DAWSON, J.
In this appeal, plaintiff contends the trial court erroneously decided that the issue of lost profits caused by defendant's breach of a contract to convey land should not be presented to the jury. The trial court determined that Civil Code section 3306's authorization of the recovery of consequential damages permitted an award of lost profits, but that plaintiff failed to establish that (1) lost profits were within the contemplation of the parties when they entered their contract and (2) the occurrence and extent of the lost profits were reasonably certain as required by case law and Civil Code section 3301.
We conclude that the trial court correctly granted partial nonsuit as to lost profits because plaintiff failed to meet the requirement that "the evidence makes reasonably certain their occurrence and extent." (Grupe v. Glick (1945) 26 Cal.2d 680, 693.) Plaintiff's theory of lost profits was based on an expert's assumption that traffic and corresponding fuel sales would have been diverted to the location where plaintiff intended to build a large truck stop. That diversion of traffic and the related volume of fuel sales were not reasonably certain in their occurrence and extent and, therefore, neither were the corresponding lost profits.
The judgment will be affirmed.
Plaintiff Flying J, Inc., a Utah corporation licensed to do business in California (Flying J), operated a network of travel plazas along state and interstate highways. The travel plazas were large truck stops with (1) parking areas for tractor-trailers to enter and leave easily, (2) convenience stores, (3) driver lounges, (4) game rooms, (5) private showers, and (6) full service restaurants. At the time of the trial in September 2009, Flying J operated over 260 travel plazas.
Defendant Department of Transportation (CalTrans) is the entity in charge of state highways and has the authority to exercise the right of eminent domain to acquire property for state highway purposes.
In January 1997, Flying J purchased 18.8 acres of vacant land adjacent to State Routes 14 and 58 in the Mojave Desert. Flying J paid $282,000 for the land, or $15,000 per acre.
In August 1999, CalTrans filed an action in eminent domain seeking to condemn 4.43 acres along the southeastern property line of Flying J's 18.8-acre parcel for use as a frontage road in a highway improvement project located at the intersection of State Routes 14 and 58. The project is located north of the City of Mojave.
In early 2000, Flying J and CalTrans began negotiating the transfer of the 4.43 acres to CalTrans and a resolution of the eminent domain action. Flying J had opposed the condemnation because the loss of the 4.43 acres would have prevented it from having sufficient land to operate a travel plaza. Flying J also rejected an acre-for-acre exchange because the configurations created by such an exchange would not have worked for a travel plaza. Eventually, the negotiations resulted in the signing of an agreement dated December 13, 2001. The agreement was labeled "Right of Way Contract" and given CalTrans's document No. 3152-1. For purposes of this opinion, we will refer to the contract as the "Settlement Agreement."
The Settlement Agreement provided for Flying J to deliver a grant deed for the 4.43-acre parcel to CalTrans through a designated escrow company and CalTrans to pay Flying J $14,800 for the parcel. In addition CalTrans was to deliver to Flying J a deed for a 20.57 acre parcel adjacent to Flying J's remaining 14.37 acres. Prior to the delivery of this deed, Flying J was required to deposit certain amounts into escrow. The first amount was the difference between the amount due Flying J for the 4.43-acre parcel ($14,800) and the appraised value of the 20.57-acre parcel ($55,000),
Paragraph 7 of the Settlement Agreement stated that Flying J agreed to the dismissal of the eminent domain action and waived any claim it had to the money deposited in that action. Less than a week after the Settlement Agreement was signed, CalTrans filed a request for dismissal without prejudice in the eminent domain action. In March 2002, Flying J forwarded a grant deed for the 4.43-acre parcel to CalTrans.
The Settlement Agreement made CalTrans's delivery of the deed to the 20.57-acre parcel "[s]ubject to approval by the California Transportation Commission ...." As a result, the transfer of the 20.57 acres to Flying J was brought before the California Transportation Commission (the Commission) on October 3, 2002, as part of its consent calendar. Commissioners John Lawson and Allen Lawrence asked questions that indicated a concern about the price being received for 20.57 acres of land next to the highway. Because the CalTrans representative was not able to answer the questions, the item was pulled from the consent calendar and CalTrans was asked to return to the next meeting with additional information. At trial, Stephen Ikeda, the CalTrans representative who appeared at the October 3, 2002, meeting testified that, to his knowledge, it was the only time an item on the consent agenda had not been approved by the Commission.
