N.W.I. International v. Edgewood Bank

SIXTH DIVISION
September 5, 1997


No. 1-95-4079
N.W.I. INTERNATIONAL, INC., ) Appeal from the
) Circuit Court of
Plaintiff-Appellee/Cross-Appellant,) Cook County.
)
v. )
)
EDGEWOOD BANK, )
)
Defendant-Appellant/Cross-Appellee,)
)
and )
)
CHARLES A. BRUNING, ) Honorable
) Cyril J. Watson,
Defendant/Cross-Appellee. ) Judge Presiding.

Modified Upon Denial Of Petition For Rehearing
PRESIDING JUSTICE GREIMAN delivered the opinion of the
court:
Plaintiff, NWI International, Inc. (NWI), borrowed operating
capital from Edgewood Bank (Edgewood or the bank) over several
years with loans secured by notes and a security agreement.
Eventually, the bank required that all obligations be
consolidated into a single note that incorporated the security
agreement by reference. Soon after, the bank deemed itself
insecure and called the note, collecting part from funds on
deposit and the balance by exercise of assignments of accounts
receivable.
NWI brought this action against Edgewood, alleging breach of
the parties' lending agreement with respect to the loan.
Following a jury trial, the trial court entered judgment on the
jury's verdict in favor of NWI in the amount of $4,700,001. The
bank appeals the verdict and judgment entered against it.
The central issues before us are whether: (1) the note
executed by NWI was a demand note, or otherwise, and who should
make that determination; (2) the jury was properly instructed
with regard to the character of the instrument; (3) the bank's
declaration of default was proper; (4) the instructions to the
jury as to damages available for breach of a lending agreement
were appropriate, whether the damages assessed by the jury for
lost profits were proper and whether the jury's verdict was
against the manifest weight of the evidence.
Additionally, issues have been raised relating to whether
NWI materially breached the agreement between the parties, thus
precluding recovery, mitigated its alleged damages and whether
the trial court erred in excluding evidence of NWI's failure to
perform under the terms of a contract that was the basis for a
claim upon NWI's performance bond.
NWI cross-appeals from directed verdicts in favor of the
bank on NWI's conversion and tortious interference counts,
alleging trial court error in directing those verdicts.
The Illinois Bankers Association was given leave by this
court to file an amicus curiae brief which supports Edgewood's
stance on appeal and argues that the note was a demand instrument
and that the jury should have been instructed to apply a
subjective standard as to whether the bank had reason to deem
itself insecure.
We do not lightly overturn jury verdicts, particularly where
plaintiff's counsel have conducted such a thorough presentation,
however, for the reasons that follow, we affirm in part, reverse
in part and remand.
NWI was incorporated in 1975 by its principal, John
Robertson (Robertson). Prior to its dissolution in 1992, NWI was
a welding company specializing primarily in metal fabrication and
repair and whose customers included Commonwealth Edison (Com Ed),
nuclear utilities and the United States military.
NWI's initial contact with Edgewood came in 1979 or 1980,
when Edgewood's president, Charles Bruning (Bruning), introduced
himself to Robertson. A relationship soon began, and in the
spring of 1980, Edgewood extended a $375,000 line of credit to
NWI for working capital. The line was increased to $500,000 a
year later, and to $800,000 in May of 1982. Bruning served as the
loan officer and NWI's primary contact with Edgewood from 1980
until 1983.
In drawing on the line of credit, NWI executed 90-day notes,
and when the note matured it either paid the interest and renewed
the note or paid it off entirely. Most often, NWI would pay the
interest and roll over the principal to a new 90-day note. The
interest rate on NWI's loans was prime plus 1%, which ranged
between 11% and 22% over the course of the parties' relationship.
NWI was required to execute a typewritten security agreement
dated September 23, 1980, that set forth Edgewood's right to
accelerate the loan in the event of default, including failure to
make required payments or impairment of collateral and at least
10 other events of default. The agreement also provided "that the
Bank shall not be liable for any error of judgment or mistakes of
fact or law."
