## Facts

- Dr. A.H. Manouchehri, a physician in Cedar Crest, New Mexico, sought to purchase a used 100/100 x-ray machine for use in his medical practice.
- Jeff Heim, a medical supply sales representative who had previously sold items to Dr. Manouchehri, sold him a machine for $1,900 in December 1991.
- Dr. Manouchehri paid by check bearing notations stating the machine was “guaranteed to work” as a “Continental 100-100 x-ray” and that the payment was for “purchase and installation”; Heim signed the check after the notations were read to him.
- After installation, the machine performed as a 100/60 unit, limiting its ability to produce adequate images for many adult patients.
- Dr. Manouchehri notified Heim and requested repair, offering to pay half the repair costs; Heim sent an inspector, but no repairs were made.
- Dr. Manouchehri testified Heim ultimately admitted knowing the machine was 100/60 and suggested its limited capability corresponded to its low price.
- Over roughly two and a half years, Dr. Manouchehri continued seeking a cure while the machine’s limitations allegedly caused lost profits from x-rays he could not perform.
- Dr. Manouchehri sued for breach of warranty; after a bench trial in which he was the only witness and Heim offered no affirmative evidence, the district court awarded $1,900 in direct damages and $2,500 in lost-profit consequential damages (though labeled “incidental” by the trial court).

## Issues

1. Whether the defendant’s venue challenge was waived because it was raised too late.
2. Whether direct damages were improper where the trial court referenced repair costs but the plaintiff offered no evidence of repair cost.
3. Whether lost-profit consequential damages were barred or reduced because (a) the plaintiff should have avoided losses by promptly obtaining a replacement, (b) the losses were not foreseeable, or (c) the losses were not proved with reasonable certainty.

## Decision

- The Court of Appeals of New Mexico affirmed the judgment.
- The venue objection was untimely and not properly preserved, so it provided no basis for reversal.
- The $1,900 direct-damages award was sustainable under the UCC “difference in value” measure (value as warranted minus value as delivered), regardless of the trial court’s discussion of repair cost.
- The $2,500 lost-profit award was properly treated as consequential damages and was supported by evidence of foreseeability, non-avoidability under the circumstances, and reasonable certainty of proof.

## Legal Principles

- Venue objections can be waived if not timely raised; a defendant who answers and litigates without promptly objecting may forfeit the issue.
- For breach of warranty in a sale of goods, direct damages may be measured by the difference between the value of the goods as warranted and the value as accepted; an award may be affirmed if supported by any correct legal theory consistent with the evidence.
- Consequential damages for lost profits are recoverable when the seller had reason to know of the buyer’s intended use and the losses were foreseeable at contracting.
- A buyer’s mitigation duty does not necessarily require immediate replacement when the buyer reasonably relies on the seller’s assurances or conduct suggesting the defect will be cured.
- Lost profits need not be proved with mathematical precision; credible testimony can provide a reasonably certain basis for a reasonable estimate.

## Conclusion

The court affirmed damages for sale of a nonconforming x-ray machine, holding that venue was waived by an untimely objection, direct damages were supportable under the UCC difference-in-value measure despite the trial court’s repair-cost framing, and lost-profit consequential damages were recoverable because they were foreseeable, not unreasonably avoidable, and proved with reasonable certainty.


Manouchehri v. Heim, 123 N.M. 439, 941 P.2d 978 (N.M. Ct. App. 1997)