Midwest Mailing & Shipping Systems, Inc. v. Schoenberg, Finkel, Newman & Rosenberg, 2023 IL App (1st) 220562-U illustrates in sharp relief the consequences flowing from a failure to file a post-trial motion in a jury case and the latitude afforded a jury when it fashions a money damages award/
Plaintiff, a Wisconsin corporation licensed to do business in Illinois was the exclusive dealer for Neopost, a Wisconsin company that made and sold postage meters.
The plaintiff-Neopost agreement allowed the latter to terminate the exclusive arrangement if plaintiff assigned its dealership rights or abandoned its business.
After a dispute arose between plaintiff and Neopost, defendants advised plaintiff to terminate its Wisconsin incorporation, incorporate a new Illinois business, and assign the Wisconsin company’s business to the new Illinois entity. As a result, plaintiff alleged Neopost terminated the dealership agreement and financially gutted plaintiff’s business.
Plaintiff and Neopost then filed separate lawsuits in Illinois state court and New York Federal, respectively. The parties eventually settled and dismissed their competing lawsuits with Plaintiff receiving a payment of $300,000 to give up its “territorial exclusivity right” to sell and service Neopost’s postage meters.
Plaintiff then sued defendant law firm and two of its attorneys, Gambino and Goldberg for legal malpractice. Plaintiff’s damages expert opined that but for defendant’s legal malpractice, Neopost would have paid Plaintiff $2.73 million – some $2.4 million north of the settlement amount – for Plaintiff to give up its exclusive right to sell Neopost products.
After a jury trial, the jury sided with the law firm and attorney Gambino but entered a judgment against attorney Goldberg for $700,000.
On appeal, Goldberg argued that the Court improperly considered speculative damages testimony from Plaintiff’s expert. The Court found that Goldberg forfeited this argument on appeal. It cited Code Section 2-1202 states that if a party in a jury case fails to file a posttrial motion seeking a new trial, it waives the right to apply for a new trial. 735 ILCS 5/2-1202(e)(2020). (By contrast, Code Section 2-1203, governing bench trials, provides that a party may (but doesn’t have to) file a posttrial motion within 30 days after judgment.)
Since Goldberg did not file a posttrial motion challenging the jury verdict, he forfeited his arguments against the damages expert.
The Court rejected Goldberg’s argument that he preserved for appeal the issue of plaintiff’s damages expert’s testimony by raising a challenge to the testimony in an earlier summary judgment motion. This is because when a summary judgment motion is denied and a case proceeds to trial, the denial of summary judgment is not appealable since any error in denying summary judgment merges into the judgment entered at trial. [¶ 20]
The Court then rejected Goldberg’s argument that the jury verdict was too imprecise. The Court cited well-settled Illinois law that a jury verdict amount is generally at the jury’s discretion and is only required to be based on a fair degree of probability and is not subject to “precise determination.” [¶ 25]
Here, the plaintiff’s expert opined that but-for Goldberg’s legal malpractice, plaintiff lost out on an approximate $2.4 million payout to release its territorial exclusivity right. The jury, by only allowing a fraction of the claimed damages, clearly did not fully credit the expert’s testimony.
Lastly, the Court found that the evidence introduced at trial supported the jury’s $700,000 verdict. It credited the testimony that the sale of Neopost’s postal machine products accounted for the majority of plaintiff’s business, that plaintiff planned to ask for a $5 million payment in exchange for release of territorial exclusivity rights several years before trial, and that a Neopost witness testified that it likely would have paid $600,000 for plaintiff to cede its exclusivity rights. In the aggregate, according to the Court, the plaintiff introduced sufficient evidence to support the jury’s verdict.
Case Lessons:
A failure to raise an issue in a post-trial motion can result in forfeiture of the issue on appeal;
A jury is given wide berth in terms of damages it can award. A damages verdict does not require mathematical precision; all that’s required is there be a reasonable basis for the verdict; and
Jury damage award will not easily be overturned. All that is required is that the money verdict establish, with a fair degree of probability, a basis for computation of damages.
