Opinion
110,017.
10-10-2014
BOARD OF TRUSTEES OF JOHNSON COUNTY COMMUNITY COLLEGE, Appellee, v. MISSION CO., Mission Developers, LLC, et al., Defendants, and The Gateway Developers, LLC, Appellant.
Kevin J. Breer and Brett C. Randol, of Polsinelli PC, of Kansas City, Missouri, for appellant. Eldon J. Shields and Steven R. Smith, of Gates, Shields & Ferguson, P.A., of Overland Park, for appellee.
Kevin J. Breer and Brett C. Randol, of Polsinelli PC, of Kansas City, Missouri, for appellant.
Eldon J. Shields and Steven R. Smith, of Gates, Shields & Ferguson, P.A., of Overland Park, for appellee.
Before STANDRIDGE, P.J., GREEN and ATCHESON, JJ.
MEMORANDUM OPINION
PER CURIAM.
The Gateway Developers, LLC (Gateway), acquired the Mission Center Mall and with it a 5–year commercial lease with Johnson County Community College (JCCC). A rider attached to the lease provided that the landlord could terminate the lease by giving JCCC 300 days' notice and paying JCCC for a portion of what it spent remodeling the space to make it suitable for college classes. Gateway later learned that it would have to tear down the mall and enlarge underground culverts in order for the City of Mission (City) to approve any redevelopment plans. Gateway terminated the lease with JCCC before the 5–year term ended, without giving a full 300 days' notice. Accordingly, JCCC moved its classes to a former junior high school owned by the Bishop Miege High School Foundation (Bishop Miege).
JCCC filed suit against Gateway, and the trial court found in favor of the community college on its breach of contract, wrongful eviction, and promissory estoppel claims. As damages, the court awarded JCCC the construction expenses related to making the Bishop Miege property a suitable space to hold classes and a pro rata amount of the money JCCC spent remodeling the mall space right before it moved in. The court found no merit to JCCC's claim for tortious interference with a business advantage.
Gateway appeals, arguing that the trial court erred (1) by awarding a pro rata amount of what JCCC originally spent remodeling the mall before it moved in and (2) by permitting JCCC to present a summary of expenses itemizing construction costs associated with converting the Bishop Miege property into a suitable space to hold classes. JCCC cross-appeals, arguing that the trial court (1) abused its discretion by denying JCCC's motion to amend the petition to add a claim for punitive damages and (2) erred in finding insufficient evidence of lost-profit damages.
For the reasons stated below, we find no merit to the claims or counterclaims presented by the parties and, therefore, affirm the trial court's decision in all respects.
Facts
On August 13, 2002, Mission Company and JCCC entered into a 5–year (plus partial-year) commercial lease. Mission Company agreed to lease approximately 7,543 square feet in the Mission Center Mall in Mission, Kansas. Under the lease, JCCC was responsible for all improvements necessary to make the space suitable for classrooms, including store fronts, ceilings, walls, paint, floors, plumbing, electrical work, HVAC exhaust and make-up air systems, and telephones.
A rider attached to the lease contained termination clauses. The owner's termination clause indicated that the landlord could terminate the lease by giving JCCC 300 days' notice and paying JCCC a portion of the cost of JCCC's remodeling work, which would be based on the amount of time left in the lease.
In the summer of 2004, Tom Valenti met with the City on behalf of Mission Developers, which is now Gateway, to discuss Gateway's possible acquisition of the mall. Valenti initially intended to improve the mall without tearing it down. Citing to changes in the floodplain maps, however, the City advised Valenti that Gateway would have to tear the existing mall down and enlarge underground culverts for the City to approve redevelopment plans.
In the summer of 2005, Gateway acquired the note and mortgage held by Mission Company's lender and accepted a deed in lieu of foreclosure from Mission Company. On September 25, 2005, the mall's property manager sent notice to JCCC indicating that Gateway intended to close the mall on January 31, 2006. Valenti also sent a letter to JCCC, requesting that it vacate the mall premises on or before January 31, 2006, and proposing that it become a tenant when a new mall was built.
