Opinion
Rehearing Denied Jan. 21, 1975.
Page 371
Milnor H. Senior, P.C., Denver, for plaintiff-appellant.
Hornbein, MacDonald & Fattor, Martin D. Buckley, Denver, for defendant-appellee.
RULAND, Judge.
In an action arising out of a landlordtenant relationship, the jury returned verdicts denying plaintiff's claim for unpaid rentals and awarded defendant $10,000 on his counterclaim. The trial court deducted $1,800 from the jury verdict for undisputed rentals owed plaintiff and entered judgment for $8,200 for defendant. Plaintiff appeals. We reverse.
The record reflects that Charles F. Leppla, Jr., deceased, owned certain land in Adams County from which he operated a commercial fertilizer business. Beginning in September 1968 pursuant to an agreement to lease made with the decedent, defendant operated his fertilizer processing and distribution business from the same premises. The three-year agreement provided, Inter alia, for a rental of $250 per month plus seven and one-half percent on gross annual income up to $40,000 and 12 percent on gross annual income in excess of $40,000. No formal lease was signed pursuant to this agreement, and, at its expiration, defendant remained on the premises on the same terms.
Despite extended negotiations after decedent's death in February of 1972, no written agreement was reached on terms of a new lease. However, by oral agreement, the rental became $600 monthly, commencing in May 1972. Plaintiff claimed that the rent was effectively raised to $650 per month beginning in May 1973.
Plaintiff, as administratrix for the estate of Charles F. Leppla, Jr., deceased, commenced this action for possession (which defendant relinquished July 31, 1973), to recover delinquent rents, and for $10,000 damages for interference with plaintiff's business. The trial court dismissed the latter claim, and no appeal is taken from that dismissal. The claim for delinquent rent was based both on failure to pay $650 monthly, May to July 1973, and on the allegation that defendant failed to pay the full percentage of gross proceeds from 1968 to 1971.
Defendant counterclaimed for $2,064 based on sale of processed fertilizer to plaintiff, services rendered, use of equipment, and expenses incurred as a result of interference with use of demised premises. In addition, defendant claimed damages in the amount of $7,500 for loss of income from May 1972 through July 1973, resulting from plaintiff's alleged interference with defendant's business. The parties stipulated during trial to $414 owed by plaintiff for fertilizer purchased from defendant.
In the motion for new trial, plaintiff claimed, Inter alia, that the jury verdict of no damages for plaintiff was error inasmuch as it was undisputed that defendant owed $1,800 rental; that excessive damages had been awarded defendant inasmuch as they exceeded by $436 the amount claimed by defendant in the prayer of the counterclaim; that the evidence was insufficient to support the verdict for defendant; and that the verdicts resulted from passion and prejudice.
In this appeal, plaintiff raised for the first time numerous other alleged errors. These issues were not timely raised; thus, except for the asserted errors committed in instructing the jury on damages, we do not consider them on review. See C.R.C.P. 51 and 59(f).
The measure of damages for business interference is loss of net profits. Lee v. Durango Music, 144 Colo. 270, 355 P.2d 1083; Power Equipment Co. v. Fulton, 32 Colo.App. 430, 513 P.2d 234. In support of his claim, defendant presented testimony concerning loss of gross profits resulting from the alleged interference and some evidence of loss of net profits in 1973 compared to 1968 to 1972. However, the jury was instructed:
'If you find from the preponderance of the evidence that the plaintiff interfered with the defendant's right to peaceable and quiet enjoyment of the property, you shall proceed to assess as his damages such sum as shall reasonably compensate him for the interference.
'In assessing such damages you may take into consideration the amount of business he was doing at the time of such interference and any reasonable and necessary expenses he incurred by reason of the interference, as each has been established by a preponderance of the evidence.'
While neither party objected to the instruction given nor offered alternate damages instructions, the trial court was obligated to instruct the jury fully and properly on the measure of damages, and we may notice this particular error even if raised for the first time on appeal. See Kendall v. Hargrave, 142 Colo. 120, 349 P.2d 993. The jury must be specifically instructed that loss of net profits is the measure of defendant's recovery, and an appropriate instruction must be included defining net profits under the circumstances of this case. See Colorado Jury Instruction 23:48 (and notes relative thereto). The jury must also be properly instructed as to the measure of recovery for defendant's other damage claims. See Colorado Jury Instructions 23:32 and 23:51.
While the jury was not properly instructed relative to defendant's admission that $1,800 in rentals was owed, this error was corrected by the trial court in granting an 'off-set' to the verdict returned for defendant. The balance of plaintiff's claim for rentals was resolved on conflicting evidence against the estate, and that determination will not be disturbed here. We have examined plaintiff's other allegations of error which are properly before us and find them to be without merit.
The judgment is reversed and the cause remanded with directions to enter judgment for plaintiff on the claim for past due rentals in the amount of $1,800, for defendant in the amount of $414 for fertilizer purchased by plaintiff, and, since the liability and damages issues are closely interwoven, for a new trial on the balance of defendant's counterclaim. See Bassett v. O'Dell, 30 Colo.App. 215, 491 P.2d 604, affirmed, 179 Colo. 424, 498 P.2d 1134.
PIERCE and VAN CISE, JJ., concur.