Appellate Division Dismisses Subcontractor Claim for Lost Profits

In an unpublished decision that was issued today, the Appellate Division reversed a trial court's award of $50,832.17 to a stucco subcontractor and dismissed the subcontractor's claim for the unpaid contract balance with prejudice.  The two-judge appellate panel did not disturb the trial court's finding that the general contractor did, in fact, breach its contract with the subcontractor.  However, despite the breach of contract, the court reversed the Law Division judge and held that the subcontractor could not recover any damages whatsoever since the subcontractor failed to prove what portion of the monies owed constituted lost profit.    The appellate panel stated that the trial court, "omitted, however, the second step:  calculating 'the difference between the contract price and the cost of performance or production'."  This ruling confirms that the burden of proving lost profits is on the party seeking damages, and evidence must be presented that is sufficient to enable the court to identify what portion of the monies due represent the subcontractor's profit.  (Professional Stone, Stucco & Siding Applicators, Inc. v. JMOC Builders, Inc.)