Gainer v. Storck

This is an appeal from a judgment for plaintiffs in an action for damages resulting from upset damage to a truck caused by faulty brake repair and from loss of use. The contentions of appellant Storck are that he was denied a fair trial through plaintiffs’ wrongful injection into the case of the matter of liability insurance, and that damages were improperly proved and were excessive. Since Bernard H. Gainer appears to have been in charge of all activities following the accident and, alone of the two plaintiffs, testified at the trial, we shall refer to plaintiffs in the singular as 1 ‘ Gainer. ’ ’

Gainer’s first amended complaint contained two counts, one against Storck for negligence in repairing the brakes on Gainer’s truck, and the second against Storck’s insurance carrier for breach of contract. The contract count alleged that one Edmonds, an adjuster employed by Storck’s insurance carrier, promised Gainer he would be paid all of the cost of repair and damages for loss of use; that this promise was breached. The amount of damages alleged in each count was identical. A demurrer to the second count was sustained and Gainer filed a second amended complaint. This time Storck’s insurance carrier was dropped as a party defendant, but the second count contained allegations that one Edmonds, a named defendant later dismissed from the case, acting as the authorized agent of Storck had admitted the liability of Storck and, for Storck, had promised that Storck would pay for repairs and loss of use; that later this contract obligation had been breached by Storck. As to agential authority of Edmonds to bind Storck, it was Gainer’s theory that Edmonds was an employee of Storck’s insurance carrier, that the policy of insurance authorized the insurance carrier to act for Storck with regard to plaintiffs’ claim, which it did through Edmonds, its claims adjuster, and that Edmonds’ dealings with Gainer bound Storck. The cause came on for trial on the second amended complaint and Storck’s answer thereto. At the opening of the trial and before evidence was taken Storck moved for summary judgment as to the contract count. The motion was denied. Claiming that the joinder of the insurance carrier in the first instance and the pleading of the contract count in the second amended complaint against Storck only was all sham and pretense for the purpose of injecting insurance into the case to the prejudice of Storck, it is argued here that the denial of Storck’s motion for summary judgment on the second count, followed by references to insurance during

A study of the whole record has led us to the conclusion that although the record strongly suggests there was on the part of Gainer’s counsel a studied effort to try the insurance company instead of Storck the plan did not in fact succeed and that the trial was fair. To begin with, it is not contended on appeal that the evidence of Storck’s negligence in repairing the brakes on Gainer’s truck was not sufficient to warrant the jury in finding that it was that negligence which caused the overturn of Gainer’s truck when put in operation shortly after it had been delivered to him for use. The evidence upon the matter of negligence and proximate cause is ample and persuasive. Next the references to insurance made in the presence of the jury were few. The trial court appears to have been diligent to prevent unwarranted references to insurance, and prompt to admonish the jury to disregard those that occurred. When plaintiff approached the proof of the contract count the court ruled that agency must be first proved and that proof could not be made through or by reference to the insurance policy. No other proof was attempted and Gainer was non-suited as to the contract count. The ruling on nonsuit was made out of the presence of the jury.

Storck claims that Gainer’s counsel also injected insurance into the case in his opening statement. It is admitted that he did not use the word “insurance” at all, but it is claimed that he secured the same effect by innuendo. Having described the accident, counsel stated that Gainer got in touch with Storck, told Storck about the accident and then went back to San Leandro, where he lived “because he had a policy of insurance on his own truck for collision; $500 Deductible clause; he. wanted to get in touch with his own company.” This, argues appellant, inferred that there was a second insurance company, to wit: Storck’s company. Counsel then stated that Gainer asked Mr. Reeser, an attorney, to take over, and Mr. Reeser got in touch with the “representative of Storek’s.” This again, argues appellant, inferred insurance. The statement continued, counsel saying that after Mr. Reeser “got in touch with the representative of Storck’s . . . they agreed they would take the truck . . . inspect the brakes, and if they found the brake job was the fault of the accident, then Mr. Gainer would be reimbursed ... . ” Counsel said the inspection showed the brakes were faulty and then Mr. Reeser “got

