This section contains the nature of the case and procedural background.

McDonalds (D) leased property from Tellar Arms, Inc., Pomeranz's (P) predecessor in interest. The property was in a shopping mall, and P and D mutually agreed to amend the lease to require D to pay taxes and maintenance costs in addition to rent. D remained in possession of the property until 1986 when it moved to another location. D then breached the lease agreement about 6 months later when it ceased making payments and was unable to sublease the property. P sued D for future rent, future taxes, and maintenance expenses. The only evidence presented by P for the other charges it was seeking was supplied by Theodore Pomeranz, the managing co-owner of the shopping center. Pomeranz testified that the future taxes would be about $48,363 through the end of the lease term based on the current rate and a 5% inflation adjustment and that future maintenance would amount to $35,407 based on an estimate of $4,800 per year with an annual increase of 5% for inflation. Pomeranz was not qualified as an expert in either the estimation of inflation rates, property taxes, or maintenance expenses. The court found for P on all issues. The court of appeals reversed the future taxes and maintenance expenses as they constituted hearsay and speculation and were insufficient to support an award of damages.

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