In 1981, NWI was awarded a subcontract worth approximately
$1 million on a Department of Energy project contracted to
Dynamic Industrial Contractors (DICON). The project involved on-
site fabrication of aluminum pipe, which, according to NWI, was a
unique application for the DICON job. NWI purchased $250,000 of
equipment to use at the DICON site and began work in May 1982.
In early 1983, NWI was on schedule with the DICON project,
but DICON had stopped paying its subcontractors, leaving NWI with
a receivable of $579,000. In response, NWI discontinued work for
DICON. DICON, however, prevented NWI from removing its equipment
from the worksite and filed a claim against NWI's performance
bond on the project. The DICON project ultimately resulted in
litigation between DICON and NWI.
In March 1983, Robertson and his attorney met with Bruning
to discuss the effect of the DICON situation and whether Edgewood
would continue to finance NWI. According to Bruning, he had
concerns about NWI's survival due to its diminishing cash flow
after the failure of the DICON project. Bruning was aware that
the total loss to NWI as a result of the DICON project, including
the receivable and lost equipment, was roughly $800,000.
As a result, Edgewood required NWI to submit more frequent
financial statements, updated accounts receivable and additional
collateral in the form of Robertson's personal residence. For the
first and second fiscal quarters of 1983, NWI failed to pay the
Internal Revenue Service (IRS) payroll withholdings and social
security (FICA) taxes in the amount of $200,000. In April 1983,
state bank examiners classified the NWI loan as "substandard,"
causing Edgewood to place the loan on its "watch list." During
and following this period, NWI went through three accountants who
produced conflicting financial statements, all of which
documented losses by the company. In short, Edgewood maintains
that it then viewed the loan as "insecure."
In July 1983, Foothill Capital Corporation (Foothill), a
venture capital firm, was contacted as a possible successor
lender for alternate or additional financing to NWI for working
capital. NWI was, however, reluctant because the terms of any
financing through Foothill imposed substantially higher interest.
Edgewood advised NWI that it was at its legal lending limit
and contacted LaSalle National Bank (LaSalle) as a potential
third-party lender. LaSalle agreed to lend NWI $100,000, which
was necessary to allow NWI to bid on a Com Ed job valued at
$500,000, which NWI subsequently received.
An agreement was discussed between NWI, Edgewood and LaSalle
to finance NWI for the next five years, assuming the company
remained "viable." As part of this agreement, Edgewood asked
Robertson to execute a consolidated note for $800,000, dated
October 31, 1983. This note consolidated all outstanding notes
NWI had with Edgewood and represents the agreement here at issue.
The note was a printed form with the words "on demand" typed in
after the amount of the loan is described and after the
explanation as to when the loan is payable. However, in addition,
there is a typed statement that the security agreement of
September 23, 1980, would be incorporated by reference. Hence,
both the notation that the instrument is payable on demand and
the incorporation by reference in the agreement that sets out the
events of default have been typed onto the form note. Robertson
testified that he "knew" the note was a demand instrument and
that none of the prior notes contained demand language.
Watching its investment, LaSalle embarked on a collateral
review of NWI through the accounting firm of Friedman Raemer &
Schwartz. Through its representative, Gene Leeb (Leeb), the
firm's investigation of NWI revealed "inconsistencies" in NWI's
bookkeeping, prompting Leeb to contact Edgewood. Unable to reach
Bruning, who was out of town, Leeb spoke with Andrew Collins
(Collins), who was new on the NWI account but functioned as
Edgewood's chief loan officer, and expressed his concerns about
NWI's financial status.
While Leeb's audit was ongoing, NWI deposited the $500,000
from the Com Ed project in its account with Edgewood. Leeb
advised Collins that, given his analysis of NWI's future as
uncertain, he should "lock-up" the $500,000 deposit as collateral
on the outstanding $800,000 loan.
The next day, Leeb met with Collins to discuss his findings.
