In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17‐2847
ENTERTAINMENT USA, INC.,
Plaintiff‐Appellant,
v.
MOOREHEAD COMMUNICATIONS, INC.,
Defendant‐Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Indiana, Fort Wayne Division.
No. 12‐CV‐116 — Robert L. Miller, Jr., Judge.
____________________
ARGUED FEBRUARY 21, 2018 — DECIDED JULY 26, 2018
____________________
Before RIPPLE, KANNE, and HAMILTON, Circuit Judges.
HAMILTON, Circuit Judge. In 2006, plaintiff Entertainment
USA sold cellular telephones and service contracts in central
Pennsylvania through a network of retail dealers. Defendant
Moorehead Communications, an Indiana company, sought to
break into that geographic market by offering dealers the
chance to sell Verizon products and services. Without aid of
counsel, the two companies signed a two‐page “referral
agreement” connecting Moorehead with a number of
2 No. 17‐2847
Entertainment USA’s dealers. The agreement promised
Entertainment USA a “referral fee” for every Verizon
activation or upgrade that resulted.
Six years later, this referral agreement became the subject
of litigation in the Northern District of Indiana. Entertainment
USA alleged that Moorehead breached the agreement by
discontinuing the referral payments. After a bench trial, the
district court agreed that Moorehead had breached, but in
much narrower ways than Entertainment USA had claimed.
The court also found, however, that Entertainment USA had
failed to prove the amount of its damages with reasonable
certainty. The court therefore awarded no damages to
Entertainment USA. Entertainment USA, Inc. v. Moorehead
Communications, Inc., 2017 WL 3432319 (N.D. Ind. Aug. 9,
2017). We affirm.
I. Factual Background and Procedural History
A. The Referral Agreement
This case is about selling cell phones. More specifically, it
is about who sells cell phones. When a customer walks into a
cellular telephone retail store, depending on the store, the
customer may have a choice of wireless carrier service
contracts with different companies (e.g., AT&T, T‐Mobile,
etc.), or the store may offer only one option (e.g., only Verizon
or only Sprint). Whether the customer has a choice of carrier
or not depends on the licensing status of the store owner and
its wholesaler, and the licensing policies of the various
carriers.
In 2006, plaintiff Entertainment USA—doing business as
One Wireless World or “OWW,” as the parties’ documents
sometimes called it—operated as a cell phone wholesaler and
No. 17‐2847 3
licensor. It had a network of affiliated dealers and retail stores
in central Pennsylvania.1 At that time, the stores affiliated
with Entertainment USA offered their customers service
contracts through several different carriers, including AT&T,
Sprint, and T‐Mobile. Entertainment USA did not have a
relationship with Verizon, however, so its stores could not
offer customers Verizon service. Around this time, defendant
Moorehead Communications, a Verizon master agent based
in Indiana, sought to expand its presence in central
Pennsylvania by signing up dealers and their stores with
Verizon.
Entertainment USA had the kind of stores Moorehead
sought to do business with, but Entertainment USA would
probably lose out on some revenue from offering service
through other carriers if its stores added Verizon to its lineup.
So the parties made a deal: the referral agreement whereby
Entertainment USA agreed to refer some of its stores to
Moorehead for consideration as potential new Verizon
locations. In return, Moorehead agreed to pay Entertainment
USA a “referral bonus” for each new Verizon activation that
eventually resulted from this arrangement, whether or not the
referred stores continued to offer service with other carriers.
Representatives for both sides worked together to draft a two‐
page contract formalizing this arrangement in January 2006,
though neither side engaged counsel. The relevant portions of
the referral agreement are as follows:
1 The trade name One Wireless World was used by several related
wireless wholesaling companies run at the time by brothers Chau and
Chinh Nguyen. To minimize confusion, we use the plaintiff entity’s name,
Entertainment USA, to refer to all of the related entities on that side of the
disputed referral agreement.
4 No. 17‐2847
The proposed referral fee is designed to
compensate OWW for location handoffs and
offset loss incurred from adding another
carrier to their Branded Store’s existing lineup.
This will also include any locations, other than
the current list of Branded stores that are
approved through Verizon and signed up
under Moorehead Communications in the
future that are referred directly to us by the
OWW group.
