In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 03-3658

SHANNON L. HASLUND,

Plaintiff-Appellee,

v.

SIMON PROPERTY GROUP, INC.,

Defendant-Appellant.

____________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 01 C 9587—Milton I. Shadur, Judge.

____________

ARGUED MAY 26, 2004—DECIDED AUGUST 6, 2004

____________

Before BAUER, POSNER, and COFFEY, Circuit Judges.

POSNER, Circuit Judge. In a diversity suit for breach of

contract governed by Illinois law, the district judge after a

bench trial awarded Shannon Haslund $537,634.41 in damages, plus prejudgment interest, against Simon Property

Group (SPG). 284 F. Supp. 2d 1102 (N.D. Ill. 2003). SPG’s

appeal argues that the provision of the contract that it was

found to have violated was too indefinite to be enforceable,

that no injury was proved, and that in any event no prejudgment interest should have been awarded.
2 No. 03-3658

During the dot-com boom of the late 1990s, SPG, a real

estate company that operates hundreds of shopping malls,

decided to form a subsidiary, “clixnmortar.com,” to create

Internet-related services ancillary to its mall business. It

appointed its chief information officer, Melanie Alshab, to

be the president of the new subsidiary. She approached

Haslund, a management consultant who had done work for

SPG in the past and was employed by Ernst & Young, to be

clixnmortar’s vice president for operations. Haslund was

interested, but told Alshab that she wanted not only a

substantial raise (from $125,000, her salary at Ernst &

Young, to $175,000), but also equity in clixnmortar. She was

taking a chance by leaving an established firm for a startup,

and so she wanted upside potential. She made clear that

unless she was given equity she wouldn’t sign on with the

new company. Alshab got authorization from her superiors

to offer Haslund not only the salary increase that she requested

but also one percent of clixnmortar’s equity. The deal was

confirmed in a letter to Haslund from SPG’s director of

human resources that under the caption “Annual Salary”

recited “$175,000 plus 1% equity in clixnmortar.com, structure to be determined.”

Haslund started her new job at the end of 1999 shortly

after receiving this letter. No stock was issued to her, however, either then or later. She kept badgering SPG for the

stock to no avail, and 10 months after starting work she was

fired, having denounced SPG’s boss in an email to a firm

that was in the process of acquiring an interest in

clixnmortar. The startup never turned a profit—in fact never

had any significant income—and was soon moribund, though

it wasn’t dissolved until last year.

The fact that a contract is incomplete, presents interpretive

questions, bristles with unresolved contingencies, and in

short has as many holes as a Swiss cheese does not make it
No. 03-3658 3

unenforceable for indefiniteness. Otherwise there would be

few enforceable contracts. Complete contingent contracts are

impossible. The future, over which contractual performance

evolves, is too uncertain. We once decided a case in which

the contract exceeded 2000 pages yet the dispute that gave

rise to the suit had not been anticipated (or, if anticipated,

provided for). S.A. Healy Co. v. Milwaukee Metropolitan

Sewerage District, 50 F.3d 476 (7th Cir. 1995). If contracting

parties had to provide for every contingency that might arise,

contract negotiations would be interminable. Contracts can

be shorter and simpler and cheaper when courts stand

ready to fill gaps and resolve ambiguities in the minority of

contracts that get drawn into litigation. Jinwoong, Inc. v.

Jinwoong, Inc., 310 F.3d 962, 965 (7th Cir. 2002).

But that is in general and not in every case. A contract is

rightly deemed unenforceable for indefiniteness when it

leaves out (1) a crucial term that (2) a court cannot reasonably be asked to supply in the name of interpretation.

Academy Chicago Publishers v. Cheever, 578 N.E.2d 981, 984

(Ill. 1991); Hintz v. Lazarus, 373 N.E.2d 1018, 1020 (Ill. App.

1978); Goldstick v. ICM Realty, 788 F.2d 456, 461-62 (7th Cir.

