Wasco, Inc. v. Econ. Dev. Unit, Inc. - 461 So. 2d 1055 (La. Ct. App. 1984)

Rule:

Lost profits are recoverable in an action for breach of contract where the plaintiff can prove the amount with reasonable certainty. Loss of profit awards may not rest on speculation or conjecture unless direct evidence is not available to establish this element of damage.

Facts:

The parties entered into a written contract whereby the corporation agreed to provide janitorial services for certain commercial real estate owned by the organization. After an investigation of arson began at the place where the contract was to be performed, the organization terminated the contract. The corporation filed an action for breach of contract seeking damages and attorney's fees. The organization failed to answer the corporation's interrogatories; therefore, the trial court refused to allow its witnesses to testify. The trial court awarded the corporation $ 30,000 in damages and attorney's fees. The organization sought review of the decision. 

Issue:

Did the trial court err in awarding the corporation damages and attorney’s fees? 

Answer:

Yes.

Conclusion:

On appeal, the court reversed the judgment and held that the corporation failed to sustain its burden of proof for an award. No evidence was offered by the corporation of any attempt to recover the allegedly missing records, correspondence requesting the return of records, or corroborative evidence of the claimed loss of profits. The court ruled that the award of damages was based on uncorroborated testimony that was speculative. Therefore, the trial court erred in awarding a judgment for loss of profits.