Opinion ID: 164803
Heading Depth: 3
Heading Rank: 2

Heading: Reliance Damages

Text: 78 In light of its disposition of the case on the liens issue and lost profits damages, the district court did not reach LifeWise's claim for reliance damages. XIII Aplt.App. at 5666. LifeWise now argues that even if this court affirms the district court on the issue of lost profit damages, we should still remand the case to the district court to determine what, if any, reliance damages it may recover. Based on the jury's finding that ETRADE's discontinuation of funding was not in breach of the Funding Agreement, see id. at 5593, we disagree. 79 In order to recover reliance damages for breach of contract, the plaintiff must demonstrate with certainty that there was a breach and that such damages have been caused by the breach. See Kenford Co. v. County of Erie, 67 N.Y.2d 257, 502 N.Y.S.2d 131, 493 N.E.2d 234, 235 (1986). In other words, there must be a definite and logical connection between what is proved and the damages a jury is asked to find. Berley Indus., Inc. v. City of New York, 45 N.Y.2d 683, 412 N.Y.S.2d 589, 385 N.E.2d 281, 283 (1978). 80 As noted above, the jury found that (1) ETRADE had a good faith basis for denying funding because it was not satisfied with the general business operations of LifeWise, but (2) ETRADE did not adequately disclose in writing the reasons for its dissatisfaction with LifeWise's business operations. XIII Aplt.App. at 5592-93. However, upon the district court's issuance of its Memorandum Opinion and Order granting ETRADE's Motion for Summary Judgment Regarding Lost Profits Damages and ETRADE's Motion for Judgment as a Matter of Law on the Basis of LifeWise's Failure to Satisfy Conditions Precedent Relating to Liens, the district court entered judgment in favor of ETRADE and vacated the jury verdict. Id. at 5667. 81 LifeWise argues that because the jury's verdict was vacated, its finding that ETRADE did not deny the funding in bad faith cannot be used to argue that no causal link connects ETRADE to LifeWise's damages. We disagree. A judge continue[s] to be bound by a jury's findings even if its verdict is vacated, so long as the underlying factfinding is not impugned. Artis v. Hitachi Zosen Clearing, Inc., 967 F.2d 1132, 1138 (7th Cir.1992); cf. Lytle v. Household Mfg., Inc., 494 U.S. 545, 550, 110 S.Ct. 1331, 108 L.Ed.2d 504 (1990). Here, the jury verdict was vacated not because it was thought to be unreliable, but rather because the district court's decision as to a matter of law made the verdict moot. Compare Dranchak v. Akzo Nobel, Inc., 88 F.3d 457, 459 (7th Cir.1996) (when events during trial and improper omission from jury instructions contributed to reasons for setting aside verdict, the verdict's factual accuracy is impugned, and verdict has no implications in court's analysis of non-jury issues). Thus, as the jury's finding that ETRADE denied funding in good faith was not appealed, it must stand. Such a finding removed any causal connection between ETRADE's denial of funding and LifeWise's reliance damages. 82 Alternatively, LifeWise argues that ETRADE, by refusing to provide adequate grounds for its dissatisfaction, deprived LifeWise of the ability to cure and resulted in the loss of the Facility and destruction of LifeWise's business. Aplt. Reply Br. at 26. This argument presupposes a right to cure, a right that we do not see in the agreement documents, and which was not pinpointed in LifeWise's briefs. When pressed in oral argument about where such a right originated, counsel for LifeWise first pointed to § 4.10 of the Funding Agreement, I Aplt.App. at 259. In his rebuttal argument, counsel corrected himself, stating that the right to cure was not in the Funding Agreement, but in sections 6.1(c) and 11.3 of the Trust Indenture. XV Aplt.App. at 6583, 6609. Finally, in a letter to the court after oral argument, counsel stated that he misread the proper references. According to counsel, (1) § 11.1 of the Funding Agreement, I Aplt.App. at 270, refers to the Trust Indenture for events of default; (2) § 6.1(c) and (d) of the Trust Indenture, XV Aplt.App. at 6583, defines Events of Default for breach of covenant and breach of warranty; and (3) § 11.3 of the Trust Indenture, XV Aplt.App. at 6609, further refers to breaches of warranty. 83 We do not read either the Funding Agreement or the Trust Indenture to provide an opportunity for LifeWise to cure its breach of § 4.10 of the Funding Agreement. Sections 6.1(c)-(d) and 11.3 allow 30 days to cure a breach of certain representations or warranties. XV Aplt.App. at 6583, 6609. Section 4.10 is a condition precedent to each funding, not a representation or warranty. I Aplt.App. at 257-59. Accordingly, the provisions in the Trust Indenture cited by LifeWise do not give a contractual right to cure a breach of section 4.10. 84 As a last resort, LifeWise essentially claims that a cure provision is implied in § 4.10 because (1) such notice would be useful only if LifeWise can address the alleged concerns, and (2) ETRADE in fact requested LifeWise to cure its dissatisfaction before it declined to fund. We disagree. 85 First, LifeWise does not oppose the district court's statement of undisputed facts, which indicates that the notice provision grew out of ETRADE's desire to have the ability to be released from the contract in its sole discretion. See XIII Aplt.App. at 5598. The provision ensures that a decision by ETRADE to terminate funding is objectively reasonable and in good faith. It does not, explicitly or implicitly, confer any right whatsoever to LifeWise to cure any defect identified by ETRADE. Second, the fact that ETRADE requested that LifeWise address ETRADE's dissatisfaction before ETRADE declined to fund does not create a contractual right to cure after ETRADE declined to fund. Finally, even if a cure provision existed, it could not be a basis for causation. LifeWise has offered no evidence that within 30 days, it could have improved its business operations to meet ETRADE's good faith satisfaction. 86 LifeWise therefore cannot claim reliance damages resulting from ETRADE's failure to fund or failure to provide adequate reasons for its refusal to fund. 87 AFFIRMED.