Opinion ID: 773741
Heading Depth: 2
Heading Rank: 3

Heading: The Classification of Damages

Text: 25 Sears asks this court to remit the damage award from $4.1 million to the amount of liquidated damages assessed by the government--$1,349,100. Sears contends that the amounts exceeding the liquidated damages assessment constitute consequential damages, which Sears maintains are not permitted under the BAA. Sears argues that the district court erred when it submitted an instruction to the jury permitting the jury to award damages for unusual loss if the jury found that special circumstances existed which caused unusual loss to the plaintiff. (Appellant's App. at 2002.) Sears contends that this instruction amounts to a submission of consequential damages directly contravening the terms of its contract with Inacom. 26 We first note that Sears failed to raise the precise consequential damages issue before the district court that it now argues on appeal to this court. Sears did object to the inclusion of the unusual loss instruction, but it did not state this particular ground in its objection. When questioned by the district court as to the basis for its objection, Sears's counsel stated that he did not believe that any evidence of an unusual loss existed. Sears's counsel did not apprise the district court of the contract's prohibition against consequential damages or any Illinois law on the issue. It is axiomatic that a litigant must articulate the specific bases for its objection in order to allow the district court an opportunity to fully assess the merits of the objection. See Dupre v. Fru-Con Eng'g Inc., 112 F.3d 329, 333-34 (8th Cir. 1997). Sears's failure to articulate in district court the precise objection that it now relies upon compels us to evaluate the argument under a plain error standard of review. See id. at 333. 27 Illinois courts define consequential damages as loss or injury that does not flow directly and immediately from a defendant's wrongful action but still occur as a result or consequence of that action. See Hartford Acc. & Indem. Co. v. Case Found. Co., 294 N.E.2d 7, 14 (Ill. App. Ct. 1973). Sears argues that only the liquidated damage assessment flowed directly from its breach of contract. Sears contends that Inacom's remaining damages are collateral consequences that do not directly ensue from Sears's wrongful actions. We disagree. 28 Sears materially breached its contract with the DOD by unilaterally discontinuing the D1075 model computers and directly caused Inacom's inability to supply the government with the contractually agreed upon computers. Unable to fulfill the DOD contract as written, Inacom still remained obligated to fulfill Sears's obligations under the DOD contract as best it could, requiring added costs in mitigation. Inacom incurred the remaining financial losses (those exceeding the liquidated damages assessment) during the process of attempting to satisfy its newly acquired contractual obligations under the agency agreement. The fact that Inacom suffered losses as a result of its inability to ship the contractually designated computers was a direct outcome of Sears's breach, not a consequential loss. Hence, we conclude that the jury's entire $4.1 million award represents direct rather than consequential damages as defined by Illinois law. Our conclusion renders null Sears's challenge to the propriety of the district court's jury instruction (which we note is an approved Illinois pattern instruction), and we find no plain error.