E.F.K. COLLINS CORP., APPELLANT,
v.
S.M.M.G., INC., A FLORIDA CORPORATION, APPELLEE
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E.F.K. Collins Corp. appeals a judgment finding it liable for violating a sublease restriction by operating a competing shooting gallery game machine and awarding $37,965.50 in damages. The Florida appellate court reversed and remanded for a new trial because the appellee failed to establish actual damages and failed to properly authenticate the sublease agreement establishing Collins as the proper defendant.
The court reversed because appellee failed to establish that it suffered any actual loss and failed to comply with the rules requiring authentication and production of original documents. To establish lost profits, a litigant must prove that the business earned profits for a reasonable time prior to the breach, which appellee did not do by failing to introduce 1981 earnings records. Additionally, the copy of the sublease agreement was inadmissible hearsay lacking proper authentication under Florida law.
[1] Lost profits cannot be recovered without proof of prior earnings to establish a baseline for comparison.
[2] A litigant must prove that its business earned profits for a reasonable time prior to the breach to establish lost profits.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“It is axiomatic that to establish lost profits, a litigant must prove that his business has earned profits for a reasonable time anterior to the breach.”
Establishes the foundational requirement for proving lost profits damages, which appellee failed to satisfy by not producing 1981 earnings records.
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Join FLexlaw to unlock all legal intelligenceAppellee S.M.M.G., Inc. operated a game room and alleged that appellant E.F.K. Collins Corp. violated a sublease restriction by operating a competing …
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HENDRY, Judge.
E.F.K. Collins Corp. appeals from a final judgment of the trial court finding appellant liable for violating a sublease restriction by operating a shooting gallery game machine which directly competed with appellee’s game room, and assessing $37,-965.50 as damages, plus costs of $122.50. We reverse and remand for a new trial.
We are compelled to reverse on the issue of damages because appellee failed to establish that it in fact suffered any loss. The complained of competition took place in 1982. Appellee’s president did not place any documents from 1981 into evidence to substantiate what its earnings were before the alleged competition occurred. It introduced evidence as to what was earned in 1982, when there was direct competition, and 1983, at which point the shooting gallery game machine was no longer open. Curiously, testimony at trial appeared to prove that appellee earned far more money in 1982, with the competition than in 1983, after the shooting gallery was closed. The $37,965.50 awarded by the trial court is the difference between what was earned in 1982 and what was earned in 1983. Without the records from 1981, it is impossible to determine whether the competition was in fact detrimental, or whether the shooting gallery game machine was fortuitous in that it also increased profits at appellee’s game room by attracting more game players into the building. It is axiomatic that to establish lost profits, a litigant must prove that his business has earned profits for a reasonable time anteri-or to the breach. Murciano v. Urroz, 455 So. 2d 463 (Fla. 3d DCA 1984); Born v. Goldstein, 450 So. 2d 262 (Fla. 5th DCA 1984).
While a trial judge is vested with reasonable discretion in awarding damages, there must be a reasonable basis in the evidence for the amount awarded. U.S. Home Corp. v. Suncoast Utilities, Inc., 454 So. 2d 601 (Fla. 2d DCA 1984); Clearwater Associates v. Hicks Laundry Equipment Corp., 433 So. 2d 7 (Fla. 2d DCA 1983).
There is no such evidence here.
We further find that appellee did not establish by competent, substantial evidence that it had brought the proper defendant before the trial court. Appellee introduced what purported to be a sublease agreement between Nathan’s Famous of Miami Beach, Inc. (the original operator of the restaurant where the shooting gallery machine was later installed) and appellant. It was this agreement which allegedly gave appellant control over the game machine.1 However, appellee was not a party to the agreement, nor did it introduce testimony from anyone who was a party. It introduced a mere copy of the agreement. The agreement was not listed on appellee’s pretrial catalogue of exhibits nor did appellee make any demand upon appellant to produce the original of the agreement. Since appellee did not comply with either section 90.901, (requirement of authentication or identification) or section 90.-952 (requirement of originals), Florida Statutes (1981), the agreement should not have been allowed into evidence. On retrial, appellee will have to introduce better direct evidence to support its contention that appellant had the requisite control over the premises to be the proper defendant in this cause.2
Reversed and remanded for a new trial.
. By this agreement appellant allegedly became appellee’s landlord, taking over the sublease between Nathan’s and appellee which contained the restrictive covenant.
. Appellee’s president testified that he did not know what entity in fact operated the game machine.
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Forest's Mens Shop and Ladies Den of Stuart v. Schmidt, 536 So. 2d 334 (Fla. 4th DCA 1988)…le certainty, a condition precedent to the recovery of such damages is proof, by competent evidence, that the business had earned profits for a reasonable time before the occurrence of the wrong complained of. E.F.K. Collins Corp. v. S.M.M.G., Inc., 464 So. 2d 214 (Fla. 3d DCA 1985); Murciano v. Urroz, 455 So. 2d 463 (Fla. 3d DCA 1984); A & P Bakery Supply & Equipment Co. v. Hawatmeh, 388 So. 2d 1071 (Fla. 3d DCA 1980). In other words, “[i]n order to recover lost profits, there must be an on-going business wi…
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Pearce & Pearce, Inc. v. Kroh Bros. Dev. Co., 474 So. 2d 369 (Fla. 1st DCA 1985)…issue was conflicting. The general rule is that the extent of damages determined by a trial court is a question of fact which will be affirmed on appeal if supported by competent, substantial evidence. Compare E.F.K. Collins Corp. v. S.M.M.G., Inc., 464 So. 2d 214 (Fla. 3d DCA 1985) (trial court is vested with reasonable discretion in awarding damages where a reasonable basis exists in the record for the amount awarded) (citations omitted). [*372] Here, an examination of the record below leads us to conclude…
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Brink Distribs., Inc. v. J. Evans Assocs., Inc., 667 So. 2d 926 (Fla. 5th DCA 1996)…l balance of $224,061.12. He did not award prejudgment or post-judgment interest. We reverse, first, because there is no apparent view of the evidence which supports the $100,000 figure awarded as damages. See E.F.K Collins Corp. v. S.M.M.G., Inc., 464 So. 2d 214 (Fla. 3d DCA 1985) (while factfinder has reasonable discretion in awarding damages, there must be a reasonable basis in the evidence for the amount awarded). The remedy for this problem is, in part, the one used in Tibbetts v. Nichols, 578 So. 2d 17…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- U.S. Home Corp. v. Suncoast Utils., Inc., 454 So. 2d 601 (Fla. 2d DCA 1984)
- Born v. Goldstein, 450 So. 2d 262 (Fla. 5th DCA 1984)
- Clearwater Assocs. v. Hicks Laundry Equip. Corp., 433 So. 2d 7 (Fla. 2d DCA 1983)
- Murciano v. Urroz, 455 So. 2d 463 (Fla. 3d DCA 1984)