Source: https://illinois.lexroll.com/midland-hotel-v-r-h-donnelley-corp-118-ill-2d-306-1987/
Timestamp: 2019-04-24 17:53:25+00:00

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MIDLAND HOTEL CORPORATION, Appellee and Cross-Appellant, v. THE REUBEN H. DONNELLEY CORPORATION, Appellant and Cross-Appellee.
Nos. 64301, 64557 cons. Appellate court affirmed in part and reversed in part; cause remanded.Supreme Court of Illinois.
Opinion filed October 5, 1987. Rehearing denied December 1, 1987.
Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. James S. Quinlan, Jr., Judge, presiding.
Byron L. Gregory, Steven H. Hoeft and Richard L. Sandler, of Chicago (McDermott, Will Emery, of counsel), for appellant and cross-appellee.
Barbara B. Hirsch, of Chicago, for appellee and cross-appellant.
Plaintiff, Midland Hotel Corporation, brought suit in the circuit court of Cook County against defendant, The Reuben H. Donnelley Corporation, seeking lost profits arising from the breach of an oral contract to include plaintiff in the first issue of a newly published telephone directory. Following a jury trial, the plaintiff was awarded damages of $500,000. Defendant appealed and the appellate court affirmed as to liability but remanded on the issue of damages, finding that a jury instruction, tendered by the defendant as to damages, was improperly refused. (149 Ill. App.3d 53.) Appeal is taken to this court pursuant to Rule 315. 107 Ill.2d R. 315.
have been within the reasonable contemplation of the defendant when the contract was formed.
The defendant publishes telephone directories which list telephone numbers and display advertisements of businesses under descriptive headings. In July of 1981, defendant issued its first Chicago Visitors Guide and Downtown Directory (the Guide). The 1981 edition of the Guide ran until July of 1982, when a new edition was released. The Guide was intended to serve as a reference material for tourists and business travelers as well as a directory for downtown businesses. It was divided into two sections, the first section contained numerous maps and photos of points of interest in the city of Chicago while the second section consisted of an ordinary Yellow Pages directory for the downtown area. All downtown businesses were to receive one free regular listing in the Yellow Pages section of the Guide. Defendant earned revenue by selling bold-faced listings and display advertisements with rates proportional to the breadth of distribution. Distribution was accomplished by delivering copies to downtown businesses and residents, providing copies to the Chicago Convention and Tourism Bureau and entering into contracts with downtown hotels for lobby distribution and in-room placement by their maid services. Defendant estimated that a total of 160,000 copies of the 1981 Guide had been distributed, with hotel distribution accounting for about half of the total.
that he only offered an outside back-cover ad on all Guides distributed in the hotel in exchange for the distribution service; he denied promising Levy any listings in exchange for distribution. Robert Hughes, defendant’s vice-president of sales and marketing, testified that it was defendant’s corporate policy to offer only a free back-page ad in exchange for hotel distribution.
When the 1981 Guide was released, the plaintiff was not listed under the “Hotels” heading in the Yellow Pages section; instead, it was listed under “Banquet Rooms.” The plaintiff also received the back-page advertisement for the Guides to be distributed in the hotel. In the 1982 and 1983 editions of the Guide, the plaintiff was listed under the “Hotels” heading, “Banquet Rooms” heading and had two listings under the “Restaurant” heading.
would have otherwise equalled the downtown Trends average. Adler noted that for numerous months prior to July of 1981, plaintiff’s occupancy percentage was trailing the Trends average and that therefore there was no basis for the assumption that the plaintiff would have otherwise equalled the Trends averag after July of 1981.
