               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                       _____________________

                            No. 95-10009
                       _____________________


          CALCOGEN CORP.; CALCOGEN METROPOLITAN CORP.;
          CALCOGEN SAN LUIS OBISPO CORP.,

                                 Plaintiffs-Appellants,

          v.

          DRESSER INDUSTRIES INC.; DRESSER LEASING
          CORP.; DRESSER FINANCE CORP.,

                                 Defendants-Appellees.

_________________________________________________________________

           Appeal from the United States District Court
                for the Northern District of Texas
                          (3:89-CV-1939-X)
_________________________________________________________________
                         December 11, 1995
Before KING, SMITH, and STEWART, Circuit Judges.

PER CURIAM:*

     This is a breach of contract case arising out of

unsuccessful negotiations for the financing, construction and

operation of two cogeneration plants in California.       The case

went to trial in October 1994.    Several days after trial

commenced, the district court advised the plaintiffs of the

court's concern about the plaintiffs' ability to prove damages


     *
      Local Rule 47.5 provides: "The publication of opinions
that have no precedential value and merely decide particular
cases on the basis of well-settled principles of law imposes
needless expense on the public and burdens on the legal
profession." Pursuant to that Rule, the court has determined
that this opinion should not be published.
and requested the plaintiffs to present all their evidence on

damages.    Following the presentation of that evidence, the

district court granted the defendants' motion under Fed. R. Civ.

P. 50 and dismissed the plaintiffs' claims.        This appeal

followed.

       We review a grant of a Rule 50 motion de novo.       Enlow v.

Tishomingo County, 45 F.3d 885, 888 (5th Cir. 1995).         Judgment as

a matter of law is appropriate if "a party has been fully heard

on an issue and there is no legally sufficient evidentiary basis

for a reasonable jury to find for that party on that issue."

Fed. R. Civ. P. 50(a)(1).    In considering whether there was

sufficient evidence for a jury, this court examines the evidence

in the light most favorable to the non-movant and draws all

reasonable inferences in that party's favor.         Enlow, 45 F.3d at

888.    If the facts and inferences point so strongly and

overwhelmingly in favor of one party, such that reasonable

persons could not arrive at a contrary verdict, the motion should

be granted.     Id.   A mere scintilla of evidence is insufficient

to present a question for the jury.         Id.

       The primary issue on appeal is whether there is sufficient

evidence of the fact or amount of damages to justify a jury trial

on the issue.    The plaintiffs correctly argue that a plaintiff is

not required to prove the amount of lost profits with perfect

accuracy.    The defendants agree.       The defendants argue, however,

that the threshold question is whether or not the plaintiffs have




                                     2
presented sufficient evidence that the defendants' conduct

actually resulted in a loss of profits.

       Both parties agree that California law applies to this

action.    Under California law, a party may recover lost profits

only if it is certain that a profit would have been derived from

the proposed undertaking.       S.C. Anderson, Inc. v. Bank of

America, 30 Cal. Rptr. 2d 286, 289 (Cal. Ct. App. 1994).         In

order to recover lost prospective profits, the plaintiff must

present evidence that shows, "with reasonable certainty, both

their occurrence and extent."        S.C. Anderson, 30 Cal. Rptr. 2d at

289.    The plaintiff must demonstrate with a reasonable

probability that profits would have been earned but for the

defendant's conduct.     Id.    California law creates a two step

analysis for evaluating lost profit claims.        See GHK Assoc. v.

Mayer Group, Inc., 274 Cal. Rptr. 168, 179 (Cal. Ct. App. 1990)

(analyzing occurrence before discussing extent of lost profits).

First, a plaintiff must establish that the defendant's conduct

actually resulted in a loss of profits.       This is proof of

occurrence.    The second step entails quantifying the loss.       This

is proof of extent.    The fact that damages have occurred requires

certainty.    Id.   The amount of damages need not be calculated

with the same precision.       Id.

       This case foundered on the first step -- proof of

occurrence.    In this case, that translates into proof that the

plants would actually have been profitable if built.       The

plaintiffs' evidence on damages consists of the commitment letter


                                     3
dated April 24, 1984 (the "Commitment Letter"), entered into

between Dresser Finance Corporation and Dresser Leasing

Corporation, on the one hand, and Calcogen, Inc., on the other

hand, and the defendants' income projections.    According to the

plaintiffs, the income projections are enough to raise a jury

question as to whether the cogeneration plants would have been

profitable.   The district court was not persuaded, and nor are

we.   We look to California cases to see what kind of evidence has

passed muster.   In S.C. Anderson, the plaintiff was able to show

that but for the defendant's actions, its low bid on a

construction project would have been accepted.    The plaintiff

also presented evidence that it had made a 5% profit on its

projects in the past.   The court nevertheless held that the

evidence was insufficient because the plaintiff presented no

specific evidence that it would have made a profit on the

specific project.   S.C. Anderson, 30 Cal. Rptr. 2d at 290.    The

fact that the plaintiff failed to present evidence that the bid

was accurate, or that the scope of the project would not increase

costs, or that other factors would not lead to a reduction in its

historical profits was fatal to the plaintiff's    claim.   Id.

      Here, assuming arguendo that the plaintiffs were able to

show that the plants would have been built, the plaintiffs are

otherwise in the same position as the plaintiff in S.C. Anderson.

The plaintiffs presented no evidence that they could in fact

build the projects for the proposed cost, or that they would

receive all the necessary permits.   Even the core assumption of


                                 4
the income projections had changed at the time of trial -- gas

prices were much lower then than when the income projections were

produced.   There was simply no evidence that under the conditions

prevailing at the time of trial, the plaintiffs could make a

profit on the cogeneration plants.

     The plaintiffs' fall-back position appears to be that the

evidence raises a jury question on whether they would have

received a $2.5 million payment regardless of construction.     For

evidence of that, they point to the Commitment Letter.     But the

defendants correctly point out that the Commitment Letter was

only an agreement to provide construction financing (subject to

certain conditions which were never satisfied).     The paragraphs

that the plaintiffs point to itemize the components of "the

maximum amount of construction financing available under this

commitment."     That is a far cry from an agreement to pay those

amounts.

     In summary, reviewed de novo, the evidence failed to raise a

jury issue on the fact of damages, and the Rule 50(a) motion was

correctly granted.

     AFFIRMED.




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