Hardwick v. Dravo Equipment Co.

569 P.2d 588, 279 Or. 619, 22 U.C.C. Rep. Serv. (West) 968, 1977 Ore. LEXIS 868
CourtOregon Supreme Court
DecidedSeptember 27, 1977
Docket5612, SC P2511
StatusPublished
Cited by32 cases

This text of 569 P.2d 588 (Hardwick v. Dravo Equipment Co.) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hardwick v. Dravo Equipment Co., 569 P.2d 588, 279 Or. 619, 22 U.C.C. Rep. Serv. (West) 968, 1977 Ore. LEXIS 868 (Or. 1977).

Opinions

[621]*621BRYSON, J.

Plaintiff is a contract logger for Kinzua Corporation. He purchased a new Barko diesel log loader from defendant Dravo Equipment Company on September 17, 1974. Plaintiff subsequently discovered the loader had certain defects and revoked his acceptance of it on May 19, 1975. He then brought this action for breach of contract.

The jury made a special finding "that Plaintiff righfully [sic] revoked his acceptance of the Barko 350 Loader” and awarded him the following damages: return of the purchase price ($58,000); lost profits ($37,500); personal property taxes ($622.01); and insurance premiums ($877.50). The jury also awarded defendant a $6,000 setoff against plaintiff for the reasonable rental value of the loader. The trial court entered judgment on the verdict. Defendant appeals and plaintiff cross-appeals.

Defendant only appeals from that part of the judgment awarding lost profits. Also, defendant does not contest the jury’s findings that plaintiff properly revoked acceptance under ORS 72.6080,1 nor does it [622]*622contest the availability of the remedies plaintiff sought under ORS 72.7150.2

Defendant first contends that "[t]he trial court erred in denying defendant’s motions to strike plaintiff’s claim for lost profits.” The defendant has combined under this single assignment of error the trial court’s denial of three of defendant’s motions to strike plaintiff’s claim for lost profits. j

Defendant’s first motion contended that plaintiff had not introduced sufficient evidence to justify submitting plaintiff’s claim for lost profits to the jury.

We are concerned here with plaintiffs evidence relating to lost profits. This part of plaintiff’s case was based largely on the testimony of his expert witness, Dr. Dennis Dykstra, whose expertise is not questioned by defendant. Generally, plaintiff chose to prove his alleged lost profits by showing how many additional logs he could have loaded during the claim period3 if he had had the use of the Barko log loader. After determining the number of additional logs, this was multiplied by the price of the additional logs from which was substracted the expenses in connection therewith.

[623]*623Dr. Dykstra prepared for trial by examining plaintiffs records and inspecting the site of plaintiff’s logging operation. As to the quantity of logs plaintiff could have loaded, Dr. Dykstra testified that the Barko loader, together with plaintiff’s original loader, would have been able to load all the logs that plaintiff’s existing equipment could "skid” from where the trees were felled to the loading area. With two log loaders plaintiff could have "loaded” as much as he could "skid.” Thus, plaintiff’s lost production would be equivalent to the difference between his total skidding capacity and his actual production with only one loader.

Dr. Dykstra determined plaintiffs skidding capacity as follows. From his inspection of the site, he determined that the average skidding distance was 700 feet. From his inspection of plaintiff’s scale tickets, he determined that the average log volume was 200 board feet. From his inspection of plaintiffs seven skidding machines, and by use of a recognized formula, he determined that each machine could skid 1,000 board feet of timber in 19.25 minutes. He further testified that each machine could operate eight hours per day. On this basis he testified that each skidding machine could skid 24,960 board feet per day.

From plaintiff’s records, Dr. Dykstra next testified that there were 65% working days during the claim period which, multiplied by plaintiff’s seven machines, gave 458% machine days. Multiplying that figure by 24,960 board feet per machine-day, he calculated a potential total production of 9,946,560 board feet. Subtracting plaintiffs actual production of 5,897,280 board feet, he determined that plaintiff’s total net lost production for the claim period was 4,049,280 board feet.

There was evidence that during the claim period plaintiff was not under a quota with the Kinzua mill and so could have sold as many logs as he could produce. He received a net payment for the logs of $22 [624]*624per thousand board feet for 30 days dining the claim period and $24 per thousand board feet for 35y2 days during the remainder of the claim period. Applying these prices to the lost production yields, he testified there was a lost gross income of $93,473.35.

On the expense element of the proof of lost profits, Dr. Dykstra testified that plaintiff would have needed four additional employees, working 13 hours pier day. He assumed that plaintiff would pay these employees time and one-half for overtime and that he would have to pay 24 percent above wages for payroll taxes and insurance. At plaintiffs wage scales, the additional labor costs would have amounted to $27,040.30.

Dr. Dykstra next calculated plaintiffs equipment costs by using a formula accepted in the forest industry that such costs are no more than 90 percent of the depreciation of the equipment. These costs, for the loaders and the skidding machines, would have been $9,759.24. Finally, Dr. Dykstra made an additional adjustment to lost profits of $937, reflecting the depreciation of a new loader plaintiff bought and an income tax credit for purchasing the machine.

Based on this data, Dr. Dykstra testified, over defendant’s objection, that plaintiff’s net lost profits were $57,610.81. In order to verify this estimate, he also testified that he had examined plaintiff’s ¡actual production with two loaders. The comparison periods were from December 1, 1975, through February 15, 1976, and in June, 1976. Both periods were after the claim period. Dr. Dykstra chose these periods because, as in the claim period, plaintiff was not under a quota. In Dr. Dykstra’s opinion, plaintiff’s production during these two periods supported his estimate of plaintiff’s lost production during the claim period. j

With one exception, pertaining to average log volume as hereinafter discussed, defendant made no objection to the admissibility of any of Dr. Dykstra’s testimony. Instead, defendant moved to strike plaintiff’s claim for lost profits on three grounds.

[625]*625Defendant first argues that the evidence failed to support plaintiffs claim for lost profits. In Kwipco, Inc. v. General Trailer Co., 267 Or 184, 188, 515 P2d 1317 (1973), we stated the test for evidence needed to support a claim for lost profits:

"This court has adopted the rule that damages are recoverable for loss of future profits only to the extent that the evidence affords a sufficient basis for estimating the amount of such profits with reasonable certainty. [Douglas Const. v. Mazama Timber, 256 Or 107, 115, 471 P2d 768 (1970).] As stated more recently, '* * * the essential ingredient of proof of lost profits to a reasonable certainty is supporting data.’ [Verret v. Leagjeld, 263 Or 112, 115, 501 P2d 780 (1972).]” (Footnotes omitted.)

Plaintiffs evidence met this test. The "supporting data” supplied by Dr. Dykstra was from his personal inspection of the site, from his inspection of plaintiffs records, and from his expert knowledge.

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Bluebook (online)
569 P.2d 588, 279 Or. 619, 22 U.C.C. Rep. Serv. (West) 968, 1977 Ore. LEXIS 868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hardwick-v-dravo-equipment-co-or-1977.