Defendant argues that there was no enforceable contract to list the plaintiff as a hotel. In support of this argument, defendant asserts that there was no credible evidence that defendant promised “appropriate listings,” that there was no meeting of the minds between the parties and that the contract was too ambiguous to be enforced.
unless contrary to the manifest weight of the evidence (Bauske v. City of Des Plaines (1957), 13 Ill.2d 169, 181). As such, the sufficiency of the evidence is not contingent upon the sheer number of witnesses; a jury is free to credit the testimony of one witness against the conflicting testimony of several witnesses. Here, we cannot say that Levy’s testimony was contrary to the manifest weight of the evidence. Levy’s testimony that he was promised “appropriate listings” without inquiring as to the number or placement of the listings is quite plausible since he well could have entrusted such matters to defendant’s expertise.
We agree with the appellate court that “[u]ltimately, this case turns on whether one chooses to believe plaintiff’s witness, Levy, concerning the terms of the contract, or defendant’s witnesses.” (149 Ill. App.3d 53, 60.) In our view, it is certainly not implausible that the defendant may have promised Levy “appropriate listings” in order to induce him to undertake distribution of the Guide.
Defendant contends that there was no enforceable contract to provide plaintiff with “appropriate listings” since there was no meeting of the minds between the parties on this term. Defendant argues that it only understood that it was to provide a free back-page advertisement in exchange for the distribution service. Thus, defendant asserts that even if the plaintiff understood that it was to receive “appropriate listings,” there was still no meeting of the minds since there was no evidence that it shared this understanding.
the conduct of the contracting parties indicates an agreement to the terms of the alleged contract.” (Steinberg v. Chicago Medical School (1977), 69 Ill.2d 320, 331.) Otherwise, a party would be free to avoid his contractual liabilities by simply denying that which his course of conduct indicates. As such, defendant’s subjective understanding of the terms of the contract is immaterial. The jury found that the defendant promised “appropriate listings” and whether this promise accurately reflected the defendant’s subjective intention is simply irrelevant.
The essential terms of a contract must be definite and certain in order for a contract to be enforceable. (A.S.S. W. Club v. Drobnick (1962), 26 Ill.2d 521, 525.) However, a contract “is sufficiently definite and certain to be enforceable if the court is enabled from the terms and provisions thereof, under proper rules of construction and applicable principles of equity, to ascertain what the parties have agreed to do.” (Morey v. Hoffman (1957), 12 Ill.2d 125, 131.) Defendant asserts that “appropriate listings” is too vague to be enforced since there are a number of appropriate listings for the Midland, but this misses the point. Plaintiff did not seek recovery because it was not listed under “Caterers” or “Cocktail Lounges.” Plaintiff only sought to recover lost profits that were the result of its being omitted from the “Hotels” section and that the plaintiff should have been listed as a hotel was admitted by two of defendant’s executives.
Moreover, common sense alone would inform that a listing under “Hotels” would be “appropriate” for a business whose primary function concerns the provision of lodging.
If plaintiff had sued to recover lost profits resulting from its not being listed under “Caterers,” a genuine issue of ambiguity may well be present. However, this is not the case before us. “It is not necessary or proper for us to construe in abstraction the terms of the agreement * * *.” (Gale v. York Center Community Cooperative, Inc. (1960), 21 Ill.2d 86, 94.) Plaintiff only alleges that it should have been listed under “Hotels,” and we hold that the term “appropriate listings” is not ambiguous in this respect.
Defendant next argues that plaintiff’s proof of damages was speculative since plaintiff’s calculation of lost profits erroneously assumed that plaintiff’s occupancy rate would have equalled the downtown Trends average. Defendant maintains that as the plaintiff’s occupancy rate had been consistently trailing the Trends average prior to the issuance of the Guide in July of 1981, there was therefore no basis upon which to conclude that the plaintiff would have otherwise performed as well as the Trends average. Plaintiff responds by noting that both Levy and Eugene Pekow, plaintiff’s president, testified that the plaintiff’s occupancy rate “tracked” the Trends average prior to July 1981. In addition, plaintiff notes that Adler, defendant’s expert witness, admitted that for the 30-month period prior to July 1981 the Trends occupancy average was 62.83% while the Midland’s average was 61.14%.
