First Alarm Fire Equipment, Inc. v. Southland International of Louisiana, Inc.
114 So. 3d 1168
La. Ct. App.2013Background
- First Alarm sued Southland for breach of a contract granting First Alarm first choice on used LDA trucks.
- Southland moved for summary judgment arguing First Alarm could not prove damages; the trial court granted.
- The dispute centers on 1998–1999 LDA trade-in trucks and a buyer’s order stating that the “THIS ORDER IS NOT A BINDING CONTRACT” but that First Alarm would have first choice.
- First Alarm bought 10 trucks in 1999 for $13,000 each and later 3 more; the remaining 76 trucks were sold to a competitor.
- First Alarm sought damages for lost profits and attorney fees; Southland argued damages were speculative; the appellate court reviewed the summary-judgment ruling de novo and affirmed.
- Judge Sexton dissented, suggesting there were material facts about potential profits that could support damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Damages from breach of right of first refusal can be proven? | First Alarm could show profits from additional trucks. | Damages are speculative without a firm plan and financing. | No; damages not proven with reasonable certainty. |
| Was First Alarm able to show it sustained lost profits from the remaining trucks? | There were potential profits and financing possibilities. | No concrete plan or financing; profits speculative. | Not proven; evidence insufficient for lost-profits with reasonable certainty. |
| Did lack of a firm contract quantity bar damages inquiry on summary judgment? | Agreement to purchase more than 10 trucks implied a binding opportunity. | No binding contract for 76 trucks; damages depend on proof of loss. | Court addressed damages; not the existence of a contract; no genuine issue on damages. |
Key Cases Cited
- Jackson v. Lare, 779 So.2d 808 (La.App.2d Cir. 2000) (damages must be proven by loss suffered from breach)
- Rosbottom v. Office Lounge, Inc., 654 So.2d 377 (La.App.3d Cir. 1995) (lost profits require proof beyond speculation)
- Simpson v. Restructure Petroleum Marketing Services, Inc., 830 So.2d 480 (La.App.2d Cir. 2002) (lost profits require some evidentiary support)
- ScenicLand Const. Co. LLC v. St. Francis Medical Center, Inc., 936 So.2d 247 (La.App.2d Cir. 2006) (lost profits recoverable with reasonable certainty; discretion allowed)