1472 N. Milwaukee, Ltd. v. Feinerman

• Citation: 996 N.E.2d 652,2013 IL App (1st) 121191,374 Ill.Dec. 957
• Decision Date: 28 August 2013
• Docket Number: Docket No. 1–12–1191.
• Parties: 1472 N. MILWAUKEE, LTD., and David J. Ginople, Plaintiffs–Appellees, v. Lyle FEINERMAN, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

2013 IL App (1st) 121191
996 N.E.2d 652
374 Ill.Dec. 957

1472 N. MILWAUKEE, LTD., and David J. Ginople, Plaintiffs–Appellees,
v.
Lyle FEINERMAN, Defendant–Appellant.

Docket No. 1–12–1191.

Appellate Court of Illinois,
First District, Third Division.

Aug. 28, 2013.

[996 N.E.2d 655]

Karlin Eide LLP, of Chicago (Lawrence M. Karlin, of counsel), for appellant.

Robert Habib, of Chicago, for appellees.

Justice PIERCE delivered the judgment of the court, with opinion.
[374 Ill.Dec. 960]OPINION

¶ 1 Defendant, Lyle Feinerman (Feinerman), appeals from the judgment of the circuit court of Cook County awarding plaintiffs, 1472 N. Milwaukee, Ltd., and David J. Ginople, damages for breach of a real estate sales contract. Following a bench trial, the trial court awarded plaintiffs $212,964.40 in damages that was later reduced to $194,125.44. Feinerman appeals the judgment awarding plaintiffs general damages and consequential damages comprised of “carrying costs” for mortgage interest expense and real estate taxes incurred during the period between the failed closing and the later resale of the real estate. Defendant's appeal takes issue with the sufficiency of the evidence submitted by plaintiffs to establish direct and consequential damages. For the reasons that follow, we affirm the judgment of the trial court.

¶ 2 BACKGROUND

¶ 3 The following facts were established at trial. Plaintiff David J. Ginople was the sole shareholder of 1472 N. Milwaukee, Ltd. (1472 Ltd.), the owner of record of a commercial building located at 1472 N. Milwaukee Avenue in Chicago, Illinois. Ginople owned and operated a clothing resale business on the first-floor commercial space of the property. On July 27, 2006, Ginople entered into an exclusive listing agreement with real estate broker Claudia Langman authorizing Langman to list the real estate for sale at a price of $995,000. Ginople's listing agreement provided that Langman would market the property with the disclosure that Ginople wanted to either lease or buy back the first-floor commercial space.

[996 N.E.2d 656]

[374 Ill.Dec. 961]¶ 4 On September 27, 2006, defendant Feinerman entered into a written contract for the purchase of the real estate at an agreed contract price of $1,200,000. The closing date set forth in the contract was November 17, 2006. A rider attached to the contract provided for 1472 Ltd. to lease back the first-floor commercial space at a specified rental rate from the closing date until February 15, 2007, allowing Ginople to move his inventory to another location. Feinerman failed to appear for closing on the agreed date, and again failed to appear at a later agreed-upon closing date, December 8, 2006.

¶ 5 In January, 2007, the property was relisted for sale for $1.2 million. That same month, Ginople signed a sales contract for $1,145,500 which did not close because the parties could not agree on certain insurance indemnification issues. Another potential sale in March 2007 for $1,000,500 failed because the potential purchasers wanted 120 days to close. Finally, on May 23, 2007, plaintiffs agreed to sell the building to 1472 Partners, Ltd., a company partially owned by the plaintiffs' former real estate broker, for $911,500. The sale closed on July 30, 2007, eight months after the first Feinerman failed closing.

¶ 6 On March 17, 2009, plaintiffs filed this action in the circuit court of Cook County for breach of real estate sales contract. At trial, defendant conceded liability on the breach of contract claim; however, he contested plaintiffs' claim for damages. After presiding over a trial marked by repeated and prolonged interruptions by counsel for both parties and repetitive, redundant and oftentimes confusing positions advanced by the attorneys, the trial court awarded damages in favor of plaintiffs consisting of general damages amounting to the difference in sales price between defendant's agreed purchase price of $1.2 million and the July 2007 sale price of $911,500. The court reduced this award by $60,000, which was the commission that would have been paid by plaintiffs on the failed Feinerman contract (and not due on the later sale), and a further reduction of $25,768 was made representing the amount of rent plaintiffs would have paid under the failed contract from November 2006 to the closing date of the later sale, July 30, 2007.¹

¶ 7 With respect to the award of consequential damages, the court awarded plaintiffs $10,000 for interest paid on a mortgage during the “carry period” (the period of time between the date of the breach and the later sale). The court also awarded consequential damages of $1,100 in attorney fees incurred due to the failed closing and $675 paid by plaintiffs for a land survey, neither amount is contested on appeal. As the court was about to award damages for real estate taxes incurred during the carry period, counsel once again engaged in argument and contentious commentary prompting the court to continue the matter to allow for the submission of additional information on that issue.

