Waymon Howze Farms v. Jazer Enterprises

Filed 10/28/08 Waymon Howze Farms v. Jazer Enterprises CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

APPEAL from a judgment of the Superior Court of Kern County. Sidney P. Chapin, Judge.

Borton Petrini and Roger A. Parkinson for Defendant and Appellant.

The Law Offices of Young Wooldridge, Scott D. Howry and Andrea Selvidge for Plaintiffs and Respondents.

-ooOoo-

The defendant negligently serviced the plaintiffs cherry orchard, causing the plaintiffs to tear out 29 acres of trees. The plaintiffs sued, alleging their damages included lost profits and the costs of removing and replacing the trees.

The jury awarded the plaintiffs $1,732,592, the exact amount of damages calculated by the plaintiffs accounting expert. The defendants appealed, contending that (1) the jury was instructed on the wrong measure of damages for the loss of fruit trees, (2) the plaintiffs failed to present the best evidence available to prove their claim for lost profits, and (3) the plaintiffs evidence failed to prove the claimed lost profits with reasonable certainty.

We conclude as follows. First, the defendant forfeited its challenge to the measure of damages presented to the jury because it joined in the request for the damage instructions given. Second, the principle that a claimant has the burden of proving a claim for lost profits with the best evidence available in the circumstances does not apply to this case. Third, the plaintiffs evidence provided a sufficient basis for the award of lost profits, and the trial court did not err in denying the defendants request for a directed verdict.

Accordingly, the judgment will be affirmed.

FACTS

Plaintiffs Waymon Howze Farms, Waymon Howze and Christine Howze (collectively, Howze Farms or Howze) grew cherries and almonds on their farm near Shafter, California. Howze Farms planted 10 acres of cherries in early 2000, another 10 acres of cherries in 2001, and a final nine acres in 2002. The 29-acre cherry orchard contained approximately 4,380 trees.

Walter Krause testified at trial about the productive life of a cherry orchard. Krause worked in research and development for a large California nursery and owned and operated his own orchards. He testified that three-year-old cherry trees will produce a few cherries, four-year-old trees may produce enough to harvest commercially, and five-year-old trees generally will produce enough to pay all the bills and make some money.

Krause also testified that production in a cherry orchard could be expected to (1) increase until about the 12th to 15th year, (2) remain at a top notch level of productivity until through the 18th year, and (3) continue to have an economic life until the 20th to 25th year. He also testified that he would expect the peak production for cherry trees to be between seven and ten tons per acre annually. With respect to Howze Farmss orchard in particular, Krause testified that he would expect its productivity to increase until the eighth to tenth year.

Waymon Howze testified that the volume of cherries produced by the orchard in 2003 was 19 bins that weighed 300 pounds, that the volume increased to 109 bins in 2004, and that the volume was 648 bins in 2005.

The 2005 cherry crop was harvested and packed by Delta Packing Company of Lodi, Inc. (Delta Packing). The Delta Packing grower statement for Howze Farmss 2005 crop indicated that 171,890 pounds of cherries were delivered to the packinghouse.^[1] Of this total weight, only 77,931 pounds were marketed by Delta Packing.

The low percentage of marketable cherries in the 2005 harvest was the result of untimely rains. Specifically, rains in Kern County during the time leading up to the 2005 cherry harvest created problems. When cherries are ripening, rain is detrimental because the fruit soaks up rainwater, swells and the skin cracks. Cherries with cracked skins are unmarketable.

In 2005, representatives of Delta Packing and Maricopa Orchards, LLC talked to Waymon Howze about the advantages of girdling the cherry trees. Girdling is a process that involves cutting into the bark around the trunk of the tree, using a knife specifically designed for that purpose. Girdling causes the sugars in the tree to remain in its upper trunk and branches, causing the cherries to grow larger, ripen sooner, and ripen over a shorter range of time.^[2] Waymon Howze was told that the cherries on girdled trees would ripen three to four days earlier. Cherries that ripen sooner can be harvested and sold sooner at a better price.