1986) (Illinois law); Olympia Equipment Leasing Co. v. Western

Union Telegraph Co., 797 F.2d 370, 381 (7th Cir. 1986). An

example is the contract price. E.g., Tranzact Technologies, Ltd.

v. Evergreen Partners, Ltd., 366 F.3d 542, 546 (7th Cir. 2004)

(Illinois law); Cloud Corp. v. Hasbro, Inc., 314 F.3d 289, 292

(7th Cir. 2002) (ditto); Feldman v. Allegheny Int’l, Inc., 850

F.2d 1217, 1223-24 (7th Cir. 1988) (ditto); Goldstick v. ICM

Realty, supra, 788 F.2d at 461-62. Not only is price central, so

that if the choice of price could be delegated to a court it

would be the court and not the parties that was the contract

maker, but there is no interpretive path that leads from the

terms the parties agreed on to the price they would have

agreed on. In the division of functions between parties and

the judiciary in the joint enterprise of fixing contractual
4 No. 03-3658

meaning, the selection of the contract price falls clearly on

the parties’ side. What is more, the omission of crucial terms

is powerful evidence that no contract was intended.

So if the employment agreement had said that Haslund

would receive equity but hadn’t indicated how much, a court

could not supply the missing percentage. Cf. Architectural

Metal Systems, Inc. v. Consolidated Systems, Inc., 58 F.3d 1227,

1229 (7th Cir. 1995) (Illinois law); Ray Dancer, Inc. v. DMC

Corp., 530 N.E.2d 605, 610 (Ill. App. 1988). No interpretive

technique would enable the court to build a bridge between

what the parties had agreed to and the percentage of the

equity in the new firm that she would receive. But the contract

did specify the percentage. What it omitted was a number

of details, such as the form of the equity—would it be voting stock or nonvoting stock?—and whether there would be

restrictions on vesting: could Haslund show up for work on

December 27, 1999, and the next day announce she was quitting and demand her shares? Important details, to be sure;

but their absence did not necessarily make the contract indefinite. A court might be able to fill them in without

shouldering an inordinate burden of inquiry or creating an

inordinate risk of error. There might for example be a custom in the industry as to whether stock in a startup issued

to a new employee carries voting rights, whether the right

to the stock vests immediately or only after the employee

has been on the job for a reasonable period of time, whether

the right is forfeited if the employee is fired for cause, and

whether and when and to whom the employee can sell the

stock once it is issued to him.

Evidence of trade usage is admissible to supply the answers to such questions. E.g., Chicago Bridge & Iron Co. v.

Reliance Ins. Co., 264 N.E.2d 134, 139 (Ill. 1970); Merchants

Environmental Industries, Inc. v. SLT Realty Limited Partnership,

731 N.E.2d 394, 405 (Ill. App. 2000); Architectural Metal
No. 03-3658 5

Systems, Inc. v. Consolidated Systems, Inc., supra, 58 F.3d at

1229. Neither party presented such evidence, but Haslund

presented evidence that, if not nearly as good, was nevertheless sufficient. This was Alshab’s testimony that there

were no restrictions on the equity interest that Haslund was

to receive—that all that “structure to be determined” meant

was that SPG had not yet decided on the form that equity in

clixnmortar would take, for example the number of shares

that would be issued and whether there would be classes of

stock, such as voting and nonvoting. Alshab’s testimony was

implausible—it seems almost unthinkable that SPG would

have agreed to give Haslund an unrestricted one percent

interest in a company that SPG hoped not wholly without

reason would be highly valuable; for if taken literally the

absence of any restrictions would mean that she could quit

and sell the stock the day she received it even if she’d been

on the job for only five minutes. And Alshab had quit SPG

before the trial and there was no love lost between her and

her former employer; she may have been inclined to shade

her testimony in favor of Haslund, whom after all she had

recruited. Nevertheless, her testimony was not so implausible that the district judge’s crediting it over the evasive and

ambiguous denials of SPG’s principal, David Simon, could

be found to be reversible error.

SPG might have presented evidence, presumably in the

form of expert testimony by management consultants

knowledgeable about dot-com startups during the boom,

that equity in a startup would never be given to a new employee without restrictions, specifically a restriction on vesting

and sale. SPG presented no such evidence. It is common

knowledge that such restrictions are the norm, but that

doesn’t mean that they are universal.