Moorehead is proposing the following:
‐ For all handoffs / referrals from OWW,
dating back to Jan 1, 2006 and any locations
that are approved following that date as a
direct result of an OWW referral, we will
pay a referral bonus in the amount
described below.
Monthly Activations for the referred group
*** 20$ per activation (New Activations Only)
to assist with ramp up period which will
remain in effect 6 months from the date this
agreement is signed by both parties. After
which, referral bonus will be adjusted to the
appropriate tier. (See Below)
50‐150 per month ‐ 10$ referral bonus per
activation
151‐250 per month – 15$ referral bonus per
activation
251‐350 per month – 20$ referral bonus per
activation
No. 17‐2847 5
351‐450 per month – 25$ referral bonus per
activation
451‐500 per month – 30$ referral bonus per
activation
501 per month and higher – 35$ referral bonus
per activation
*There will be a flat fee of 10$ per 2 year
upgrade in addition to items listed above.
Dkt. 1 at 7.
From early 2006 until sometime in 2008, Moorehead paid
referral fees on a regular basis to Entertainment USA under
this agreement. Though the agreement did not specifically
define the term “activation,” Moorehead paid referral fees for
“two‐year phone activations (new lines of service) and two‐
year upgrades”—the kinds of phone sales that entailed new
two‐year service contracts with Verizon. Though it also did
not define “location,” the agreement did include an initial list
of referred locations, with the name of each store, its
owner/operator, and its address or city. After Sprint required
exclusivity from all of its wholesalers and dealers in late 2006,
Entertainment USA referred several more stores to
Moorehead—the stores that did not wish to become exclusive
Sprint retailers. From 2006 to 2008, Moorehead paid
$70,979.50 in referral fees with respect to six referred stores
that sold Verizon products.
In 2008, Moorehead stopped paying referral fees to
Entertainment USA, and around that time, Entertainment
USA’s “OWW group” of stores stopped selling Sprint
products entirely. Chau Nguyen then started a new company
and proposed a new referral agreement to Moorehead.
6 No. 17‐2847
Moorehead declined. From 2009 to 2011, Chau Nguyen sent
several more requests for commission reports and payments
to Moorehead, to no avail.
B. The Lawsuit
In April 2012, about four years after the payments
stopped, Entertainment USA filed its complaint alleging a
breach of contract, requesting an equitable accounting, and
claiming unjust enrichment. Since “Moorehead has and
continues to enjoy the fruits of” the plaintiff’s referrals, the
complaint alleged, Moorehead should have continued to pay
referral fees under the contract. Moorehead agreed in part, as
shown by two additional payments it made to Entertainment
USA after the suit was filed, totaling $52,273.24. After
tendering those additional payments, though, Moorehead
answered the complaint and asserted that it had paid
Entertainment USA in full. Given that the parties were
citizens of different states litigating an amount in controversy
estimated in the millions, federal jurisdiction was secure. See
28 U.S.C. § 1332(a). The parties agreed that Indiana contract
law applied.
The parties filed cross‐motions for summary judgment in
2014. Entertainment USA, Inc. v. Moorehead Communications,
Inc., 93 F. Supp. 3d 915, 922 (N.D. Ind. 2015). Judge Lozano
resolved several of the disputed issues on summary
judgment. He decided that the agreement’s term “referred
locations” meant only physical locations and not individuals
and entities, id. at 924–25, 926, and decided that Entertainment
USA’s unjust enrichment claim had to be rejected as
duplicative because it covered the same subject matter as a
contract (the referral agreement), id. at 934–35. The rest of the
issues, including questions about the duration of the
No. 17‐2847 7
agreement, the precise meaning of the term “activations,” and
whether there were additional “directly referred” locations
beyond a list stipulated to by Moorehead, remained for trial.
Id. at 927, 930, 931–32.
The case was transferred to Judge Miller, who held a bench
trial in August 2016 and set forth his findings in a thorough
order. Judge Miller agreed with Entertainment USA that the
parties “intended an agreement that would live on as long as
any referred location was producing activations,” though he
sided with Moorehead that only two‐year post‐paid phone
contracts counted as “activations.” 2017 WL 3432319, at *6,
*13. Since the agreement required fee payments from any
“referred location,” the district court went store‐by‐store to
determine which of the many alleged stores were in fact
referred by the plaintiff, settling on a list of twelve stores. Id.
at *14.
