NO. 83-379
IN THE SUPPIME COURT OF THE STATE OF MONTANA
1984
LENZ CONSTRUCTION COMPANY,
a Mont. corp. ,
Plaintiff and Appellant,
EARL CAMERON, d/b/a CAMERON
TRUCKING COMPATJY, et a1 . ,
Defendants and Respondents.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable James M. Salansky, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
E. Eugene Atherton, Kalispell, Montana
For Respondents:
Warden, Christiansen, Johnson & Berg, Ka.lispel1,
Montana
Murray, Kaufman, Vidal & Gordon, Kalispell,
Montana
Submitted on Briefs: October 6, 1983
Decided: January 19, 1984
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Clerk
Mr. Justice Fred J. Weber delivered the Opinion of the Court.
Plaintiff Lenz Construction Company (Lenz) appeals and
defendant Earl Cameron (Cameron) cross-appeals from the
judgment of the Eleventh Judicial District Court, Flathead
County, awarding Lenz $22,148.96 in damages. We affirm the
judgment of the District Court.
The sole issue is whether the evidence is sufficient to
support the amount of loss-of-use damages awarded by the
District Court.
In 1977, Lenz purchased a used 1967 model 720
Economobile forklift for $8,500. After the purchase, Lenz
made repairs and improvements to the machine totalling
$3,549. At the time of purchase, the machine had been used
approximately 1,600 hours. Lenz used the machine an
additional 1,000 to 1,500 hours after purchase.
On November 2, 1979, the forklift was destroyed as a
result of Cameron's negligence. The District Court granted
summary judgment on the liability issue and that judgment was
not appealed. The District Court held a non-jury trial on
the issue of damages.
The Court found the forklift was damaged beyond repair
and had no salvage value. The Court also found the forklift
had capabilities which gave Lenz some bidding advantage on
certain construction jobs. The machine also generated some
rental income. Lenz claims that after the machine was
destroyed, he generated no rental income from the machine's
use and was unsuccessful in bidding on construction projects.
Lenz incurred $5,564 in rental expense.
At the time of the accident, the particular model of
forklift was no longer being manufactured. However, used
units of the same or comparable makes and new comparable
machines were available. The parties could not agree on
responsibility for costs of travel to view the machines and
no settlement was reached. The District Court found that
Lenz was at least partly responsible for the long delay in
replacing the machine because of his refusal to accept a
replacement.
The District Court found that the market value of the
forklift at the time of the accident was $17,000 and that
Lenz had incurred expenses of $170 for towing and $478.96 for
travel to view possible replacements. These amounts are not
disputed on appeal. The Court also found that Lenz suffered
$4,500 damage for loss of use of the forklift. Both parties
claim this was error. The Court awarded $22,148.96 total
damages. Lenz appeals and Cameron cross-appeals on the issue
of loss-of-use damages.
Lenz contends that the law and evidence require an award
for loss of use in the amount of $178,292. Lenz contends the
Court erroneously awarded $4,500 rental expense rather than
the actual $5,564 expended. Further, Lenz contends the Court
ignored the proper elements of lost rental income and
business interruption. Lenz argues the evidence is
insufficient to support the $4,500 loss-of-use award. We
disagree.
Section 27-1-317, MCA states the general measure of
damages applicable to this case:
"For the breach of an obligation not arising from
contract, the measure of damages, except where
otherwise expressly provided by this code, is the
amount which will compensate for all detriment
proximately caused thereby, whether it could have
been anticipated or not."
