WILKINSON, Circuit Judge:
Cancun Adventure Tours filed suit against Underwater Designer Company (UDC) and Paul Califano alleging breach of contract, breach of warranty, and fraud in the sale of a modified air compressor. A federal magistrate awarded compensatory and punitive damages to Cancun but declined to award Cancun damages for lost profits. We reverse the punitive damages award. In all other respects, the magistrate's judgment is affirmed.
I.
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