“The nature of the business or venture upon which the anticipated profits are claimed must be such as to support an inference of definite profits grounded upon a reasonably sure basis of facts. When the elements, upon which the claim for prospective profits rests, are numerous and shifting contingencies whose relation to the wrong complained of is problematical, and such profits are not provable with assurance as a trustworthy result of the alleged cause, then there can be no recovery.” Lowrie v. Castle (1916), 225 Mass. 37, 51-52, 113 N.E. 206, 210.
July of 1981, the plaintiff trailed the Trends average. In the two months prior to July 1981, the Midland was considerably below the Trends average: in May by 14% and in June by 12%. Plaintiff argues that it tracked the Trends average because in the 30-month period prior to July 1981, the plaintiff’s occupancy average was only one percentage point below the Trends average for the same period. This statistic, however, is misleading since a 30-month average does not sufficiently illuminate the plaintiff’s downward tendency immediately preceding July 1981 but rather reflects the plaintiff’s substantial gains in early 1979.
After the 1981 Guide was issued, the disparity in occupancy levels between the plaintiff and the Trends average continued to widen. When the 1982 edition of the Guide was issued with the plaintiff listed as a hotel, this disparity widened yet further. And while it is possible that plaintiff’s omission from the 1981 Guide may have resulted in residual effects, it is difficult to believe that such residual effects could account for losses so great. If exclusion from the Guide caused substantial losses, as plaintiff contends, then it is only reasonable to expect that inclusion would result in at least modest gains. Moreover, the record furnishes no basis for plaintiff’s claim that such residual effects lasted for two years rather than one, three or five years. Plaintiff could have as easily asserted that the residual effects of its omission from the Guide caused the entire variance in occupancy between the plaintiff and Trends for seven, eight or ten years thereafter.
amount of lost profits, if any, attributable to its omission from the Guide. Accordingly, we cannot say that lost profits in the amount of $500,000 were proven with reasonable certainty.
(1854), 9 Ex. 341, 156 Eng. Rep. 145, reasoned that where, as here, lost profits are sought for transactions collateral to the original contract, it must be shown that the lost profits were within the reasonable contemplation of the defaulting party.
and therefore held that it was for the jury to decide whether such lost profits were within the reasonable contemplation of the defendant. However, the court’s characterization of the lost profits as collateral to the contract with defendant is contrary to both defendant’s own assertions and the very nature of a Yellow Pages listing. In one of the promotional brochures for the Guide, the defendant stated, “Your ad in the Chicago Visitor’s Guide and Downtown Directory will tell a prospective buyer about your products or service at just the time this potential customer is looking to be TOLD and SOLD.” In another brochure, defendant proclaimed, “Chicago attracts people who spend money * * * 5.5 million people spending over 551 million dollars.” Moreover, the very purpose of a Yellow Pages listing is to increase profits. The value of a Yellow Pages listing is not the dissemination of a business identity as an end in itself but is rather a means towards attracting new customers and stimulating new growth and thereby increasing profits. Clearly, the plaintiff’s profits formed the very basis of its contract with defendant; it cannot be said that such profits were only collateral to the contract. Thus, as plaintiff’s lost profits were a direct and foreseeable consequence of defendant’s breach as a matter of law, the trial court properly refused to tender a “reasonable contemplation” instruction to the jury. (See Postal Telegraph Cable Co. v. Lathrop (1890), 131 Ill. 575; Providence-Washington Insurance Co. v. Western Union Telegraph Co. (1910), 247 Ill. 84.) Accordingly, we hold that the appellate court erred as to this issue.
Thus, the jury’s response indicates that it found the defendant liable notwithstanding its award of damages. As such, we perceive no prejudice to the defendant in a trial limited to the issue of damages.
For the foregoing reasons, the judgment of the appellate court is affirmed in part and reversed in part, and the cause is remanded to the trial court for a new trial limited to the issue of damages.
Appellate court affirmed in part and reversed in part; cause remanded.
JUSTICE CUNNINGHAM took no part in the consideration or decision of this case.

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