Bettius & Sanderson, P.c., Plaintiff-appellant, v. National Union Fire Insurance Company of Pittsburgh, Pa.,defendant-appellee.national Union Fire Insurance Company of Pittsburgh, Pa.,defendant-appellant, v. Bettius & Sanderson, P.c., Plaintiff-appellee, 892 F.2d 34 (4th Cir. 1989)

In Bettius & Sanderson, P.C. v. National Union Fire Ins. Co., 839 F.2d 1009 (4th Cir. 1988), we sustained a professional corporation's argument that compensation paid to its principals was relevant to show its net profits in an action to recover damages for lost profits. At trial on remand, the court entered judgment on the jury's verdict in favor of the corporation in the amount of $250,000. The corporation appeals, assigning error to the admission of evidence showing the subsequent earnings of former principals to offset the lost profits of the professional corporation. We affirm.

The professional corporation was permitted to show the amount disbursed to its principals in order to prove the loss caused by the defendant. See Bettius I, 839 F.2d at 1012-14. The principals, however, continued to practice law with other firms. Their earnings offset the loss they suffered when the defendant harmed the professional corporation in which they were formerly principals. The district court quite properly treated the professional corporation in effect as a partnership for the purpose of determining the principals' loss. Cf. Johnson v. Oroweat Foods, Inc., 785 F.2d 503, 508-10 (4th Cir. 1986) (partners' loss caused by breach of contract terminating partnership's business must be offset or mitigated by future earnings of partners).

We find no cause for reversal in the other assignments of error.