Opinion ID: 608115
Heading Depth: 2
Heading Rank: 2

Heading: New trial in federal district court

Text: 18 Upon removal from the state court the district court ordered a new trial, citing several errors in the state trial. Lester now argues that the district court erred and requests that the state court verdict be reinstated. Ordinarily we review the trial court's decision to grant a new trial under the deferential abuse of discretion standard. See Forrester v. White, 846 F.2d 29, 31 (7th Cir.1988). Lester argues that since the federal district judge did not preside over the first trial, deferential review of the district court's ruling should be subject to closer scrutiny. See Finn v. American Fire & Casualty Co., 207 F.2d 113, 116 (5th Cir.1953), cert. denied, 347 U.S. 912, 74 S.Ct. 476, 98 L.Ed. 1069 (1954). In addition, Lester contends the federal district court erred as a matter of law. 19 Under either standard we conclude that the district court did not err when it granted the RTC's motion for a new trial. At the first trial, Lester was permitted to introduce expert testimony on lost profits for Phases II and III of the project. Illinois law does not require lost profits to be proven with absolute certainty, but they must be established with a reasonable degree of certainty. See Midland Hotel Corp. v. Reuben H. Donnelley Corp., 118 Ill.2d 306, 113 Ill.Dec. 252, 257, 515 N.E.2d 61, 66 (1987); Doctors Sellke & Conlon, Ltd. v. Twin Oaks Realty, Inc., 143 Ill.App.3d 168, 96 Ill.Dec. 633, 638, 491 N.E.2d 912, 917 (1986). Here, it is undisputed that the infrastructure on Phase I of the Zurich Village Mall was never completed and that Harper did not post a completion bond nor place sufficient funds on deposit to insure completion of the infrastructure. We cannot therefore say that the district court erred in concluding that lost profits evidence from Phases II and III of the venture was speculative, particularly where Arlington's commitment letter at issue pertained only to Phase I. See Midland Hotel, 113 Ill.Dec. at 257-58, 515 N.E.2d at 66-67. Any ensuing loss of profit from Phases II and III were not foreseeable by reason of Arlington's refusal to fund the loan; rather, the evidence indicates that Harper's inability to complete the infrastructure was the sole cause of the project's failure. 20 In addition, at the first trial, Lester was permitted to press a tort claim for intentional breach of contract, a cause of action that does not exist under Illinois law. See Morrow v. L.A. Goldschmidt Assocs., Inc., 112 Ill.2d 87, 96 Ill.Dec. 939, 941-42, 492 N.E.2d 181, 183-84 (1986). Although the state judge dismissed this count before the case was submitted to the jury, the jury nevertheless heard evidence of agreements between Arlington and Harper pertaining to other Harper projects (Woodhills Bay Colony and Mohawk Point). Although this evidence was irrelevant to the contract claim in this case (which involved only the Zurich Town Mall project), Lester was permitted to introduce this evidence to support the tort claim, that is, to show Arlington's alleged continuing bad faith in dealing with Harper. Moreover, the state judge improperly allowed Harper individually to press a $20 million fraud claim against Arlington, a claim which belonged only to the bankruptcy estate. See Henderson v. Binkley Coal Co., 74 F.2d 567, 569 (7th Cir.1935). Given these errors in the first trial, we agree with the district court that a new trial was properly ordered.