Second Department Affirms Jury's Lost Profits Damage Award

On January 23, 2019, the Second Department issued a decision in East Hampton Union Free Sch. Dist. v. Sandpebble Bldrs., Inc., 2019 NY Slip Op. 00420, affirming a jury's award of lost profits damages, explaining:

A party may not recover damages for lost profits unless they were within the contemplation of the parties at the time the contract was entered into and are capable of measurement with reasonable certainty.

Here, based on the evidence presented at trial, there was a valid line of reasoning and permissible inferences by which the jury could have rationally reached its verdict awarding the defendant the sum of $755,767.41 in damages. Contrary to the defendant's contention, there was evidence from which the jury could have arrived at that amount based on the assumed project cost of $18,000,000. The jury also could have determined that lost profits based on the subsequent $79,000,000 project were not contemplated by the parties at the time of the execution of the April 2002 contract. Furthermore, the jury's verdict on the issue of damages was not contrary to the weight of the evidence, as the record demonstrates that the verdict on that issue was based on a fair interpretation of the evidence. The jury was free to accept or reject some or all of the testimony at trial, and weigh any conflicting inferences.

(Internal quotations and citations omitted).

A key element in commercial litigation is proving damages. As this decision shows, in some circumstances, those damages can include lost profits. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding proving damages.