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RSB Laboratory Services, Inc. v. BSI Corp.

847 A.2d 599 (2004)

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RSB Laboratory Services, Inc. v. BSI Corp.

New Jersey Superior Court
847 A.2d 599 (2004)

Facts

Ruth Yao (plaintiff) and her sister Susan Reyes (plaintiff), both experienced registered nurses, formed a corporation to operate a bleeding station—an office where patients have blood or other fluids drawn and analyzed. Two years later, Yao and Reyes decided to expand the bleeding station into a full-service laboratory. The full-service laboratory used the same facilities, employees, and referring physicians and treated the same patients that it had treated when it was a bleeding station. As part of their business expansion, Yao and Reyes changed the name of their corporation to RSB Laboratory Services, Inc. (RSB) (plaintiff) and ordered refurbished lab equipment from BSI Corporation (defendant). Ruth was qualified to operate the lab equipment but did not have experience operating it. Therefore, BSI also agreed to train Ruth on the equipment. After BSI failed to deliver functioning equipment and failed to train Ruth, RSB sued for lost profits. At trial, RSB’s expert witness provided a detailed accounting of RSB’s lost profits using standard accounting practices. BSI did not present expert testimony regarding lost profits. The jury found for RSB and awarded $254,763 in damages, which included lost profits. BSI appealed, arguing that the new-business rule barred the award of lost profits.

Rule of Law

Issue

Holding and Reasoning (Fuentes, J.)

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