Law School Case Brief
Harris v. Peters - 274 Ill. App. 3d 206, 210 Ill. Dec. 812, 653 N.E.2d 1274 (1995)
Compensatory damages are those which are awarded to a person as compensation, indemnity or restitution for a wrong or injury sustained by him. The purpose of awarding compensatory damages is to make the injured party whole and restore him to the position he was in before the loss, but not to enable him to make a profit or windfall on the transaction. Accordingly, when personal property is destroyed or rendered useless, the measure of damages is the fair market value of the thing in question immediately prior to its destruction.
Harris entered into a lease agreement with U.B. Vehicle Leasing, Inc. (UB) whereby Harris leased a 1988 Audi from UB. The Audi was totaled in a collision with Peters’ vehicle. Peters’ insurer tendered Harris a check for the fair market value of the Audi. Harris endorsed the check over to UB, which under the terms of the leasing agreement applied the funds towards paying the balance due it under the agreement’s terms. Thereafter, UB filed a complaint against Harris, seeking $5,560.48, the balance remaining on the lease. Harris filed his answer to UB's complaint and a two-count third-party complaint against Peters and his insurer seeking judgment in an amount equivalent to any judgment which might be entered against Harris in the underlying UB action. In essence, Harris was seeking the difference between the Audi's fair market value and the total amount due over the term of the vehicle lease. Peters and the insurance company filed a motion to dismiss the third-party complaint. Thereafter, the circuit court dismissed the count against Peters and allowed Harris to voluntarily dismiss the count against the underwriter. The instant appeal followed.
Was Harris properly compensated for the property loss that he suffered in the accident with Peters?
The court held that when personal property was destroyed or rendered useless, the measure of damages was the fair market value of the thing in question immediately prior to its destruction. Consequently, the Court determined that Harris was made whole when he was given the fair market value of the car, which necessarily compensated for loss of use and enjoyment.
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