Pennsylvania Truck Lines, Inc. v. Solar Equity Corp., s. 87-1813

• Decision Date: 03 August 1989
• Docket Number: 88-1904,Nos. 87-1813,s. 87-1813
• Parties: PENNSYLVANIA TRUCK LINES, INC., Plaintiff-Counterdefendant-Appellant, v. SOLAR EQUITY CORPORATION, Defendant-Counterplaintiff-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 221

882 F.2d 221

PENNSYLVANIA TRUCK LINES, INC., Plaintiff-Counterdefendant-Appellant, v. SOLAR EQUITY CORPORATION, Defendant-Counterplaintiff-Appellee.

Nos. 87-1813, 88-1904.

United States Court of Appeals Seventh Circuit.

Argued May 19, 1989.

Decided Aug. 3, 1989.

Richard M. Kates, Chicago, Ill., for Pennsylvania Truck Lines, Inc.

Mitchell H. Frazen, Ruberry, Phares, Abramson & Fox, Chicago, Ill., for Solar Equity Corp.

Before FLAUM and MANION, Circuit Judges, and ESCHBACH, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge.

Pennsylvania Truck Lines, Inc. ("PTL") originally brought this breach of contract action against Solar Equity Corporation ("Solar") for declaratory judgment. ¹ Solar filed a counterclaim against PTL, seeking in part damages from PTL's alleged breach of contract, interest, and costs (including reasonable attorney fees). At trial, Solar moved for a directed verdict on the ground that PTL failed to prove damages, and PTL moved for leave to file an amended complaint to include a second count for damages in addition to its declaratory judgment count. The district court granted PTL's motion to amend the complaint, but it also granted Solar's motion for directed verdict on the issue of damages. The court ruled that PTL failed to show that it suffered damages (injury) and that it did not present sufficient evidence from which the jury could determine the amount of damages sustained. Subsequently, the jury entered a verdict in favor of Solar on the first part of Solar's counterclaim, awarding it $40,555.75 in damages, but found for PTL on the second part of Solar's counterclaim. After the trial, the district court granted Solar's motion to amend the judgment to include interest, costs, and reasonable attorney fees and eventually awarded Solar $61,573.31 for costs and attorney fees. 127 F.R.D. 127. The court also entered judgment nunc pro tunc in favor of Solar as to the remaining portion of PTL's declaratory judgment count.

On appeal, PTL raises two distinct issues. First, PTL argues that the district court erred in granting Solar's motion for directed verdict as to the issue of damages. PTL contends that it presented sufficient evidence from which the jury could have determined that it suffered damages and the amount of damages sustained. Second, PTL contests the amount of money the court awarded to Solar for costs and attorney fees. For the reasons discussed below, we affirm the judgment of the district court.

I

In 1974, pursuant to five separate lease agreements, Solar leased to PTL 500 piggyback trailers. ² Each lease covered 100 trailers and lasted for an initial term of eight years. At the end of eight years, the leases continued in effect on a monthly basis until PTL gave Solar a thirty-day notice of its intent to terminate them. The leases provided that both Solar and PTL had to agree to designate a location at which PTL could return the trailers and that PTL had to return the trailers in good working order. The leases also provided that Solar was entitled to all costs (including reasonable attorney fees) incurred in enforcing its rights under the lease.

During the term of the leases, all went well between the parties. Their relations soured, however, when PTL tried to terminate the leases at the end of their eight-year terms. On July 13, 1982, PTL gave Solar written notice that it was terminating one of the leases whose initial eight-year term was due to expire on June 28, 1982. As part of the notice, PTL suggested eleven different cities at which it would be willing to return the trailers. On August 2, 1982, PTL sent Solar another termination notice for a second lease whose eight-year term was due to expire on September 18, 1982. As part of this termination notice, PTL again listed eleven cities at which it was willing to deliver the trailers. Solar, however, did not designate a city to which PTL could return the trailers.

On August 27, 1982, PTL sent a letter to Solar reminding Solar that PTL had sent notices terminating two of the leases. In this letter, PTL requested that Solar choose a city to which it wanted the trailers returned. Shortly thereafter, PTL sent Solar a third termination notice for the other three leases whose eight-year terms expired on November 11, 1982, December 19, 1982, and December 23, 1982, respectively. Once again, PTL suggested eleven different cities to which it was willing to deliver the trailers. In this letter, PTL requested that Solar respond to PTL's earlier termination notices by picking a city, and PTL informed Solar that it would not pay any rent past the original expiration dates of the leases.