In anticipation of the mall's closing, JCCC moved out of the mall in December 2005 and entered into a lease with Bishop Miege on December 22, 2005. JCCC leased Old Mission Junior High School in Roeland Park, which was less than a mile from the mall. JCCC began construction on the Bishop Miege property in December 2005 in order to make the space suitable for its classes before the spring semester started. JCCC ultimately held spring classes at the new site as scheduled in mid-January 2006. The mall was torn down before JCCC's lease expired.
On September 21, 2010, JCCC filed suit against Gateway and other defendants, alleging breach of contract, wrongful eviction, tortious interference with prospective business advantage, and promissory estoppel. JCCC later filed a motion to amend the petition to add a claim for punitive damages, which the court denied.
The case was tried to the court in September 2012. At trial, Dr. Terry Calaway, the president of JCCC since June 2007, testified that JCCC had spent about $100,000 on improvements to the Mission Mall:
“Q. [Defense counsel:] During your testimony, you described, and I think testified, that you believe that the tenant improvement expenses at the old mall location were about $100,000?
“A. [Dr. Calaway:] Yes, sir.
“Q. [Defense counsel:] And that you were asking the Court to award you damages for either all or some portion of that $100,000, correct?
“A. [Dr. Calaway:] Yes, sir.”
As further proof of money expended to improve the mall site, JCCC introduced into evidence a proposed settlement letter that was sent from JCCC's attorney to Valenti in January 2006. The letter indicated that the value of the improvements exceeded $100,000.
Dr. Calaway also testified that after JCCC was evicted from the mall, he told Valenti that JCCC experienced decreased enrollment and that Valenti offered him “a pretty good deal”—to rent JCCC space in the future mall for about $15 per square foot—if JCCC would wait until the new mall was finished. Dr. Calaway stated that Valenti continually misled him about the status of the mall project over approximately a 4–year period by repeatedly telling him that construction was just about to commence.
Rex Hayes, JCCC's Executive Director of Campus Services, testified that his office kept records of all construction work performed for JCCC. Hayes said that, based on the records in his office, Exhibit 35 listed the total outside construction costs expended on the Bishop Miege property—$208,707.79. He stated that he and his assistant prepared the list of expenses in Exhibit 35. Based on his examination of the records kept by his office, Hayes testified JCCC's internal expenditures allocated to construction and maintenance on the Bishop Miege property was $10,000. Hayes testified that Exhibit 36, which his assistant prepared under his supervision, itemized the internal costs associated with this construction and maintenance.
Gateway objected to the admission of Exhibits 35 and 36 and Hayes' corresponding testimony about them, arguing that the exhibits were mere lists of numbers and that the underlying invoices that proved the actual costs of construction had not been produced during discovery. The court overruled the objection and considered the exhibits as evidence, noting that Hayes testified that the costs listed in the documents were the exact breakdown of expenses to renovate the junior high school and that the underlying invoices were available at trial.
Loralee Stevens, Assistant Dean of Community Outreach at JCCC, testified about JCCC's various locations. But after Gateway objected on the bases of speculation, foundation, and hearsay, the trial court did not permit her to testify as to why JCCC's student enrollment decreased when classes were moved from the mall to the Bishop Miege property. Stevens' affidavit, however, stated that it was her job to monitor student attendance and that based on the evidence she had gathered, enrollment decreased at the Bishop Miege site because it was an inferior facility with less accessibility and visibility than the mall.
