No. 2--95--0877
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
_________________________________________________________________
AARDVARK ART, INC., ) Appeal from the Circuit Court
) of Du Page County.
Plaintiff-Appellant, )
) No. 91--CH--1130
v. )
)
LEHIGH/STECK-WARLICK, INC., ) Honorable
) Richard A. Lucas,
Defendant-Appellee. ) Judge, Presiding.
_________________________________________________________________
JUSTICE HUTCHINSON delivered the opinion of the court:
This cause was commenced by the filing of a suit by plaintiff,
Aardvark Art, Inc., against defendant, Lehigh/Steck-Warlick, Inc.,
for breach of contract. Following a first trial, the court entered
judgment on a jury verdict in favor of plaintiff and against
defendant in the sum of $1,695,833. The first trial court
submitted only one of plaintiff's several damages claims to the
jury, a claim for the "diminished value" of plaintiff's business.
The first trial court directed a verdict against plaintiff on its
other damages claim for "lost profits." Plaintiff did not appeal
the directed verdict on its "lost profits" claim. Defendant
appealed from the "diminished value" damages judgment.
On the first appeal, this court reversed and remanded the
cause for a new trial on the issue of damages only, holding that
(a) the trial court erred in failing to instruct the jury to
disregard the evidence of lost profits in view of the court's
directed verdict against plaintiff on its lost profits claim; and
(b) the jury's verdict was tainted by evidence in support of that
claim. Aardvark Art, Inc. v. Lehigh/Steck-Warlick, Inc., 212 Ill.
App. 3d 492, 495-96 (1991). At the conclusion of the damages
trial on remand, defendant offered, and the court allowed over
objection, a verdict form allowing the jury to find "against"
plaintiff and "for" defendant. The jury returned a verdict of no
damages on plaintiff's diminished value claim. This second appeal
follows.
On this second appeal, plaintiff contends: (1) the trial
court erred (A) in failing to follow this court's mandate when it
improperly gave the jury grounds to return a finding that did not
determine damages alone, (B) in precluding plaintiff from
introducing lost profits damages testimony, and (C) in permitting
defendant's experts to violate Supreme Court Rule 220 (134 Ill. 2d
R. 220) and give opinions at trial beyond the scope of their
opinions disclosed before trial; (2) the jury's verdict is contrary
to the manifest weight of the evidence; and (3) plaintiff's case
was prejudiced by the erroneous admission of irrelevant evidence
and by defense counsel's improper conduct. We reverse and we
remand with directions.
Plaintiff first argues that the trial court erred in failing
to follow this court's mandate when it improperly gave the jury an
opportunity to return a finding that did not determine damages
alone.
"The correctness of the trial court's action on remand is
to be determined from the appellate court's mandate, as
opposed to the appellate court opinion. [Citations.]
However, if the direction is to proceed in conformity with the
opinion, then, of course, the content of the opinion is
significant. [Citations.] In construing the language,
matters which are implied may be considered embraced by the
mandate. [Citation.] The trial court may only do those
things directed in the mandate. [Citations.] The trial court
has no authority to act beyond the dictates of the mandate.
Thus, the controlling question in the appeal from the remand
in this case is whether the trial court complied with the
mandate." PSL Realty Co. v. Granite Investment Co., 86 Ill.
2d 291, 308-09 (1981).
A new trial dealing solely with the question of damages
"is appropriate where (1) the jury's verdict on the
question of liability is amply supported by the evidence; (2)
the questions of damages and liability are so separate and
distinct that a trial limited to the question of damages is
not unfair to the defendant; and (3) the record suggests
neither that the jury reached a compromise verdict nor that,
in some identifiable manner, the error which resulted in the
jury's awarding inadequate damages also affected its verdict
on the question of liability." Raithel v. Dustcutter, Inc.,
261 Ill. App. 3d 904, 906-07 (1994).
With regard to a contract action, it is well established:
"To meet his burden in a breach of contract action, the
plaintiff must establish an offer and acceptance,
consideration, definite and certain terms of the contract,
plaintiff's performance of all required contractual
conditions, the defendant's breach of the terms of the
contract, and damages resulting from the breach." Mannion v.
Stallings & Co., 204 Ill. App. 3d 179, 186 (1990).
With regard to jury instructions,
"[i]n general, the criterion for determining the adequacy
of jury instructions is whether, taken as a whole and in
series, they fairly, fully, and comprehensively apprised the
jury as to applicable legal principles [citation], and a jury
instruction should not assume as true any version of disputed
facts which the jury should be expected to resolve
[Citation]." Pietka v. Chelco Corp., 107 Ill. App. 3d 544,
554 (1982).
