Benchmark Health Care Ctr., Inc. v. Cain
| Docket Number: | 2003-CA-02399-COA | |
| Oral Argument: | 03-10-2005 | |
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| Court of Appeals: |
Opinion Link Opinion Date: 10-04-2005 Opinion Author: BARNES, J., Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Lost profits - Remittitur - Additur - Section 11-1-55 - Parol evidence - Prejudgment interest Judge(s) Concurring: KING, C.J., BRIDGES AND LEE, P.JJ., IRVING, MYERS, CHANDLER, GRIFFIS AND ISHEE, JJ., Procedural History: Jury Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 09-08-2003 Appealed from: Lauderdale County Circuit Court Judge: Robert Bailey Disposition: JURY VERDICT FOR PLAINTIFF Case Number: 98CV-146(B) |
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| Party Name: | Attorney Name: | |||
| Appellant: | BENCHMARK HEALTH CARE CENTER, INC. |
CHARLES W. WRIGHT JR. |
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| Appellee: | H. TED CAIN D/B/A QUEST REHAB | DARREN E. GRAY |
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| Topic: | Contract - Lost profits - Remittitur - Additur - Section 11-1-55 - Parol evidence - Prejudgment interest |
| Summary of the Facts: | H. Ted Cain d/b/a Quest Rehab filed suit against Benchmark Health Care, Inc., asserting breach of contract. The jury returned a verdict in favor of Quest and ordered Benchmark to pay damages in the amount of $130,774.48. The trial court entered judgment on the jury verdict. Benchmark appeals, and Quest cross-appeals. |
| Summary of Opinion Analysis: | Issue 1: Lost profits Benchmark argues that Quest failed to prove lost profits by a preponderance of the evidence, because the testimony provided by Quest’s accountant was based entirely on speculation and conjecture. A party may recover for loss of future profits in a breach of contract action so long as such profits are proved to a reasonable certainty and not based on mere speculation or conjecture. If the nature of the damages is certain but the extent is uncertain, recovery is not prevented. Accordingly, Quest was only required to put on sufficient proof to enable the finder of fact to reach a fair and reasonable estimation of the damages. In this case, the accountant testified that his estimate did involve a certain amount of speculation, but that the report he prepared was based upon the specific evidence of two previous months of Quest’s operations with Benchmark. Extrapolating actual past profits to reach a figure that represented anticipated future profits was a reasonably certain method of proving lost profits. The accountant chose the revenue months of November and December, 1997, to compute his estimate, because those months reflected a median between the months of highest profit and the months of lowest profit. Thus, there was ample evidence for the court to examine his methodology and then determine the estimate to be reasonably certain. Issue 2: Remittitur Benchmark argues that the court should have granted a remittitur, while Quest cross-appeals on the issue of whether the court should have granted an additur for lost profits sustained by Quest. In order to impose an additur or remittitur under section 11-1-55, the court must find that the damages are excessive or inadequate for the reason that the jury was influenced by bias, prejudice, or passion, or that the damages awarded were contrary to the overwhelming weight of credible evidence. Both parties contend that the jury’s award of $130,774.48 in damages was likely divided into specific damages of $79,474.48, and lost profits of $51,300. If the parties’ assumption regarding the jury’s calculation of lost profits is correct, it would appear that the jury reduced Quest’s claim for lost profits by approximately two to two and one-half months’ profits from the Lakeview contract. The jury would have been well within its discretion to reduce Quest’s claim for lost profits by the amount estimated to have been earned on the Lakeview contract from either March or April to June 16, 1998. Therefore, the court did not abuse its discretion in refusing to grant either an additur or remittitur. Issue 3: Parol evidence Benchmark argues that parol evidence should have been introduced at trial which tends to establish that an extrinsic agreement existed between Benchmark and Quest regarding receipt of payment and early termination of the contract. Parol evidence of the intention of the contracting parties may be admitted only when the terms of the agreed-upon contract are ambiguous. Here, the trial court correctly concluded that the parties’ intentions were unambiguously specified in the contract. The clear terms of the contract state that Benchmark is responsible “for all billing, collections, denials, and payments.” Benchmark is further obligated to compensate Quest for Quest’s services within thirty days of the date that Quest submits an appropriate invoice. Absent just cause, the only provision for termination is that either party may terminate after the expiration of the initial term of the contract provided that the terminating party gives sixty days’ written notice. Issue 4: Prejudgment interest Quest argues that the court erred in denying prejudgment interest. Prejudgment interest may be awarded where the claim is liquidated or where there is a bad faith refusal to pay an amount owed. The claim here was unliquidated. The total contract price was not set forth in the contract. Although the agreement contained a formula for calculating the cost of work performed, the record reflects a legitimate dispute over how much money was owed under the contract. |
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