So the contract was enforceable, and was broken, and the

next question is whether the district judge was right to

award Haslund some half million dollars in damages (or,
6 No. 03-3658

indeed, as we shall see, whether he was right to award her

any amount of damages). The amount he awarded was one

percent of his estimate that clixnmortar had a net worth

when Haslund was fired of $54 million. The principal evidence on which he relied for this extravagant estimate— for

remember that when Haslund was fired (indeed at all times)

clixnmortar had not shown a profit on the basis of which a

capital value could be estimated by conventional methods,

and apparently had no assets whose value could be

appraised—consisted of two transactions. In the first a

company named CPG Partners bought a 9.3 percent equity

interest in clixnmortar from SPG for $5 million, which implies (arithmetically) a total value of clixnmortar of $54

million. In the second transaction a consulting company

named Found.com (the investor to which Haslund had sent

the email that precipitated her being fired) forgave $3.7

million in consulting fees owed it by SPG in exchange for a

6.9 percent equity stake in clixnmortar, implying, by the

same arithmetical procedure of dividing the amount of consideration by the percentage of equity received, a similar

valuation of the company.

These transactions—though the one with CPG, at least,

was rich in the structure missing from Haslund’s one percent interest, since the number of shares and the type of

stock were specified, along with restrictions on transfer—

constitute but poor evidence of clixnmortar’s value. Compare Ashe v. Sunshine Broadcasting Corp., 412 N.E.2d 1142,

1145 (Ill. App. 1980). The transaction with CPG was devoid

of economic substance, because at the same time that CPG

paid $5 million for 50,000 shares in clixnmortar’s common

stock SPG paid $5 million for 50,000 shares of the common

stock of a subsidiary of CPG—which means that no money

changed hands. Probably the aim of the transaction was to

make each company seem to be worth $5 million more than

it was. But what is certain is that the swap provided no in-
No. 03-3658 7

formation with regard to the value of either company. And

Haslund does not argue that SPG’s accounting maneuver

should estop SPG to deny that 9.3 percent of clixnmortar

was worth $54 million when the transaction was made.

As for the “investment” by Found, its $3.7 million receivable

in uncollected consulting fees was the softest of soft numbers. For, having essentially no assets, liquid or otherwise,

clixnmortar could not be expected to cough up $3.7 million

in cash for consulting services. Found would have expected

to have to write off much of the bill; and so clixnmortar would

not have given Found, or Found insisted on receiving, equity

actually worth $3.7 million. The stock Found received was

worth only the collectable portion of the debt, not its face value, and no evidence concerning that amount was presented.

Even if, as we do not for a moment believe, clixnmortar

was worth $54 million when Haslund was fired, and even if

we accept, as we must (though reluctantly), Alshab’s testimony that there would have been no restrictions whatever

on Haslund’s selling the stock had she been issued it, and

even though Haslund might well have wanted to sell her

stock then had it been issued to her, it is beyond unlikely

that she could have persuaded anyone to pay her $537,000

for the stock. Even if we accept, as we should not, that CPG

and Found really did invest in a meaningful sense in

clixnmortar, there is a big difference between putting money

into a startup and buying stock in a startup from another

investor. In the first case the investor is strengthening the

startup by his investment and thus increasing the likelihood

of its succeeding. In the second case he is contributing

nothing to the company unless the purchase is big enough

to affect the price at which the company might issue new

stock. The district judge speculated that CPG or Found

might have bought Haslund’s stock. But this is hopelessly

speculative and utterly implausible—CPG, remember, had
8 No. 03-3658

not contributed a nickel to clixnmortar, while Found had

contributed only a wooden nickel. Neither company had

indicated any willingness actually to invest cash in the

startup.

All that Haslund has going for her on the proof-of-damages

front is SPG’s failure to propose an alternative damages

figure other than zero. As we have remarked in the past,

this is a risky strategy for defendants. Avitia v. Metropolitan

Club of Chicago, Inc., 49 F.3d 1219, 1230 (7th Cir. 1995);