Initially, defendant urges that plaintiff has waived this jury
instruction issue. It is arguable that plaintiff did not object to
defendant's proposed verdict form at the jury instruction
conference. Therefore, plaintiff would be barred from raising any
objection here. See, e.g., 155 Ill. 2d R. 366(b)(2)(iii); Brown v.
Decatur Memorial Hospital, 83 Ill. 2d 344, 350 (1980); Village of
Worth v. Hahn, 206 Ill. App. 3d 987, 991-92 (1990). However, after
a careful review of the record, we find that plaintiff did dispute
defendant's proposed verdict form by stating, "we don't think they
are entitled to a verdict in favor of Lehigh." Furthermore, with
respect to plaintiff's alleged acquiescence to defendant's proposed
verdict form, it should be noted that (1) plaintiff's alleged
acquiescence occurred only after the trial court ruled, "We'll give
it to them"; and (2) plaintiff's alleged acquiescence may have
resulted from a fear that had they not acquiesced, they might not
have been able to submit their own verdict form. In either case,
we determine that this argument was not waived. Therefore, we will
address the issue of whether the trial court complied with the
mandate.
The mandate states that the judgment is reversed and the cause
remanded "for a new trial on the issue of damages only." Aardvark
Art, 212 Ill. App. 3d at 496. By submitting a verdict form which
allowed the jury to find "against" plaintiff and "for" defendant,
the trial court allowed the jury to address the issue of liability.
We recognize that the same result could have been reached without
the submission of defendant's verdict form. In other words, using
plaintiff's verdict form, the jury could have come back with a
damages award of $0. However, this is not the issue. The fact
remains that defendant's submitted verdict form went beyond the
scope of the mandate by indicating that the previously adjudicated
issue of liability was somehow in question. Therefore, we must
conclude that the trial court erred when it improperly gave the
jury an opportunity to return a verdict that did not determine
damages alone.
As a result of the foregoing analysis, we find it unnecessary
to reach the issue of whether the jury's verdict was contrary to
the manifest weight of the evidence. In fact, our order could end
here. However, we will address plaintiff's remaining arguments
independent of our earlier determination in an effort to assist the
parties on this second remand.
Next, plaintiff contends the trial court erred in precluding
plaintiff from introducing lost profits damages testimony.
Specifically, plaintiff argues that (1) since the issue of lost
profits testimony was not decided by the prior appeal taken by
defendant, the "law of the case" doctrine is inapplicable; and (2)
the trial court further erred in allowing defendant to introduce
lost profits testimony, while precluding plaintiff from doing so.
Under the law of the case doctrine,
"a legal decision made at one stage of litigation,
unchallenged in a subsequent appeal when the opportunity to do
so existed, becomes the law of the case for future stages of
the same litigation, and the parties are deemed to have waived
the right to challenge that decision at a later time.
[Citations.] The doctrine encompasses a court's explicit
decisions, as well as those issues decided by necessary
implication." Williamsburg Wax Museum, Inc. v. Historic
Figures, Inc., 810 F.2d 243, 250 (D.C. Cir. 1987).
It is well established that "[o]n appellate court reversal and
remand, a trial court is bound by the appellate court's
determination of all questions decided and may act only in
conformance with the appellate court's judgment." Salkeld v. V.R.
Business Brokers, Inc., 231 Ill. App. 3d 441, 445 (1992). "The law
of the case doctrine provides that a question of law decided on a
previous appeal is binding on the trial court on remand as well as
the appellate court on a subsequent appeal." Martin v. Federal
Life Insurance Co., 268 Ill. App. 3d 698, 701 (1994). However,
"invoking the law of the case might still not preclude
reconsideration of an earlier judge's order if the facts before the
court changed or error or injustice were manifest." People v.
Williams, 138 Ill. 2d 377, 392 (1990).
Furthermore, "[t]he doctrine of res judicata provides that 'a
final judgment rendered by a court of competent jurisdiction on the
merits is conclusive as to the rights of the parties and their
privies, and, as to them, constitutes an absolute bar to a
subsequent action involving the same claim, demand or cause of
action.' " (Emphasis in original.) Housing Authority v. Young
Men's Christian Ass'n, 101 Ill. 2d 246, 251 (1984), quoting People
v. Kidd, 398 Ill. 405, 408 (1947).
"The rule is that no question which was raised or could have
been raised in a prior appeal on the merits can be urged on
subsequent appeal and those not raised are considered waived."
Kazubowski v. Kazubowski, 45 Ill. 2d 405, 413 (1970).