After hearing the evidence and arguments of counsel, the trial court granted judgment to JCCC on its breach of contract, wrongful eviction, and promissory estoppel claims. The court held JCCC's failure to produce evidence of intentional misconduct or malice on Gateway's part prevented JCCC from prevailing on its claim of tortious interference. The court awarded JCCC damages, including $38,330 in unrecovered amortization costs (a pro-rata amount of the $100,000 spent on mall construction); $208,707.79 in outside-construction expenses for the junior high school; and $10,000 in in-house construction expenses for the junior high school. It also awarded JCCC $82,442.92 in attorneys' fees. The court declined to award damages for lost profits based on lost student enrollment at the Bishop Miege property because there was insufficient evidence to establish that the new location caused the drop in enrollment.
Gateway filed a motion to reconsider, arguing in part that the $100,000 in damages to compensate JCCC for remodeling the mall was not supported by evidence in the record. At a hearing on the motion, the trial court made a finding of fact that JCCC spent $100,000 remodeling the mall. The finding was based on the fact that Dr. Calaway testified that JCCC spent $100,000 on the mall remodel and that JCCC's demand letters stated that it had spent $100,000 remodeling the mall and Gateway's responses did not dispute that amount.
Gateway appeals the court's damages award, and JCCC cross-appeals the trial court's refusal to consider its punitive damages claim and finding that JCCC failed to prove that it lost students because it moved its classes to the Bishop Miege property.
Analysis
Gateway's appeal
Damages for JCCC's mall construction expenses
The trial court awarded JCCC $38,330 in unrecovered amortization costs for a pro-rata portion of the $100,000 JCCC alleged it spent on mall construction. Gateway argues that the court should not have awarded the amortized costs damages because the trial court made no factual findings supporting the damages award, there was no evidence to support such a finding, and JCCC was not entitled to recover its unamortized costs under the language of the lease.
Gateway's first argument—that the trial court did not make a factual finding regarding the amortized costs damages—is without merit. At the hearing on Gateway's motion to reconsider, the trial court explicitly found that JCCC spent $100,000 remodeling the mall. The trial court noted that a witness had testified that JCCC spent $100,000 on the mall remodel, that a demand letter also stated that JCCC had spent $100,000, and that Gateway's response to the letter did not dispute the $100,000 amount listed in the letter.
Gateway next argues that JCCC did not present evidence at trial that would support the trial court's finding that JCCC spent $100,000 remodeling the mall. We review the trial court's findings of fact to determine whether they are supported by substantial competent evidence. Substantial competent evidence “ ‘possesses both relevance and substance and ... furnishes a substantial basis of fact from which the issues can reasonably be resolved. In other words, substantial evidence is such legal and relevant evidence as a reasonable person might accept as being sufficient to support a conclusion.’ “ Venters v. Sellers, 293 Kan. 87, 93, 261 P.3d 538 (2011).
Plaintiffs have the burden of proving damages and must present evidence of the damages at trial. Enlow v. Sears, Roebuck & Co., 249 Kan. 732, 740, 822 P.2d 617 (1991) ; Belot v. U.S.D. No. 497, 27 Kan.App.2d 367, 370, 4 P.3d 626 (2000). The evidence must provide a reasonable basis for computing the damage award. Martinez v. Milburn Enterprises, Inc., 290 Kan. 572, 640, 233 P.3d 205 (2010). At trial, JCCC did not present invoices or checks showing that it spent $100,000 remodeling the mall and did not present proof that the landlord approved the expenses as required by the lease.
But Dr. Calaway testified that JCCC spent $100,000 on the remodel. As president of the college, Dr. Caiaway certainly had access to the college's invoices and records that would support his testimony. And as the trial court noted, the $100,000 figure is the same number quoted in the demand letter sent in 2006, which Gateway did not challenge. While invoices and records might have had greater probative value, Dr. Calaway's testimony provided a reasonable basis for the finding that JCCC spent $100,000. A reasonable person might accept testimony from the president of the college as sufficient to support the trial court's conclusion.