Howze Farms agreed to have their cherry trees girdled. Delta Packing took care of hiring the company that girdled the trees. That company was defendant Jazer Enterprises, Inc. (Jazer Enterprises or Jazer).

Jazer Enterprises girdled Howze Farmss 29 acres of cherry trees in the spring of 2005. In June 2005, cherry trees in the orchard started to die. As the weather grew hotter during the summer, more trees died. By Waymon Howzes last count, approximately 1,750 trees had died. Jazer Enterprises admitted liability for any injury Howze Farms may have suffered.

Waymon Howze tried to find a packinghouse to harvest the 2006 cherry crop produced by the surviving trees. He also spoke with an individual from Los Angeles who had a fresh market. Despite his efforts, Waymon Howze did not find anyone to harvest the 2006 cherry crop.

Howze Farms removed all of the cherry trees from the 29 acres in January 2007 because of the tree loss and a subsequent infestation of borer worms. Waymon Howze testified that he intended to leave the ground fallow for two years and replant the orchard in January 2009.

Christine Howze has taken care of the books and records for Howze Farms since it was formed in 2000. She also works for the Kern High School District as the school secretary for Shafter High School, where her duties include handling all of the payroll. Her experience includes keeping the financial records for her father-in-laws farming operations for about five years in the mid-1980s.

Christine Howze recorded the financial information for Howze Farms on a computer using Quick Books software. She testified that Howze Farms was profitable in 2004 and 2005 despite the fact that the cherry trees and some of the almond trees were still immature. She attempted to attribute bills to either the cherries or almonds when feasible, but not all of the bills could be separated. As examples, she testified that she was not able to tell how the actual use of fuel, fertilizer, and chemicals was divided between the two types of orchards. As a result, she put expenses of that type into a general account.

Geoffrey B. King, a certified public accountant with over 30 years experience, testified as Howze Farmss expert witness regarding the calculation of damages. Kings calculations of lost cherry production, projected net profit per pound, projected net profit per 18-pound box, and total projected losses were set forth in exhibit 55.

Based on the 2003, 2004, and 2005 cherry crops, King estimated that in 2005 the 10 acres of five-year-old trees produced 90 pounds of cherries per tree, the four-year-old trees produced 20 pounds per tree, and the three-year-old trees produced five pounds per tree. King projected that, without the injury, the cherry trees planted in 2000 and 2001 would have produced an average of 90 pounds per tree per year in future years. He also projected that the nine acres planted in 2002 would have produced 20 pounds per tree in 2006 and 90 pounds per tree in subsequent years. King asserted these projections were conservative because those trees would be expected to produce more as they reached full maturity.

King subtracted his projection of what a cherry orchard replanted in 2009 would produce from his projection of what the orchard would have produced without the girdling damage. The difference represented his estimate of the amount of cherry production Howze Farms lost due to the negligent girdling.

Kings projections for the replanted orchard were based on the fact that the trees on the 29 acres were ripped out in 2007 and on Waymon Howzes intention to replant the 29 acres in early 2009. Based on this replanting date, King projected that the replanted orchard would reach 90 pounds of production per tree in the 2014 season. As a result, King projected that Howze Farms would experience production losses from 2006 through 2013.

King calculated the orchards future production based on 150 trees per acre and a total of 4,350 trees. At 90 pounds per tree, the orchards total production would equal 391,500 pounds. Thus, the estimated production lost in the five seasons from 2007 through 2011, inclusive, was 391,500 pounds per year. The loss from the 2006 season was slightly less because the nine acres planted in 2002 were only four years old in 2006 and their production was estimated at 20 pounds per tree. Also, the losses in 2012 and 2013 were less because the replanted orchard was projected as producing five pounds per tree in 2012 and 20 pounds per tree in 2013.

Based on projections, King concluded that Howze Farms lost a total of 2,928,750 pounds of cherry production, which is equivalent to approximately 162,708 boxes weighing 18 pounds each.