Nevertheless, "findings of the trial court adverse to the appellee
do not require the appellee's cross-appeal if the judgment of the
trial court was not at least in part against the appellee."
Anderson v. Sutter, 119 Ill. App. 3d 1070, 1077 (1983).
The crucial issue in terms of our review is whether the first
trial court's directed verdict on plaintiff's lost profits claim
amounted to (1) an evidentiary ruling or (2) a dismissal as a
matter of law, and, in effect, an entry of judgment on that claim.
We determine that the trial court's directed verdict amounted to an
evidentiary ruling and did not become the law of the case. This
conclusion is supported by the fact that the trial court's directed
verdict went to the sufficiency of the evidence. Specifically, the
trial court ruled that "plaintiff has failed to isolate the basis
for lost profits through the sole evidence of its chief executive
officer and I rule that it's not sufficient." It cannot be implied
from this ruling that no competent witness or evidence is available
to establish the basis for a lost profits claim.
In addition, the appellate court chose to reverse and remand
"for a new trial on the issue of damages only." Aardvark Art, 212
Ill. App. 3d at 496. It is without question that lost profits can
be considered as part of a damages award. Had the appellate court
wished to preclude lost profits testimony from consideration on
remand, it could have easily done so. Nevertheless, the mandate
gave no such restriction on damages testimony during retrial.
Since we have determined that the trial court's directed
verdict was an evidentiary ruling, it follows that plaintiff was
not obligated to cross-appeal this issue in order to preserve it
for review. Therefore, we determine that the trial court erred in
precluding plaintiff from introducing lost profits damages
testimony. We also determine it was fundamentally unfair that
defendant's experts were allowed to give opinions as to lost
profits whereas plaintiff was not allowed to place lost profits
issues in contention. We conclude that plaintiff was substantially
prejudiced and the outcome of the trial was affected by the trial
court's ruling precluding plaintiff from introducing lost profits
damages testimony. As a result, plaintiff is entitled to a
reversal. Cairns v. Hansen, 170 Ill. App. 3d 505, 511 (1988).
Next, plaintiff argues that the trial court erred in
permitting defendant's experts to violate Supreme Court Rule 220
and give opinions at trial beyond the scope of their opinions
disclosed before trial. Plaintiff argues the purpose behind Rule
220 was frustrated and the rule itself was violated when (1) one of
defendant's expert witnesses, Frank Bernatowicz, gave testimony on
the separate dimunition of value element of damages when his
disclosed opinions before trial all went solely to lost profits;
(2) Bernatowicz offered two widely different damages figures before
trial, then testified at trial completely inconsistently with those
two opinions by stating he believed plaintiff did not suffer any
damages; (3) Jane Donovan was allowed to give expert opinions for
defendant when she had never been disclosed as an expert prior to
trial; and (4) defendant's additional expert (Carr) based his
opinions on information contained in plaintiff's 1987 Small
Business Administration (SBA) loan documentation when the basis for
that opinion had not been disclosed before trial.
Supreme Court Rule 220 states, in relevant part:
"(d) Scope of testimony. To the extent that the facts
known or opinions held by an expert have been developed in
discovery proceedings through interrogatories, depositions or
requests to produce, his direct testimony at trial may not be
inconsistent with or go beyond the fair scope of the facts
known or opinions disclosed in such discovery proceedings."
134 Ill 2d R. 220(d) (repealed eff. January 1, 1996).
Furthermore,
" '[t]he purpose of the rule is to facilitate trial
preparation by eliminating last-minute disclosure of expert
witnesses. [Citations.] The rule was designed to eliminate
this evil by establishing a uniform, but not inflexible,
framework regarding the timely revelation of the identity of
expert witnesses and the subject matter of their testimony.
[Citations.] The rule requires that parties act in good faith
to ascertain the identity of expert witnesses they reasonably
anticipate using.' " Wehde v. Regional Transportation
Authority, 237 Ill. App. 3d 664, 685 (1992), quoting Vallejo
v. Mercado, 220 Ill. App. 3d 1, 7-8 (1991).
Occurrence witnesses testify "not because they were retained
in the expectation they might develop and give a particular opinion
on a disputed issue at trial, but because they witnessed or
participated in the transactions or events that are part of the
subject matter of the litigation." Tzystuck v. Chicago Transit
Authority, 124 Ill. 2d 226, 234-35 (1988). Finally, it should be
remembered that it is within the jury's discretion to resolve
conflicts in the evidence and to make findings regarding the
credibility of the witnesses and the weight to be given to their
testimony. See Maple v. Gustafson, 151 Ill. 2d 445, 452 (1992).