Gateway's final argument about the amortization costs is that because Gateway did not give JCCC 300 days' notice that it would be terminating the lease, its obligation to pay for a portion of the mall remodel was not triggered. Gateway did not raise this issue before the trial court, and issues generally cannot be raised for the first time on appeal. See Wolfe Electric, Inc. v. Duckworth, 293 Kan. 375, 403, 266 P.3d 516 (2011). There are several exceptions to this general rule, but Gateway has not explained why this court should consider this issue for the first time on appeal as required under Supreme Court Rule 6.02(a)(5) (2013 Kan. Ct. R. Annot. 39). As a result, this issue is not properly before this court.
But even if Gateway had raised this below, its argument would still fail. We have unlimited review of the interpretation of contracts and their legal effects and do not owe the trial court's interpretation any deference. Stechschulte v. Jennings, 297 Kan. 2, 14–15, 298 P.3d 1083 (2013). When interpreting the contract, we look for the parties' intent. “ ‘If the terms of the contract are clear, the intent of the parties is to be determined from the language of the contract without applying rules of construction.’ “ 297 Kan. at 15, 298 P.3d 1083.
The termination provision of the lease stated:
“OWNER'S RIGHT TO TERMINATE.
“Owner may at anytime during the time of the Lease ... terminate the Lease by giving written notice thereof to Tenant, in which case (i) the Lease shall terminate effective as of the date 300 days after the date of such notice (the ‘Termination Date [’] ) ..., and (iv) provided the Termination Date is during the regular term of the Lease ..., Owner shall pay to Tenant an amount equal to the unamortized cost of the Remodeling Work as of the Termination date, calculated on a straight line basis without interest over the initial term of the Lease: The ‘cost of the Remodeling Work’ shall mean the so-called ‘hard’ construction cost for the Remodeling Work as documented by Tenant and approved in writing by Owner within 30 days after the Commencement Date.”
The termination provision is clear and unambiguous. If the landlord terminates the lease, the landlord must pay the tenant a pro-rata amount of the cost of the remodeling work. Section (iv) of the provision, which provides that the landlord will pay for a portion of the remodel, is not contingent on section (i) of the provision, which provides that the lease terminates 300 days after notice. Instead, the obligations in both sections become effective when the landlord terminates the lease with written notice. Accordingly, Gateway's eviction before the lease was set to expire did not excuse Gateway from its other contractual duties in the event of termination, namely paying for a portion of JCCC's remodel. As JCCC points out, it would be illogical for us to reward Gateway by eliminating its obligation to pay for some of the remodel after it breached the terms of the lease. Thus, the trial court did not err in awarding JCCC $38,330 in unrecovered amortization costs for a pro-rata portion of JCCC's remodeling costs.
Admissibility of summary evidence of damages
Gateway's second argument on appeal is that Exhibits 35 and 36—which list JCCC's outside and in-house construction expenses at the Bishop Miege property—were summaries of evidence that should not have been admitted under the best evidence rule. The Kansas best evidence rule provides that the content of a writing may not be proven by means other than the writing itself unless one of several exceptions to this general rule applies. K.S.A. 60–467. Under the best evidence rule, summaries of voluminous writings are admissible if the adverse party has an opportunity to examine the underlying writings before trial and the underlying writings are available at trial:
“As tending to prove the content of a writing, no evidence other than the writing itself is admissible, except as otherwise provided in these rules, unless the judge finds that ... calculations or summaries of content are called for as a result of an examination by a qualified witness of multiple or voluminous writings, which cannot be conveniently examined in court, but the adverse party shall have had a reasonable opportunity to examine such records before trial, and such writings are present in court for use in cross-examination, or the adverse party has waived their production, or the judge finds that their production is unnecessary.” K.S.A. 60–467(a).