Although the district court’s findings on liability could
have set up Entertainment USA to recover a significant
portion of its requested damages, the district court saw a
fundamental problem with the plaintiff’s damages
presentation: Entertainment USA “provides no help in
identifying any difference between what was paid and what
was due under the referral agreement as the court construes
it.” Id. at *15. In essence, the plaintiff presented a damages
calculation aligned with its broad theories of liability, but it
did not present an estimate or evidence that could, with
reasonable effort, be disaggregated and recalculated in
accordance with the district court’s much narrower bases for
finding liability. Id. Examining other exhibits in the record did
not help the judge, since the plaintiff’s “numbers differ
frighteningly from the Moorehead records introduced into
8 No. 17‐2847
evidence,” and the plaintiff’s numbers were purportedly
based on six additional years of data not contained in the
record. See id.2
Citing Indiana law, which requires a plaintiff to prove its
breach of contract damages with reasonable certainty, see
R&R Real Estate Co. v. C&N Armstrong Farms, Ltd., 854 N.E.2d
365, 370–71 (Ind. App. 2006), the district court concluded:
Even a reasonable estimate can’t be achieved on
this record. …. [Entertainment USA] hasn’t
proved that it was paid any less than it should
have been. This record doesn’t support a
damages award in any amount.
2017 WL 3432319, at *16. Since the plaintiff had full use of the
discovery process yet still failed to prove its damages with
any certainty, the district court also denied an equitable
accounting. Id. at *17. As a result, the district court ruled that
“Entertainment USA, Inc. … shall take nothing by its
complaint.” Id. The plaintiff appeals that determination, as
well as all of the other decisions that led to the district court’s
judgment, except for the dismissal of its unjust enrichment
claim.
II. Analysis
A. Standard of Review
Entertainment USA urges us to revisit all of the district
court’s many conclusions about how to interpret the contract,
2 As seen above at 4–5, the per‐activation referral fee depended in part
on the per‐month volume of the “referral group” of stores. That means
that a correct calculation of the amount due would require analysis of all
the data about all the relevant sales in all time periods.
No. 17‐2847 9
its denial of an equitable accounting, and its critical finding
on damages. We focus on the damages issue, which is
sufficient to decide virtually all of this appeal. As we have
said in other complex cases with fatal shortcomings of proof:
“It is not always necessary to march through this entire
process if a single issue proves to be dispositive.” Lesch v.
Crown Cork & Seal Co., 282 F.3d 467, 473 (7th Cir. 2002)
(declining to sort through all of the evidence of employment
discrimination under McDonnell Douglas Corp. v. Green, 411
U.S. 792 (1973), when plaintiff failed to show pretext); Harden
v. Marion County Sheriff’s Dep’t, 799 F.3d 857, 866 (7th Cir. 2015)
(same). Here, that core issue is whether Entertainment USA
met its burden in proving damages with reasonable certainty
under Indiana law. See National American Insurance Co. v.
Artisan & Truckers Casualty Co., 796 F.3d 717, 723 (7th Cir. 2015)
(“In diversity cases, we apply federal procedural law and
state substantive law.”), citing Allen v. Cedar Real Estate Group,
LLP, 236 F.3d 374, 380 (7th Cir. 2001); see generally Erie
Railroad Co. v. Tompkins, 304 U.S. 64 (1938).
We review the district court’s decision on damages for
clear error. Advertising Specialty Institute v. Hall‐Erickson, Inc.,
601 F.3d 683, 688 (7th Cir. 2010) (applying Pennsylvania’s
“reasonable certainty” requirement for contract damages).
