Appeals court backs $1 million jury award

The U.S. 9th Circuit Court of Appeals has upheld a jury verdict that awarded nearly $1 million in lost profits to a Volborg couple who charged that a trenching machine that didn't perform as promised ruined their business.

A federal district court jury in Billings awarded Chris and Jan Michal $947,537 from Vermeer Manufacturing Co. of Pella, Iowa, following a trial in the spring of 1993. The award was appealed to the 9th Circuit on the basis of several legal theories, all of which were rejected by the three-judge panel that heard arguments in the case last month in Seattle.

The Michals are represented by Billings attorney Cliff Edwards, who received word of the decision Monday.

According to testimony at the trial, the Michals spent $216,000 on a T655 Vermeer trencher in 1990 to upgrade their construction business. They charged that Vermeer misrepresented the capabilities of the machine, and that it cut their production in half. As a result, they fell behind on their contracts and went heavily into debt.

Vermeer argued unsuccessfully that a partial settlement reached in July 1992, under which the Michals were reimbursed $190,000 for the trencher, took care of any liability owed to the couple. The company also maintained that the Michals had made no effort to start a new business or to prevent losses.

The T655 was designed to cut through rock, but it could also operate in dirt. Company officials said they had told the Michals they would have to do more rock work, but that Michal continued to operate mainly in dirt.

The jury rejected Vermeer's arguments and so did the appeals court. The judges said that based on evidence of the Michals' income before and after they bought the machines, the jury made a reasonable decision that reflected the lost profits, and ''therefore we decline to disturb it.''