In response to PTL's requests, Solar informed PTL that Solar would not designate a place of return until it inspected the trailers to determine what repairs were necessary and later reinspected the trailers to make sure that PTL had properly repaired them. Only after an inspection and reinspection would Solar choose a city to which PTL could deliver the trailers. PTL, however, would not repair the trailers before delivering them because it did not want to risk repairing them a second time, in the event that the trailers were damaged in transit to the designated place of return. The parties were unable to settle their dispute, and thus, PTL was stuck with the trailers. Since PTL did not have sufficient space to store these trailers, it stored them on property belonging to Consolidated Rail Corporation ("Conrail"), the parent corporation of PTL.

While the trailers were in storage, Solar sold some of them. After Solar made a sale, it would then designate a city as the place of return for some of the trailers, even though Solar apparently had not inspected these trailers. By June 1983, however, PTL still had almost 400 trailers that it wanted to return and that Conrail wanted removed from its property.

On March 7, 1983, Conrail sent Solar a letter, which stated that if Solar did not choose a place of return for the trailers within ten days, Conrail would start to assess storage charges of $5.00 per day per trailer. When Solar still would not designate a place of return, Conrail started to send bills to Solar for the storage charges and then filed an action against Solar in court because Solar would not pay the bills. Conrail eventually dropped this lawsuit.

On October 13, 1983, PTL filed a one-count complaint against Solar, ³ seeking declaratory judgment to the effect that PTL properly terminated the leases and that Solar owes PTL $5.00 per day per trailer in storage charges. Solar filed a three-count counterclaim seeking in part damages, interest, and costs (including reasonable attorney fees) for breach of contract. Although the parties eventually entered into an agreement on returning the trailers, they were unable to settle their dispute over the storage charges. On April 5, 1985, Solar filed an amended counterclaim seeking damages, interest, and costs (including reasonable attorney fees) for PTL's breach of contract. Solar premised its counterclaim on two grounds: (1) PTL failed to pay rent pursuant to the terms of the leases from the date of the expiration of the original eight-year terms until PTL returned the trailers; and (2) PTL failed to properly repair the trailers before returning them.

Beginning on February 26, 1987, the parties tried this case before a jury. At the close of PTL's evidence, Solar moved for directed verdict on the issue of damages. PTL then moved for leave to amend orally its complaint to include a second count for damages. The district court granted PTL's motion to amend its complaint, but it also granted Solar's motion for directed verdict on the issue of damages. The district court ruled that PTL had failed to show that it suffered damages (injury) and that it had failed to present sufficient evidence from which the jury could make a determination of the amount of damages sustained. The trial subsequently continued, and the jury rendered a verdict in favor of Solar on the first part of its counterclaim for rent, awarding Solar $40,555.75 in damages. The jury, however, returned a verdict in favor of PTL on the second part of Solar's counterclaim for repairs.

Solar filed a post-trial motion to amend the judgment to include interest, costs, and reasonable attorney fees. The district court granted Solar's motion to amend the judgment and eventually awarded it $61,573.31 for costs and attorney fees. The district court also entered judgment nunc pro tunc (dating back to the date the jury verdict was docketed) against PTL on the remaining portion of its declaratory judgment count.

II

PTL argues that the district court erred in granting Solar's motion for directed verdict on the issue of damages. In cases in which the district court's jurisdiction rests on diversity of citizenship, state law governs the standard of review for determining whether the district court properly granted a motion for directed verdict. E.g., Bethlehem Steel Corp. v. Chicago E. Corp., 863 F.2d 508, 512-13 (7th Cir.1988); Goldman v. Fadell, 844 F.2d 1297, 1301 (7th Cir.1988). Therefore, our court must turn to the law of the forum state, Illinois, in deciding whether the district court erred in granting Solar's motion for directed verdict. See Patton v. Mid-Continent Sys., Inc., 841 F.2d 742, 749 (7th Cir.1988); Twohy v. First Nat'l Bank, 758 F.2d 1185, 1189 (7th Cir.1985).

Under Illinois law, a trial court should direct a verdict "only in those cases in which 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 & E.R.R., 37 Ill.2d 494, 229 N.E.2d 504, 513-14 (1967); accord Schmidt v. Archer Iron Works, Inc., 44 Ill.2d 401, 256 N.E.2d 6, 8, cert. denied, 398 U.S. 959, 90 S.Ct. 2173, 26 L.Ed.2d 544 (1970); First Nat'l Bank v. Shape Magnetronics, Inc., 135 Ill.App.3d 288, 90 Ill.Dec. 153, 155...