During the trial there were only two instances in which the matter of insurance was referred to. The first was during the direct examination of Gainer. After the witness had described the accident, the following occurred: “ Q. Now, what did you do after that ? A. Well, the truck was crossways of the road, they got it out of there; then I come back in to Storck’s garage and notified them, Mr. Storck’s son-in-law, just what had happened, and- Q. Tell mo this: Did Mr. Storck’s son-in-law tell you that he would do anything about it ? A. He reported it to his insurance- Mr. Farrow [Gainer’s Counsel] : Just a moment. Don’t say anything—he reported it to

In ruling on the question of prejudice by reference to insurance the following must be taken into consideration. First, there was ample proof of liability. This is not a case where the weight of the evidence on that issue approaches even balance. Next, the references as to insurance in counsel’s opening statement are at most inferential and not direct, and the references to insurance' during the taking of testimony were volunteer statements by witnesses. The court was prompt to admonish the jury to disregard anything said about insurance. Next the court instructed the jury that they were to disregard such references, that no insurance company was a party to the action, and they were not to consider the case as one other

Storck contends that the wrong measure of damages was used, that the damages awarded were unreasonable, that Gainer failed to mitigate damages, and that the damages awarded included wrongfully an amount for Gainer’s personal services. Gainer sued for the cost of repairs which he was required to pay in the sum of $500 and there is no dispute as to that item. The dispute concerns the amount awarded for loss of use in the sum of $4,880.54. The proof was confined to evidence o£ the profits which Gainer would have received if his truck had been available for use. Gainer had two trucks of the same hauling capacity and had been using both in contract work for some time prior to the damage to one. He testified that he would have used this truck a total of 88 days during the time it was being repaired, on the same jobs on which the other truck was used; that he kept a record of the earnings and expenses of the other truck during these days; that the gross amount earned by the truck in use was $5,642.64; that the expenses of operating that truck was the amount he testified to for each item of expense and that the net, after deducting all expenses, was the sum of $4,947.64. The jury awarded slightly less. He introduced in evidence his records and books of account and had marked for identification a summary which he prepared therefrom showing the accounting by which he arrived at the net amount of profits he would have received from use of the damaged truck. Appellant introduced no evidence on the subject of damages. He contends here that the only and exclusive measure of damages properly applicable in this case was the rental value of the truck, but he introduced no evidence as to what that rental value was. In Grupe v. Glick, 26 Cal.2d 680 , 692-693 [ 160 P.2d 832 ], it is stated:

“. . . [w]here the operation of an established business is prevented or interrupted, as by a tort or breach of contract or warranty, damages for the loss of prospective profits that otherwise might have been made from its operation are generally recoverable for the reason that their occurrence and extent may be ascertained with reasonable certainty from the past volume of business and other provable data relevant to

the probable future sales. . . . On the other hand, where the operation of an unestablished business is prevented or interrupted, damages for prospective profits that might otherwise have been made from its operation are not recoverable for the reason that their occurrence is uncertain, contingent and speculative. . . . But although generally objectionable for the reason that their estimation is conjectural and speculative, anticipated profits dependent upon future events are allowed where their nature and occurrence can be shown by evidence of reasonable reliability. . . . All of these cases recognize and apply the general principle that damages for the loss of prospective profits are recoverable where the evidence makes reasonably certain their occurrence and extent.’’ (See also Edwards v. Container Craft Carton etc. Co., 161 Cal.App.2d 752 [ 327 P.2d 622 ] ; Natural Soda Products Co. v. City of Los Angeles, 23 Cal.2d 193 ,199 [ 143 P.2d 12 ] ; Lambert v. Haskell, 80 Cal. 611 , 618 [ 22 P. 327 ].)