AMPAT/Midwest, Inc. v. Illinois Tool Works Inc., 896 F.2d

1035, 1046 (7th Cir. 1990); Lancaster v. Norfolk & Western Ry.,

773 F.2d 807, 823 (7th Cir. 1985). It turns the damages phase

of a litigation into a simulacrum of final-offer arbitration,

where each party submits a figure to the arbitrator and he

must choose one of the figures—he cannot pick a number in

between. When a plaintiff asks for damages in a specific

amount and the defendant ripostes that the plaintiff’s damages are zero, period, and no evidence is presented that

would support an intermediate figure, the trier of fact has

to decide whether it is more likely that the plaintiff’s figure

(or the plaintiff’s minimum figure, if the plaintiff has proposed a minimum figure—for the strategy of proposing only

a maximum figure is as risky for a plaintiff as the strategy

of proposing only zero is for a defendant) is correct or that

zero is correct, because he is given no basis for picking an

intermediate figure. If the plaintiff testifies that his damages

were $100 million and the defendant that they were $0, the

trier of fact cannot just throw a dart to determine the

amount of damages to award within that range; yet that is

what he would be doing were there no basis in the evidence

for estimating the damages. Assessing damages is often and

permissibly speculative, but only within limits. A “plaintiff

has the burden of proving damages to a reasonable degree

of certainty.” Williams v. Board of Education, 367 N.E.2d 549,

553 (Ill. App. 1977); see also Bigelow v. RKO Radio Pictures,
No. 03-3658 9

Inc., 327 U.S. 251, 264-66 (1946); BE&K Construction Co. v.

Will & Grundy Counties Building Trades Council, 156 F.3d 756,

770 (7th Cir. 1998); Sir Speedy, Inc. v. L & P Graphics, Inc., 957

F.2d 1033, 1038 (2d Cir. 1992).

On this record, we have to say that it is more likely that

zero is correct than that $537,000 is, and we are sufficiently

confident about this conclusion to pronounce the district

judge’s contrary finding clearly erroneous and therefore not

binding on us. There is no evidence that there would have

been a market for Haslund’s equity interest, had it been

given to her in accordance with the contract, during the

limited period between when she was fired and when it

became apparent that clixnmortar would never leave the

starting gate. The “investments” by CPG and Found are no

evidence at all that there would have been a willing buyer

for Haslund’s stock even in the unlikely event that the stock

would have been completely unrestricted.

She argues that by breaking the contract and never issuing

her the stock, SPG prevented her from testing the market; and

it is true that when a defendant by violating the plaintiff’s

rights makes it difficult for her to prove her damages, all

reasonable doubts about the amount of damages are

resolved in her favor. Bigelow v. RKO Radio Pictures, Inc., supra,

327 U.S. at 264-66; BE&K Construction Co. v. Will & Grundy

Counties Building Trades Council, supra, 156 F.3d at 770; Bailey

v. Meister Brau, Inc., 535 F.2d 982, 991 (7th Cir. 1976). But

this rule does not apply to the threshold issue of injury.

Once the plaintiff proves injury, broad latitude is allowed in

quantifying damages, especially when the defendant’s own

conduct impedes quantification. But the injury itself must be

proved in the usual way, without speculation or burden

shifting. Story Parchment Co. v. Paterson Parchment Paper Co.,

282 U.S. 555, 562-63 (1931); Fishman v. Estate of Wirtz, 807

F.2d 520, 550-51 (7th Cir. 1986); In re Lower Lake Erie Iron Ore
10 No. 03-3658

Antitrust Litigation, 998 F.2d 1144, 1176 (3d Cir. 1993).

Haslund failed to prove that she was injured by the breach.

So far as appears, the stock to which she was entitled would

have been worthless in her hands.

But, surely, it will be replied, she could have gotten something for her equity interest—if only a few hundred dollars.

No doubt. But if that is all she could have gotten, she would

have held on to the stock in the hope that clixnmortar would

succeed—in which event she would have been holding fairy

dust when the company failed. Although SPG’s breach of

her employment contract appears to have been deliberate

and indeed reprehensible, without proof of actual loss

Haslund is entitled only to nominal damages, Kleinwort Benson

North America, Inc. v. Quantum Financial Services, Inc., 673

N.E.2d 369, 378 (Ill. App. 1996); Movitz v. First Nat’l Bank of

Chicago, 148 F.3d 760, 765 (7th Cir. 1998) (Illinois law)—

which eliminates any entitlement to prejudgment interest, as

well.

The judgment is reversed with instructions to enter judgment for the plaintiff for nominal damages only.

REVERSED AND REMANDED, WITH DIRECTIONS.
No. 03-3658 11

A true Copy:

Teste:

 _____________________________

Clerk of the United States Court of 

Appeals for the Seventh Circuit 

USCA-02-C-0072—8-6-04