This meeting prompted Collins to review the NWI file, which
caused Collins additional "concern" about the loan's status and
NWI's future viability. As a result, Collins, in perhaps the move
which most angered NWI and served as the primary basis for NWI's
original complaint in this matter, placed the recent $500,000
deposit in a segregated account to which NWI had no access.
NWI identifies the bank's act of segregating its funds as a
breach of the loan agreement. NWI claims the breach was both
unwarranted given NWI's relationship with Edgewood and the most
recent award of a $1.5 million Com Ed project. As a direct result
of the breach, NWI claims it was unable to procure alternate bank
financing or bonding, both prerequisites in the area of
contracting. After Edgewood called the loan, it sent letters to
NWI customers advising them of its claim on NWI's accounts
receivable. By late January 1984, NWI's debt to Edgewood was
repaid through the offset of the $500,000 Com Ed payment and
collection of $300,000 of NWI's accounts receivables.
NWI maintains Edgewood's breach of the loan agreement was
nothing short of "devastating" and lists as examples the facts
that (1) NWI was relegated to "small jobs" from Com Ed; (2) NWI
was taken off Sundstrand's active bid list; (3) Barber Coleman
closed its account with NWI resulting in NWI's loss of its
contract to manufacture air duct assemblies for the F-116 fighter
plane; (4) Mobil Oil terminated its business relationship with
NWI; and (5) Union Carbide removed NWI from its bid list.
After the bank called the loan, NWI "scraped by" doing small
jobs and consulting work, financed by Robertson's personal assets
and factoring -- financing on accounts receivable -- at a cost of
$3,700 in interest on a $50,000 project for a 30-day period
compared to bank financing at a cost of about $550. NWI remained
in business "to some degree" until its eventual "demise" in 1992.
NWI's expert, James Kerwin (Kerwin), opined that NWI's resulting
lost profits ranged from $3.8 million to $5 million.
NWI first filed suit in December 1988, alleging breach of
contract, conversion and bad-faith dealing against Edgewood and
Bruning personally. NWI voluntarily dismissed the suit on
December 20, 1989, and refiled it on December 19, 1990, alleging
breach of contract, conversion, intentional interference with
business relations, fraud and breach of the duty of good faith
against Edgewood and Bruning. In both complaints, NWI
characterized the consolidated note as a demand instrument --
"This note was payable on demand."
In March 1995, just prior to trial, NWI filed an amended
complaint, alleging breach of contract and conversion against
Edgewood and interference with business relations against
Edgewood and Bruning. The amended complaint omitted the
allegation that the consolidated note was payable on demand.
The case was first tried in March and April of 1995. The
trial court granted defendants' (Edgewood and Bruning) motion for
directed verdicts on the claims of conversion and interference
with business relations. However, the jury was unable to reach a
verdict on the contract claim, and the trial court declared a
mistrial.
Prior to retrial, Edgewood moved in limine to bar evidence
of NWI's lost profits on the basis that lost profits were not the
proper measure of damages for breach of a lending agreement and
that the period for which lost profits were sought was excessive.
The trial court denied this motion. NWI moved in limine to bar
introduction of evidence relating to NWI's litigation and
settlement with United States Fidelity & Guaranty (USF&G) arising
out of the DICON project. The trial court denied this motion,
although this issue was the subject of cross-examination of
plaintiff's expert witness.
At the second trial before a different trial court, NWI's
banking expert, Henry Faurest (Faurest), testified that the bank
was not reasonably insecure as to NWI's loan, had acted contrary
to the parties' established course of dealing, failed to give
Robertson sufficient time to obtain alternate financing and
directly interfered with NWI's ability to secure alternate
financing. Faurest initially acknowledged that Edgewood had
consolidated all of NWI's 90-day notes into a demand note.
However, over objection, Faurest opined that a "true demand" note
would not have any events of default or an insecurity clause.