We do not ask “what we would find were we sitting at the
trial level.” Id., citing Lever v. Northwestern University, 979 F.2d
552, 553–54 (7th Cir. 1992), and Jones v. Hamelman, 869 F.2d
1023, 1031 (7th Cir. 1989). Instead, we “must affirm if the
district court’s account of the evidence is plausible” in light of
the whole record, asking whether “a reasonable trier of fact
could conclude that the proffered evidence falls short of
proving damages with reasonable specificity.” Id.; see also
Trustees of Chicago Painters & Decorators Pension, Health &
10 No. 17‐2847
Welfare, & Deferred Savings Plan Trust Funds v. Royal Int’l
Drywall & Decorating, Inc., 493 F.3d 782, 785 (7th Cir. 2007) (“In
an appeal from a bench trial, we review a district court’s
conclusions of law de novo, and we review its findings of fact,
as well as applications of law to those findings of fact, for clear
error.”) (cleaned up). As the Indiana courts have observed, the
role of an appellate court in cases like this is to “focus upon
the evidence in favor of the judgment and any reasonable
inferences to be drawn therefrom.” Gigax v. Boone Village L.P.,
656 N.E.2d 854, 857 (Ind. App. 1995), citing K‐Mart Corp. v.
Beall, 620 N.E.2d 700, 706 (Ind. App. 1993).
B. Damages
The “essential elements of any breach of contract claim are
the existence of a contract, the defendant’s breach thereof, and
damages.” Old Nat’l Bank v. Kelly, 31 N.E.3d 522, 531 (Ind.
App. 2015), quoting Holloway v. Bob Evans Farms, Inc., 695
N.E.2d 991, 995 (Ind. App. 1998); see also Haegert v. University
of Evansville, 977 N.E.2d 924, 937 (Ind. 2012) (“the plaintiff
must prove … damages resulting from the breach”). Indiana
contract law requires a plaintiff to prove its damages with
reasonable certainty:
In actions for breach of contract, damages must
be proven with reasonable certainty. Noble
Romanʹs, Inc. v. Ward, 760 N.E.2d 1132, 1140
(Ind.Ct.App.2002). While the plaintiff need not
prove the amount of damages suffered to a
mathematical certainty, the award must be
supported by evidence in the record. [Gigax, 656
N.E.2d at 856.] A factfinder may not award
damages on the mere basis of conjecture or
speculation. Noble Romanʹs, 760 N.E.2d at [1140].
No. 17‐2847 11
As the party that had the burden of proving
damages, R & R is appealing from a negative
judgment. See id. Consequently, R & R must
demonstrate that the damage award is clearly
erroneous or contrary to law to have it set aside.
Id.
R&R Real Estate, 854 N.E.2d at 370–71 (cleaned up).
This burden falls on the plaintiff because damages are an
element of a breach of contract action—a plaintiff cannot
recover anything without “proving with reasonable certainty
the damages which he incurred” due to the breach. Indiana
Bell Tel. Co. v. O’Bryan, 408 N.E.2d 178, 183 (Ind. App. 1980),
citing Daly v. Nau, 339 N.E.2d 71 (Ind. App. 1975), and Bond v.
Snyder Construction Co., 234 N.E.2d 659 (Ind. App. 1968); see
also City of North Vernon v. Voegler, 2 N.E. 821, 824 (Ind. 1885)
(“In every valid cause of action two elements must be present,
the injury and the damages. The one is the legal wrong which
is to be redressed; the other, the scale or measure of the
recovery.”).
While seeking to recover “the benefit of the bargain,”
Berkel & Co. Contractors, Inc. v. Palm & Assocs., Inc., 814 N.E.2d
649, 658 (Ind. App. 2004), a plaintiff may use any “proper
evidence” to measure damages, see Indianapolis City Market
Corp., v. MAV, Inc., 915 N.E.2d 1013, 1024–25 (Ind. App. 2009),
citing Berkel & Co., 814 N.E.2d at 658. Trial testimony can
support a decision on damages, as long as the evidence in
total is “sufficient to enable the factfinder to make a fair and
reasonable finding as to the proper damages.” Id. at 1025,
citing Jerry Alderman Ford Sales, Inc. v. Bailey, 291 N.E.2d 92,
106 (Ind. App. 1972). An award of damages must be “within
12 No. 17‐2847
the scope of the evidence that was presented at trial” and
cannot stray beyond that scope. Id. at 1026.
