v.A.L. Floors, Inc. v. Westminster Communities, Inc.

810 A.2d 625 (2002)

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Nature of the Case

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Facts

P learned of a flooring project at D to install and upgrade flooring materials. P presented a base bid of $ 443,000. D contacted P and informed it that D was accepting P's bid. The parties reached a verbal agreement that P would perform the work set out in its bid. P then commenced a discussion with D concerning various upgrade programs that would be offered to prospective unit purchasers in lieu of the base materials. P estimated, based on past experience, that there would probably be approximately $232,000 worth of upgrades bringing the total contract amount to at least $675,000. Upgraded work is highly profitable in comparison to base contract work. Ps even constructed on-site a showroom containing samples of base grade items and the various upgrades of flooring materials which would be available to prospective purchasers of the units. D's clients would and did choose their selections from this showroom. On April 22, 1998, D terminated the contract. P sued D claiming both out-of-pocket expenses for 'labor, services and materials,' as well as lost profits. Initially, P had estimated a profit margin of 33%. Based on the 19 units completed before termination, actual profits were 36%. P alleged that they would have reaped a total profit of approximately $534,000. D moved for summary judgment on the grounds that P had no enforceable oral contract and that P's claim for lost profits were speculative as a matter of law. The court agreed and held that the jury would be free to speculate as to what would have been the market conditions, especially given the fact, that the history of this project shows that even though the price quotes were given in May of 1998, the actual construction did not begin until two years thereafter. The trial judge concluded 'that the party claiming damages for breach of contract has the burden of showing the breach caused loss [or] prevented gain. The burden here cannot be satisfied without the jury being allowed to speculate as to what that measure of damages would have been.' The court ruled for D and P appealed.