In McPherson v. Kerr (1981), 195 Mont. 454, 636 P.2d 852, we
restated the principles of compensatory damages:
"'As for the issue of compensatory damages, the
question is always a difficult one. In tort
actions, the wrongdoer is liable, in general, for
any injury which is the natural and probable
consequence of the wrong. These may include both
the direct and indirect, but reasonably probable,
results of the wrong. Where damage to property is
concerned, the purpose of awarding damages is to
return the party injured to the same, or as nearly
possible the same, condition as he enjoyed before
the injury to his property. The injured party is
to be made as nearly whole as possible - but not to
realize a profit. Compensatory damages are
designed to compensate the injured party for actual
loss or injury - no more, no less. I McPherson,
'
195 Mont. at 459, 636 P.2d at 855, quoting Spackman
v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 506,
414 P.2d 918, 921.
Lenz argues that the District Court should have
him the cost of renting a comparable machine regardless of
whether another machine was actually rented. We do not
disagree with using, as a general measure of loss-of-use
damages, the reasonable rental value of a comparable machine
for the period of time necessary for replacement, regardless
of whether another machine is actually rented. See Colorado
Kenworth, Inc. v. Archie Meek Transportation Co. (Wyo. 19721,
However, Lenz contends that the Court should {have
awarded rental value for the 33 months from destruction of
the forklift to trial at $1,700 per month, or $56,100. Lenz
made no showing that he was entitled to an award for loss of
use beyond the three-month period following destruction of
the machine. Such loss is not compensable beyond the period
of time rea.sonably necessary for replacement. McPherson, 195
Mont. at 460, 636 P.2d at 856. The District Court found that
a period of 3 months was all that was reasonably necessary
for replacement and that the delay in replacement was at
least in part due to Lenzl reluctance to accept a suitable
replacement. That finding is supported by the record. he
District Court did not err in refusing to a.ward Lenz $56,100
rental value.
Lenz argues the Court should have awarded a minimum of
$5,564 in actual rental expenses. We disagree. Although
Lenz incurred actual rental expenses of $5,564, these
expenses were incurred beginning in September of 1980. The
three-month replacement period expired in or around March of
1980. The actual rental expense is not compensable because
it was beyond the period of time reasonably necessary for
replacement. McPherson, 195 Mont. at 460, 636 P.2d at 856.
The District Court did award Lenz the reasonable rental
value of a comparable machine for the three-month replacement
period as loss-of-use damages. Cameron argues on
cross-appeal that the $1,500 per month loss-of-use figure is
unsupported by the record. The District Court based this
award on the reasonable monthly rental value of the machine.
The testimony was that rental value of a comparable new
machine would have been $1,700 per month. That figure was
too high for a used machine and was accordingly reduced by
the District Court. In light of the evidence of the
capabilities of the destroyed forklift, we cannot say that
the Court's rental value determination was unreasonable. We
find no reason to disturb the District Court's $4,500
loss-of-use award.
Lenz further claims that destruction of the machine
resulted in loss of rental income and business interruption
in the amounts of $15,840 and $156,888 respectively.
This Court has long held that a judgment for damages
must be supported by substantial evidence that is not the
product of mere guess or speculation, although mathematical
precision is not required. Crener v. Cremer Rodeo Land and
Livestock Co. (Mont. 1981), 627 P.2d 1199, 1202, 38 St.Rep.
574, 578.
Lenz calculated the alleged loss of rental income by
averaging the yearly rental income ($5,280) and multiplying
by the number of years between destruction of the machine and
trial. However, Lenz presented no evidence of actual lost
rental income. The District Court's refusal to award damages
for loss of rental income is supported by the record.
Lenz calculated the alleged loss from business
interruption by comparing average yearly gross income before
and after the loss. Lenz contends that the machine gave him
a bidding advantage without which he was unable to
successfully bid on construction projects, resulting in a
loss of $156,888 gross profit over 3 years. The record,
however, contains ample evidence of other likely causes for
Lenz' reduction in income and no specific evidence linking
destruction of the machine to lack of successful bids. Lenz
agreed at trial that beginning in 1980, the construction
industry was significantly impacted by the depressed economy
and that bidding competition for construction contracts
greatly increased. Lenz presented no evidence of specific
bids, how loss of the forklift affected his bids, nor by what
margins his bids were unsuccessful. In fact, the record
shows Lenz had no work for the machine for at least 3 or 4
months after the accident. By then, the machine could have
been replaced. In short, Lenz' claim for business
interruption was entirely speculative and unproven. The
District Court did not err in denying Lenz' claim for
business interruption.
The judgment of the District Court is affirmed.
We concur:
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