This means that to award damages at all, a judge finding
a breach of contract after a trial must have enough reliable
evidence available to support a damages award without
resorting to speculation or conjecture. See Vaughn v. General
Foods Corp., 797 F.2d 1403, 1416 (7th Cir. 1986) (applying
Indiana law). The “award must be supported by evidence in
the record,” or it is improper, Gigax, 656 N.E.2d at 856, though
this analysis “does not require any particular degree of
mathematical certainty” and “where there is doubt as to the
exact proof of damages, such uncertainty must be resolved
against the wrongdoer,” Stoneburner v. Fletcher, 408 N.E.2d
545, 550 (Ind. App. 1980), citing Friendship Farms Camps, Inc. v.
Parson, 359 N.E.2d 280 (Ind. App. 1977) and Gene B. Glick Co.
v. Marion Construction Corp., 331 N.E.2d 26 (Ind. App. 1975).
Reasonable estimates are enough, as long as they are
supported by a factual basis. See id. at 550–51 (upholding
award where “a reasonably sound factual basis for the award
[could] be found”).
Entertainment USA’s presentation of damages fell well
short of this modest threshold. The presentation consisted of
several demonstrative spreadsheets that summarized
Moorehead’s relevant account records, and calculated
expected referral fees in accordance with the plaintiff’s
sweeping theory of liability, arriving at a total damages
estimate of $2,282,550. See Dkt. 157–5; Dkt. 174–4 at 1. Chau
Nguyen, who prepared this estimate himself, admitted in his
trial testimony that he based his count of qualifying
activations on appearances of generic terms like “NEWACT:”
and “UPGR:” in Moorehead’s account records, terms which
No. 17‐2847 13
included many instances of non‐compensable activity like
dealer incentive payments, customer returns, and even
upgrade deactivations. Dkt. 173 at 567–73. In response,
Moorehead submitted its own summary of the relevant
records matching its theory of the case, which estimated the
total referral fees due to be $20,600—well below the amount
Moorehead had already paid Entertainment USA. See Dkt.
175 at 6. Neither side’s estimate contained citations to the
docket or trial record, making verification of the underlying
methods nearly impossible. Since the district court’s liability
findings did not accord with the assumptions built into any
of these calculations, the parties, and especially the plaintiff,
which had the burden of proof, left the court without reliable
guidance in finding a supportable figure somewhere between
$20,600 and $2.28 million.
Entertainment USA argues on appeal that the judge had
all the information needed to re‐calculate damages in
accordance with his findings, and points out that the
summary spreadsheets were provided in its written closing
argument. See Dkt. 174 at 20–22; Dkt. 174–4. This argument
vastly overstates the reliability, clarity, and usefulness of the
plaintiff’s presentation. The judge would have had to exclude
rows of data that did not match the court’s liability findings,
then excise columns that also did not match, then select a new
per‐activation “referral bonus” amount from the sliding scale
in the contract (despite not having a month‐by‐month
breakdown of sales). Then the judge would have had to
simply trust that the underlying counts of activations and
upgrades were correct, despite Chau Nguyen’s testimony that
those counts were incorrect. No trial judge could (or should)
have done what Entertainment USA urges here. It was not
14 No. 17‐2847
error—let alone clear error—to refuse to award damages on
such an infirm basis.
Entertainment USA attempts to explain away the errors in
Chau Nguyen’s damages estimate by reference to a pretrial
discovery dispute it lost. Moorehead produced some pre‐2013
account records in Adobe Portable Document Format (PDF)
files instead of in spreadsheet form, making Chau Nguyen’s
task more difficult. See Dkt. 72. On appeal, however, the
parties agreed that this discovery dispute about the file
format of document production actually pertained not to
Verizon activations and upgrades, but instead to satellite
television services not relevant to this appeal. Even if the file
format dispute were relevant, Entertainment USA had every
opportunity to present an accurate estimate of damages. As
the district court wrote in rejecting the plaintiff’s request for
an accounting:
This court held several hearings, issued 6
separate written rulings on discovery‐related
motions, issued a 47‐page summary judgment
order, and conducted a 3‐day bench trial on
[Entertainment USA’s] complaint for damages,
with this 40‐page opinion setting forth findings
of fact and conclusions of law. The trial record
doesn’t suggest that Moorehead produced
anything short of what it was ordered to do in
discovery … .
