Opinion ID: 2995635
Heading Depth: 1
Heading Rank: 9

Heading: Ill App.3d at 58-59 (distinguishing on

Text: the facts yet approvingly citing Schneider v. Dumbarton Devs. Inc., 767 F.2d 1007 (D.C. Cir. 1985), which affirmed a finding of material breach based on a one-day delay in a real estate transaction); John H. Scheid, Buying Blackacre, 23 J. Marshall L. Rev. 15, 59 (1989) (If time is of the essence, Illinois courts, tending to be strict constructionists, will enforce the clause and hold that a delay of one day is a material breach.); 12A Illinois Law & Practice sec.sec. 303-05 (1983 & Supp. 2001); see also Hardin Rodriguez & Boivin v. Paradigm Ins. Co., 962 F.2d 628, 637 (7th Cir. 1992) (Doctrine of substantial performance [does] not extend to cases like the one before us, where the plaintiff insisted upon strict compliance with its conditions and has never waived them.). Our holding is consistent with those from other jurisdictions that have found material breaches in cases that are analogous to the one before us. See FDIC v. Kansas Bankers Sur. Co., 963 F.2d 289 (10th Cir. 1992); Schneider, 767 F.2d 1007; Sun Bank of Miami v. Lester, 404 So.2d 141 (Fla. App. Ct. 1981); see also Jacob & Youngs Inc. v. Kent, 129 N.E. 889, 891 (N.Y. 1921) (Cardozo, J.) (the parties are free by apt and certain words to effectuate a purpose that performance of every term shall be a con dition of recovery); Brady v. Oliver, 147 S.W. 1135, 1140 (Tenn. 1911) (A case can be conceived where a default of one day might defeat the whole purpose of the contract.); 15 Williston on Contracts sec. 44:53 at 225 (2000) (A typical example of a clause requiring strict compliance is one making time of the essence of the contract; substantial, although late, performance is not generally sufficient. . . .). b. The relevant factors i. Bargained-for objective Ocean Atlantic disputes the court’s finding that the failure to close by January 25, 2001 defeated the bargained- for objective of the contract. Ocean Atlantic contends that the general objective of the Settlement Agreement was to effectuate the sale of the property. In Ocean Atlantic’s view, termination of the Settlement Agreement was never a bargained-for objective of either party, but rather a potential consequence if the bargained-for objective was not met. (Br. at 16-17.) We cannot accept this unduly narrow reading of the agreement in this case. Illinois courts construe contract terms so as to avoid rendering other terms redundant or meaningless. Carroll v. Acme-Cleveland Corp., 955 F.2d 1107, 1112 (7th Cir. 1992). [W]here a contract does not set a closing date and time is not made of the essence, the law will imply that the contract is to be performed within a reasonable time. Omni Partners, 246 Ill.App.3d at 63. Thus, a material time-essence provision indicates that substantial but incomplete performance is not the central objective of the contract. Rather, the deal must be done on time if it may be done at all. By enforcing such provisions, courts avoid substituting their judgment for those of sophisticated parties and concomitantly extinguishing the parties’ legitimate expectations in freedom of contract as well as freedom from contract. See, e.g., Venture Assoc. Corp. v. Zenith Data Sys. Corp., 96 F.3d 275, 281 (7th Cir. 1996) (Cudahy, J., concurring) (Freedom not to contract should be protected as stringently as freedom to contract.). The trial judge in this case concluded that a material, bargained-for objective of the contract was to establish an absolute date beyond which the parties’ obligations to each other would terminate, either by the sale of the property or by the passage of time. This finding was supported by ample evidence, including seller John Argoudelis’s statements that we quoted and discussed in Part IV.A.1 to the effect that we bargained for . . . we wanted finality. We wanted a date whereby our relationship with Ocean Atlantic would end, one way or the other. When Ocean Atlantic failed to pay the Sellers any money and failed to take title to the property by January 25, 2001, it deprived the Sellers of the finality for which they had bargained. This breach went to the very heart and substance of the contract. It was material; indeed, it is difficult to imagine anything more material, given nearly three years of delays, three contract extensions, and two federal lawsuits involving the sale of this very property. The Sellers displayed the patience of Job by