King calculated the profits per box of cherries by starting with the sales price of $1.47 per pound from Delta Packings 2005 grower statement. From the $1.47 figure, King subtracted the 36 cents per pound packing charge and 40 cents per pound picking and handling costs that Delta Packing took out of the amount it owed Howze Farms. (See fn. 1, ante, & fn. 5, post.) King multiplied the resulting 71 cents per pound by 18 pounds per box to get a net return per box before cultural costs of $12.78. He subtracted $1.32 estimated cultural costs per box and arrived at a net profit per box of $11.46. King estimated cultural costs at $989 per acre based on (1) a University of California Cooperative Extension publication that estimated the per acre cultural costs of cherries at $2,018 and (2) information from Howze Farms about its actual costs.

King calculated the total lost profits at $1,864,638 based on his estimate of the net profit of $11.46 per box and lost production of approximately 162,708 boxes. King discounted the total lost profit to present value using a 6 percent discount rate, which reduced to the total lost profits figure to $1,533,927.

Kings estimate of Howze Farmss total projected loss included (1) the present value of lost profits, (2) the cost of replacement trees, (3) the cost of removing the old trees and planting the replacement trees, and (4) the cost of replacing irrigation valves. The cost of replacing 4,350 trees was $30,095. The cost of removing the old trees, which includes pulling out the stumps, and planting the new trees was $160,950, based on an estimate of $37 per tree. The cost of replacing the irrigation valves was $7,619. As a result, Kings final projection of Howze Farmss total losses was $1,732,592.

PROCEEDINGS

In February 2006, Howze Farms filed a complaint against Jazer Enterprises, Delta Sales Company, Inc., and Maricopa Orchards, LLC. Subsequently, Howze named Delta Packing as the defendant previously designated as Doe 1. The complaint sought economic damages in excess of $1.5 million, including lost profits and the costs of removing and replacing the cherry trees. The only cause of action Howze asserted against Jazer was negligence.

In January 2007, codefendants Delta Sales Company, Inc., Delta Packing and Maricopa Orchards, LLC, agreed to pay Howze Farms $10,000 to settle the claims against them. These defendants filed a motion for approval of a good faith settlement, which was granted by the superior court. As a result, these defendants were dismissed from the lawsuit and are not parties to this appeal.

Part I.B, post, describes (1) the motion in limine relevant to this appeal and (2) the proceedings that resulted in the damage instructions given to the jury.

The matter was tried before a jury in May 2007. The jury returned a verdict in favor of Howze Farms. The jury verdict form awarded Howze Farms $542,745 for [p]ast economic loss, including lost profits and $1,189,847 for [f]uture economic loss, including lost profits for a total award of $1,732,592. The total damages awarded are the same as the total projected loss calculated by King and set forth in exhibit 55.

A judgment on verdict in open court was signed and filed by the trial court on May 24, 2007.

In June 2007, Jazer Enterprises filed a motion for new trial. It argued that the wrong measure of damages was used and the evidence was not sufficient to justify the amount of damages awarded. In support of the motion for new trial, Jazer submitted the declaration of Lynn E. Rickard, a real estate appraiser, who stated that sales of cherry orchards in the southern San Joaquin Valley over the past five years have ranged from a low of $10,000 per acre to a high of approximately $27,000 per net planted acre. Rickards declaration also stated that the value of cherry properties in the area of Stockton and Lodi, the most common cherry-growing region in California, has ranged from $13,000 to $18,000 per acre. Based on these property values, Jazer Enterprises argued that the damage award of over $59,000 per acre was outrageous because Howze Farms could buy replacement trees and land of two to four times the size of the damaged orchard while retaining their 29 acres of land.

Howze Farms opposed the motion for new trial and argued, among other things, that the declaration of Rickard was inadmissible because it was not part of the trial record. The trial court sustained Howze Farmss objection to Rickards declaration and denied the motion for new trial.

On August 23, 2007, a judgment was entered that (1) included the $1,732,592 damage award, (2) added costs of $47,619.26, (3) subtracted the good faith settlement of $10,000 that Howze received from the three other defendants, and (4) awarded interest on the total of $1,770,211.26 at the legal rate of 10 percent per annum from May 24, 2007.

