AGF, Inc. v. Great Lakes Heat Treating Co.

Great Lakes Heat Treating Co. (Great Lakes) (defendant) was a new business that did heat treating and needed to purchase a heat-treating furnace capable of processing 500 to 520 pounds of parts per hour. Norman Fisher, owner of Great Lakes, purchased such a furnace from AGF, Inc. (plaintiff). The furnace experienced a never-ending string of problems and required constant repairs. AGF sent a technician to repair the furnace on at least six occasions, but the furnace never operated consistently up to its full capacity. Great Lakes refused to pay the remaining balance, and AGF filed suit for breach of contract. Great Lakes counterclaimed, citing lost profits. Great Lakes attempted to submit evidence showing its lost profits. This evidence consisted of testimony of a customer, Robert Steinheiser; testimony from a certified public accountant, Charles Ciuni; and testimony from Fisher. Steinheiser testified that he was willing to give Great Lakes all the business that they could handle. Ciuni reviewed numerous documents, including records of similar businesses, but relied on records that were not submitted into evidence. Great Lakes did not attempt to submit its own business records into evidence. The trial court prevented Great Lakes from introducing its evidence. A jury awarded AGF $9,718.17 on its original complaint and $30,000 to Great Lakes on its counterclaim. The court of appeals affirmed the trial court’s decision, applying Ohio’s new-business rule for evidence of lost profits and finding that the evidence did not establish lost profits with a reasonable degree of certainty, as required by the rule. Great Lakes appealed, arguing that the trial court erred in excluding its evidence of lost profits.