waiting nearly 3 years to accomplish the sale of farmland that was originally intended to be transferred within six months. Paragraph 15 of the settlement agreement clearly called for closing or termination [i]f closing has not occurred on or before January 25, 2001, for any reason, and the closing failed to occur in a timely fashion. Based on the facts before us, we do not perceive any clear error with the district court’s findings. See O’Malley, 86 Ill.App.2d at 451 (holding that explicit deadline, coupled with forfeiture provision, was sufficient evidence of materiality); Schneider, 767 F.2d at 1014 (The parties bargained for the strict construction that Schneider urges and it would be improper for the courts to put any other interpretation on the ’time is of the essence’ clause.). ii. Proportionality of prejudice Ocean Atlantic also asserts that the trial judge mistakenly determined that Ocean Atlantic only arguably--rather than substantially--suffered greater prejudice than the Sellers as a result of its breach of contract. (Br. at 22-26.) We decline Ocean Atlantic’s none-too- subtle invitation to reweigh the facts and revisit the trial court’s findings. The proportionality-of-prejudice element of the materiality test requires the factfinder to compare the relative burdens that each side would suffer if the contract were terminated. McBride v. Pennant Supply Corp., 253 Ill.App.3d 363, 368 (5th Dist. 1993); Maywood Proviso, 252 Ill.App.3d at 169-70; see also Markhoff-Fitzgerald Assocs. v. Sable Corp., 1990 U.S. Dist. LEXIS 2875 -25 (N.D. Ill. 1990) (finding immateriality as matter of law; breach of option-to- purchase-insurance clause failed to defeat bargained-for objective and disparity of prejudice was significant). In the case before us, the district court found that Ocean Atlantic spent $1.7 million in fees and expenses related to the annexation, rezoning, planning, preliminary engineering, and marketing of the property between 1997 and 2001. On the other hand, because the Sellers testified that they would have placed the funds in a non-interest bearing account if they had been transferred one-day earlier, the trial judge concluded that the Sellers were not financially prejudiced by Ocean Atlantic’s delay in payment. In arguing that the district court’s findings are clearly erroneous, Ocean Atlantic assumes that the disparity of prejudice is calculated in terms of the absolute economic loss suffered by each party as a result of the breach, and that a $1.7 million difference is simply too much. We cannot agree. If we fully accepted Ocean Atlantic’s view, then idiosyncratic parties would have the scale tipped against them and would be gravely handicapped in their efforts to obtain the full, objective, bargained-for benefits of their contract. Although the Sellers suffered no consequential damages in this case, Argoudelis testified that they suffered at least nominal damages in the sense that we were robbed of the benefit of our bargain if the contract is not terminated on that date. That’s what we bargained for. Either we close or we terminate. The question of prejudice is one for the trier of fact, with each case resting upon its own merits. Arrow Master, 12 F.3d at 714; Sahadi, 706 F.2d at 196. We have repeatedly noted that appellate courts do not reweigh the evidence considered by the trier of fact. United States v. Suarez, 225 F.3d 777 (7th Cir. 2000); Merriweather v. Family Dollar Stores of Ind., 103 F.3d 576 (7th Cir. 1996); Lange, 31 F.3d at 539. Ocean Atlantic’s million-dollar loss was, admittedly, substantial. However, a reasonable factfinder, believing that promises conditioned upon timely performance should be kept when made, could have determined that the loss was not enough to warrant granting Ocean Atlantic’s motion for specific performance. See Kansas Bankers, 963 F.2d at 294 (parties who have bargained for strict compliance with specific time requirements . . . inherently are prejudiced by noncompliance with those deadlines); Dove v. Rose Acre Farms Inc., 434 N.E.2d 931 (Ind. App. Ct. 1982); see also Jacob & Youngs, 129 N.E. at 891 (suggesting that eccentric homeowner who insists on using Reading pipe should not be forced to accept Cohoes pipe that general contractor believes is just as good). We refuse to hold that the trial judge committed clear error. Anderson, 470 U.S. at 574. iii. Unreasonable, unfair advantage In this section, we reject Ocean Atlantic’s final argument that the