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Keywords

contractbreach of contractdamagestriallease
contractbreach of contractdamagestriallease

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Jetz Service Co., Inc. v. Salina Properties, 19 Kan.App.2d 144, 865 P.2d 1051

Facts

Jetz Service Co., Inc. leased space from Salina Properties to install coin-operated laundry equipment in an apartment complex. The lease was for six years, and Jetz Service paid an initial decorating allowance. In July 1992, with 16 months remaining on the lease, Salina Properties disconnected Jetz Service's equipment and replaced it with its own. Jetz Service retrieved its equipment at a cost and later re-leased some of it, but sought damages for lost profits for the remaining lease term.

Jetz Service Co., Inc. leased space from Salina Properties to install coin-operated laundry equipment in an apartment complex. The lease was for six years, and Jetz Service paid an initial decorating allowance. In July 1992, with 16 months remaining on the lease, Salina Properties disconnected Jetz Service's equipment and replaced it with its own. Jetz Service retrieved its equipment at a cost and later re-leased some of it, but sought damages for lost profits for the remaining lease term.

Issue

The main legal issues were whether Jetz Service failed to mitigate its damages and whether it proved the requisite elements to recover lost profits.

The main legal issues were whether Jetz Service failed to mitigate its damages and whether it proved the requisite elements to recover lost profits.

Rule

Lost profits resulting from a breach of contract may be recovered as damages when such profits are proved with reasonable certainty and are within the contemplation of the parties. The 'lost volume seller' measure of damages applies when the non-breaching seller incurs a loss of business due to a buyer's breach.

Lost profits resulting from a breach of contract may be recovered as damages when such profits are proved with reasonable certainty and are within the contemplation of the parties. The 'lost volume seller' measure of damages applies when the non-breaching seller incurs a loss of business due to a buyer's breach.

Analysis

The court determined that Jetz Service was a 'lost volume' lessee, meaning it could have fulfilled both the original lease and a subsequent lease without the two being substitutes for one another. The court found that Jetz Service had sufficient inventory and was actively seeking new locations, thus supporting its claim for lost profits despite having re-leased some equipment.

The court determined that Jetz Service was a 'lost volume' lessee, meaning it could have fulfilled both the original lease and a subsequent lease without the two being substitutes for one another. The court found that Jetz Service had sufficient inventory and was actively seeking new locations, thus supporting its claim for lost profits despite having re-leased some equipment.

Conclusion

The court affirmed the trial court's judgment in favor of Jetz Service, allowing it to recover lost profits for the remaining term of the lease.

The court affirmed the trial court's judgment in favor of Jetz Service, allowing it to recover lost profits for the remaining term of the lease.

Who won?

Jetz Service Co., Inc. prevailed in the case because the court found it was a 'lost volume' lessee entitled to recover lost profits without the duty to mitigate damages by using the equipment in another lease.

Jetz Service Co., Inc. prevailed in the case because the court found it was a 'lost volume' lessee entitled to recover lost profits without the duty to mitigate damages by using the equipment in another lease.

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