The transfer of the 20.57 acre parcel was placed on the regular agenda for the Commission's February 2003 hearing. At that hearing, the Commission voted to put the property out to bid (public auction) rather than approve the exchange with Flying J.
On May 7, 2003, Flying J filed this breach of contract action against CalTrans in Kern Superior Court.
Later in May 2003, the public auction was held. Thomas Pistacchio was the winning bidder and obtained the option to purchase the 20.57 acres for $377,000. Pistacchio was a competitor of Flying J.
In November 2003, Flying J filed a lawsuit in federal district court against Pistacchio and Commissioner Lawson, alleging that they conspired to sabotage the Commission's approval of the transfer of the 20.57 acres to Flying J in violation of California's Political Reform Act (Gov. Code, §§ 81000-91014), Government Code section 1090, and California's common law doctrine against conflict of interest. (Flying J, Inc. v. Pistacchio (E.D.Cal. Mar. 31, 2008, No. CV-F-03-6706 OWW GSA) [2008 WL 906396, pp. 2 & 7, 2008 U.S. Dist. LEXIS 26243 pp. 6 & 18-19].) This case went to the Ninth Circuit twice—the last time the court affirmed the district court's dismissal of the action. (Flying J, Inc. v. Pistacchio (9th Cir. 2009) 351 Fed.Appx. 236.)
In February 2004, the Commission heard Flying J's arguments for reconsideration of the denial of the conveyance of the 20.57 acres to Flying J. The six Commissioners at the hearing (by that time, Lawson was no longer a member) unanimously voted to reject the proposed conveyance to Flying J.
The next month, Flying J filed in superior court a petition for writ of administrative mandate against the Commission that requested the Commission be directed to approve the conveyance of the 20.57 acres from CalTrans to Flying J.
Before the present case went to trial, Flying J sought protection in bankruptcy. Specifically, on December 22, 2008, Flying J filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. (In re Flying J, Inc. (D.Del. 2009) 2010-1 U.S. Tax Cas. (CCH) ¶ 50,155 [2009 Bankr. LEXIS 4200, 2009 WL 5215000].)
While Flying J's bankruptcy was still pending, the jury trial in this breach of contract action began. Flying J presented witnesses who testified about its claim for lost profits. The witnesses included James Pampinella and Forrest Sandusky Baker, Jr.
At the time of trial, Pampinella was a director in the San Francisco office of Deloitte Financial Advisory Services and practiced in the area of forensics and dispute resolution services. Pampinella was licensed by California as a certified public accountant and had a certificate in financial forensics. Pampinella testified that Flying J lost approximately $13 million in profits because it was not able to open a travel plaza at the Mojave site.
Baker testified as an expert in the trucking and travel plaza industry and the economics of that industry. Baker was asked to use his expertise to calculate the financial impact on the Flying J network of not opening the Mojave facility on the scheduled date of July 1, 2003, exclusive of the profits the Mojave facility would have generated. Baker concluded that the net present value of the damages was approximately $47.1 million. Baker's calculation attempted to quantify the synergistic effect the Flying J network would have received from opening a travel plaza at the Mojave site. Based on the testimony of Pampinella and Baker, Flying J claimed lost profits totaling approximately $60 million.
Baker also addressed the reasons why Flying J filed for bankruptcy. Baker testified that Flying J got into trouble with its other lines of business—oil fields, refineries, pipelines and storage tanks—and the money made by the travel plazas was not enough to carry the other businesses when the credit market seized up and Flying J lost its financing for them. Baker testified that Flying J's travel plaza business for the 2008 fiscal year, which ended January 31, 2009, was the most profitable in the company's history, making approximately $200 million in net profit. In addition, Baker testified that Flying J's truck stops were being sold to bail out the rest of the system.
During the trial, CalTrans filed a motion to strike evidence of lost profits, which Flying J opposed. On October 9, 2009, the trial court addressed the motion to strike, treated it as a motion for partial nonsuit on the issue of lost profits, and granted the motion. Based on this ruling, the trial court instructed the jury that Flying J's claim for lost profits was no longer an issue in the case.
On October 22, 2009, the jury found that CalTrans breached the Settlement Agreement (1) by recording the deed for the 4.43-acre parcel, (2) by acts or failures to act that caused the Commission to not approve the conveyance of the 20.57-acre parcel, and (3) by not agreeing to return the $47,754 Flying J paid for the construction change order. The jury also found that Flying J's damages totaled $991,824.