In objecting to the trial court's decision to consider the summaries of the underlying invoices in the absence of the underlying invoices themselves, Gateway asserted it “never had an opportunity to examine the underlying records prior to trial because, although they were requested by Gateway Developers, they were never produced by the JCCC.” Notably, however, the rule does not require that Gateway have had the opportunity to examine the underlying records; it requires that Gateway have had a reasonable opportunity to do so. The rules of civil procedure allow for the inspection of documents in a reasonable time, place, and manner. K.S.A.2013 Supp. 60–234(b)(l)(B). And Gateway readily concedes it knew the invoices existed because it specifically requested JCCC to produce them during discovery to no avail. Notwithstanding JCCC's failure to produce the invoices in response to the discovery request, Gateway did not move to compel their production as authorized by K.S.A.2013 Supp. 60–237. By failing to file a motion to compel JCCC to respond to its request for production of the underlying invoices, Gateway necessarily failed to take advantage of a reasonable opportunity to examine those records. As such, Gateway waived any objection to admission of the summaries at trial. See K.S .A. 60–467(a) (no evidence other than the writing itself is admissible to prove content of that writing unless adverse party has waived their production after reasonable opportunity to examine such records before trial).
Even if Gateway had not waived its right to object to production of the underlying invoices, the trial court's decision to admit the summaries into evidence is not reversible error because parties may prove facts with nonwritten evidence, such as testimony, even if a written record of the fact is available. We begin with the two-step process used to review the propriety of a trial court's decision to admit evidence. First, we determine whether the evidence was admissible, and then if the evidence was not admissible, we determine whether its admission was harmless error as defined in K.S .A.2013 Supp. 60–261. State v. Longstaff, 296 Kan. 884, 895, 299 P.3d 268 (2013) ; Kansas City Mall Assocs. v. Unified Gov't of Wyandotte County/KCK, 294 Kan. 1, 8, 272 P.3d 600 (2012). Under the statute, harmless error is error that does not affect the parties' substantial rights. The party benefitting from the error has the burden of demonstrating that it was harmless. 294 Kan. at 8, 272 P.3d 600.
Our first question is whether the exhibits were admissible. Under the best evidence rule, JCCC's summaries of its expenses at the Bishop Miege property would only be admissible to prove those expenses if Gateway had an opportunity to review the underlying written proof—such as invoices—before trial. See K.S.A. 60–467(a). Here Gateway requested to see proof of JCCC's expenses at the Bishop Miege property before trial but never received them. Although the trial should not have permitted JCCC to introduce the summaries into evidence for this reason, any error in doing so was harmless because the exhibits did not affect Gateway's substantial rights. See K.S.A. 60–261. Hayes testified about JCCC's expenses on the Bishop Miege property based on his knowledge of the records of construction costs routinely kept by his office. As stated in State v. Hill, 211 Kan. 239, 246, 505 P.2d 704 (1973), the best evidence rule does not prevent the admission of independent testimony; by its very terms, the best evidence rule is “limited to proof of the contents of a writing. ” (Emphasis added.) Testimony only falls under the rule if it is being offered to prove the contents of a writing. See e.g., State v. Rohr, 19 Kan.App.2d 869, 870–72, 878 P.2d 221 (1994) (when certification was required to admit breath-test results, officer's testimony that a breath-test machine was certified violated the best evidence rule).
The federal rules of evidence contain a similar best evidence rule. Fed.R.Evid. 1002 (“An original writing, recording, or photograph is required in order to prove its content.”). The advisory committee notes to the federal rule provide that parties may prove facts with non-written evidence, such as testimony, even if a written record of the fact is available. Fed.R.Evid. 1002, 1972 Advisory Committee Note; R & R Associates, Inc. v. Visual Scene, Inc., 726 F.2d 36, 38 (1st Cir.1984) (best evidence rule did not prohibit company president's testimony that defective merchandise cost $31,850.19); State Office Systems, Inc. v. Olivetti Corp. of America, 762 F.2d 843, 845 (10th Cir.1985). If witness testimony is not supported by written evidence at trial, that fact goes to the weight of the evidence—not its admissibility—and may be challenged on cross-examination. 762 F.2d at 846.
