United States v. Henry Wayne Friesen, 545 F.2d 672

United States v. Henry Wayne Friesen

545 F.2d 672

9th Cir.

1976

Check Treatment

UNITED STATES of America, Plaintiff-Appellee, v. Henry Wayne FRIESEN, Defendant-Appellant.

No. 75-1799.

United States Court of Appeals, Ninth Circuit.

Nov. 12, 1976.

546 F.2d 672

that the Soderlings were in fact induced, there can be no genuine dispute under Washington law about the Soderlings’ right to rely,

Boonstra, supra; . To paraphrase the Supreme Court of California,¹ an ignorant or gullible man is as much entitled to protection against fraud as an informed or skeptical one, and much more in need of it. Thus the court‘s failure to state specifically that the Soderlings had a right to rely on Magna‘s misrepresentations is not reversible error.

However, we find the trial court‘s method of fixing damages to be in error and reverse and remand the damage issue for redetermination. The court based its finding of damages on the sales and cost projections that Magna used in inducing the Soderlings to become its distributor, and on that basis determined the profits that they would have had during the two and one-half years in which they acted as Magna‘s distributor if Magna‘s lies had been true. This was error.

First, damages for lost profits must be for profits actually lost, and these must be proven with reasonable certainty.

National School Studios, Inc. v. Superior School Photo Service, Inc., 1952, 40 Wash.2d 263, 242 P.2d 756. Magna‘s false predictions cannot be used to measure the actual losses, if any, suffered by the Soderlings. Failure to obtain anticipated “pie in the sky” is not a financial loss, however disappointing it may be.

Second, even if such representations could be used to measure damages in some cases, Washington forbids awarding lost profits as damages for misrepresentation when the business is a new one with no established financial track record.

O‘Brien v. Larson, 1974, 11 Wash.App. 52, 521 P.2d 228, 230. Magna Sales was such a business.

Third, to award the Soderlings lost profits for the entire time that they remained in business was error when, by H. L. Soderling‘s own admission, he became aware that Magna had misrepresented its products to him by March 15, 1970, less than half a year after the agreement was made. The agreement allowed him to terminate upon notice for cause, yet he continued to purchase Magna products for inventory. Once the Soderlings became aware of the falsity of representations, they were no longer entitled to rely on them, and they cannot recover losses incurred as a result of their choosing to remain in the business. In fact, it was Magna that finally terminated the agreement two years later, and surely, had it not done so, the Soderlings could not have continued to claim “lost profits” indefinitely.

The judgment of liability is affirmed, but the award of damages is reversed and the case is remanded for recomputation of the amount of actual loss suffered by the Soderlings before the time when they discovered falsity of representations.

Thomas Schneiger (argued), Portland, Ore., for defendant-appellant.

Bill Youngman, Asst. U. S. Atty. (argued), Portland, Ore., for plaintiff-appellee.

Before HUFSTEDLER and CHOY, Circuit Judges, and REAL,* District Judge.

REAL, District Judge:

Appellant was arrested by Oregon State Police upon an outstanding arrest warrant. After his arrest he was permitted to gather his belongings from his motel room into two suitcases. Appellant and his luggage were then transported to the police station where his personal property—including the property in his suitcases—was inventoried.¹

Appellant was tried and convicted of interstate transportation of a stolen aircraft. He complains of the failure of the trial court to suppress those items used as evidence which were obtained as a result of the inventory of his suitcases.

The United States Supreme Court has not directly addressed the issue. Obliquely, the case of

Cooper v. California, 386 U.S. 58, 87 S.Ct. 788, 17 L.Ed.2d 730 (1966), upheld the search without a warrant of an auto being held pending a civil forfeiture action. In preserving its position in , the Court does say:

We made it clear in Preston that whether a search and seizure is unreasonable within the meaning of the Fourth Amendment depends upon the facts and circumstances of each case and pointed out, in particular, that searches of cars that are constantly movable may make the search of a car without a warrant a reasonable one although the result might be the opposite in a search of a home, a store, or other fixed piece of property.

386 U.S. at 59, 87 S.Ct. at 790.

What appears clear from reading

Cooper (supra) and is that searches are to be measured for their reasonableness on the factual context in which the trier of fact must apply Fourth Amendment protections.

More recently the Supreme Court considered and approved inventory searches of seized automobiles.

South Dakota v. Opperman, — U.S. —, 96 S.Ct. 3092, 49 L.Ed.2d 1000 (1976). is dispositive.

Where property is validly held by law enforcement officers for which they may have responsibility, it seems a useless gesture, whether it be an automobile or a suitcase, to require a search warrant to effect an inventory of the property. See

Harris v. United States, 390 U.S. 234, 88 S.Ct. 992, 19 L.Ed.2d 1067 (1968); ; ; ; ; .

Appellant‘s other contentions on this appeal are without merit.

The judgment is affirmed.

HUFSTEDLER, Circuit Judge (concurring specially).

I concur in the result following the teaching of

South Dakota v. Opperman (1976) — U.S. —, 96 S.Ct. 3092, 49 L.Ed.2d 1000.

REAL

DISTRICT JUDGE

Notes

“A drunken man is as much entitled to a safe street, as a sober one, and much more in need of it.” . The trial court found that the contents of the suitcases were inventoried at the police station pursuant to proper police procedures. This finding is supported by the evidence and will not be disturbed on this appeal.