¶ 8 After the court considered posttrial submissions, the court made an award of $23,457.40 in consequential damages for real estate taxes incurred by plaintiffs during the carry period.

¶ 9 The defendant filed a timely motion for reconsideration contesting the entire [374 Ill.Dec. 962]

[996 N.E.2d 657]

general damage award and that part of the consequential damage award that related to mortgage interest and real estate taxes during the carry period. Defendant raised three arguments. First, defendant argued that the court erred in awarding general damages in the sum of $202,732 (net of reductions discussed above) because the court applied an incorrect measure of damages. Second, the defendant argued the court erred in awarding plaintiffs $23,507.40 for real estate taxes incurred during the carry period because: (1) the damages had never been disclosed or itemized prior to trial; (2) plaintiffs rested their case without presenting any competent evidence as to the amount of taxes paid; and (3) plaintiffs' posttrial calculations submitted to the court were incorrect and not supported by the trial evidence. Lastly, defendant argued that the court erred in awarding mortgage interest paid during the carry period because the only testimony submitted as to the mortgage interest paid was through the testimony of Mr. Ginople, which was refreshed after he was being shown an unauthenticated document rendering the testimony unreliable.

¶ 10 After a hearing, the trial court denied the motion for reconsideration as to the general damages award and the consequential damages for mortgage interest paid. However, the court granted the motion as to the real estate taxes finding that it relied on improper evidence submitted in the posttrial proceedings. Based on the trial testimony and exhibits, the court reduced the real estate tax award from $23,457.40 to $4,618. As a result of the ruling on the motion for reconsideration, the trial court issued a revised final judgment of $194,125.44. Defendant timely filed his notice of appeal on April 18, 2012.

¶ 11 ANALYSIS

¶ 12 The defendant raises two arguments on appeal. First, defendant contends that the trial court erred in awarding general damages to the plaintiffs, based on the difference between the Feinerman contract price and the price the property sold for approximately eight months later. Second, defendant argues that the trial court erred in awarding plaintiffs consequential damages for mortgage interest expenses and real estate taxes paid by plaintiffs between the date of the breach and the date of resale.

¶ 13 Where an award of damages is made after a bench trial, the standard of review is whether the trial court's judgment is against the manifest weight of the evidence. Chicago's Pizza, Inc. v. Chicago's Pizza Franchise Ltd. USA, 384 Ill.App.3d 849, 859, 323 Ill.Dec. 507, 893 N.E.2d 981 (2008). A judgment is against the manifest weight of the evidence only if the opposite conclusion is clear or where the trial court's findings appear to be unreasonable, arbitrary, or not based on evidence. Id. “[A] reviewing court should not overturn a trial court's findings merely because it does not agree with the lower court or because it might have reached a different conclusion had it been the trier of fact.” In re Application of the County Treasurer, 131 Ill.2d 541, 549, 137 Ill.Dec. 561, 546 N.E.2d 506 (1989). However, in overturning a damage award, a reviewing court must find that the trial judge either ignored the evidence or that its measure of damages was erroneous as a matter of law. MBC, Inc. v. Space Center Minnesota, Inc., 177 Ill.App.3d 226, 234, 126 Ill.Dec. 570, 532 N.E.2d 255 (1988). Stated differently, a factual finding is against the manifest weight of the evidence when an opposite conclusion is apparent or when the findings appear to be unreasonable, arbitrary, or not based on the evidence. Eychaner v. Gross, 202 Ill.2d 228, 252, 269 Ill.Dec. 80, 779 N.E.2d 1115 (2002). An [374 Ill.Dec. 963]

[996 N.E.2d 658]

award of damages is not against the manifest weight or manifestly erroneous if there is an adequate basis in the record to support the trial court's determination of damages. Schatz v. Abbott Laboratories, Inc., 51 Ill.2d 143, 147, 281 N.E.2d 323 (1972); Aetna Insurance Co. v. Amelio Brothers Meat Co., 182 Ill.App.3d 863, 865, 131 Ill.Dec. 332, 538 N.E.2d 707 (1989). We affirm the trial court's damage award and find that it is not contrary to the manifest weight of the evidence.

¶ 14 I. General Damages

¶ 15 Defendant argues the trial court's award of general damages was against the manifest weight of the evidence because plaintiffs failed to carry their burden with regard to both the quality and quantity of evidence to prove fair market value of the real estate on the date of the breach. Specifically, defendant argues: (1) plaintiffs failed to offer evidence of fair market value on the date of the breach; (2)...