2017 WL 3432319, at *17.3
3 There is yet another problem with Entertainment USA’s expectation
that the district court re‐engineer its damages estimate—the credibility of
the estimator. In two incidents in the course of discovery, Chau Nguyen
No. 17‐2847 15
Of course, in a case with multiple disputed legal
interpretations, Entertainment USA could not have predicted
in advance precisely how the district court would rule on
liability. It needed to plan accordingly and present its
evidence in a format that would allow reliable adjustments.
Yet Entertainment USA did not even attempt to present the
district court with a damages estimate matching the court’s
liability findings. It did not file a motion to reconsider after
the district court’s post‐trial ruling. Even on appeal, it was still
unable to give this court such an estimate.
Motions to reconsider are not explicitly provided for in the
Federal Rules of Civil Procedure or in this district court’s local
rules, but filing them is a common practice in many district
courts in situations like this. (We have even reversed district
courts on occasion for failing to grant them. See, e.g., Terry v.
Spencer, 888 F.3d 890, 893–94 (7th Cir. 2018) (district court
abused its discretion by misapprehending the law and
substance of a motion for reconsideration).) In fact, Judge
Miller ruled on at least three motions to reconsider in other
cases in the six months leading up to his post‐trial ruling. See
Patrick v. Cowen, No. 3:14‐CV‐782 RLM, 2017 WL 993067 (N.D.
Ind. Mar. 15, 2017); Valley Forge Insur. Co. v. Hartford Iron &
drew his trustworthiness into serious doubt. First, he “doctored an
important email” regarding the payment of referral fees. 2017 WL
3432319, at *4. Second, Moorehead filed an affidavit from a former
Entertainment USA dealer accusing Chau Nguyen of deliberately
withholding documents in discovery. Chau’s alleged plan was to “‘punch’
Moorehead’s counsel ‘in the face’ with the documents at a later date.” Dkt.
63–3 at 2. Chau responded with an affidavit of his own denying the
statement, Dkt. 70–3, and the matter was dropped. Given both of these
incidents in discovery, the district court was entitled to look skeptically at
the assumptions underlying Entertainment USA’s estimates.
16 No. 17‐2847
Metal, Inc., No. 1:14‐cv‐6 RLM‐SLC, 2017 WL 1546277 (N.D.
Ind. Apr. 28, 2017); Brown v. Biomet Orthopedics, LLC, No. 3:14‐
CV‐1470 RLM‐MGG, 2017 WL 2684856 (N.D. Ind. Jun. 22,
2017). In one such order, the judge noted the availability of
Rule 59(e) motions to correct a judgment within 28 days.
Valley Forge, 2017 WL 1546277 at *1, citing Fed. Rule Civ. Pro.
59(e). He correctly observed that motions to reconsider exist
to spare parties and courts unnecessary appeals. Id., quoting
Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746, 749
(7th Cir. 1995). Perhaps the district court might have been
persuaded by a responsive and reliable damages estimate that
fit its findings of liability, and perhaps the plaintiff would
have been satisfied with that result. But we cannot know since
Entertainment USA decided to invoke our clear‐error review
instead.4 Since the district court did not make an error, we
affirm its judgment. Regardless of the scope of potential
liability under the referral agreement, Entertainment USA did
not show the district court that it was entitled to any recovery.
C. Equitable Accounting
The plaintiff’s failure to prove its damages with reasonable
certainty also shows why its request for an equitable
accounting must fail. Because this was a request for an
equitable remedy, we review its denial by the district court for
an abuse of discretion. ABM Marking, Inc. v. Zanasi Fratelli,
S.R.L., 353 F.3d 541, 544–45 (7th Cir. 2003), citing EEOC v.
4 If Entertainment USA had presented a responsive, reliable, and
updated damages estimate to the district court and been denied, it could
have sought review of that decision for an abuse of discretion. Selective
Insur. Co. of South Carolina v. City of Paris, 769 F.3d 501, 507 (7th Cir. 2014)
(“We review denials of motions for reconsideration brought under Rules
59(e) and 60(b) for abuse of discretion.”). But that did not happen here.
