Kimball v. Little River Lumber Co.

606 P.2d 660, 44 Or. App. 497
CourtCourt of Appeals of Oregon
DecidedFebruary 11, 1980
DocketL78-0012, CA 12819
StatusPublished
Cited by5 cases

This text of 606 P.2d 660 (Kimball v. Little River Lumber Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kimball v. Little River Lumber Co., 606 P.2d 660, 44 Or. App. 497 (Or. Ct. App. 1980).

Opinion

*499 ROBERTS, J.

Defendant appeals from the jury verdict in favor of plaintiffs in the amount of $75,000 for breach of two logging contracts. Plaintiffs separately appeal the award of $7,500 in attorney fees, contending the award was inadequate. We affirm.

The parties entered into two separate contracts involving two separate geographical areas in which defendant had purchased the right to remove timber for a specified period of time. Plaintiffs contracted to perform certain of the logging operations.

The contract involving the "Pass Creek” area in Douglas County was entered into on April 6,1977, and required that plaintiffs skid, deck and load all the timber on the site. Plaintiffs were required to install a bridge and clear the roadway before beginning the logging operations. They encountered various difficulties with rainy weather and equipment breakdowns. By May 23, 1977, they had removed 79 loads of an estimated 800 to 1000 loads which the contract required be removed by November 15,1977. On May 23, 1977, defendant terminated the contract.

The other contract involved a nearby area known as the "Granddad sale” on U.S. Forest Service property. Operations were to begin under that contract on May 1, 1977 and to be completed by November 30,1979. As of May 23, 1977, a subcontractor brought in by plaintiffs with defendant’s approval had loaded approximately 66,000 board feet of what eventually proved to be 5,659,580 board feet on the site. Defendant also terminated that contract on May 23, 1977.

Both contracts provided that plaintiffs must "* * * diligently and continuously pursue said operations, except to the extent [they are] prevented or materially hindered by causes beyond [their] reasonable control.” Both also contained provisions indicating that time was of the essence.

*500 Plaintiffs’ action sought lost profits from both jobs. Defendant alleged as an affirmative defense that plaintiffs breached both contracts before May 23, 1977, and, therefore, it was justified in terminating the contracts as it did.

The case was tried to a jury which returned a verdict in favor of plaintiffs in the amount of $39,000 on the Pass Creek contract and $36,000 in the Granddad sale contract. The trial court awarded plaintiffs $7,500 of the $13,460.17 attorney fees they sought.

Defendant assigns as error the denial of its motions for nonsuit made at the close of plaintiffs’ case and renewed in the form of motions for a directed verdict at the close of all the evidence. There were two grounds for the motions. Defendant first contends that plaintiffs’ own evidence showed that they breached the contracts before defendant terminated them in that plaintiffs failed to perform "diligently and continuously” in face of the time limits involved.

In reviewing the evidence in the light most favorable to plaintiffs, as we must, Wootten v. Dillard, 286 Or 129, 592 P2d 1021 (1979); Welch v. U.S. Bancorp, 286 Or 673, 596 P2d 947 (1979), we find that a jury question was presented as to whether plaintiffs performed "diligently and continuously * * * except to the extent * * * prevented or materially hindered by causes beyond [their] reasonable control.” The problems plaintiffs encountered with the rainy weather and equipment failures were obviously a factor in the slow pace of their operations prior to termination by defendant. Whether plaintiffs’ response to those problems amounted to diligent and continuous pursuit of the operations was a question for the jury. 1

*501 The second ground for defendant’s motions for non-suit on the two contracts was plaintiffs’ purported failure to produce sufficient evidence of lost profits to allow the jury to award damages without speculation. This argument is two-pronged. First, it is contended that plaintiffs did not produce any evidence that they would have made any profit on either of the two contracts. Secondly, defendant challenges the sufficiency of the evidence introduced to show the amount of profit plaintiffs would have made had they been allowed to complete the contracts.

Although defendant is correct that plaintiffs did not specifically testify or produce evidence directly stating that they would have made a profit, they are not precluded from recovering. There was evidence, although not uncontradicted, that plaintiffs could have completed both contracts within the time limits of the contracts without incurring significant costs in addition to those anticipated costs used in calculating the amount uf profit claimed by plaintiffs. We hold that the calculations used in projecting the amount of lost profit, based on the known expenses involved and the past, although short, history of plaintiffs partnership, were sufficient to allow the jury to find that plaintiffs would have made a profit on the two contracts in question.

In reviewing evidence of lost profits we are now guided by the recent Supreme Court decision in Welch v. US Bancorp., 286 Or 673, 596 P2d 947 (1979). Welch begins its analysis of the issue of lost profits with the fundamental proposition that consequential damages are recoverable if they are reasonably *502 foreseeable. Obviously defendant was aware that plaintiffs expected to make a profit from their execution of the contract. Here, as in Welch, "[l]oss of profits from nonperformance of the agreement, if it occurred, was foreseeable.” 286 Or at 704.

The Supreme Court in Welch pointed out that it had previously adopted McCormick’s interpretation of the term "reasonable certainty” which has been the standard of proof required for recovery of lost profits:

" '* * * [I]t appears that the epithet "certainty” is overstrong, and that the standard is a qualified one, of "reasonable certainty” merely, or, in other words, of "probability.” ’ ” Cont. Plants v. Measured Mkt., 274 Or 621, 624, 547 P2d 1368 (1976).

While the "probability” test is the standard to be employed by the finder of fact, Welch held that in a jury trial the court should intervene to take the issue of lost profits from the jury

"* * * only when it can say that the evidence is clearly insufficient to establish the claim of lost profits. This does not mean that the court should withdraw the question just because the court is not convinced by the evidence. * * * If reasonable men could be persuaded of the validity of the claim on the evidence presented, the jury must be allowed to make the decision.” (Citation omitted.) 286 Or at 704-5.

We find that the plaintiffs presented evidence of lost profits which was not "clearly insufficient” to establish their lost profits claim. Their evidence consisted of the testimony of their bookkeeper, who was experienced in bookkeeping for logging operations. He testified to the figures ultimately awarded by the jury.

His testimony on the Pass Creek contract was an extrapolation from the prior year’s income tax return of the plaintiffs’ partnership.

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Bluebook (online)
606 P.2d 660, 44 Or. App. 497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kimball-v-little-river-lumber-co-orctapp-1980.