony elicited from Nora was not mere conjecture or speculation and as a consequence the admission of Nora's testimony did not violate the rule set forth in Jolley.

Safeco also contends that it was error to admit the testimony of Glen Capps, an experienced track buyer, concerning his volume of business and profit margins. The experience of other persons in the same or similar businesses was relevant evidence which could be considered by the court. Speer v. Quinlan, 96 Idaho 119, 525 P.2d 314 (1974). The fact that there were differences between Nora and Capps regarding their experience in the track buying business does not per se render Capps' testimony inadmissible. The question as to whether these differences were great enough to render Capps' testimony irrelevant and consequently inadmissible, is vested in the sound discretion of the trial court. The trial court's determination will not be disturbed, absent a showing of abuse of discretion. Cogswell v. C. C. Anderson Stores Co., 68 Idaho 205, 192 P.2d 383 (1948). The testimony of the witness Capps was competent for the...