Jazer Enterprises filed a notice of appeal on July 30, 2007.

DISCUSSION

I. Appropriate Measure of Damages

A. Contentions of the Parties

Jazer Enterprises contends that the trial court erred by submitting a lost profits measure of damages to the jury, because that measure did not limit the award to an amount that would have made Howze Farms whole. The long-established measure of damages for injury to fruit trees, according to Jazer, is the difference between the market value of the real property before and after the injury and that is the measure that would have made Howze Farms whole. Jazer asserts that the injustice of the verdict is obvious from the fact that the amount awardedover $59,700 per acrewould pay for the purchase of two or more orchards similar to the one injured.

Howze Farms contends that the doctrines of invited error and waiver^[3]apply to Jazer Enterprises argument that the trial court erred in instructing the jury under a lost profits measure of damages. Howze Farms argues that Jazer Enterprises requested a lost profits instruction as a tactical choice and gambled that it could convince the jury that lost profits had not been proven with reasonable certainty.

B. Proceedings Related to the Applicable Measure of Damages

1. Motion in limine No. 8 and speculative future profits

In December 2006, Jazers codefendants submitted motions in limine to the clerk of the trial court and that document was marked received. Motion in limine No. 8 sought to exclude any and all evidence or argument relating to Howze Farmss claimed consequential damages because they were speculative. Among other things, the motion contended that Howze Farmss future yields and expected cherry prices for their cherry orchard, which is located in the southern San Joaquin Valley, is wholly speculative and predicted that Howze Farmss economic loss expert would lack the qualifications to offer an opinion on these issues. Based on these contentions, the moving papers concluded that the motion to exclude any and all evidence, references to evidence, testimony or argument relating to [Howze Farmss] loss of past and future cherry profits should be granted.

In January 2007, Jazer Enterprises submitted a joinder in the codefendants motion in limine No. 8 (amongst others). The clerk of the superior court stamped the joinder received and subsequently filed the joinder on May 23, 2007.

On May 15, 2007, the trial court heard argument on motion in limine No. 8. The court considered the contentions that the damages were speculative and that the certified public accountant was not qualified to testify as to lost profits. During that argument, counsel for Jazer Enterprises stated: Were saying [the evidence of lost future profits] should be excluded because theres an insufficient foundational basis for a claim that there would have ever been any such future profits.

Thus, motion in limine No. 8 did not assert the position that a lost profits measure of damages was not a legally correct measure, aside from the evidence, or that the appropriate measure of damages was the reduction in value of the real estate.

2. Jazer Enterprises request for jury instructions

On April 30, 2007, before in limine motion No. 8 was argued, the clerk of the superior court received Jazers amended request for jury instructions and special instruction. The amended request was filed by the clerk of the superior court on May 23, 2007. Among other instructions, Jazer requested CACI Nos. 3903I and 3903N as well as a special instruction regarding lost profits.

CACI No. 3903I is titled Damage to Perennial Crop (Economic Damage) and sets forth two different formulae. The first is based on the difference in the rental value of the land with and without the crop. The second formula concerns crops that can be harvested and sold and bases damages on the expected value of the crops less certain costs and, where trees are involved, may include the cost of replacing the trees. CACI No. 3903N is titled Lost Profits (Economic Damage).^[4]

CACI No. 3903N describes a formula for the recovery of lost profits and includes the admonitions that the plaintiff must prove that the lost profits were reasonably certain.

The special instruction proposed by Jazer Enterprises was based on Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892 and stated: Evidence of lost profits must be unspeculative, and in order to support a lost profits award the evidence must show with reasonable certainty both their occurrence and the extent thereof.

In addition to Jazer Enterprises April 2007 request for jury instructions, it made a subsequent joint request. The declaration of counsel for Howze Farms submitted in support of its opposition to Jazer Enterprises motion for new trial asserted: The parties, after modifying CACI 3903I and 3903N, jointly agreed to the instructions as modified, and these instructions were thereafter read to the jury. Attached to the declaration was a copy of the modified versions of CACI Nos. 3903I and 3903N submitted to the trial court. Also attached was a copy of a joint list of undisputed and disputed jury instructions prepared by counsel for Howze and dated May 14, 2005.

