Acoustic Marketing Research, Inc. v. Technics, LLC

Summary

The Colorado Supreme Court held that lost future royalties may be awarded as breach-of-contract damages when the fact and amount of future loss can be established with reasonable certainty. The court affirmed the award because evidence supported the jury’s finding that the defendant would likely continue its refurbishment process and that future royalties could be reasonably calculated. A dissent argued that the defendant’s contractual right to discontinue production made future royalty damages too speculative.

Holdings

1. Future damages, including lost future royalties, may be awarded in a breach-of-contract action when the fact of future loss and the amount of the loss are demonstrated with reasonable certainty; future royalties are not speculative as a matter of law merely because they depend on future events.
2. The jury had adequate record support to find that Sonora was reasonably certain to continue its refurbishment process through the contract's 3,000-unit royalty ceiling and to calculate future royalties, so the adjusted future royalty award was not speculative and would not be disturbed.
3. After breaching the royalty agreement, Sonora could no longer avoid its royalty-payment obligation by ceasing production; a lump-sum damages award compensating Technics for the position it would have occupied absent the breach did not require Sonora to continue production.

Questions Presented

1. Whether future royalty damages are speculative as a matter of law because royalty payments depend on uncertain future events.
2. Whether future royalty damages are speculative as a matter of law when the contract permits the breaching party to cease royalty-generating production at any time.
3. Whether the record contained sufficient evidence to establish with reasonable certainty that future royalties would accrue and to provide a reasonable basis for calculating them.
4. Whether awarding future royalties improperly rewrote the contract or eliminated Sonora's contractual right to discontinue production.

Disposition

affirmed