In March 2010, the trial court filed a judgment. Flying J filed a motion for new trial, which the trial court denied in May 2010. In June 2010, Flying J filed a notice of appeal, challenging the trial court's grant of partial nonsuit on the issue of lost profits. Flying J's opening appellate brief states that it appeals the grant of partial nonsuit only with respect to its claim for lost profits damages associated with the Mojave facility. Thus, Flying J has abandoned its claim that its travel plaza system lost approximately $47.1 million in profits from the synergistic effect the Mojave facility would have had on its other travel plazas.
Flying J contends that the order granting partial nonsuit precluding it "from recovering lost profits damages is subject to independent review. (Aas v. Superior Court (2000) 24 Cal.4th 627, 634.)" CalTrans contends Flying J's "reliance on
We conclude that the standard of review applicable to an order granting nonsuit was set forth accurately by the Second Appellate District as follows:
Accordingly, our Supreme Court's statement in Aas v. Superior Court, supra, 24 Cal.4th at page 634 that "a motion to exclude all evidence on a particular claim is subject to independent review" is still good law. The assertion of CalTrans that Aas has been overruled is not accurate. Neither the United States Supreme Court nor the California Supreme Court has overruled Aas. Rather, one of the holdings in Aas was superseded by statute. (See Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1202 [Legislature enacted Right to Repair Act (Civ. Code, § 895 et seq.) in response to Aas and authorized homeowner recovery of economic losses from builder's violation of building standard without having to show property damage or personal injury].)
The California Legislature has addressed the damages that a buyer may recover when a seller breaches an agreement to convey real estate. Civil Code section 3306 provides in full:
The statute does not expressly mention lost profits and, therefore, a thwarted buyer's attempt to recover lost profits will be governed by the statutory phrase "consequential damages according to proof." This phrase was added to Civil Code section 3306 by an amendment adopted in 1983. (Stats. 1983, ch. 262, § 1, p. 806.) The amendment also deleted a bad faith requirement from the statute. In Stevens Group Fund IV v. Sobrato Development Co. (1991) 1 Cal.App.4th 886 (Stevens Group Fund), the appellate court discussed the legislative history relating to the amendment:
The legislative history discussed in Stevens Group Fund did not expressly indicate whether lost profits were included in, or excluded from, the consequential damages authorized by the amended version of Civil Code section 3306.
The question "whether consequential damages under [Civil Code] section 3306 may include lost profits" was addressed recently in Greenwich S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 751 (Greenwich). The court regarded the question of statutory interpretation as one of law subject to its de novo review. (Ibid.) The court noted the absence of a California case directly answering this question, reviewed the differing positions set forth in various treatises, discussed the case law applying Civil Code section 3306 both before and after its amendment, examined the legislative history discussed in Stevens Group Fund, and considered decisions from other states that recognized lost profits as a component of consequential damages for the breach of a contract to sell land. (Greenwich, supra, at pp. 751-758.) These sources and the generally accepted inclusion of lost profits as a component of consequential or special damages in other breach of contract contexts (i.e., contracts not involving the sale of land) persuaded the court "that lost profits may be awarded as part of consequential damages under section 3306 upon a proper showing." (Id. at p. 758.)
We agree with the statutory interpretation adopted by the court in Greenwich and join in its conclusion that lost profits may be awarded as part of the consequential damages authorized by Civil Code section 3306 upon a proper showing. In our view, the court's use of the phrase "upon a proper showing" (Greenwich, supra, 190 Cal.App.4th at p. 758) is the equivalent of the statutory language that authorizes the recovery of consequential damages "according to proof." (§ 3306.) In other words, a proper showing means presenting adequate proof.
A proper showing of lost profits includes satisfying the certainty requirement of Civil Code section 3301, which provides in full: "No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and origin." This certainty requirement is reflected in California case law, which has long recognized "the general principle that damages for the loss of prospective profits are recoverable where the evidence makes reasonably certain their occurrence and extent." (Grupe v. Glick, supra, 26 Cal.2d at p. 693.) More recently, our Supreme Court addressed the limitations on the recovery of lost profits by stating: "Not only must such damages be pled with particularity [citation], but they must also be proven to be certain both as to their occurrence and their extent, albeit not with `mathematical precision.' [Citations.]" (Lewis Jorge Construction Management, Inc. v. Pomona Unified School Dist. (2004) 34 Cal.4th 960, 975.)