3. Instructions given to the jury

The modified version of CACI No. 3903I presented to the jury used the formula based on the expected market value of the lost crop less certain estimated costs. As read to the jury by the trial court, that version stated:

Damages for destruction of cherries which can be harvested and sold are determined as follows: One, determine the expected market value of the crop before the harm occurred; and two, subtract from this amount the estimated costs of producing and marketing the crop, excluding costs that have already been paid by Howze Farms . If the trees responsible for producing the crop are destroyed, the measure of damages may also include the cost of reseeding and replanting.

The modified version of CACI No. 3903N, the lost profits instruction, was read to the jury as follows:

To recover damages for lost profits Howze Farms must prove it is reasonably certain [it] would have earned profits but for Jazer Enterprises Incorporateds conduct. To decide the amount of damages for lost profits, you must determine the gross amount Howze Farms[s] crop would have received but for Jazer Enterprises Incorporateds conduct, and then subtract from that amount the expenses such as the labor, materials, all expenses, interest of the capital employed that Howze Farms[s] crop would have had if Jazer Enterprises conduct had not occurred. The amount of the lost profits need not be calculated with mathematical precision, but there must be a reasonable basis for computing the loss.

C. Forfeiture of the Claim the Wrong Measure of Damages Was Used

Howze argues that Jazer forfeited the contention that the jury was instructed to apply an inappropriate measure of damages. Jazer responds by arguing that its actions in the trial court protected its right to challenge the erroneous measure of damages on appeal. Jazer asserts that its joinder in the codefendants motion in limine to preclude evidence of lost profits established its position that the proposed proof of lost profits was insufficient to establish that type of damage with the requisite certainty, and it was not required to keep raising the same issue.

We reject Jazers position that it did not forfeit the issue concerning the appropriate measure of damages.

First, Jazer submitted its request for the use of CACI Nos. 3903I and 3903N before the trial court ruled on motion in limine No. 8. Therefore, Jazers conduct did not bring the issue now raised on appeal to the attention of the trial court before it submitted its request for an instruction on lost profits. As a result, Jazer Enterprises conduct was one of the reasons the trial court gave the instructions that Jazer now attempts to challenge. From this, we conclude that the doctrine of invited error applies. In other words, Jazers request for an instruction on lost profits was not a defensive response to a prior adverse ruling regarding the appropriate measure of damages. (See Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 212 [under invited error doctrine, a party whose conduct helps induce an alleged error may not claim error on appeal; doctrine does not apply if party acquiesces in a judicial determination after making appropriate objections].)

Second, even if Jazer had not requested CACI No. 3903N before the ruling on motion in limine No. 8, the issues raised in that motion were too narrow to preserve the argument that the proper measure of damages was the reduction in the value of the real estate that was caused by the negligent girdling. Arguing that a plaintiffs evidence does not prove lost profits with the requisite certainty is not the same as arguing that lost profits is a legally incorrect measure of damages.

As a result of our determination regarding forfeiture, we need not address Jazers argument that the trial court erred at the motion for new trial by refusing to admit the declaration of an expert regarding the market value of the 29 acres of cherry trees.

D. Sua Sponte Duty of the Trial Court

Jazer makes the alternative argument that the trial court was bound to follow the law as to the measure of damages for physical injury to real property and could not leave that issue to the parties. Jazer cites Valdez v. Taylor Automobile Co. (1954) 129 Cal.App.2d 810 for the proposition that the trial court is responsible for instructing the jury on the correct measure of damages even if the parties have stipulated to an incorrect measure of damages.

We reject this view of a trial courts sua sponte duties. First, the view that a trial court can commit reversible error by instructing a jury in accordance with a stipulation of the civil litigants would eliminate the invited error doctrine. Second, Jazers position is not compatible with recent statements by our Supreme Court regarding the role and responsibilities of the trial court when instructing a jury:

In a civil case, each of the parties must propose complete and comprehensive instructions in accordance with his theory of the litigation; if the parties do not do so, the court has no duty to instruct on its own motion. [Citations.] [Citation.] Neither a trial court nor a reviewing court in a civil action is obligated to seek out theories plaintiff might have advanced, or to articulate for him that which he has left unspoken. (Metcalf v. County of San Joaquin, supra, 42 Cal.4th at pp. 1130-1131.)