We think this was a ease where damages, measured by loss of profits from the use of Gainer’s truck, were properly allowable and the amount of damage so measured was sufficiently shown by Gainer’s testimony. He had been the owner and operator of two trucks engaged in contract hauling, one driven by himself and one by a hired driver. He had had the trucks in operation for some time and he testified from business experience as to the profits that could reasonably be made by the use of the truck that was damaged. The proof he submitted cannot be attacked as being too remote or too speculative to support the jury’s award based on loss of profits from loss of use.

Passing from the appropriateness of the measure of damages used, appellant contends that the damages awarded were unreasonable; that they included an amount for Gainer’s personal services in driving; that the period of loss of use was excessive and unnecessary; and that Gainer failed in his duty to mitigate damages. We will discuss these assignments of error together. Storck argues: “It would seem as if something were basically wrong with the judgment for $500 property damage plus $4,880.54 for the loss of use of a truck for a maximum period of three and one-half months, which was purchased less than two months prior to the date it was damaged for $2,800.” Elaborating upon this premise, Storck attacks the evidence in various ways and presents arguments that were no doubt addressed to the jury at the trial and to the court on motion for a new trial. However, viewed from

On the subject of Gainer’s alleged failure to mitigate damages, Storek argues that a part of the period the damaged truck was out of commission is chargeable to Gainer himself in that for a considerable period after the truck had been repaired he did not pay the repair bill and put the truck back to work. But Gainer testified that the company which repaired the truck refused to release it to him until the repair bill was paid in full; that he was unable to obtain the necessary money until November 1, 1955, at which time he obtained his truck and within a few days thereafter put it to work; that in the meantime he attempted to rent another truck, but found that none was available, whereupon he patched up an old Chevrolet, which broke down after one trip; that he tried to arrange for his emplo3ree driver to drive for someone else in the interim, but was unable to do so without losing his services when both trucks would be available; that he used his best efforts to get his truck repaired and back on the job as soon as possible and that although the second truck was earning the income he testified to this did not supply him with the necessary funds because he had to use that income for keeping the operating truck in fuel, in making payments on the conditional contracts whereunder he was purchasing both trucks and in keeping up insurance on the two trucks. In short, he didn’t have the money to redeem the damaged truck from the repairman’s bill until November 1st. It cannot be said as a matter of law that respondent did not make reasonable efforts to mitigate damage. Once again the argument on this point was no doubt persuasively addressed to the jury at the trial and to the trial court on motion for new trial and we see no good reason for not accepting their decisions. The evidence discloses a situation comparable to that discussed in Valencia v. Shell Oil Co., 23 Cal.2d 840 , 847-848 [ 147 P.2d 558 ], wherein the court said:

“There is ample evidence to support the implied finding that plaintiff lacked the funds and financial ability which in the exercise of ordinary care would have required him to pay the repair bill. The evidence shows that at the time of the accident plaintiff was the owner and operator of a service station costing $5,000 and against which there remained an indebtedness of $500; that he was the owner of a truck and automobile upon which two or three payments of $71.48 each were yet due; and that payments on the truck were completed

a few months after the accident, while the service station indebtedness was not fully paid until just before the trial of this action on March 18, 1937. Plaintiff testified that what little capital he had after the accident was needed for the operation of his service station. . . .

"It also appears from a finding of the trial court, which is amply supported by the evidence, that plaintiff attempted and was unable to obtain the use of a substitute truck while his truck was being repaired. ’ ’

We think it was entirely a question for the jury and for the trial court to determine whether or not plaintiff’s efforts to mitigate damage by getting his truck back to work were all that were reasonably required under the circumstances.

For the reasons given, the judgment appealed from is affirmed.

Peek, J., and Schottky, J., concurred.

A petition for a rehearing was denied May 8, 1959, and the petition of defendant and appellant for a hearing by the Supreme Court was denied June 9, 1959. Spence, J., and Peters, J., were of the opinion that the petition should be granted.