California appellate courts have applied the certainty requirement to reverse judgments awarding lost profits and to affirm decisions that kept the issue of lost profits from the jury. (E.g., Greenwich, supra, 190 Cal.App.4th 739 [jury award of lost profits reversed]; Parlour Enterprises, Inc. v. Kirin Group, Inc. (2007) 152 Cal.App.4th 281 [jury award of lost profits reversed]; Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870 [summary judgment affirmed].)
In Kids' Universe v. In2Labs, supra, 95 Cal.App.4th 870, a retail toy store and its owners sued an adjacent business that caused a flood in their store and prevented them from launching an Internet Web site for the sale of toys. The trial court granted summary judgment on the ground the plaintiffs could not establish with the requisite certainty that profits would have been made by the online business. (Id. at pp. 887-888.) The appellate court affirmed, concluding that the plaintiffs' claim for lost profits was uncertain and speculative. The evidence deemed inadequate included the plaintiffs' five years of experience as toy retailers and testimony from an expert witness who compared the proposed Web site with the success of another toy company operating on the Internet and concluded the plaintiffs would have made a healthy profit. (Id. at pp. 876-877.) The appellate court supported its conclusion regarding the uncertainty of lost profits by setting forth undisputed contingencies affecting the computation of lost profits. Those contingencies included competition with two other toy retailers on the MindSpring portal and the necessity for attracting viewers from that portal who would make actual purchases at a level sufficient to make the site financially profitable. (Kids' Universe v. In2Labs, supra, at pp. 887-888.)
In Parlour Enterprises, Inc. v. Kirin Group, Inc., supra, 152 Cal.App.4th 281, the plaintiffs sued franchisees for failing to open Farrell's ice cream parlors as required by their franchise agreement and sought lost profits, lost franchise fees, and consequential expenses. The jury awarded over $6 million in damages and the appellate court reversed the award except for approximately $130,000 in lost franchise fees and extra expenses. (Id. at pp. 283-284.) The court concluded that the evidence was speculative and insufficient to show lost profits were reasonably certain to occur or the extent of any lost profits for three proposed restaurants. (Id. at pp. 288-289.) The plaintiffs' expert considered market data from about 12 ice cream parlors, but admitted that they were smaller operations that served only ice cream and were not similar to the Farrell's concept, which involved the sale of food and ice cream. (Id. at p. 290.) With respect to existing Farrell's restaurants in Santa Clarita and San Diego, the court indicated that the expert did not use figures from the Santa Clarita Farrell's, and there was no evidence as to what the numbers were from the Farrell's in San Diego or how those numbers were used in the expert's calculations. Also, the court rejected the expert's reliance on industry data from a variety of businesses because the evidence failed to show a substantial similarity between those businesses and the three proposed restaurants. (Id. at p. 291.)
In Greenwich, 190 Cal.App.4th 739, after construing the term "consequential damages" in Civil Code section 3306 to include lost profits, the court addressed whether the evidence presented to the jury was sufficient to support the jury's award of $600,000 as lost profits. (Greenwich, supra, at p. 758.) The buyer claimed lost profits on the ground that it would have renovated the property in question and resold it for a profit. The buyer's evidence included the testimony of a real estate appraiser who gave her opinion as to the value of the property if the renovation plans had been completed. (Id. at p. 749.) Factors that increased the uncertainty of the profits included the buyer's lack of a track record in successfully redeveloping properties, the size of the renovated building (which was dependent upon the square footage approved by the city), the timing of the sale of the renovated property, and the cost of constructing the proposed renovations. (Id. at pp. 763, 765.) As a result of these and other factors, the appellate court concluded that "the occurrence and extent of the projected lost profits were not proven with the requisite reasonable certainty in this case." (Id. at p. 760.) Consequently, the court reversed the jury's award of lost profits. (Greenwich, supra, at p. 768.)
During the trial, CalTrans filed a motion to strike evidence of lost or speculative profits, a motion to strike the testimony of Baker, and a motion to strike the testimony of Pampinella. Among other things, the motions challenged Baker's and Pampinella's use of financial data from five other travel plazas as the basis for predicting the profits that would have been realized at a Mojave travel plaza.
Flying J's opposition to CalTrans's motion to strike evidence of lost profits addressed Civil Code section 3301, the requirement that the occurrence and extent of lost profits must be determined with reasonable certainty, and the circumstances under which even new, unestablished businesses are allowed to recover lost profits. Flying J argued that the methodologies of its experts were not speculative and the foundation for its lost profits claim was the historical sales and profit information from its other travel plazas. In addition, Flying J cited Kids' Universe v. In2Labs, supra, 95 Cal.App.4th 870 for the proposition that, if a business is new, "`damages may be established with reasonable certainty with the aid of expert testimony, economic and financial data, market surveys and analyses, business records of similar enterprises, and the like.'" (Id. at p. 884, quoting Rest.2d Contracts, § 352, com. b, p. 146.)