Thus, it does not matter that the exhibits were not admissible as summaries of voluminous writings. Hayes' testimony, which was based on his review of JCCC's construction records, provided the same evidence found in the summaries. Hayes' testimony had a high probative value since Hayes created the exhibits or supervised the person who did. Moreover, Gateway had an opportunity to cross-examine Hayes about the costs and to attack the bases for his calculations. Therefore, allowing the exhibits into evidence was harmless error that did not affect Gateway's substantial rights.
JCCC's cross-appeal
Punitive damages
JCCC filed a cross-appeal, raising two issues. JCCC's first argument on cross-appeal is that the trial court should have allowed it to amend its petition to add a claim for punitive damages. JCCC says punitive damages were warranted for its wrongful eviction claim because Gateway knew JCCC would suffer significant damages if evicted from the mall. It also claims that punitive damages were warranted for its claim for tortious interference with a business advantage because Valenti tried to induce JCCC to stay at the Bishop Miege property even though he understood that JCCC would continue to suffer damages there.
Punitive damages are permitted when a defendant has maliciously, vindictively, or willfully and wantonly invaded a plaintiff's rights. K.S.A. 60–3702(c) ; Adamson v. Bicknell, 295 Kan. 879, 888, 287 P.3d 274 (2012). They are imposed to punish the wrongdoer and deter others from similar wrongs. 295 at 888.
Under K.S.A. 60–3703, trial courts have discretion to permit plaintiffs to make punitive damages claims. The trial court may permit a punitive damages claim if the plaintiff can establish a probability—that it is more likely than not—that he or she will prevail on the claim. To prevail, he or she must prove, under the clear and convincing evidentiary standard, that the defendant acted willfully, wantonly, fraudulently, or with malice. K.S.A. 60–3702(c) ; Adamson, 295 at 888, 287 P.3d 274. The trial court considers the evidence in the light most favorable to the moving party but does not make credibility determinations, weigh evidence, or draw inferences from the facts. 295 Kan. at 888, 287 P.3d 274. We review the trial court's decision under an abuse of discretion standard. 295 Kan. at 887, 287 P.3d 274. A trial court abuses its discretion if its actions are:
“(1) arbitrary, fanciful, or unreasonable, i.e., if no reasonable person would have taken the view adopted by the trial court; (2) based on an error of law, i.e., if the discretion is guided by an erroneous legal conclusion; or (3) based on an error of fact, i.e., if substantial competent evidence does not support a factual finding on which a prerequisite conclusion of law or the exercise of discretion is based.” State v. Maestas, 298 Kan. 765, 785, 316 P.3d 724 (2014).
We first consider the trial court's decision to deny punitive damages for the tortious interference claim. In Kansas, a verdict for actual damages is required for punitive damages. Wendt v. University of Kansas Med. Center, 274 Kan. 966, 982, 59 P.3d 325 (2002). Kansas courts will not punish conduct that causes no injury, “no matter how malicious or reprehensible” the conduct may be. Dicker v. Smith, 215 Kan. 212, 216, 523 P.2d 371 (1974). In Tichenor v. City of Topeka, No. 106,384, 2012 WL 3136219, at *8 (Kan.App.2012) (unpublished opinion), rev. denied 297 Kan 1257 (2013), a panel of this court explained that if a plaintiff is not awarded damages at the trial level, a claim on appeal that the trial court erred in refusing to let the plaintiff claim punitive damages is moot.
In JCCC's case, the trial court denied the tortious interference claim, finding that JCCC did not present any evidence of Gateway's intentional misconduct or malice. As a result, we could not award punitive damages for tortious interference, and JCCC's claim regarding tortious interference is moot.