Based on these principles and the invited error doctrine, we conclude that the trial court was not required to override the parties choice of jury instructions and present a different measure of damages to the jury.

II. Sufficiency of the Evidence Concerning Lost Profits

A. Contentions of the Parties

Jazer Enterprises contends the trial court erred by failing to direct a verdict in its favor because Howze Farmss proof of lost profits (1) was uncertain and (2) omitted evidence of past profits, which is a necessary basis for projecting lost future profits.

Howze argues the evidence was sufficient to uphold the damages awarded. It also argues that its evidence established an adequate history of the underlying components used to calculate profits and, thus, provided a reasonable basis for estimating probable income and operational expenses and the related lost profits.

B. Necessity of Past Profits to Prove Prospective Profits

Jazer Enterprises argues that California law requires proof in the record of past profits from which the likelihood of future profits can be legally deduced. (Italics in original.)

We reject the view that proof of past profits is essential for the recovery of prospective profits. First, we conclude that Howze Farmss cherry operation does not qualify as an unestablished business. Second, we conclude that prospective profits can be proven with reasonable certainty by evidence other than past profits.

1. Howze Farmss cherry operation was not unestablished

California has long recognized the general principle that damages for the loss of prospective profits are recoverable where the evidence makes reasonably certain their occurrence and extent. (Grupe v. Glick (1945) 26 Cal.2d 680, 693.) Under this general principle, unestablished businesses often have difficulty proving the existence and extent of prospective profits with sufficient certainty. (Ibid.)

The difficulty unestablished businesses experience when attempting to recover prospective profit, however, is of no consequence in this case.

Howze Farmss cherry business cannot be regarded as unestablished because it had a record of producing and marketing cherries. (See Kids Universe v. In2Labs (2002) 95 Cal.App.4th 870, 887 [unlaunched Web site for marketing toys treated as an unestablished business].) Specifically, the 10 acres of cherries that Howze planted in early 2000 produced cherries in 2003, 2004, and 2005. The additional 10 acres of cherries that Howze planted in 2001 produced cherries that were included in the 2004 and 2005 crop that Howze sold. The last nine acres Howze planted produced cherries that were included in the final packout of the 2005 crop.^[5]

Therefore, the foundation for Howze Farmss calculation of prospective profits was derived from actual past production. (Cf. Parlour Enterprises, Inc. v. Kirin Group, Inc. (2007) 152 Cal.App.4th 281 [profit projections not based on actual numbers generated by other locations of that restaurant or substantially similar businesses; jury award of lost profits relating to three unopened restaurants was overturned by court of appeal].) As a result, Howze Farmss cherry operation should not be regarded as an unestablished business for purposes of analyzing the uncertainty of its claim to lost prospective profits.

2. Proof of prospective profits

The difficulty that unestablished businesses have in proving the loss of prospective profits might be perceived as the rule that lost profits cannot be recovered by a new business . (23 Cal.Jur.3d (2008) Damages,  86, p. 189.) We, however, do not regard the existence of many cases in which new businesses failed to prove lost profits with sufficient certainty as creating a rule of law that a new business cannot recover lost profits. Indeed, the full sentence from which the so-called rule was taken provides:

However, the rule that lost profits cannot be recovered by a new business is not a hard and fast one and loss of prospective profits may nevertheless be recovered if the evidence shows with reasonable certainty both their occurrence and their extent. (23 Cal.Jur.3d, supra, Damages,  86, p. 189, fn. omitted; see Parlour Enterprises, Inc. v. Kirin Group, Inc., supra, 152 Cal.App.4th at p. 289.)

