Summary
The Eleventh Circuit affirmed a $22.5 million jury verdict for Nebula Glass International, Inc. in a contract action arising from Reichhold, Inc.'s supply of defective resin used in laminated glass. The court held that the evidence supported future replacement damages for glass installed at Pensacola Christian College and lost-profit damages under Florida's reasonable-certainty standard. It also upheld the district court's denial of Reichhold's motions for judgment as a matter of law under Federal Rule of Civil Procedure 50.
Topics
Practice areas
Questions Presented
- Whether the district court abused its discretion by permitting Glasslam to seek future replacement damages for glass installed at Pensacola Christian College after partially granting summary judgment against speculative future claims.
- Whether the evidence established with reasonable certainty that Glasslam would incur the Pensacola Christian College replacement costs.
- Whether Glasslam proved causation for its lost-profit damages with reasonable certainty.
- Whether Glasslam presented an adequate standard or yardstick for determining the amount of lost-profit damages.
Holdings
- The district court reasonably interpreted its own partial summary judgment order as barring only speculative future replacement claims unsupported by specific complaints or evidence, not the Pensacola Christian College claim identified in Glasslam's interrogatory answers and supported at trial.
- Future economic damages are recoverable under Florida law when both the fact and amount of damages are established with reasonable certainty, rather than absolute certainty. The evidence was sufficient for a reasonable jury to find that the college's glass would fail and that Glasslam would be required to incur replacement costs.
- Lost-profit damages may be established with reasonable certainty through a combination of direct and circumstantial evidence; a plaintiff need not present testimony explaining every customer's purchasing decision.
- Lost-profit damages are recoverable when causation is established with reasonable certainty and there is a reasonable yardstick by which the amount can be determined; uncertainty as to the precise amount does not defeat recovery.
Key quotations
“Under Florida law, future damages need only be reasonably certain, not absolutely certain.” (454 F.3d at 1209)
“A business can recover lost prospective profits regardless of whether it is established or has any "track record." The party must prove that 1) the defendant's action caused the damage and 2) there is some standard by which the amount of damages may be adequately determined.” (454 F.3d at 1211)
“In lost profit cases, Florida's courts have clearly held that once causation is proven with reasonable certainty, uncertainty as to the precise amount of the lost profits will not defeat recovery so long as there is a reasonable yardstick by which to estimate the damages.” (454 F.3d at 1213)
Factual background
Reichhold manufactured resin for Glasslam's patented Safety Plus 1 laminated-glass product. Although the parties agreed that the resin would contain a specified amount of Tinuvin 328, Reichhold supplied resin with insufficient Tinuvin 328 or a different, less effective ultraviolet absorber, and supplied undercooked resin for approximately five years. Glasslam and its customers experienced discoloration, delamination, and other failures in laminated glass made with the resin. Glasslam presented evidence that the defects caused imminent replacement obligations for glass installed at Pensacola Christian College and damaged Glasslam's reputation and sales of Safety Plus 1, resulting in lost profits.
Procedural history
Glasslam filed suit in Broward County Circuit Court on April 5, 2002. Reichhold removed the action to the United States District Court for the Southern District of Florida based on diversity jurisdiction. The district court dismissed the warranty-of-fitness and fraud counts with prejudice, the remaining claims were tried to a jury, and the jury awarded $22.5 million. The district court denied Reichhold's Rule 50 motions and entered final judgment, which the Eleventh Circuit affirmed.