David Keller (Keller), Edgewood's banking expert, testified
that Edgewood acted reasonably and in line with industry practice
in demanding payment from NWI. In Keller's opinion, Edgewood's
concerns about the condition of the loan had been mounting
throughout the early part of 1983, and that those concerns
justified calling the loan. Keller pointed to the facts that
Edgewood (1) was aware of conflicting financial statements
generated by NWI; (2) had noticed bank overdrafts; (3) was aware
that bank examiners had classified the NWI loan as substandard;
(4) was aware of NWI's loss, of a large receivable and equipment,
on the DICON project; (5) was aware of NWI's failure to timely
pay withholding taxes; and (6) knew of Leeb's report detailing
his concerns about NWI's present and future viability.
Keller further testified that the consolidated note was a
demand instrument which, regardless of whether Edgewood was
reasonably insecure, could be called at any time.
Ray Throckmorton (Throckmorton), Edgewood's damages expert,
opined that NWI suffered "no lost profits" as a result of the
bank's actions.
Following the close of testimony, the trial court refused to
give defendant's special interrogatory No. 1, which asked, "Was
the note and security agreement dated October 31, 1983, a demand
note?" The trial court stated: "The finding is I'm prepared today
to say as a matter of law that *** it is not a demand note ***."
The record is unclear whether this finding is based on the plain
language of the note or only after admission of parol evidence.
The trial court also rejected defendant's instruction No.
14, which defined a demand note and included the rules of
construction set out in section 3-114 of the Uniform Commercial
Code (UCC) (810 ILCS 5/3-114 (West 1992)). The trial court
stated: "I have indicated to both parties that I do not find that
this is a demand note. That's one of the reasons I refuse this
[instruction]."
The trial court, however, also refused to give plaintiff's
instruction No. 3, which stated that the note was not, as a
matter of law, due on demand. Instead, the trial court instructed
the jury that the bank would be liable if it accelerated the note
when it was not reasonably insecure, acted contrary to the
parties' established course of dealing and failed to act in good
faith.
The trial court defined "good faith" as:
"The doctrine of good faith requires a party
vested with contractual discretion to exercise that
discretion reasonably and with proper motive, not
arbitrarily, capriciously, or in a manner inconsistent
with the reasonable expectations of the parties. ***
When I use the words 'ordinary care,' I mean the
care a reasonably careful person would use under the
circumstances similar to those shown by the evidence.
The law does not say how a reasonably careful person
would act under those circumstances. That is for you to
decide."
Finally, the trial court instructed the jury that the
"elements of damages claimed by NWI International, Inc. in this
case are the cost of alternative financing, the loss of profits."
The jury returned a verdict in favor of NWI, assessing
damages in the amount of $4,700,001 against Edgewood. The trial
court entered judgment on this verdict and denied Edgewood's
post-trial motions. Also, the trial court declined to vacate the
prior order directing verdicts in favor of Edgewood and Bruning
on the counts of conversion and intentional interference with
economic advantage.
(1) The Nature of the Consolidated Note
From an examination of the plain language of the instrument,
if the trial court can determine that it is or is not a demand
note, then it may make an appropriate ruling as a matter of law
without resort to extrinsic evidence. Bank of Ravenswood v.
Polan, 256 Ill. App. 3d 470, 474 (1993); Newcastle Properties,
Inc. v. Shalowitz, 221 Ill. App. 3d 716 (1991). That is a
threshold decision for the trial court. On the other hand, if the
language of the note is unclear and ambiguous as to whether the
parties intended it to be a demand note, only then may evidence
be offered regarding the intentions and conduct of the parties at
and prior to the execution and delivery of the instrument. Bank
of Ravenswood, 256 Ill. App. 3d at 474; Pioneer Trust & Savings
Bank v. Lucky Stores, Inc., 91 Ill. App. 3d 573 (1980). In the
present case, the trial court did not construe the demand nature
of the note until after admission of parol evidence.
Examination of the consolidated note reveals that the words,
"on demand" are prominent and typewritten in two places and
included again in the note's form language. However, the note
also includes three instances of form language, in what is best
described as "fine print," mentioning terms of default that would
trigger the bank's right to accelerate payment. In addition,
other events of default are recited in the September 1980
security agreement which has been specifically incorporated by
reference.
