David L. Lambert, Plaintiff-appellee, v. Airport Connection, Incorporated, Defendant-appellant,andgarfield Pollard, Defendant.david L. Lambert, Plaintiff-appellee, v. Garfield Pollard, Defendant-appellant,andairport Connection, Incorporated, Defendant.david L. Lambert, Plaintiff-appellant, v. Airport Connection, Incorporated, Garfield Pollard,defendants-appellees, 928 F.2d 399 (4th Cir. 1991)

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U.S. Court of Appeals for the Fourth Circuit - 928 F.2d 399 (4th Cir. 1991) Argued Jan. 7, 1991. Decided March 20, 1991

Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. James C. Cacheris, District Judge. (CA-89-643-A)

James W. Morris, III, Morris & Morris, Richmond, Va., John J. Brandt, Slenker, Brandt, Jennings & Johnston, Merrifield, Va., (Argued), for appellants; Walter J. Smith, Jr., Gerald F. Ivey, Michele S. Ponte, Wilson, Elser, Moskowitz, Edelman & Dicker, Washington, D.C., on brief.

Martin Henry Freeman, Freeman & Richardson, Bethesda, Md., (Argued), for appellee; Benjamin W. Glass, III, Brian C. Shevlin & Associates, P.C., Arlington, Va., on brief.

E.D. Va.


Before PHILLIPS, MURNAGHAN and NIEMEYER, Circuit Judges.


In this personal injury diversity action in which the defendants, Airport Connection, Inc. and its employee, Garfield Pollard, conceded liability to the plaintiff, David Lambert, a jury returned a verdict for $2.3 million. The defendants appealed, primarily challenging the district court's admission of lost profits evidence, and of a chart which summarized the damages claimed. We conclude that the district court acted within its discretion in admitting both items of evidence and affirm.

* The action arose from a collision in June of 1987 between an automobile driven by David Lambert and an Air Connection shuttle bus driven by Garfield Pollard. As a result of the accident, Lambert sustained a broken back and other injuries. In his ensuing action against Air Connection and Pollard, the defendants conceded liability and the case was tried on damages alone.

In the year before the accident Lambert had started a new business, working as a general contractor of high-end custom built homes in Aspen, Colorado. The success of his business depended on his ability to perform heavy physical work. At trial, Lambert introduced the expert medical testimony of Dr. John Odom. Odom opined that the 1987 accident created a high probability of long-term degenerative back problems on the part of Lambert, a probability that was borne out the following year. Odom testified that Lambert's back injury degenerated in 1988 and that Lambert would probably require back surgery within two years. He also opined that as a result of the accident, Lambert could no longer perform any heavy physical work without risking accelerated deterioration of his spine.

Lambert also introduced the expert testimony of an economist, Richard Lurito, who testified regarding the extent of Lambert's business losses resulting from the accident. Although Lambert's business was started in 1986, Lurito relied only on projected income for 1989 and 1990 in his future income projections. He explained that he viewed 1986 through 1988 as atypical years, for various reasons, and pointed to a series of projects which were either completed, under contract, or "firm" as the basis for his 1989 and 1990 income forecasts. Lurito testified that the accident resulted in a loss of income to Lambert of over two million dollars.

Among the witnesses offered by the defendants, economist Richard Gaskins was the most significant. Gaskins testified that the accident would not result in a substantial reduction of income to Lambert. His testimony rested on certain assumptions regarding land values and home prices in Aspen. On rebuttal, Lambert called Anne Austin to refute Lurito's assumptions about housing costs in Aspen. She testified about the accelerating cost of housing in Aspen, the reasons for these rapid increases, and the impact of this inflation on a general contractor's income.

Before charging the jury, the court ruled that all exhibits entered into evidence could be reviewed by the jury during deliberations, but declined to allow jury consideration of Lambert's counsel's handwritten summary of lost profits which he had used in closing argument. Shortly after deliberations began, the foreman submitted to the court a note stating: "We would like to know if we are allowed to see any of the charts (exhibits) that were presented specifically the one demonstrating the breakdown of monies involving hospital expenses, etc." Trial counsel for defendants was not present when the note came in. The court tried to reach him at the telephone number provided. When that failed, the court called his hotel's restaurant and bar, paged him, and called his office, all to no avail. Ten minutes after the note arrived, with only plaintiff's attorney present, the court decided to allow the jury to consider the handwritten summary of lost profits. The jury eventually returned a damages verdict of $2.3 million.

This appeal followed.


Appellants first argue that the district court should not have allowed Lurito to testify to the projected profitability of Lambert's contracting business because the business was not yet established. While Virginia allows damages for lost business profits, it does not do so where the businesses are new or not yet established, on the theory that such projections would be too speculative and uncertain. Kay Advertising Co. v. Olde London Transp. Co., 217 S.E.2d 876, 878 (Va.1975).1 

Airport Connection cites several cases where the Virginia Supreme Court has held that profit projections for businesses which were new or not yet established could not be admitted. None of these cases is ultimately helpful to the appellants. In Mullen v. Brantley, 195 S.E.2d 696 (Va.1973), for instance, the Virginia Supreme Court rejected use of projected profits for a pizza parlor that had not yet opened. Similarly, in Pennsylvania State Shopping Plaza v. Olive, 120 S.E.2d 372 (Va.1961), the court held profit projections for an as-yet-unopened service station to be too speculative. Lambert's business, on the other hand, had been in operation since 1986. The damages were calculated in late 1988, two years after it began operation, and projections were based on contracts reaching into 1990. Unlike a business that has yet to open, this business remained open--with some success--for a substantial period of time before trial. It was not a "new business" in the sense at issue.