Accordingly, the issue is not whether there was proof of past profits but whether the evidence admitted contained a reasonably certain basis for ascertaining prospective profits. (See A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 494 [experienced farmer who had never grown tomatoes awarded damages for lost prospective profits from tomato crop].)

Evidence relevant to this inquiry includes the historical performance of the business, such as past volume and other data. (23 Cal.Jur.3d, supra, Damages,  85, p. 185.) Other relevant evidence includes expert testimony, economic and financial data, market surveys and analyses, and business records of similar enterprises. The underlying requirement for the evidence is a substantial similarity between the profit projections and the business opportunity that was destroyed. (Id., p. 190; see Kids Universe v. In2Labs, supra, 95 Cal.App.4th at p. 884.)

In summary, we reject Jazer Enterprises argument that [t]he trial court was wrong in accepting [Howze Farmss] rhetoric that they needed just to prove that there were past operations, not that the operations resulted in profits. Instead, we conclude that California law allows prospective profits to be proven with reasonable certainty by evidence other than past profits.

C. Best Evidence Available to Prove Lost Profits

Jazer argues that a plaintiff seeking to prove lost profits has the burden to produce the best evidence available in the circumstances and that, because Howze did not produce evidence of its past profits, its proof was insufficient. Jazer supports this view of the law with the following quote from an opinion of this court:

The plaintiff has the burden to produce the best evidence available in the circumstances to attempt to establish a claim for loss of profits. (Warner Constr. Corp. v. City of Los Angeles[ (1970)] 2 Cal.3d [285,] 302; Stott v. Johnston (1951) 36 Cal.2d 864, 876.) (S.C. Anderson, Inc. v. Bank of America (1994) 24 Cal.App.4th 529, 535.)

We think, however, that Jazer attributes to the quoted language a broader application than is appropriate.

Initially, we note that the statement regarding a plaintiffs burden to produce the best evidence available could be viewed as stating a principle that was not necessary to the outcome of the two cited California Supreme Court cases. For purposes of this opinion, however, we will not address whether that statement is good law.

Further, we note that it could be argued that the best-evidence-available principle should be limited to certain situations. For example, those limited situations might involve (1) claims for lost profits based on a future contract or contracts involving construction or (2) claims concerning losses of future business due to the impairment of capital or bonding capacity. (Cf. Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004) 34 Cal.4th 960, 972 [in breach of contract case, court distinguishes between damages for lost profits on related transactions involving crops and damages for lost profits arising from impairment of bonding capacity in construction case].) In any event, we will not attempt to produce a definitive list of cases to which the best-evidence-available principle should be applied. Instead, we will address only the narrow question whether the best-evidence-available principle should have been applied to the lost profit claim arising from the facts of this casenamely, a case involving the loss of a series of annual crops produced by trees.

Jazer Enterprises has cited, and we have located, no published California decision in which a court has applied the best-evidence-available principle to a lost profits claim involving lost crops or damaged trees.

We conclude that the general rule that lost prospective profits are recoverable only where the evidence makes reasonably certain their occurrence and extent (Grupe v. Glick, supra, 26 Cal.2d at p. 693) is the fundamental rule that applies in this case. Here, the lost profits were established by estimating the components of a formula. Specifically, the estimated lost profits equaled the estimated future production of cherries multiplied by the estimated price at which those cherries could be sold, less the estimated costs for raising, picking, hauling, and packing the cherries. When a plaintiff has proven each component of the formula with the reasonable certainty required by Grupe v. Glick, supra, 26 Cal.2d 680, we are reluctant to raise the level of proof required by imposing the best-evidence-available principle with respect to each component.

Accordingly, we conclude that, in the facts of this case, the general rule regarding the proof of lost profits is not modified by the best-evidence-available principle.

D. Sufficiency of Howze Farmss Proof

1. Applicable rules of law

Jazer Enterprises argument that the evidence was insufficient to prove lost profits with reasonable certainty arises in the context of a motion for directed verdict.

