Opinion ID: 551863
Heading Depth: 2
Heading Rank: 2

Heading: Future Lost Profits

Text: 18 Goodman v. Motor Products Corp., 9 Ill.App.2d 57, 132 N.E.2d 356 (2d Dist.1956) [Goodman I ], aff'd after remand, 22 Ill.App. 2d 378, 161 N.E.2d 31 (2d Dist.1959) [Goodman II ], sets forth the applicable law on the issue of All Line's future lost profits: The remedy for a breach of a terminable-at-will contract is pre-termination lost profits only. In Goodman, Motor Products Corporation and Goodman entered an oral agreement giving Goodman the exclusive right to distribute freezers in foreign countries. There was no requirement that Goodman sell freezers, but as long as he did so, Motor Products Corporation was prohibited from competing with him. Goodman I, 132 N.E.2d at 360. The court considered the contract as one terminable at will and unenforceable to the extent it was executory because there was no fixed duration for the contract, and Goodman could cease distributing freezers whenever he chose. Id. 132 N.E.2d at 363. Prior to termination, however, Motor Products Corporation began making direct sales into Mexico, thus breaching the agreement. At the first trial, a jury awarded Goodman $130,000 in damages for his lost profits before and after termination. In an unpublished order the trial judge subsequently granted the defendant's motion for judgment notwithstanding the verdict or, in the alternative, a new trial. The appellate court reversed the judgment notwithstanding the verdict and remanded for a new trial. [T]he issue which was to be submitted to the jury was the amount of damages due the plaintiff as a result of the breach of the distributorship agreement prior to its termination.  Goodman II, 161 N.E.2d at 36 (emphasis added). The jury verdict at the second trial was $800 for the pre-termination damages. 19 The trial court somehow misread Goodman (the judge failed to identify which Goodman opinion he was construing) and concluded that it was inapplicable to the instant case. In contrast to the trial judge's reading of the Goodman cases, it was the appellate court, not the jury, that limited Goodman's recovery to pre-termination damages. When this cause was remanded for a new trial, the issue which was to be submitted to the jury was the amount of damages due the plaintiff as a result of the breach of the distributorship agreement prior to its termination.  Goodman II, 161 N.E.2d at 36 (emphasis added). Thus Goodman supports Rabar's argument that Rabar is liable for pre-termination damages only. The agreement between Rabar and All Line was much like the contract in Goodman in that it granted All Line an exclusive distributorship of Rabar rope products to Little Tikes. While the agreement had an indefinite duration, All Line had no obligation to buy rope from Rabar. Either party could have terminated the agreement at any time, and thus it was unenforceable only to the extent it was executory. As in Goodman, Rabar subjected itself to a claim for damages by breaching the agreement and must reimburse All Line for pre-termination damages. 20 The trial judge erroneously relied upon Schatz v. Abbott Laboratories, Inc., 51 Ill.2d 143, 281 N.E.2d 323 (1972) for the proposition that All Line is entitled to recover all reasonably ascertainable losses it has suffered and continues to suffer as a result of [Rabar's] breach. (Emphasis added.) Schatz was a nuisance action for the loss of the use and enjoyment of a residence and the loss of business at a movie theater because of obnoxious odors emanating from defendant's business. The nuisance was an on-going tort with readily ascertainable damages. In contrast, we are of the opinion that the instant case involves an executory contract terminable at will. Because there are no on-going damages after the termination of an executory, at-will contract, Schatz is inapposite to the issue of damages in such a contract. The trial judge should have relied upon Goodman and denied All Line's request for future lost profits. 21