Airport Connection then argues that, at minimum, Lambert's business was not "established." The cases upon which it relies for this proposition similarly fail to support this conclusion. In Kay Advertising, supra, the court found that a bus company operating for only 45 days was not yet established. Obviously, profit projections for a 45-day old bus tour company are far more speculative than for a two-year old construction company, holding contracts with multiple parties to build houses for the next two years.

In United Construction Workers v. Laburnum Constr. Corp., 75 S.E.2d 694 (Va.1953), the court held that a construction company which served a single corporate customer was not sufficiently established to sustain projections of lost income. The court observed that "the plaintiff had established a relationship with what was in effect a single customer, involving a relatively small number of transactions." Id. at 707. Pressing this point, Airport Connection asserts that Stan Mathis, an architect who provided references for Lambert, was the sole source of Lambert's business. We disagree that the evidence supports this view of the evidence, and therefore think that Laburnum is inapposite.

First, the evidence merely established that Mathis acted as a good reference and referral. It did not establish that all of Lambert's business came from Mathis. Rather, Lambert's business involved several different customers. Each, presumably, would have functioned as a future reference, assuming--as we must, based on the testimony--that Lambert's work was good. But there is a more fundamental difference between Laburnum and this case. In Laburnum, the construction company had lost its single client, a corporation. Obviously, one can never know how often--or how much--a single company will require the services of a construction company. At some point, any construction company may not require additional construction for a long period. On the other hand, it is fair to assume the home building market will always require the service of a general contractor. Thus in order to determine the likelihood of future business, Lambert may point to the vitality of the home building market, as well as his own talent for garnering a share of that market, in order to determine lost profits. Lambert offered substantial evidence showing that his business would continue to meet with success in the construction market. Lambert's business had been operating for a sufficient amount of time, and had met with sufficient success, that we conclude that it was "established" for the purpose of Virginia law. The district court therefore did not abuse its discretion in admitting Lurito's testimony.

Airport Connection and Pollard next argue that Dr. Odom's testimony was unreliable and speculative. Appellants note that Lambert had had several back injuries before the accident, and that his medical picture was thereafter not simple and straightforward. They further contend that because Odom could not state with assurance that Lambert required surgery, or provide a specific time frame for the procedure, the testimony was therefore speculative. Odom, however, testified that such surgery was extremely likely and would probably need to occur within one and five years--most likely about two years. His testimony was thorough, involving an extensive review of Lambert's record and significant hands-on treatment of Lambert. He explained the sorts of degenerative injury Lambert was experiencing and gave as definite a prediction as any doctor could be expected to give regarding a patient's future need for surgery. More important, Airport Connection does not dispute Odom's finding that--surgery or not--Lambert could not do the heavy work necessary for his job. Again, the district court did not abuse its discretion in admitting this testimony.

Airport Connection next argues that the court abused its discretion by allowing Lambert to introduce a rebuttal witness to testify to issues never raised in defendants' case-in-chief. In general to avoid prejudice to a defendant such non-rebutting evidence should not be admitted. Emerick v. Suzuki Motor Corp., 750 F.2d 19, 22 (3d Cir. 1984).

In support of this proposition, Airport Connection contends that it never offered any information about housing values in Aspen as part of its case in chief so that the "rebuttal" testimony as to such values by the witness Austin should not have been admitted. The flaw in this argument is that Airport Connection's witness, Gaskins, did, in the course of his projections, make certain assumptions regarding housing costs and contractor profits. Austin's rebuttal testimony, explaining why the increased cost of housing would result in substantially increased profits for Lambert, was therefore admissible in the district court's discretion. Austin's testimony was responsive to Gaskins' testimony.

Airport Connection next contends that Lambert's future profits summary sheet, never introduced into evidence, was improperly given to the jury in defense counsel's absence. The document was a redacted summary of information already in evidence, including past medicals, future medicals, supervisory expense, 1989 lost earnings, and future profits. Although the court, during the pre-deliberation conference, had decided not to allow this document to be considered by the jury, the information was otherwise in evidence and pursuant to Federal Rule of Evidence 1006 could have been admitted in its own right.

A trial court retains broad discretion in deciding what materials to provide a jury in response to a jury request. See Government of the Canal Zone v. Scott, 502 F.2d 566, 570 (5th Cir. 1974). Here, the court decided to allow consideration of a summary with factual support in the record. The court reached its decision out of the presence of defense counsel after it expended a substantial effort in attempting to reach counsel. In addition, defense counsel had left the courthouse without the consent of the judge. The court made an effort to balance the need for a quick response to the jury with the need for both counsels' presence. Under the circumstances, the court did not abuse its discretion in providing the summary to the jury.



Airport Connection primarily contended that the profit projections should not have been permitted at all. Secondarily, they contend that, if these projections were allowed, they should have included profits from 1986-1988, in addition to 1989-90. The question of whether Lurito's projections were credible is properly left for the jury's consideration. The expert offered his opinion as to why 1986-88 were atypical and thus unhelpful to his calculation and Airport Connection had an opportunity to refute Lurito's assessment