Court Opinion

ID: 9739471
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:15:42.141472+00
Date Added: 2024-06-11T07:24:12.400894
License: Public Domain

JUSTICE CARTER, concurring in part and dissenting in part: Because I agree with the majority’s affirmation as to finding defendant breached the contract, I partially concur with the majority opinion. However, because I disagree with the majority’s decision not to remand the cause for further proceedings at the trial court level with regard to the issue of damages, I must partially dissent. The issue of damages is important because the plaintiff Meyers failed to meet her burden of proof on the issue of damages. In his brief and at trial, defendant did object to the amended complaint for damages as a pleading matter and claimed the damages were speculative and not caused by the breach. Although I would agree with the majority that as a pleading matter the issue is waived, I would reach the issue of the proper calculation of damages in the interests of justice. To recover damages, the burden is on the plaintiff to establish damages resulting from defendant’s breach of contract. Oakleaf of Illinois v. Oakleaf & Associates, Inc., 173 Ill. App. 3d 637, 646-47, 527 N.E.2d 926, 933 (1988). The calculation of damages is a fundamental element in breach of contract cases. See Village of South Elgin v. Waste Management of Illinois, Inc., 348 Ill. App. 3d 929, 939, 810 N.E.2d 658, 669 (2004). When appropriate, an appellate court may remand a cause to the trial court for a determination of damages in the interests of justice. For example, when there had been a proper determination of liability in a breach of warranty of habitability case, but an improper calculation of damages, the reviewing court affirmed the trial court’s judgment on the question of liability, but remanded the cause to the trial court for a new trial on the damages issue only. Park v. Sohn, 89 Ill. 2d 453, 465, 433 N.E.2d 651, 657 (1982). In the instant case, there was error in calculating damages because the only evidence presented by the parties was on the cost of repair. As stated above, the burden is on the plaintiff to prove damages resulting from the defendant’s breach of contract. Oakleaf, 173 Ill. App. 3d at 646-47, 527 N.E.2d at 933. Not only must the plaintiff prove damages, however, but the plaintiff also has the burden to prove the correct measure of damages. See Ollivier v. Alden, 262 Ill. App. 3d 190, 634 N.E.2d 418 (1994); First National Bank of Elgin v. Dusold, 180 Ill. App. 3d 714, 536 N.E.2d 100 (1989). In Ollivier, a real-estate sales contract contained a provision whereby the seller guaranteed that the roof and basement were free of leaks and that all utilities were in good working order at the time of closing. Ollivier, 262 Ill. App. 3d at 193, 634 N.E.2d at 420. However, after the closing, it was discovered that leaks remained and had not been fixed. The plaintiffs filed a complaint alleging, among other things, breach of contract, but the trial court soon thereafter granted the defendant’s motion for summary judgment on the breach of contract count. Ollivier, 262 Ill. App. 3d at 193-94, 634 N.E.2d at 421. On review, the appellate court noted that the defendants clearly did breach the section of the contract guaranteeing no leaks, and that the plaintiffs were entitled to demonstrate what damages they suffered as a result of the breach, and that therefore, summary judgment on that matter was inappropriate. Ollivier, 262 Ill. App. 3d at 196, 634 N.E.2d at 422. In support of this holding, the court wrote: “In determining damages, it is fundamental that a monetary award should, to the extent possible, put the nonbreaching party in the position he would have been in had the contract been performed. [Citation.] As the party seeking to recover, the plaintiff bears the burden of proving that he or she sustained damages resulting from the breach and establishing both the correct measurement of damages and the final computation of damages based on that measurement. [Citations.] One measurement of damages often applied in breach of warranty cases is cost of repair. [Citations.] However, a plaintiff is not entitled to a windfall.” Ollivier, 262 Ill. App. 3d at 196, 634 N.E.2d at 422-23. The court thus reversed the trial court’s granting of summary judgment and held that the plaintiffs must “demonstrate on remand that they suffered damages directly linked to those deficiencies that arose within the first six months after closing and not beyond. They are not entitled to the cost of permanent repair or replacement, but rather the loss of value for the first six months of the closing.” Ollivier, 262 Ill. App. 3d at 197, 634 N.E.2d at 423. In First National Bank of Elgin v. Dusold, the trustee and owners of residential real estate brought an action for damages to the residence and various appliances and fixtures found therein, alleging breach of warranty by conveyor of interest in premises. Dusold, 180 Ill. App. 3d 714, 536 N.E.2d 100. The trial court awarded damages for plaintiff, entering judgment for plaintiff in the amount of $3,557.97. Dusold, 180 Ill. App. 3d at 716, 536 N.E.2d at 101. The trial court set forth the basis for its determination of damages: “ ‘The only evidence that is admissible in this sort of a proceeding is evidence by a competent expert to show the fair market value at the date of the occurrence, or what the useful life of any appliance might be, or the replacement value at the time of the occurrence. Without that expert testimony, I have to rely on the replacement cost as exhibited in the exhibits that have been presented by the complaining witness at this time; unless you are prepared to bring in an expert today to tell me what the fair market value, having looked at it, of that particular appliance is, or what the replacement value of that particular appliance is based on date of acquisition and date of replacement.’ ” Dusold, 180 Ill. App. 3d at 717, 536 N.E.2d at 102. On review, the appellate court noted that the burden of proof regarding the correct measure of damages was on the plaintiff, not the defendant, as placed by the trial court. Dusold, 180 Ill. App. 3d at 718, 536 N.E.2d at 103. At trial, plaintiff replaced all the kitchen appliances claimed to be defective with new appliances, but no evidence was ever admitted as to whether any of the appliances were capable of repair or the cost of repairs. Dusold, 180 Ill. App. 3d at 718, 536 N.E.2d at 103. The court noted that even if the trial judge accepted the claim that the appliances were not repairable, lack of testimony concerning the condition and fair market value of the property at the time of delivery is fatal to any action to recover for its loss. Dusold, 180 Ill. App. 3d at 719, 536 N.E.2d at 193. The court found that to award the plaintiff the cost of new items as replacement cost was to award the plaintiff a windfall and put plaintiff in a much better position than if the contract had been performed and the appliances had been in working order. Dusold, 180 Ill. App. 3d at 719, 536 N.E.2d at 193. Consequently, the appellate court substantially reduced the portion of the judgment by the cost for the new appliances. Dusold, 180 Ill. App. 3d at 719, 536 N.E.2d at 193. Further, the appellate court reversed the trial court’s award of $839 for miscellaneous repairs as not being supported by the evidence, noting that it was the plaintiffs’ burden to establish a reasonable basis for computation of the damages. Dusold, 180 Ill. App. 3d at 719-20, 536 N.E.2d at 103-04. In Witty v. C. Casey Homes, Inc., 102 Ill. App. 3d 619, 430 N.E.2d 191 (1981), the first issue presented was the proper measure of damages for a breach of a building contract. Witty, 102 Ill. App. 3d at 623, 430 N.E.2d at 194. The trial court had found that there was a breach of contract; however the trial court entered judgment in the defendant’s favor because the plaintiff’s proposed measure of damages, cost of repair, was impractical and plaintiff had introduced no evidence that the defective brick had diminished the value of the home. Witty, 102 Ill. App. 3d at 623-24, 430 N.E.2d at 194-95. In that case the cost of repair and replacement of defective material almost approximated the original contract price. Witty, 102 Ill. App. 3d at 623, 430 N.E.2d at 194. Therefore, the trial court indicated that diminution in value was the proper measure of damages, not cost of repair. The plaintiff had failed to introduce any evidence of diminished value. Therefore, the trial court had entered judgment, despite the breach, for the defendant. That judgment was affirmed by the appellate court. Witty, 102 Ill. App. 3d at 624, 430 N.E.2d at 195. In other words, the plaintiff failed to meet its burden of proof. Likewise in the instant case, plaintiff introduced no evidence on diminution in value in a case where the trial court’s award of damages was over five times the original contract price. As evinced from the cases noted above, the burden is on the plaintiff to prove damages and the proper measure of damages. In a construction or building contract, when there has been a breach of the contract based on defective workmanship, the general measure of damages is the cost of repairing the defects and/or completing the project. Arch of Illinois, Inc. v. S.K. George Painting Contractors, Inc., 288 Ill. App. 3d 1080, 1082, 681 N.E.2d 1049, 1050 (1997). However, where the repairs would (1) entail substantial tearing down of the builder’s work or unreasonable destruction of the builder’s work and/or (2) the costs are unreasonably disproportionate to the benefit of the purchaser (of which the price of the contract is a part), the measure of damages is determined by the diminution in value of the property as a result of the defects. Arch of Illinois, 288 Ill. App. 3d at 1083, 681 N.E.2d at 1051. See Castricone v. Michaud, 223 Ill. App. 3d 138, 583 N.E.2d 1184 (1991). Diminution in value is not the proper measure of damages in cases where there has been willful violation of the contract. Kangas v. Trust, 110 Ill. App. 3d 876, 441 N.E.2d 1271 (1982). In the instant case, there has been no willful violation of the contract. The foregoing rule has been recognized and explained in the Restatement (Second) of Contracts §348 (1981) and cited by Illinois courts. See Mayfield v. Swafford, 106 Ill. App. 3d 610, 435 N.E.2d 953 (1981); Village of Pawnee v. Azzarelli Construction Co., 183 Ill. App. 3d 998, 539 N.E.2d 895 (1989). Thus, the proper measure of damages in the instant case is the remedial cost to bring the structure into compliance with the contract or the difference