The trial court awarded damages for JCCC's wrongful eviction claim, so we will consider whether the trial court abused its discretion in refusing to let JCCC claim punitive damages for wrongful eviction. Punitive damages are permitted for wrongful eviction when the landlord has willfully and wantonly violated the tenant's rights. Gould v. Taco Bell, 239 Kan. 564, 571, 722 P.2d 511 (1986) ; Geiger v. Wallace, 233 Kan. 656, 661, 664 P.2d 846 (1983). Willful acts are those indicating that the defendant's design, purpose, or intent was to do wrong or cause injury. Burdick v. Southwestern Bell Tel. Co., 9 Kan.App.2d 182, 185, 675 P.2d 922 (1984) (quoting Anderson, Administrator v. White, 210 Kan. 18, 19, 499 P.2d 1056 [1972] ). Wanton acts, which are something more than ordinary negligence but less than willful acts, indicate that the defendant realized that there was imminent danger to the plaintiff but recklessly disregarded it. Cerretti v. Flint Hills Rural Electric Co-op. Ass'n, 251 Kan. 347, 367, 837 P.2d 330 (1992).
JCCC argues that its case is similar to two cases where the Kansas Supreme Court required that landlords pay punitive damages to tenants. See Geiger, 233 Kan. at 662, 664 P.2d 846 ; Walterscheid v. Crupper, 79 Kan. 627, 100 P. 623 (1909). In Geiger, a landlord failed to comply with statutory eviction notice requirements, nailed shut the door to the tenant's house, and turned off the electricity. 233 Kan. at 658, 664 P.2d 846. In Walterscheid, the landlord removed a portion of the tenant's roof before a rainstorm. 79 Kan. at 628, 100 P. 623. The Geiger and Walterscheid cases are distinguishable from JCCC's because in those cases the landlords took the law into their own hands and used extreme measures to make the houses uninhabitable in “utter disregard of the tenant[s'] rights.” Geiger, 233 Kan. at 662, 664 P.2d 846. In JCCC's case, Gateway provided written (albeit short) notice that the lease would be terminated and provided JCCC with time to remove its property from the premises. Because Gateway had to tear down the mall to fulfill its purpose for purchasing the mall—to redevelop the property—it is unlikely that Gateway intended to injure JCCC or recklessly disregarded the harm it was causing JCCC. A reasonable person could take the trial court's view—that Gateway did not act willfully or wantonly or with fraud or malice in evicting JCCC. Accordingly, the court did not abuse its discretion in refusing to allow a punitive-damages claim for wrongful eviction.
Lost profits
The trial court found that JCCC failed to prove lost profit damages. JCCC now argues that the trial court abused its discretion by not allowing the Assistant Dean of Community Outreach, Loralee Stevens, to testify—over Gateway's foundation and speculation objections—that student enrollment decreased at the Bishop Miege property because it was an inferior site. JCCC further asserts that the court's finding—that for the breach of contract and promissory estoppel claims there was insufficient evidence of damages in the form of lost profits—disregarded uncontradicted evidence from Stevens' affidavit and from testimony and affidavits from two others that indicated that the move to the Bishop Miege property cost JCCC $728,321 in lost profits.
We first look at the trial court's refusal to allow Stevens to testify about what caused the decreased enrollment at the Bishop Miege property. As stated previously, we consider the exclusion of evidence under a harmless error standard. K.S.A.2013 Supp. 60–261. Harmless error is error that does not affect the parties' substantial rights, and the party benefitting from the error has the burden of demonstrating that it was harmless. Kansas City Mall Assoc., 294 Kan. at 8, 272 P.3d 600.
Under the harmless error standard, it does not matter whether the trial court erred in excluding Stevens' testimony. Stevens' opinion was admitted into evidence via her affidavit, which stated that based on the evidence she had gathered, enrollment decreased at the Bishop Miege site because it was an inferior facility with less accessibility and visibility than the mall. Because her affidavit was admitted, if it was error to exclude her testimony at trial, the error was harmless because the court was still able to consider the evidence via her affidavit. See Jensen v. Runft, 252 Kan. 76, 78–79, 843 P.2d 191 (1992) (finding that court's exclusion of evidence is harmless error if evidence is admitted in some other form).
