Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. SC087278, John L. Segal, Judge.
McNicholas & McNicholas, John P. McNicholas and Robert P. Wargo for Defendants and Appellants.
Higgs, Fletcher & Mack and David R. Clark for Plaintiffs and Respondents.
ARMSTRONG, J.
This lawsuit was brought by plaintiffs and respondents Nancy Van Laningham and Baja Fishing and Resorts, Inc. against defendants and appellants Carlos Van Wormer Ruiz, Robert Van Wormer, and Roberto Van Wormer. The case went to the jury on a single cause of action for breach of contract. Plaintiffs prevailed, and on special verdicts, the jury awarded $417,326 for past economic loss and $2.9 million for future economic loss, for a total of $3,317,326 in damages. Defendants moved for new trial or a conditional remittitur on the grounds of excessive damages. The court denied the motion, finding that "It's a high number, but it's not an unreasonable number. . . . It's a big number. It's a big contract."
On appeal, defendants again contend that the damages were excessive, contrary to the evidence, and were the result of passion or prejudice on the part of the jury. We affirm.
Facts
Plaintiffs' case, accepted by the jury, was as follows: for many years, Van Laningham's father was the exclusive reservations agent for a hotel (later, a chain of hotels) in Baja California owned by the Van Wormer family. He eventually sold the reservations business to Van Laningham, and defendants herein eventually became partial owners of the hotels. Until 2001, the arrangement between the Van Wormers and the Van Laninghams was a handshake deal. However, on November 16, 2001, Van Laningham and defendants entered into a 15 year contract under which Van Laningham had the exclusive right to market and accept reservations for the hotels, for a 10 percent commission.
In mid-2005, defendants sought to change the agreement, suggesting, inter alia, that Van Laningham work for them as an employee or that they buy her business. The parties negotiated a sale of the business and reached an agreement on price, at $1.875 million. Plaintiffs believed this was less than the value of the business, but were willing to accept that amount in order to avoid litigation. However, due to defendants' cash flow the money was to be paid over a period of time and the deal failed over issues relating to security for the sum owing. On September 30, 2005, defendants notified plaintiffs that they were terminating the contract. This lawsuit soon followed.
Each party called expert witnesses on damages. Plaintiffs' witnesses were David Weiner, a forensic economist, and Jan Goren, a CPA. Defendants called CPA Cary Mack.
For plaintiffs, Weiner first testified that damages from the date of breach to the date of his deposition were $430,000. He offset the amount by the sum Van Laningham had actually earned in the period and arrived at the sum of $417,326.
Weiner then testified concerning the present value of the unexpired term of the contract. Based on the fact that plaintiffs had been steadily realizing $200,000 a year, and had earned $300,000 in the year before the breach, Weiner found that earnings through the end of the contract would be $2.9 million. He then did three different calculations concerning mitigation, based on three different sets of assumptions about what Van Laningham could earn. He arrived at three different damages figures, $2.858 million, $2.520 million, and $2.245 million. When combined with the figure for past loss, his damages estimates ranged from $2.663 million to $3.276 million.
Jan Goren was the CPA who assisted plaintiffs in the 2005 negotiations. He testified as a percipient witness concerning those negotiations and also testified as an expert on the value of the business at the time of the breach. He calculated that the value was $3.970 million. When interest to time of trial was added, the sum was $4.410 million.
For defendants, Cary Mack testified that the value of plaintiffs' business at the time of the breach was $1.394 million.
All three experts testified concerning the methods, data, and assumptions they used and the discount rate they applied to their calculations. All three testified that their methods were a correct method of determining damages for breach of contract. All three were cross-examined.
Contentions
Defendants argue that the trial court prejudicially erred when it allowed plaintiffs to call both Weiner and Goren, who, in defendants' view, offered duplicative testimony. They next argue that Weiner's and Goren's testimony was speculative and thus is not substantial evidence for the award of future economic loss. More specifically, defendants argue that plaintiffs' experts did not take into account the possibility of overfishing, global warming, Mexican political instability, or other potential disasters which could affect reservations, and did not take into account the duty to mitigate, and that the verdict was based on the improper inference that because the hotels had been increasingly profitable in the past, they would do as well in the next eleven years. Defendants conclude that the award for future economic damages resulted from the caprice, passion, and prejudice of the jury, was contrary to the undisputed evidence, and must be reversed.
"The amount of damages is a fact question, first committed to the discretion of the jury and next to the discretion of the trial judge on a motion for new trial. They see and hear the witnesses and frequently, as in this case, see the injury and the impairment that has resulted therefrom. As a result, all presumptions are in favor of the decision of the trial court [citation]. The power of the appellate court differs materially from that of the trial court in passing on this question. An appellate court can interfere on the ground that the judgment is excessive only on the ground that the verdict is so large that, at first blush, it shocks the conscience and suggests passion, prejudice or corruption on the part of the jury." (Seffert v. Los Angeles Transit Lines (1961) 56 Cal.2d 498, 506-507.) Under that standard, we see no ground for reversal here.
The trial court overruled defendants' objection to plaintiffs' two experts, finding that the two were to testify to different methods of determining damages. They did testify to two different methods, and in closing argument, plaintiffs' counsel reminded the jury that the methods were alternatives, and that both kinds of damages could not be awarded. (Counsel asked the jury to award Goren's $4 million as the value of plaintiffs' business on the date of the breach. The jury did not do so.) We see no abuse of discretion in the trial court ruling allowing both Weiner and Goren to testify. (Horn v. General Motors Corp. (1976) 17 Cal.3d 359, 371.)
Nor do we see a lack of substantial evidence for the verdict. Mack testified that the risk of overfishing, hurricanes, and other potential problems, including poor maintenance of the hotels or food borne illness at the hotels had to be taken into account in determining the value of the business. Defendants' counsel cross-examined plaintiffs' witnesses on those points, and in closing argument urged the theory that the damages requested were too speculative, that "a hurricane could happen tomorrow and destroy [a hotel], and maybe it never gets rebuilt."
The jury could have accepted Mack's testimony and defendants' argument, but there was other evidence. For instance, on cross-examination, Weiner was asked whether political events in Mexico could have an adverse effect on the hotels. The question referenced a recent political event. Weiner testified that a political event could affect reservations, but also testified that he had consulted the data and found no drop in tourism to the region during the period identified. Also on cross-examination, Weiner testified that he had not considered the possibility that a hurricane could destroy one of the hotels, or that the fish could migrate away, but on re-direct testified that Van Laningham's revenues had increased during a period in which there was a hurricane and during the period of the terrorist attacks of September 11, 2001.
Essentially, defendants' argument is that that the jury should have rejected plaintiffs' evidence, and accepted the defense evidence. The jury heard both sides and chose, which is what a jury is supposed to do. The award is within the range of numbers suggested by the expert witnesses. We do not find it shocking, and it does not suggest that the jury was moved by passion or prejudice. As the trial court found, the award was in accord with the evidence.
Disposition
The judgment is affirmed. Respondents to recover costs on appeal.
We concur: TURNER, P. J., KRIEGLER, J.