Ponder v. Budweiser of Asheville, Inc.

226 S.E.2d 539 (1976)

30 N.C. App. 200

Zeno Herbert PONDER v. BUDWEISER OF ASHEVILLE, INC. and William Alexander Fox.

No. 7624SC33.

Court of Appeals of North Carolina.

July 21, 1976.

*541 Gudger & McLean, by Lamar Gudger, Asheville, for plaintiff appellee.

Morris, Golding, Blue & Phillips, by James N. Golding, Asheville, for defendant appellants.

MORRIS, Judge.

Defendants, noting the plaintiff's evidence as to diminution of profits in the corporate farming operation, contend that the trial court erred ". . . by permitting the plaintiff to speculate as to profits which the corporation might have made. . . [in that] no allegation of such special damage appears in the complaint. . . and . . . [s]peculative evidence of corporation profits are not permitted to show loss of income or earning capacity in a personal injury action." We agree.

Here plaintiff's complaint alleges loss of income and earning capacity, but fails to allege properly and specifically the special damages of loss of corporate profits with respect to his tobacco crop and dairy herd. "In personal injury suits loss of profits are recoverable as special damages if properly pleaded as such, if they arise naturally and proximately from the injury, and if they are reasonably definite and certain." Smith v. Corsat, 260 N.C. 92, 99, 131 S.E.2d 894, 899 (1963). Also see: G.S. 1A-1, Rule 9(g).

Even had plaintiff complied with G.S. 1A-1, Rule 9(g), we still consider plaintiff's introduction of corporate losses improper. Justice Moore, in Smith v. Corsat, supra, at pp. 96-97, 131 S.E.2d at p. 897, well stated the law in this area and restatement of his opinion is worthwhile:

"It is a generally accepted proposition that evidence of the profits of a business in which the injured party in a personal damage suit is interested, which depend for the most part upon the employment of capital, the labor of others, and similar variable factors, is inadmissible in such suit and cannot be considered for the purpose of establishing the pecuniary value of lost time or diminution of earning capacity, for the reasons that a loss of such profits is not the necessary consequence of the injury and such profits are uncertain and speculative. In such circumstances loss of profits cannot be considered either as an element or the measure of damages. In such case, the measure of damages is the loss in value of the injured person's services in the business. `Profits' and `earnings' are not synonymous. Loss of personal earnings is properly considered as an element or measure of damages. Hendler v. Coffey, 278 Mass. 339, 179 N.E. 801 (1932); Flintjer v. Kansas City, 204 S.W. 951 (Mo.App.1918); Singer v. Martin, 96 Wash. 231, 164 P. 1105 (1917); Mahoney v. Boston Elevated R. Co., 221 Mass. 116, 108 N.E. 1033 (1915); 25 C.J.S. Damages § 86, p. 618; 15 Am.Jur., Damages, § 155, pp. 571-2. *542 See also 12 A.L.R.2d, AnnoDamagesPlaintiff's Business Profits, pp. 288, 294, 296. (In this Annotation the entire question is fully discussed and cases from many jurisdictions are cited and abstracted.) However, where the business is small and the income which it produces is principally due to the personal services and attention of the owner, the earnings of the business may afford a reasonable criterion to the owner's earning power. Bell v. Yellow Cab Co., 399 Pa. 332, 160 A.2d 437 (1960); 15 Am.Jur., Damages, § 96, p. 506; 12 A.L.R.2d 292. In cases where it is not established that the employment of capital, the use of labor of others, or similar variable factors were predominant in the injured person's business or determinative, for the most part, of the receipts realized, it is held that evidence of profits, in a restricted sense, or income (even if one or more of the factors mentioned were present and influential) may be used for the purpose of aiding in establishing a standard for the calculation of damages, if it conforms to the requirements of proximate cause and certainty. It has some bearing upon the question of damages, whether of loss of time or loss or diminution of earning capacity. Such evidence furnishes as safe a guide for the jury, under proper cautionary instructions, as may be found, in the assessment of damages, and becomes useful in helping to determine the pecuniary value of loss of time or impairment of earning capacity. Amelsburg v. Lunning, 234 Iowa 852, 14 N.W.2d 680 (1944); Roy v. United Electric R. Co., 52 R.I. 173, 159 A. 637 (1932); Atlanta v. Jolly, 39 Ga.App. 282, 146 S.E. 770 (1929); Osterode v. Almquist, 89 Cal. App. 2d 15, 200 P.2d 169 (1948); Gombert v. New York C. & H. R.R. Co., 195 N.Y. 273, 88 N.E. 382 (1909); 12 A.L.R.2d 294, 297."

Here, the diminution of crop yield and herd productivity may be attributable to a host of factors, not the least of which are purely environmental. Stated simply, plaintiff failed to show with any degree of certainty how the corporate loss of profit is a proximate result of his injuries.

Moreover, this loss was the corporation's and not the plaintiff's. The corporation relied upon considerable capitalization, employed considerable help and was owned by a number of shareholders in addition to plaintiff. There was evidence that plaintiff was paid a salary of $22,000 by the corporation for the year in which he sustained the injuries of which he complains. The trial court erred in allowing the business loss into evidence. See: 45 A.L.R.3d, Profits of Business as Factor in Determining Loss of Earnings or Earning Capacity in Action for Personal Injury or Death, § 5, pp. 369 et seq. Cf: Jernigan v. R.R. Co., 12 N.C.App. 241, 182 S.E.2d 847 (1971), (wherein the plaintiff's "own trucking business" loss was admissible for purposes of showing an impairment of earning capacity). (Emphasis supplied.) Love v. Hunt, 17 N.C.App. 673, 195 S.E.2d 135 (1973), (also involving a self-employed plaintiff).

Defendants, citing the lack of any supporting evidence, also contend that the trial court erred by instructing the jury that in resolving the damages issue they could consider ". . . any outward blemishes or scars or mutilations which tend to mar the [plaintiff's] appearance.. . ." We, again agree.

The only evidence of external injury was plaintiff's testimony that he had two "knots" on his head, minor scratches on the shoulder and a bruised hand, and plaintiff testified that those injuries were not permanent and had essentially disappeared. In short, there was no evidence of blemishes, scars or mutilations to plaintiff, and to have instructed that these disfigurements are elements to be considered in the calculation and consideration of damages was error. See: Spears v. Distributing Co., 27 N.C.App. 646, 219 S.E.2d 817 (1975).

In view of our decision that defendant is entitled to a new trial, we consider it unnecessary to discuss the appellants' other assignments of error, since they are not *543 likely to occur upon the retrial of this matter.

New trial.

PARKER and MARTIN, JJ., concur.