Law School Case Brief
Santorini Cab Corp. v. Banco Popular N. Am. - 2013 IL App (1st) 122070, 376 Ill. Dec. 403, 999 N.E.2d 46 (2013)
The measure of damages for breach of contract is the amount that will compensate the aggrieved party for the loss which either fulfillment of the contract would have prevented or which the breach of it has entailed. The purpose of damages is to put the nonbreaching party into the position he or she would have been in had the contract been performed, but not in a better position. In determining which measure of damages to use, the trial court must examine the exact interest harmed. Compensation awarded in a breach of contract action should not provide plaintiff with a windfall.
Plaintiff Santorini Cab Corporation ("Santorini") and defendant Banco Popular North America ("Banco") entered into two contracts for the sale of taxicab medallions. The May 2006 contract was for the sale of medallion number 2408 from Banco to Santorini for $48,000. The July 2006 contract was for the sale of medallion number 2361 from Banco to Santorini for $48,000. Santorini paid the required earnest money under each contract and at all relevant times was financially and otherwise able to purchase the two medallions. After the 90-day period had expired under each of the contracts, the parties still continued to work together to close the sale. The last written communication between the parties was a letter from Banco's counsel to Santorini's counsel, dated Dec. 15, 2006, which stated that an issue arose concerning whether Banco's borrower had received the requisite notice in the underlying foreclosure proceedings on the medallions. Until that issue was resolved, Banco was not in a position to move forward with the sale to Santorini. Furthermore, although the local agency had received the documents concerning the medallion transfer, the agency had not given its final approval to allow the transfer. In Sept. 2007, Santorini filed a breach of contract lawsuit against Banco in Illinois state court in which it sought damages, which included the appreciation in value of the medallions and lost profits. Banco filed a motion for partial summary judgment on the lost profits claim, which the trial court granted. After a bench trial, the trial court found that Banco had breached the two contracts because it failed to either transfer the medallions or cancel the contracts in writing. The trial court awarded Santorini total damages in the amount of $37,550, as measured by the difference between the market price at the time Santorini learned of the breach and the contract price, plus any consequential damages less expenses saved as a result of the breach. Santorini appealed.
Did the trial court err when it precluded lost profit damages when calculating Santorini's damages?
The appellate court affirmed the trial court's judgment. The court ruled that the trial court correctly entered a partial summary judgment precluding lost profit damages because Santorini failed to present proof of any lost profits with reasonable certainty, and thus there was no genuine issue of material fact concerning lost profits. Because Santorini refused to answer Banco's interrogatories requesting information about Santorini's revenues, expenses and profits, the trial court did not abuse its discretion in entering a discovery sanction order and barring Santorini's witness from testifying about Santorini's expenses, income, and profits. Santorini's compensatory damages were measured based on the market price of the medallions at the time of the breach in accordance with 810 ILCS 5/2-713 (2010).
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