Section 3-108 of the UCC as in effect at times pertinent to
this action provided:
"Instruments payable on demand include those payable at
sight or on presentation and those in which no time for
payment is stated." Ill. Rev. Stat. 1983, ch. 26, par.
3-108.
The consolidated note contains no maturity date or definite
time for payment. Rather, in each space where such a date would
logically have been inserted if the note were intended to be a
term note, the consolidated note contains the typed language "ON
DEMAND."
NWI argues that a maturity date can be implied by reference
to the 1980 security agreement incorporated in the consolidated
note and a collateral document generated by Edgewood in
connection with the loan that states that the "repayment program"
is a "5-year term." However, the present UCC, which codifies the
law existing at the time of the loan (see Exchange National Bank
v. Crest Finance Co., 53 Ill. App. 2d 255 (1964)), provides:
"If an instrument, payable at a fixed date, is
also payable upon demand made before the fixed date,
the instrument is payable on demand until the fixed
date and, if demand for payment is not made before that
date, becomes payable at a definite time on the fixed
date." 810 ILCS 5/3-108(c) (West 1992).
Edgewood argues that (1) either the demand language is
unambiguous, thus obviating the need for parol or extrinsic
evidence, or (2) even if resort to such evidence is made, the
demand language controls over the implied maturity date of five
years.
Support for this conclusion is found in the UCC rule of
construction that prioritizes typed language over form language.
The UCC provision in effect at the time of this dispute provides:
"Handwritten terms control typewritten and printed terms, and
typewritten control printed." Ill. Rev. Stat. 1983, ch. 26, par.
3-118(b). See also 3 A Corbin on Contracts, sec. 548, at 182-83
(1960); Brzozowski v. Northern Trust Co., 248 Ill. App. 3d 95, 99
(1993) (where an ambiguity exists between a typed provision and
the printed form, then the typed provision is to be given effect
over the printed provision). NWI contends that this rule of
construction is diluted since the 1980 security agreement is
entirely typewritten and contains event of default language and
the incorporation by reference is similarly typed so as to
satisfy section 3-114.
After considering the nature of the parties' agreement, we
believe it to be sufficiently ambiguous to allow parol evidence
to determine the intent of the parties as revealed by the their
amicable and informal course of dealing. NWI argues that a demand
instrument on the full $800,000 debt is out of place given the
lenient manner Edgewood previously applied to NWI's loans, e.g.,
allowing the series of 90-day notes to be "rolled over,"
handshake deals, overnight loans of large sums of money and, as
NWI notes, Bruning's "strong expression of faith in Robertson to
LaSalle less than two months" before the loan was called.
Moreover, the five-year term urged by NWI was allegedly discussed
between Bruning and Robertson at a meeting held at the Flame
Restaurant.
Accordingly, since the note appears to be ambiguous, the
issue as to whether the parties intended that the instrument be a
demand note must be submitted to the jury. Extrinsic evidence may
be introduced to show the intent of the parties and resolve an
ambiguity in a contract. Bank of Ravenswood, 256 Ill. App. 3d at
474; Pioneer Trust & Savings Bank, 91 Ill. App. 3d 573. If the
intent of the parties can be determined from facts not in
dispute, then the meaning of the contract can be determined by
the court as a matter of law. Bank of Ravenswood, 256 Ill. App.
3d at 474; Nerone v. Boehler, 34 Ill. App. 3d 888 (1976).
However, if the ambiguity can only be resolved by resort to facts
in dispute, then the contract must be construed by the trier of
fact. Bank of Ravenswood, 256 Ill. App. 3d at 474; Nerone, 34
Ill. App. 3d at 891; Vole, Inc. v. Georgacopoulos, 181 Ill. App.
3d 1012 (1989).
While NWI argues that the jury had all of the facts and
inferentially had to decide that the note was not payable on
demand, the trial court's various rulings and instructions to the
jury did not allow the jury to specifically consider whether the
note was a demand instrument. Since, at the very least, the note
is ambiguous, the question becomes whether the jury properly
considered the alternative that the note was a demand instrument.
