Leingang v. Mandan Weed Board

468 N.W.2d 397 (1991)

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Nature of the Case

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Facts

D awarded D a contract to cut weeds on lots with an area greater than 10,000 square feet. Another contractor received the contract for smaller lots. P discovered that D's agent was improperly assigning large lots to the small-lot contractor. P complained and the weed board assigned some substitute lots to him. P sued D for breach. D admitted that it had prevented P's performance under the contract and that the contract price for the lost work was $ 1,933.78. A bench trial was held to assess the damages suffered by P. P argued that the applicable measure of damages was the contract price less the costs of performance he avoided due to the breach. The trial court adopted what it called a 'modified net profit' approach as the measure of damages. It derived a profit margin of 20% by subtracting four categories of expenses reported on Leingang's Schedule C, and attributed to the weed-cutting business, from the weed-cutting income reported to the IRS. The trial court selected insurance, repairs, supplies, and car and truck expenses as costs attributed to the weed-cutting business. Applying the profit margin of 20% to the contract price, the trial court deducted 80% from the contract price as expenses and awarded Leingang $ 368.59 plus interest. P appealed. P contends that the method used by the trial court to derive net profits was improper because it did not restrict the expenses that are deductible from the contract price to those which would have been incurred, but for the breach of the contract, i.e., those expenses P did not have to pay because D kept him from doing the work.