No. 17‐2847 17
Laborers’ Int’l Union of N. Am., AFL‐CIO, Local 100, 49 F.3d 304,
307 (7th Cir. 1995); see also Lily, Inc. v. Silco, LLC, 997 N.E.2d
1055, 1076 (Ind. App. 2013) (“Generally, an action for an
accounting is a proceeding in equity and is addressed to the
sound discretion of the trial court.”), citing Atwood v. Prairie
Village Inc., 401 N.E.2d 97, 100 (Ind. App. 1980), and 1 I.L.E.
Accounts and Accounting § 1.
Under Indiana law, the main purpose of an equitable
accounting is the “striking of a balance between parties in a
fiduciary relationship … and enforcing payment of the
difference, if any, to the party entitled thereto.” Atwood, 401
N.E.2d at 100 (citations omitted). We will not find its denial to
be an abuse of discretion where the “amount of damages is
neither difficult nor impossible to measure,” and where the
accounting information “could and should have been
revealed through discovery.” Kempner Mobile Electronics, Inc.
v. Southwestern Bell Mobile Sys., 428 F.3d 706, 715 (7th Cir. 2005)
(applying Illinois law); see also Kimes v. City of Gary, 66 N.E.2d
888, 893 (Ind. 1946) (where parties have “equal knowledge or
means of knowledge[,] neither party is entitled to require an
accounting from the other”). Equitable accounting, in short, is
generally not a proper remedy in a “garden‐variety contract
dispute.” Kempner Mobile Electronics, 428 F.3d at 715.
Here, we know that Entertainment USA was not denied
equal means of knowledge. Through the discovery process, it
gained access to Moorehead’s accounting records up to 2013
and then produced a damages estimate. That estimate was
flawed, and its data sources and methods were too opaque for
the district court to verify the estimate independently.
Production of a flawed estimate, however, does not mean that
an information asymmetry existed. It simply means that the
18 No. 17‐2847
estimate as produced was not sufficient to support a damages
award. Moreover, there was no fiduciary relationship
between these parties. Arms‐length contracts do not establish
fiduciary relationships. See Kimes, 66 N.E.2d at 893 (“A mere
creditor as such has no right to compel his debtor to account
in equity in the absence of any trust relationship between
them. The relation between the bondholders and the city is
contractual and the city’s liability, if any, is that of a debtor
only and there is no trust relationship.”) (citations omitted).
Entertainment USA is not entitled to a second attempt at
proving its damages through equitable accounting.5
Conclusion
There is no reason for us to wade into the many
contractual interpretation arguments advanced by the parties
5 At oral argument we raised the possibility that under the district
court’s duration analysis—that the referral agreement remained in force
“as long as any referred location was producing activations,” 2017 WL
3432319, at *6—Moorehead may have had an ongoing post‐trial duty to
pay referral fees in 2016 and beyond that an equitable accounting would
reveal. Entertainment USA did not fail to “make the substantive
argument” on this point in either the district court or on appeal, so the
argument has not been forfeited. See Dixon v. ATI Ladish LLC, 667 F.3d 891,
895 (7th Cir. 2012), citing Elder v. Holloway, 510 U.S. 510 (1994), and FDIC
v. Wright, 942 F.2d 1089, 1094–95 (7th Cir. 1991). However, given that an
equitable accounting is a remedy left to the sound discretion of the trial
court in the first instance, and given that Entertainment USA did not ask
the district court to clarify the prospective implications of its ruling, we
decline to reach that issue here. We do not express an opinion on this
question beyond observing that the general rule in Indiana is that “a
contract containing no specific termination date is terminable at will.” See
City of East Chicago, Ind. v. East Chicago Second Century, Inc., 908 N.E.2d 611,
623 (Ind. 2009), citing House of Crane, Inc. v. H. Fendrich, Inc., 256 N.E.2d
578 (Ind. App. 1970).
No. 17‐2847 19
in this case regarding the scope of Moorehead’s liability. Even
if Entertainment USA were to prevail on them all, its gains
would be merely academic since it failed to prove its damages
with anything close to reasonable certainty. The judgment of
the district court is
AFFIRMED.