Kuffel v. Seaside Oil Co.

69 Cal. App. 3d 555, 138 Cal. Rptr. 575, 1977 Cal. App. LEXIS 1444
CourtCalifornia Court of Appeal
DecidedMay 6, 1977
DocketCiv. 2888
StatusPublished
Cited by21 cases

This text of 69 Cal. App. 3d 555 (Kuffel v. Seaside Oil Co.) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kuffel v. Seaside Oil Co., 69 Cal. App. 3d 555, 138 Cal. Rptr. 575, 1977 Cal. App. LEXIS 1444 (Cal. Ct. App. 1977).

Opinion

Opinion

FRANSON, J.

This appeal is from a judgment on the retrial of the issue of damages arising out of the wrongful termination of a contract. The judgment in favor of appellants is for $16,775.11, compensatory damages and $5,591.70, punitive damages. 1

*560 Appellants make two contentions: First, they claim that there is insufficient evidence to support the compensatory damage award. Appellants argue that they should have been awarded compensatory damages in the sum of $49,508.56. Second, appellants claim that the trial court committed reversible error in not making special findings on a material issue of fact, as required by Code of Civil Procedure section 634.

For the reasons to be stated, we hold both contentions to be without merit.

The pertinent facts on the question of compensatory damages are as follows: appellants have been engaged in the business of selling gasoline and related products from a service station in Riverbank, California, for approximately 30 years. They resold gasoline furnished by respondent Seaside Oil Company for approximately 20 years from 1946 to 1966.

In April of 1960 appellants negotiated a new 10-year contract with respondent. Under the contract, they received in addition to the basic margin on gasoline of 4 or 4Vi cents per gallon a 2-cent rental allowance and a 1-cent delivery allowance. This arrangement continued until May 18, 1966. On that date, upon representations by respondent that appellants would get a new contract on the same terms and conditions as the old, the contract was terminated. At the time of termination, the contract had an unexpired term of four years and eight days. A new contract was never received by appellants and deliveries of Seaside gasoline were terminated.

When respondent cut off appellants’ gasoline supply, appellants acquired Goodrich gasoline from June 1966 through May 1968. In June 1968 appellants became Mobil Oil Company dealers and remained Mobil dealers for the remainder of the two-year unexpired term of the contract with respondent.

The proper measure of compensatory damages in this case is stated in Kuffel v. Seaside Oil Co., supra, 11 Cal.App.3d at page 366.

“It is clear that [appellants] were entitled to be compensated for the loss of actual or prospective profits naturally and directly resulting from the fraudulent termination of Seaside’s sales contract [citation]. The court, therefore, could properly have awarded [appellants] the difference between the net profits they could reasonably have anticipated making from the sale of Seaside gasoline for the unexpired term of the sales *561 contract and the net profits they actually made and reasonably could have anticipated making from the sale of Goodrich . . . brand gasoline [or Mobil brand gasoline] over the same period.” (11 Cal.App.3d at p. 361.)

“It is fundamental that in awarding damages for the loss of profits, net profits, not gross profits, are the proper measure of recoveiy [citations].” (11 Cal.App.3d at p. 366.)

On retrial, the court followed Kuffel and made the following findings of fact and conclusions of law on the issue of damages:

Findings of Fact-

“No. 3. In the market conditions prevailing during said period, the net profits [appellants] could have reasonably anticipated making from the sale of Seaside gasoline at their station for the unexpired term of the sales contract would have exceeded the net profits they actually made from the sale of [Goodrich] and Mobil gasolines there over the same period, by the amount of $16,775.11.
“No. 4. Compensatory damages sustained by [appellants] are fixed at $16,775.11.

Conclusions of Law

“No. 5. To compensate the losses of actual and prospective profits naturally and directly resulting from the fraudulent termination of the Seaside sales contract, the [appellants] are properly entitled to receive compensatory damages in an amount equal to the difference between the net profits they could reasonably have anticipated making from the sale of Seaside gasoline for the unexpired term of the sales contract and the net profits they actually made from the sale of [Goodrich] and Mobil gasolines, respectively over the same period.”

The trial court did not include in its findings or conclusions the calculations from which the $16,775.11 figure for compensatory damages was derived. However, in its announcement of intended decision it noted that it was adopting respondent’s evaluation of compensatory damages as set forth in respondent’s exhibit Z. 2

*562 Discussion

Appellants are entitled to be compensated for the loss of actual or prospective profits naturally and directly resulting from the wrongful termination of its sales contract by respondent. (Kuffel v. Seaside Oil Co., supra, 11 Cal.App.3d at p. 361.) This means that appellants are entitled to the difference between the net profits they could reasonably have anticipated making from the sale of Seaside gasoline for the unexpired term of the sales contract and the net profits they actually made from the sale of Goodrich brand gasoline and Mobil brand gasoline over the same period. (Kuffel v. Seaside Oil Co., supra, 11 Cal.App.3d at pp. 361, 366.)

The trial court purported to apply the correct rule by adopting respondent’s exhibit Z as the proper method of calculating the damages. Thus, the issue is whether respondent’s exhibit Z and the exhibits from which it was derived constitute substantial evidence to support the trial court’s award of compensatory damages in the amount of $16,775.11.

Exhibit Z was prepared by John Pearson, manager of the. administrative services for respondent company. Mr. Pearson computed appellants’ loss of net profits over the four-year period remaining on their contract with respondent by calculating the net profits appellants could reasonably have anticipated making from the sale of respondents’s gasoline for the unexpired term of the contract and the net profits they actually made from the sale of Goodrich and Mobil brand gasoline over the same period.

Appellants’ exhibit 16 and respondent’s exhibit Q provided the actual and projected price, volume and cost for the period of June 1966 through May 1968, when appellants sold Goodrich gasoline. Appellants’ exhibits 15 and 16 and respondent’s exhibit Q provided these amounts for the period June 1968 through May 1970, when appellants sold Mobil gasoline. Appellants’ exhibit 20 provided the expenses for the entire period in question, i.e., June 1966 through May 1970.

The projected price, volume and wholesale cost of Seaside gasoline for the four-year period in question were computed on respondent’s exhibit Z as follows:

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Cite This Page — Counsel Stack

Bluebook (online)
69 Cal. App. 3d 555, 138 Cal. Rptr. 575, 1977 Cal. App. LEXIS 1444, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kuffel-v-seaside-oil-co-calctapp-1977.