Page 78 - Economic Damages Calculation

[I]t was not enough to simply assume those contractors were comparable and made a profit; it
was necessary to prove both. To do so, it was essential that the actual profit realized be proven or
that the profit be determined by subtracting their expenses from their gross sales. It was also es-
sential to establish that those contractors were ‘closely comparable’ to ASV. fn 54

Analyzing the evidence in the record before it, the Court of Appeal found:

ASV could not establish that the subsequent builders were in the same ‘start-up’ position as
ASV, could not prove the subsequent builders' costs, could not prove that those builders actually
made a profit on the subsequent pods, and could not prove that if ASV had been given the oppor-
tunity to build out the subsequent parcels, it would have been able to finance the build out and
reach the same result as the other builders. This is critical, as times and economies had changed.
fn 55

Notably, the Court of Appeal focused on the evidence of similar financial performance (or lack thereof).
This outcome contrasts with the Chung v. Kaonohi Center Co. case previously discussed. The difference
in focus by the two courts may be due to how each expert used the information from the similar compa-
ny in the respective analyses, as well as the extent of proof of comparability.

Other Factors Looked at by Courts

The previous discussion highlights issues to which courts have pointed when an expert has relied upon
data garnered from a yardstick company as an element of the damages analysis. An expert contemplat-
ing the use of data from a similar company, opportunity, or even industry may consider several indicia
of similarity that may be used by a court in determining the sufficiency of the data relied upon by the
expert. Examples of factors that have been considered by different courts are identified in the following
table.

Factors Case(s)

Operate under substantially the same condi- Farm Crop Energy v. Old National Bank of
tions. Operate in similar geographic location. Washington, 750 P.2d 231 (Wash. 1998)
Provide same or similar product or service. Chung v. Kaonohi Center Co., 618 P.2d 283
Serve the same or similar clientele. (Haw. 1980)
Differences between similar businesses con- Flying J, Inc. v. Dept. of Trans., No. F060545
sidered, including clientele and geographic lo- (Ca. Ct. App. 2012) (unpublished)
cation.
Evidence of objectively verifiable dimensions Devon Medical, Inc., et al. v. Ryvmed Medical
of similarity — including size, profits, inves- Inc., 60 So.3d 1125 (Fla. 4th DCA 2011), and
tors, management, and cost structures.
Schonfeld v. Hilliard, 218 F.3d 164 (2d Cir.
2000)

Comparable company information from the Daimler-Chrysler Motors v. Manuel, 362
relevant damages period. S.W.3d 160 (Tex. App. 2012)

fn 54 Id. at 651.

fn 55 Id.

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