(2) Whether the Jury Was Properly Instructed
Litigants are entitled to have the jury instructed on the
legal principles applicable to the facts of the case. Wind v. Hy-
Vee Food Stores, Inc., 272 Ill. App. 3d 149, 154 (1995); Alden
Press, Inc. v. Block & Co., 173 Ill. App. 3d 251, 260 (1988). The
test of a jury instruction's propriety is whether it fairly and
accurately states the law. Wind, 272 Ill. App. 3d at 154;
Korpalski v. Lyman, 114 Ill. App. 3d 563, 568 (1983). The trial
court's failure to give complete and correct instructions is
error. Winn v. Inman, 119 Ill. App. 3d 836, 840-41 (1983). A new
trial will be granted where a party shows that its right to a
fair trial has been seriously prejudiced by the denial of an
instruction. Wade v. City of Chicago Heights, 216 Ill. App. 3d
418, 423 (1991). The trial court's failure to give proper jury
instructions is reversible error when the evidence is conflicting
or the facts are closely balanced. Winn, 119 Ill. App. 3d at 840.
Prejudice results when the court fails to instruct the jury on an
issue reasonably presented by the evidence. Ellig v. Delnor
Community Hospital, 237 Ill. App. 3d 396, 408 (1992).
Edgewood's instruction No. 14, rejected by the trial court,
defined a demand note and then provided:
"If you find that the intention of the parties was that
the Note and Security Agreement was to be a demand
note, then you must find in favor of Edgewood Bank."
Edgewood's special interrogatory No. 1, also refused, asked
the jury to answer the question; "Was the Note and Security
Agreement dated October 31, 1983 a demand note?"
Edgewood argues that the trial court's failure to submit
these instructions to the jury is error warranting a new trial.
See Alden Press, Inc. v. Block & Co., 173 Ill. App. 3d 251, 269
(1988) (failure to give an instruction on a party's theory of the
case, where the evidence supports such an instruction, is error).
A review of each instruction given to the jury reveals that
the jury was not asked to determine whether the note was payable
on demand. Since, we believe the note to be, at least ambiguous,
the jury should have been given a full opportunity to resolve
this ambiguity -- to decide whether the note was a demand or time
instrument.
As instructed, the jury could find that Edgewood breached
the agreement if (1) Edgewood accelerated the note and demanded
immediate and full payment without being reasonably insecure; (2)
acted contrary to the parties' course of dealing; and (3) failed
to act in good faith. However, if, with proper instructions, the
note was found to be a demand instrument, Edgewood would (1) be
entitled to demand full and immediate payment without the
condition of reasonable insecurity; (2) it would not matter that
the note's demand nature was contrary to the parties' established
course of dealing; and (3) there would be no "good-faith" issues.
See Shawmut Bank v. Miller, 614 N.E.2d 668 (Mass. 1993).
Edgewood is, accordingly, entitled to a new trial. See Wind, 272
Ill. App. 3d at 157; Wade, 216 Ill. App. 3d at 423.
An additional issue must be considered relating to the
amicus curiae brief filed by the Bankers Association. The trial
court, in instructing the jury on the issue of "good faith," used
an objective standard -- "how a reasonably careful person would
act under those circumstances."
The Bankers Association argues that Edgewood's conduct is to
be measured by the subjective standard of good faith found in the
UCC, which provides that "good faith" means "honesty in fact in
the conduct or transaction concerned." 810 ILCS 5/1-201(19) (West
1992) (formerly Ill. Rev. Stat. 1983, ch. 26, par. 1-201(19)). As
the supreme court noted in confirming that the good faith
standard is a subjective one, an early draft of the UCC included
an objective standard for good faith, which was eliminated in the
final version. Watseka First National Bank v. Ruda, 135 Ill. 2d 140, 150 (1990). Although this error is technical and probably
had little effect on the jury's verdict, it is recognized as
error.
