Section 10 Lost Profits

• Library: Damages 2012

As a general rule, anticipated profits of a business are too remote and speculative to warrant recovery. Refrigeration Indus., Inc. v. Nemmers, 880 S.W.2d 912 (Mo. App. W.D. 1994). But anticipated profits may be recoverable if the plaintiff can prove with reasonable certainty that the defendant’s conduct caused the loss of profits and their estimated amount. Id.; M.K. Metals, Inc. v. Container Recovery Corp., 645 F.2d 583 (8^th Cir. 1981). For these purposes, “certainty” means certainty that damages have been suffered and not exact proof of the amount. BMK Corp. v. Clayton Corp., 226 S.W.3d 179 (Mo. App. E.D. 2007). Once the plaintiff has established the existence of lost profits, all that is required to establish the amount of lost profits with reasonable certainty is that the amount be supported by the best evidence available. Id. A plaintiff produces the best evidence available when the plaintiff produces all relevant facts tending to show the extent of damages. Id. Stated differently, the amount of expected profits must be proved with reasonable certainty by using actual facts and present data. Mach. Maint. & Equip. Co. v. Cooper Indus., Inc., 634 F. Supp. 367 (E.D. Mo. 1986). The amount of damages for expected profits cannot be left to speculation. Fort Zumwalt Sch. Dist. v. Recklein, 708 S.W.2d 754 (Mo. App. E.D. 1986). In calculating the amount of lost profits, lost revenue is estimated, and overhead expenses tied to the production of that income are deducted from the estimated lost revenue. Catroppa v. Metal Bldg. Supply, Inc., 267 S.W.3d 812 (Mo. App. S.D. 2008).

A plaintiff may establish future net profits of an ongoing business by proving the income and expenses of the business for a reasonable time anterior to the breach of contract. See:

· Anderson v. Abernathy, 339 S.W.2d 817 (Mo. 1960)

· Orchard Container Corp. v. Orchard, 601 S.W.2d 299 (Mo. App. E.D. 1980)

· Brown v. McIBS, Inc., 722 S.W.2d 337 (Mo. App. E.D. 1986)

On the other hand, when the business is new, it is very difficult, if not impossible, to prove anticipated lost profits with a sufficient degree of certainty. United Iron Works v. Twin City Ice & Creamery Co., 295 S.W. 109 (Mo. 1927). But see, e.g.:

· Tipton v. Mill Creek Gravel, Inc., 373 F.3d 913, 918 (8^th Cir. 2004) (stating new businesses may recover lost profits if such lost profits “are made reasonably certain by proof of actual facts, with present data for a rational estimate of their amount”)

· United Fire & Cas. Co. v. Historic Pres....