Therefore, our remaining question is whether the trial court's findings of fact are supported by substantial competent evidence. Here, JCCC had the burden of proving damages. Enlow, 249 Kan. at 740, 822 P.2d 617 ; Belot, 27 Kan.App.2d at 370, 4 P.3d 626. And lost profits damages must be proved with reasonable certainty: “[w]hile absolute certainly in proving loss of future profits is not required, a damages award for lost profits cannot be based upon purely speculative or problematic evidence. Rather, there must be some reasonable standard by which to guide the court or jury tasked with determining damages.” CoreFirst Bank & Trust v. JHawker Capital, 47 Kan.App.2d 755, 774, 282 P.3d 618 (2012) (citing Vickers v. Wichita State University, 213 Kan. 614, 618, 518 P.2d 512 [1974] ; McCormick, Law of Damages, § 29 [1935] ).
The evidentiary record supports the trial court's finding that JCCC did not prove damages for lost profits with reasonable certainty: Gateway presented evidence that directly contradicted JCCC's opinion that the inferior nature of the Bishop Miege property decreased enrollment. In its journal entry, the trial court noted that the Bishop Miege property was less than a mile from the mall and that JCCC did not miss any semesters as a result of the move. The JCCC staff acknowledged that the economic climate during the timeframe that enrollment decreased at Bishop Miege also caused a decrease in enrollment at JCCC's other locations and at junior colleges around the country. Furthermore, Dr. Calaway admitted that enrollment was down due, at least in part, to more students taking classes online. We find substantial competent evidence supports the trial court's finding that JCCC did not prove damages for lost profits with reasonable certainty. See Venters v. Sellers, 293 Kan. 87, 93, 261 P.3d 538 (2011) (“substantial evidence is such legal and relevant evidence as a reasonable person might accept as being sufficient to support a conclusion”).
Attorney fees
JCCC filed a timely motion pursuant to Supreme Court Rule 7.07 (2013 Kan. Ct. R. Annot. 67) requesting an award of attorney fees and costs incurred in bringing this appeal. In Oak Park Investment Co. v. Lundy's Inc., 6 Kan.App.2d 133, 136, 626 P.2d 1236 (1981), our Supreme Court held that “an agreement included in a commercial lease for recovery of reasonable attorney fees is valid and enforceable in Kansas, in the absence of any statutory prohibition against such a provision.”
Section 21.04 of the commercial lease between the parties here provides as follows:
“(A) In case suit shall be brought because of the breach of this Lease on the part of Tenant or Owner and a breach shall be established, the prevailing party shall be entitled to recover all expenses incurred therefor, including reasonable attorneys' fees.”
In its November 30, 2012, findings of fact and conclusions of law, the trial court granted judgment to JCCC on its claims for breach of contract, wrongful eviction, and promissory estoppel. As such, the court awarded fees and costs to JCCC based on the lease provision permitting the prevailing party these expenses. Although Gateway appealed from the amount of damages awarded, it did not appeal from the trial court's judgment in favor of JCCC on its claims for breach of contract, wrongful eviction, and promissory estoppel. Based on our decision to affirm the trial court's award of damages, JCCC, as the prevailing party, is entitled to recover expenses it incurred in defending this appeal. Because JCCC did not prevail on either claim set forth in its cross-appeal, it is not entitled to recover expenses it incurred pursuing those claims on appeal.
We have reviewed the affidavit of counsel attached to JCCC's motion and find it sufficiently describes the nature and extent of the services rendered for the time expended by counsel in defending against Gateway's appeal from the amount of damages awarded to JCCC by the trial court. See Supreme Court Rule 7.07(b)(2). Upon due consideration of the factors set forth in KRPC 1.5 (2013 Kan. Ct. R. Annot. 503), and pursuant to the lease agreement between the parties, JCCC is entitled to recover expenses it incurred in defending against Gateway's claim on appeal; specifically, reasonable attorney fees in the amount of $15,730 and costs in the amount of $390.62.
Affirmed.