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Toshiba Machine Co.11/10/2005 opined that SPM would have made the sales if the Toshiba machines could make a fluid end in thirty-five hours. He attributed a total of $2,362,821 in lost profits to lost fluid end sales.
Gilbert's third category of lost profit arose from lost sales of flow control products--valves, piping, and connections--that SPM would have sold as part of its lost fluid end sales. Gilbert examined SPM's sales history to determine which customers typically purchased flow control products along with pumps and fluid ends. He testified that the fluid end sales SPM lost to those customers would have generated additional sales of $1,317,022 in flow control products. Gilbert multiplied the lost flow control sales by SPM's 28.68 percent profit margin for a lost net profit of $377,721.
Finally, Gilbert testified that SPM had the same customer base for decades. SPM sold the same product lines "for some time," and those product lines had always been profitable. He testified that SPM has turned a profit since at least 1991, the year Gilbert joined the company.
Toshiba challenges Gilbert's testimony on three grounds. First, Toshiba argues that Gilbert did not qualify as an expert. A witness is qualified to testify as an expert if he has the appropriate knowledge, skill, experience, training, or education. Roberts v. Williamson, 111 S.W.3d 113, 121 (Tex. 2003); TEX. R. EVID. 702. The decision to admit expert testimony is within the trial court's discretion and will be disturbed on appeal only if there has been an abuse of that discretion. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 718-19 (Tex. 1998). In this case, the specific subject matter of Gilbert's testimony is SPM's damages arising from its purchase of the Toshiba machines. The question we consider is whether Gilbert has specialized knowledge that would assist the jury in understanding that issue. See Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 500 (Tex. 2001).
Gilbert earned a BBA in accounting in 1968. From 1968 to 1991 he worked as an accountant, controller, and vice president of sales and finance for several companies. In 1991, Gilbert went to work for SPM, first as vice-president and general manager with full responsibility for SPM's manufacturing, sales, marketing, and accounting, then gradually narrowing his focus to sales and accounting as SPM's vice president of finance. He testified that he had more than thirty years' experience managing the financial and accounting functions of companies engaged in the manufacture and distribution of various products. After reviewing Gilbert's testimony about his education, work history, experience, and familiarity with SPM's business, we cannot say that the trial court abused its discretion by allowing Gilbert to testify as an expert about SPM's damages.
Second, Toshiba argues that the trial court erred by admitting Gilbert's testimony about lost sales because it was rife with inadmissible hearsay. Gilbert testified that he personally contacted SPM customers to ascertain why certain sales were lost or certain orders cancelled. Toshiba made timely hearsay objections to Gilbert's testimony.
We review a trial court's rulings in admitting or excluding evidence under an abuse of discretion standard. Nat'l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). We must uphold the trial court's evidentiary ruling if there is any legitimate basis in the record for the ruling. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
An expert may rely on inadmissible facts or data to form an opinion or inference if the facts or data are of a type reasonably relied upon by experts in the particular field. TEX. R. EVID. 7
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