(3) Damages
In an effort to facilitate retrial of this matter, we
consider the question of damages. The jury awarded NWI $4.7
million in damages for lost profits from 1984 through 1992. The
standard of review is whether the jury's verdict is against the
manifest weight of the evidence. Wilmette Partners v. Hamel, 230
Ill. App. 3d 248 (1992). An assessment of damages that does not
meet the requisite degree of certainty is against the manifest
weight of the evidence and should be reversed. Bowman v. Zimny,
256 Ill. App. 3d 386 (1993).
There is a dearth of Illinois cases that address the proper
measure of damages to be awarded for breach of a contract to lend
money. A northern district of Illinois case observes that the
"measure of damages for wrongful failure to lend money [breach]
is the higher cost of alternative financing unless it is
foreseeable to the lender that substitute financing will not be
available. *** If it is foreseeable that substitute financing
will not be available, the lender is liable for the foreseeable
actual damages resulting from the breach." Lester v. Resolution
Trust Corp., 125 B.R. 528, 532 (N.D. Ill. 1991); see also
Restatement (Second) of Contracts sec. 351, Comment e (1981);
Hill v. Ben Franklin Savings & Loan Ass'n, 177 Ill. App. 3d 51
(1988).
Thus, if it were not foreseeable that NWI would be unable to
secure alternative financing, Edgewood would only be liable for
the difference between the cost of any alternative financing and
the cost of financing under the agreement between NWI and
Edgewood -- prime plus 1%. If, on the other hand, it was
foreseeable that NWI would be unable to secure alternative
financing, Edgewood would be liable for "the foreseeable actual
damages resulting from the breach." The issue of foreseeability,
therefore, is a question of fact for the jury and the jury should
have been so instructed.
Here, the trial court refused Edgewood's instruction No. 20,
which would have told the jury:
"If you find that Edgewood Bank breached the note and
Security Agreement, you may consider damages for loss
of profits only if you find that it was foreseeable to
Edgewood Bank that substitute financing would not be
available at the time of the breach."
This is an accurate statement of the law and one which the
jury should have received. Instead, the jury was instructed:
"If you decide for NWI International, Inc. on its
complaint for breach of contract, you must fix the
amount of money which will reasonably compensate NWI
for all losses naturally arising from the breach. In
calculating NWI's damages, taking into consideration
the nature, extent and duration of the damage, you
should determine the sum of money that will put NWI in
as good a position as it would have been if both NWI
and Edgewood had performed all of their promises under
the contract. The elements of damages claimed by NWI in
this case are:
-- The Cost of Alternate Financing
-- The Loss of Profits
Whether these elements of damages have been proved by
the evidence is for you to determine."
A new trial, with the jury properly instructed on the nature
of the note and the issue of damages, is required. Because a new
trial is here granted, we will not consider the issue of whether
the verdict was speculative and against the manifest weight of
the evidence. Midland Hotel Corp. v. Reuben H. Donnelley Corp.,
118 Ill. 2d 306 (1987).
(4) The Cross-Appeal
At the first trial, the trial court directed verdicts in
favor of Edgewood on the conversion count and in favor of
Edgewood and Bruning individually on the claim for intentional
interference with economic advantage. The second trial court
refused to vacate these verdicts. We affirm.
A verdict should be directed only where "all of the
evidence, when viewed in its aspect most favorable to the
opponent, so overwhelmingly favors movant that no contrary
verdict based on that evidence could ever stand." Pedrick v.
Peoria & Eastern R.R. Co., 37 Ill. 2d 494, 510 (1967). The trial
court's ruling on a motion for directed verdict will not be
reversed absent an abuse of discretion. Cohen v. Garretson, 282
Ill. App. 3d 248 (1996). In the present case, we find no abuse of
discretion and affirm the trial court's order directing the
verdicts in favor of Edgewood.
For the reasons set forth above, we affirm the directed
verdicts in favor of Edgewood and reverse and remand on the
contract claim.
Affirmed in part; reversed in part and remanded.
THEIS, J., and QUINN, J., concur.