in value of the structure as constructed and its value had it been constructed without defects, whichever is less, if the tearing down is unreasonably disproportionate to the contract price. As suggested by Justice Cardozo, an owner is entitled to the money which would permit him to have a contract fully performed in a workmanlike manner unless the cost of those repairs is grossly or unfairly out of proportion to the good attained. Jacobs & Youngs, Inc. v. Kent, 230 N.Y. 239, 244, 129 N.E. 889, 891 (1921). The record reveals that to prove damages plaintiff cited the cost of repair, that being the cost of removing the old system and installing the new one. In calculating how much to award plaintiff, the trial court was presented only with the cost of repair. The evidence established that the cost of repairs proof was not speculative and was a foreseeable result of the breach. However, the evidence indicated that the repair would entail substantial tearing down of defendant’s work. If that tearing down is unreasonably disproportionate to the contract price, the proper measure of damages would be determined by the diminution in value of the outbuilding resulting from the defects. Arch of Illinois, 288 Ill. App. 3d at 1083, 681 N.E.2d at 1051. The contract price was for $6,000, while the damages award was for $33,150. These facts raise the question whether those costs are far beyond what defendant could have contemplated at the time of the contract’s making and whether the cost to correct the defects is unreasonably disproportionate in relation to the benefit to the purchaser or unfairly out of proportion to the good to be attained. See Arch of Illinois, 288 Ill. App. 3d at 1083, 681 N.E.2d at 1051. The damages issue should be left to the fact finder to decide under all the circumstances. If the cost of repair is unreasonably disproportionate, the proper measure of damages would be the difference in value between the building had the work been properly performed under the contract and the value of the building as it stands now the way the work was actually performed. Arch of Illinois, 288 Ill. App. 3d at 1083, 681 N.E.2d at 1051. I realize that no objection was made at trial to the method used to calculate damages, nor was the issue raised directly on appeal by either party. However, the issue of waiver is a limitation on the parties and not on the court, which has the responsibility to reach a just decision, and a reviewing court may, in the exercise of its responsibility to reach a just result, ignore consideration of waiver and decide a case on grounds not properly raised or not raised at all by the parties. Occidental Chemical Co. v. Agri Profit Systems, Inc., 37 Ill. App. 3d 599, 603, 346 N.E.2d 482, 485 (1975); Bloome v. Wiseman, Shaikewitz, McGivern, Wahl, Flavin & Hesi, P.C., 279 Ill. App. 3d 469, 483, 664 N.E.2d 1125, 1134 (1996); see Hux v. Raben, 38 Ill. 2d 223, 225, 230 N.E.2d 831, 832 (1967); see also Champaign National Bank v. Landers Seed Co., 194 Ill. App. 3d 1019, 551 N.E.2d 1122 (1990); City of Wyoming v. Illinois Liquor Control Comm’n, 48 Ill. App. 3d 404, 362 N.E.2d 1080 (1977). The appellate court may review any error of law affecting the judgment or order appealed from (134 Ill. 2d R. 366(b)(1)(i)), and upon review make any judgment or order, including remand, that ought to have been given or made. 134 Ill. 2d R. 366(a)(5). As this court stated in City of Wyoming v. Illinois Liquor Control Comm’n, 48 Ill. App. 3d 404, 362 N.E.2d 1080 (1977), “a reviewing court may, in the exercise of its responsibility for a just result, ignore consideration of waiver and decide a case on grounds not properly raised or not raised at all by the parties.” City of Wyoming, 48 Ill. App. 3d at 407-08, 362 N.E.2d at 1083. (The court did note in City of Wyoming that the issue, although not raised at the circuit court level or in the appellant’s brief, was the issue before the Liquor Commission and was raised in a reply brief.) Contrary to the majority’s discussion on Hux v. Roben, I feel Hux endorses my position on ignoring waiver, when to do so would be in the best interests of justice and would maintain a sound and uniform body of precedent. Hux, 38 Ill. 2d at 225, 230 N.E.2d at 832. I would therefore remand this matter to the trial court to determine based on all the circumstances the issue of whether or not repair cost is unreasonably disproportionate to the contract price, and if it is, then whether the diminution in value of the structure is the proper measure of damages. Contrary to the majority’s assertion that I have decided for the trial court which measure of damages should apply, I would merely remand for the trial court to determine, in a hearing, what is the proper measure of damages after both sides have presented proof on the matter. In this case, to do otherwise rewards a plaintiff who failed to meet her burden of proof and ignores the proper legal standard for contract measure of damages. Thus, I would reverse the damages award of the trial court and remand for further proceedings on the measure of damages. Rendering the decision in this manner, I believe, would do justice to the parties and allow both sides on remand to present appropriate proofs and arguments to the trial court. As the majority does not do this, I must respectfully dissent.