A directed verdict may be granted only when, disregarding conflicting evidence, giving the evidence of the party against whom the motion is directed all the value to which it is legally entitled, and indulging every legitimate inference from such evidence in favor of that party, the court nonetheless determines there is no evidence of sufficient substantiality to support the claim or defense of the party opposing the motion, or a verdict in favor of that party. [Citations.] (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 629-630.)

Appellate courts independently determine whether sufficient evidence was presented to withstand a directed verdict. (Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 210.)

2. Evidence presented

Waymon Howzes testimony about the volume of cherries produced in 2003, 2004, and 2005, Delta Packings grower statement from the 2005 season, and the expert testimony regarding the productive life of a cherry orchard provide a sufficient evidentiary basis for the jury to reasonably find that, on average, the 29-acre orchard would have produced 90 pounds of cherries per tree per year but for the negligent girdling.

Also, the jury could reasonably find that $1.47 per pound was a reasonable estimate of the average sale price for the lost production. That price, which reflects the revenue from the sale of the 2005 crop divided by the pounds of cherries delivered, was diluted by the relatively low packout percentage. Thus, the jury reasonably could have found that $1.47 per pound was a conservative estimate of future prices.

Accordingly, based on the estimated lost production and the estimated price, the jury could conclude that Kings gross revenue figure was reasonable.

With respect to expenses, the records and testimony support the packing charges of 36 cents per pound and the picking and handling charges of 40 cents per pound. Furthermore, the jury could find Kings estimate of cultural costs at $989 per acre was reasonable based on the university study and Kings reliance on Howze Farmss financial records even though those records were not introduced into evidence.

Accordingly, the evidence was sufficient to support findings as to the underlying components of the lost profit calculation performed by King. Consequently, the calculation of lost profits using these components also is supported by sufficient evidence. Therefore, we conclude that the trial court correctly denied the motion for a directed verdict as well as the motion for new trial.

DISPOSITION

The judgment is affirmed. Plaintiffs shall recover their costs on appeal.

__________________________

DAWSON, J.

WE CONCUR:

________________________________

WISEMAN, Acting P.J.

________________________________

LEVY, J.

Publication courtesy of San Diego free legal advice.

Analysis and review provided by Santee Property line attorney.

San Diego Case Information provided by www.fearnotlaw.com

^[1]Delta Packings grower statement also listed sales as $252,796.89 or $1.47 per pound, packing charges as $62,055.69 or 36 cents per pound, and net return (sales minus packing charges) as $190,741.20 or $1.11 per pound.

Ultimately, Delta Packing paid Howze Farms for the 2005 crop with three checks totaling just over $121,000. The net return amount was reduced by offset for picking and handling expenses that Delta Packing charged Howze Farms.

^[2]When cherries on a particular tree ripen over a longer range of time, harvesting is less efficient because it takes the workers more passes through the orchard to harvest the ripe fruit.

^[3]Howze Farms phrased its argument using the term waiver. In accordance with the California Supreme Courts recent case involving jury instructions in a civil case (Metcalf v. County of San Joaquin (2008) 42 Cal.4th 1121, 1130), we will use the term forfeit. Forfeiture refers to the loss resulting from the failure to make a timely assertion of a right. (People v. Simon (2001) 25 Cal.4th 1082, 1097, fn. 9.) Waiver, in contrast, is the intentional relinquishment or abandonment of a known right. (Ibid.)

^[4]The Sources and Authority notes appended to CACI No. 3903I indicate that the first formula is intended for destruction of a crop that cannot be severed from the land and sold, such as perennial grass for grazing, whereas the second formula is intended for destruction of a crop that otherwise could have been harvested and sold. In either case, according to the Directions for Use appended to No. 3903I, If the plaintiff claims damages for multiple crops, damages must be calculated for each crop that would have been produced until the land was restored. (Use Note to CACI No. 3903I (LexisNexis Matthew Bender 2008) p. 736.)

^[5]King, Howze Farmss expert, testified that the production figures were obtained from statements from the packer that handled that years crop. Delta Packings grower statement indicated Howze Farms delivered 171,890 pounds of cherries for the 2005 season, the price per pound was $1.47, the packing charges were 36 cents per pound, and the net return was $1.11 per pound.