Question

From 2005 to 2015, Plaintiff Dr. James Wells owned and operated Wells Vision and Laser Eye Center in Ardmore, Oklahoma. In his practice, Dr. Wells performed laser eye surgeries using an excimer laser eye surgery machine, which he purchased in cash in 2005 for $300,000, and which had an expected lifespan of 30 years.

In early 2016, Dr. Wells decided to move his practice to Destin, Florida. To that end, Dr. Wells contacted Pilot Air Freight (“Pilot”) to arrange for the transportation of his laser eye surgery machine from Oklahoma to Florida. When arranging that shipment, both Dr. Wells and his wife and office manager, Amy Wells, had conversations with Pilot’s representative, Howard Becton. In those conversations, both Dr. Wells and Amy Wells insisted that the machine be “crated” – i.e., that a wooden crate be constructed around the machine to prevent damage to the machine – which is the standard method of shipping such expensive and sensitive medical equipment.

The shipment of Dr. Wells’s cargo was a two-leg shipment performed by two different carriers. The first carrier, Pilot, completed the first leg of the shipment by picking up the cargo in Ardmore, Oklahoma, on Friday, February 24, 2016, and transporting it 90 miles to Pilot’s warehouse in Oklahoma City, Oklahoma, that evening. Because this leg of the journey was less than 100 miles, Dr. Wells and Pilot agreed, consistent with the manufacturer’s instructions, that the machine could be safely transported over this short distance without a crate. Before he left that evening, Pilot’s driver, Jeffrey Lee, explained to Dr. Wells that the second carrier, Fast Trac, would crate the machine at its warehouse in Oklahoma City. [Note that later on, Fast Trac denied ever agreeing to crate the machine, claimed that Pilot never instructed it to do so, and presented evidence that it has never crated any items and does not have the capability to do so, as crating is normally performed by a special crating subcontractor.]

The second carrier to handle the cargo, Fast Trac, completed the final leg of the shipment by picking up the cargo at Pilot’s warehouse in Oklahoma City on the morning of Saturday, February 25, 2016, and transporting it to its final destination in Destin, a distance of 880 miles.

The machine arrived in Destin, as scheduled, on March 2, 2016. Because it had not been crated, the machine sustained extensive damage during transit. Dr. Wells later testified that when the machine arrived in Destin, the joystick used to operate the laser and an alignment track were broken,

rendering it completely inoperable.

Unfortunately for Dr. Wells, it is not clear exactly which carrier was responsible for the damage, Pilot or Fast Trac, so he sued both carriers under the Carmack Amendment, a federal statute that gives customers like Dr. Wells this option. In the same proceeding, Pilot then sued Fast Trac claiming that Fast Trac, rather than Pilot, was at fault for the lack of crating. We ultimately held a bench trial to determine who exactly was to blame for the lack of crating: the Wells’s, Pilot, or Fast Trac. There was no dispute at trial that the machine was undamaged when it was released to Pilot on February 24th. The only dispute was exactly who “caused” the damage.

At trial, evidence was presented to establish the following:

Dr. Wells paid Pilot $2,000 for the transportation of his machine (note: Pilot later subcontracted part of the job to Fast Trac).

In March, Dr. Wells spent $40,000 attempting to repair the machine, which was unsuccessful.

In April, Dr. Wells sold the damaged machine for parts for $30,000 (because it could not be repaired and was unsafe to use on patients).

Dr. Wells purchased an essentially identical replacement machine for $380,000, which was delivered to Dr. Wells on May 1, 2016.

Because he was without a machine from March 3 to May 1, Dr. Wells lost $50,000 in expected profits from surgeries he had previously scheduled during that time; only a handful of those surgeries were eventually rescheduled for later that year, resulting in profits of $10,000 (as opposed to the originally expected profits of $50,000).

Dr. Wells hired an expert witness to determine the loss of additional profits he should anticipate from losing the potential referrals of disgruntled patients. The expert testified that Dr. Wells would lose $200,000 in future profits as a result. Dr. Wells paid the expert $5,000 for his analysis.

To salvage his reputation in his new city, and to reduce the $200,000 of anticipated future lost profits, Dr. Wells hired a marketing firm to reach out to potential clients in the area. Dr. Wells paid $30,000 to the marketing firm for its efforts.

An expert witness for the defense testified that the efforts of Dr. Wells’s marketing firm would reduce his future lost profits from $200,000 to $100,000. These future lost profits would, for the most part, be attributable to lost referrals that would have occurred if Dr. Wells’s business had started off as planned. Dr. Wells did not dispute this amount.

At trial, both Pilot and Fast Trac denied fault. Essentially, each carrier pointed the finger at the other, and the primary question at trial was determining which carrier was responsible for the damage. For reasons beyond the scope of this exercise (but which Professor McAllister will explain in class), Judge Rodgers found that Pilot should be held responsible for the harm.

After finding Pilot to blame, Judge Rodgers instructed the jury to calculate Dr. Wells’s damages. Please complete that calculation now. As you do so, keep in mind that the overarching goal is to make Dr. Wells whole, and to place him in the same financial position he would have been in had the machine arrived in Destin undamaged and on time (but not a better position).

The Judge has asked you to separate Dr. Wells’s damages into categories – Direct Damages,

Consequential Damages, and Incidental Damages – so please complete that task as well by using the chart below to categorize the various damages items in the case.

Expense Item	Direct Damages	Consequential Damages (must be foreseeable to the defendant)	Incidental Damages
Expert witness fee			$5,000

TOTAL DAMAGE AWARD FOR DR. WELLS (here, specify the total amount of money Dr. Wells should receive in damages):

Answer 1

Expense item	Direct damage	Consequential Damages (must be foreseeable to the defendant)	Incidental Damages
Expert witness fee			$5,000
Damage of machine	$300000 - $30000 = $270000
Repairing of the machine		$40000
Purchasing of new machine		$380000
Loss of profits		$40000-$10000= $30000
Loss of future profits		$200000-$100000=$100000
Marketing expert fees			$30000

Total damage award for Dr. Wells = Repairing of the machine+ Purchasing of new machine – selling of parts of old damaged machine + Loss of profits + Loss of future profits + Expert witness fee+ Marketing expert fees

Total damage award for Dr. Wells = $40000 + $3800000 - $30000 + $30000 + $100000 + $5000 + $30000 = $555000