Sunnyland Farms, Inc. v. Central New Mexico Electrical Cooperative, Inc.

Central New Mexico Electrical Cooperative, Inc. (CNMEC) (defendant) shut off Sunnyland Farms, Inc.’s (plaintiff) electricity for nonpayment. The next day a fire broke out at Sunnyland’s facility as a result of Sunnyland employees’ negligence. Sunnyland’s water pumps could not operate without electricity. The fire destroyed the facility. Sunnyland brought suit against CNMEC in contract and tort, alleging that CNMEC should not have shut off the electricity because CNMEC did not provide proper notice of the impending shutoff. Sunnyland claimed that this error caused the complete destruction of the facility. The trial court found in favor of Sunnyland on both the contract and tort claims. A Sunnyland expert witness provided an estimate as to how much Sunnyland lost in profits due to the fire. Based on this testimony, the trial court calculated over $21 million in consequential damages, including the value of the crops that Sunnyland would have been able to grow at the facility. The trial court reduced that amount in the tort claim by 80 percent to account for Sunnyland’s negligence. The trial court permitted Sunnyland to elect its remedy in either contract or tort. The court of appeals reversed on the issue of damages, finding that Sunnyland was not entitled to consequential damages in contract and that the damages in tort as calculated were not reasonably certain. Sunnyland appealed.