On October 9, 2009, the trial court orally granted a motion for partial nonsuit on the issue of lost profits. The court addressed a number of points. It characterized the claim for lost profits as a claim for special damages and indicated that there had been no demonstration that special damages in the form of lost profits were foreseeable by CalTrans or that CalTrans had actual notice that lost profits could result from a breach.
Besides foreseeability, the trial court also addressed the certainty requirement. It noted that there was neither an established business nor a history of profits at the Mojave location and stated its finding that the location was not comparable to the sites used by the experts for comparison. Specifically, the court stated:
Flying J's appellate opening brief is directed primarily at challenging the trial court's determination that lost profits were not reasonably foreseeable or within the contemplation of the parties at the time of contracting. Indeed, none of the headings or subheadings in the opening brief even mentions the alternate ground for the trial court's ruling—namely, the failure to establish lost profits with the requisite certainty, including the underlying determination regarding the lack of comparability between the five existing travel plazas and the proposed Mojave site.
In its discussion of the question of foreseeability, Flying J mentions the trial court's reference to the Mojave site being a new business. Then, however, Flying J. argues that (1) "the court clearly stated that it was granting partial nonsuit on the grounds that lost profits damages were not foreseeable" and (2) "[t]he new business rule is not about foreseeability."
We agree with Flying J's contention that the so-called new business rule is not concerned with foreseeability—instead, it concerns the certainty requirement. Thus, the flaw in Flying J's argument is that it addresses the wrong requirement and seems to imply that foreseeability was the exclusive ground for the trial court's ruling. We reject this implication because the trial court clearly withheld the issue of lost profits from the jury on the alternate grounds of foreseeability and certainty. The court's reliance on the certainty requirement is apparent from its reference to the absence of an established business at the Mojave location and its statements that the Mojave site was not comparable to the other travel plazas (which we quoted earlier). In any event, we are not limited to the rationale used by the trial court to affirm a correct ruling. It is the trial court's ruling, not its rationale, that we must review. (See 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 346, pp. 397-398 and cases cited therein.)
Flying J's opening brief does include one paragraph that addresses the certainty of the lost profits requirement and the more specific issue of the comparability of sites. Flying J contends that "a plaintiff can demonstrate that lost profits for an unestablished business are not speculative or uncertain by demonstrating a reasonable probability that they would have been earned. [Citation.]" Thus, the occurrence and extent of lost profits from a new business can be determined with reasonable certainty using the past sales volume of an established business and other information projecting probable future sales volume. Finally, according to Flying J, it presented sufficient proof of certainty here—through evidence regarding its track record in operating profitable travel plazas at locations across the country, including specific evidence of profitable travel plazas in California that its experts testified were comparable to the travel plaza it intended to build in Mojave—to merit placing this issue before the jury. The expert testimony regarding comparability that Flying J relies on was provided by the accountant Pampinella and the consultant Baker.
Based on our independent review of the record, we agree with the trial court that Flying J failed to present sufficient proof of certainty to merit sending the issue to the jury. The specific issue we address is whether Flying J presented any proof that the five California travel plazas relied upon by its experts were comparable to the Mojave site. We use the term "comparable" to mean "substantially similar" as that phrase and its variants have been used in decisional law regarding the recovery of lost profits by an unestablished business. (See Kids' Universe v. In2Labs, supra, 95 Cal.App.4th at p. 886 [experience in the same business or enterprise may be admitted to prove lost profits if there is substantial similarity between facts forming basis for profit projections and the business opportunity destroyed].)
Pampinella testified as an expert regarding lost profits. He quantified the lost profits specifically related to the Mojave site as being approximately $4.1 million in pretrial damages and approximately $8.9 million in posttrial damages, for a total of approximately $13 million. Pampinella testified that he looked at five comparable sites that Baker identified and averaged the gross profits that those sites had made over the past several years for use as a benchmark on how the Mojave site would have operated. The five other travel centers were located near the California cities of Lodi, Ripon, Bakersfield, Frazier Park, and Barstow.
