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Kraatz v. Heritage Imports6/12/2003
tz's claim relate to costs incurred in "the first four months following termination." Because Kraatz is only entitled to $5,000 per year in health-care reimbursements, the trial court permitted recovery for $5,000 for that year and denied recovery for the remaining $3,484.26 incurred in the same year.
Thus, the trial court correctly applied the express terms of the contract. Kraatz has offered no legal basis for recovery of the $3,484.26, either pursuant to the express terms of the contract or as consequential damages. Accordingly, we affirm the trial court's award of unreimbursed health-care costs.
II. Consequential Damages
Kraatz also argues that the trial court erred in denying his claim for consequential damages concerning potential Christmas bonuses, Jazz tickets, retirement contributions, warranty income, and non-business use of the club memberships. Under Utah law, damages available for a breach of contract may include not only general contract damages, but because the goal is to "'place the aggrieved party in the same economic position he would have had if the contract had been performed,'" Mahmood v. Ross, 1999 UT 104, , 990 P.2d 933 (quoting John D. Calamari & Joseph M. Perillo, The Law of Contracts ยง 14-4, at 591 (3d ed. 1987)), the party may also seek redress through consequential damages.
Mahmood and Castillo v. Atlanta Cas. Co. set forth a three-part analytical test for consequential damages. See Mahmood, 1999 UT 104 at ; Castillo v. Atlanta Cas. Co., 939 P.2d 1204, 1209 (Utah Ct. App. 1997). "To recover consequential damages, a non-breaching party must prove (1) that consequential damages were caused by the contract breach; (2) that consequential damages ought to be allowed because they were foreseeable at the time the parties contracted; and (3) the amount of consequential damages within a reasonable certainty." Mahmood, 1999 UT 104 at (emphasis added). See also Castillo, 939 P.2d at 1209. These three factors are founded in basic legal principles, which we briefly address in connection with our remand of this issue.
In Mahmood, the court addressed causation in the context of a motion for a directed verdict regarding consequential damages resulting from breach of a settlement agreement, stating,
"Proximate cause is 'that cause which, in the natural and continuous sequence (unbroken by an efficient intervening cause), produces the injury and without which the result would not have occurred. It is the efficient cause--the one that necessarily sets in operation the factors that accomplish the injury.'" Proximate cause is generally determined by an examination of the facts, and questions of fact are to be decided by the [fact-finder]. . . . However, this does not mean that a [fact-finder] is free to find a causal connection between a breach and some subsequent injury by relying on unsupported speculation. Although [fact-finders] may make deductions based on reasonable probabilities, "the evidence must do more than merely raise a conjecture or show a probability. Where there are probabilities the other way equally or more potent the deductions are mere guesses and the [factfinder] should not be permitted to speculate. The rule is well established in this jurisdiction that where 'the proximate cause of the injury is left to conjecture, the plaintiff must fail as a matter of law.'"
Mahmood, 1999 UT 104 at (citations omitted). Under this definition, Mahmood failed to prove the causation factor.
Next, because of Mahmood's failure of proof, the court did not address the foreseeability factor but defined it, stating, " o prove consequential damages, a claimant must not only show a causal l
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