A review of the evidence reveals the interconnected nature
between lost profits and a diminished value claim. Therefore, it
should reasonably be expected that any testimony regarding one may
necessarily involve the discussion of the other. Furthermore,
resolving inconsistencies in Bernatowicz's testimony was within the
province of the jury. With respect to Donovan and Carr, we
determine that the trial court did not err in admitting their
testimony. After a careful review of the record and the case law,
we determine that the trial court did not err, nor did it abuse its
discretion when it allowed defendant's expert testimony. Even
assuming the trial court erred, we determine that such error would
be harmless.
Last, plaintiff argues that its case was prejudiced by the
erroneous admission of irrelevant evidence and by defense counsel's
improper conduct. Plaintiff contends (1) the trial court
improperly allowed defendant to cross-examine plaintiff's president
and chief executive officer (McGlothlin) regarding his application
for an SBA loan in 1987; (2) despite a court order prohibiting
witnesses from remaining in the courtroom to hear testimony during
trial, defendant nevertheless supplied its own witnesses with
transcripts of the continuing trial testimony before they gave
their testimony; (3) defense counsel improperly spoke with one of
plaintiff's witnesses about her testimony in the hallway outside
the courtroom; and (4) the trial court erred in failing to grant
plaintiff's ninth motion in limine to exclude evidence that
plaintiff failed to mitigate damages and in denying plaintiff's
motion for a directed verdict on the issue of mitigation.
"The objective of the reviewing court is not to determine
whether the record is totally free of error but whether any error
occurred which substantially prejudiced a party and affected the
outcome below." Healy v. Bearco Management, Inc., 216 Ill. App. 3d
945, 956 (1991). "A new trial is necessary when the cumulative
effect of trial errors so deprives a party of a fair trial that the
verdict might have been affected." Netto v. Goldenberg, 266 Ill.
App. 3d 174, 184 (1994). "[E]ven if evidence is relevant it may
not be admissible if its probative value is substantially
outweighed by the danger of unfair prejudice; it is a matter for
the sound discretion of the trial court." Tellone v. North Shore
Dodge, Inc., 271 Ill. App. 3d 885, 888 (1995).
We determine that it was reasonable for the trial court to
allow defense counsel to cross-examine McGlothlin regarding his SBA
loan application in order to impeach his testimony that defendant's
breach in essence destroyed plaintiff's company. With regard to
defense counsel supplying defendant's own witnesses with
transcripts of trial testimony before giving their testimony, there
is evidence in the record that McGlothlin's new diminished value
damages figure was not disclosed to defense counsel until
McGlothlin's testimony at the second trial. As a result, it was
not unreasonable for defense counsel to make defendant's expert
witnesses aware of this new information at trial. It might have
been prudent, however, to request relief from the trial court
before engaging in the conduct.
Furthermore, the record does not lend itself to the conclusion
that defense counsel's conversation with one of plaintiff's
witnesses (Bouchard) was improper in the respect that it affected
her testimony or that it substantially prejudiced plaintiff.
Finally, with regard to the issue of mitigation, we determine that
there was sufficient evidence to create a triable issue for the
jury. Therefore, the trial court did not abuse its discretion when
it denied plaintiff's motion for a directed verdict on the issue of
mitigation and when it failed to grant plaintiff's motion in limine
to exclude evidence that plaintiff failed to mitigate damages.
When viewing the record as a whole, we conclude that any error
which may have occurred did not substantially prejudice plaintiff
or affect the outcome below.
The history and complexity of this matter mandate additional
direction concerning the jury instructions. A concise, compact
instruction might read as follows:
The issue of liability having already been adjudicated,we, the
jury, find for AARDVARK and against LEHIGH inthe amount of
$__________.
However, this court's first mandate might better be served by a
more expansive and defining instruction such as:
The issue of liability has already been adjudicated in favor
of AARDVARK. Whether any elements of damages have been proved
is for you to determine. You must fix the amount of money, if
any, which reasonably and fairly compensates AARDVARK for any
of the following elements of damages proved by the evidence
to have resulted from the breach of contract by LEHIGH:
1. The value of earnings and profits lost and present
cash value of earnings and profits reasonably certain to be
lost in the future in the amountof $___________; and
2. The difference between the fair market value
immediately before the occurrence and its fair market value
after the occurrence in the amount of $__________.
We, the jury, find for AARDVARK and against LEHIGH in the
total amount of $_____________.
For the foregoing reasons, we reverse the judgment of the
circuit court of Du Page County, and we remand the cause for a new
trial with instructions consistent with this opinion.
Reversed and remanded with directions.
McLAREN, P.J., and GEIGER, J., concur.