During cross-examination about the choice of comparable sites, Pampinella acknowledged that he was not a travel plaza expert and indicated that he relied on Baker's choice of the five representative sites by stating: "Well, I relied heavily on [Baker]. He did compare the five sites and how they performed to the overall Flying J network and that type of thing. But ultimately it's his opinion, not mine." (Some capitalization omitted.)
Because Pampinella relied on Baker's assertion that a travel plaza at the Mojave site would perform like the travel plazas at the other sites, his testimony did not provide evidence that the Mojave site would perform in a manner substantially similar to the five sites used in his creation of a benchmark for the Mojave site. Pampinella's projections regarding lost profits will have probative value only if his assumption that the sites were comparable is supported by evidence in the record. (See Beverly Hills Concepts v. Schatz & Schatz (1998) 247 Conn. 48 [717 A.2d 724] [profit projections of certified public accountant were based on speculative assumptions and unreasonable comparisons; assumption must be reasonable in light of record evidence].) Consequently, we next consider the basis for Pampinella's assumption—the testimony of Baker regarding the comparability of the sites.
During cross-examination, counsel for CalTrans asked Baker how he determined the Mojave site would perform like the five existing sites he selected. That inquiry included the following exchange:
This testimony shows that Baker assumed that building the travel plaza would divert truck traffic to Mojave from other routes, and the diverted traffic would generate enough fuel purchases that the proposed Mojave site would achieve fuel volumes similar to the volumes achieved at the five other locations.
Baker explained his diversion-of-traffic theory by stating that there are two ways to get from the east side of the Los Angeles basin to the Bakersfield area. One way is to go to Mojave and then west to Bakersfield. The other way is to use Interstate 210 and then take Interstate 5 north, past Frazier Park, towards Bakersfield. Baker stated that the mileage for the two routes was approximately the same, but "[t]imes are substantially better coming across the desert with no traffic." (Full capitalization omitted.) A travel plaza in Mojave, according to Baker, would relocate traffic from the route using Interstate 210.
We note that Baker began his explanation of the diversion-of-traffic theory by stating that the "Mojave site is an unusual site." (Full capitalization omitted.) Although the term "an unusual site" is ambiguous, it appears Baker meant that the Mojave site presented a rare opportunity because it was on an alternate route that would save time, and truckers could be convinced to switch to that alternate route if assured of adequate services—a concern the proposed travel plaza in Mojave was intended to address.
Baker's assumptions or predictions about the diversion of traffic to a route through Mojave and his statement that the Mojave site is "unusual" demonstrate that the Mojave site was not substantially similar (i.e., comparable) to the five other travel plazas. The other sites are located on established trucking routes and did not depend upon diversions of traffic from other routes to achieve their fuel sales. The Lodi travel plaza is located on Interstate 5 south of Sacramento. The Ripon and Bakersfield travel plazas are located on State Route 99. The Frazier Park travel plaza is located on Interstate 5 north of the Los Angeles basin on the route that Baker believes will be the source of truck traffic diverted through Mojave. In short, the Mojave location is different from (not substantially similar to) the other locations because its prospective sales are based on Baker's diversion-of-traffic theory—a theory that cannot be tested against the experience at the five other sites. The fact that Baker and Flying J were willing to make business decisions based on the assumptions that traffic would be diverted—and about the amount of that traffic—is simply not proof to a reasonable certainty of either the existence or, more particularly, the extent of potential lost profits.
For these reasons alone, we conclude the trial court correctly determined that the Mojave site was not comparable to the five locations used to establish the volume of sales that the Mojave site would have achieved. The record further shows, however, that there are other contingencies affecting both the existence and extent of lost profits.
Those contingencies include (1) the amount of time it would have taken Flying J to obtain the necessary permits and build the travel plaza at Mojave, (2) the impact of the impending sale of Flying J's travel plazas on the profit projections,
In summary, we conclude as a matter of law that the evidence presented was insufficient to show lost profits with reasonable certainty. (See Civ. Code § 3301; Grupe v. Glick, supra, 26 Cal.2d at p. 693.) Too many conjectures were built into the calculations of the profits alleged to have been lost. In Greenwich, the First Appellate District stated that "no published California case of which we are aware has awarded lost profits to the buyer as consequential damages under [Civil Code] section 3306 for the seller's breach of a real property purchase and sales agreement." (Greenwich, supra, 190 Cal.App.4th at p. 760.) The evidence in this case is not strong enough for it to become the exception.
The judgment is affirmed. Respondent shall recover its costs on appeal.
WISEMAN, Acting P.J. and GOMES, J., concurs.
