was losing revenue because of the alleged breach, it was shedding costs because it didn't need as large a staff as it had expected to need. An example is those $ 150,000 salaries. When business began to fall off, Rothberg quickly cut those salaries in half, and some of the employees--within a year all, according to the tax returns--whose salaries were cut quit rather than accept the cut. If the staff shrank rapidly when business fell, the inescapable implication is that it would have had to expand rapidly, meaning that costs would have risen, had the business grown, as it would have done but for the breach. Those higher costs were saved by the breach. The savings had to be subtracted from the revenues that Universal allegedly lost to yield a lost-profit figure, and no effort to do that was made.
It might seem that if there was a breach, as I am bound to conclude for purposes of considering this motion that there was, it must have caused some harm to Universal. But this is not correct. There are losing contracts, a breach of which saves the victim money, and maybe this contract was one; this would be consistent with Universal's efforts to prove the individual defendants' rapacity and cunning. In any event, a plaintiff who fails to quantify, however roughly, the harm that he has suffered is not entitled to an award of damages, other than (in the case of a breach of contract) nominal damages, which Universal has not sought. Illinois law is clear that a plaintiff cannot recover lost profits if he presents no evidence of his revenues minus his costs. Madigan Bros., Inc. v. Melrose Shopping Center Co., 198 Ill. App. 3d 1083, 556 N.E.2d 730, 735, 145 Ill. Dec. 112 (Ill. App. 1990); Kenny Construction Co. v. Hinsdale Sanitary District, 111 Ill. App. 3d 690, 444 N.E.2d 510, 517-18, 67 Ill. Dec. 274 (Ill. App. 1982); S. A. Maxwell Co. v. DeSoto, Inc., 73 Ill. App. 3d 844, 392 N.E.2d 33, 38, 29 Ill. Dec. 476 (Ill. App. 1979). Granted, even in a case in which there is a complete failure of proof on the amount of damages to which the plaintiff is entitled, there is authority that the trial judge can order a new trial in lieu of entering judgment for the defendant and thus terminating the litigation. Network Publications, Inc. v. Ellis Graphics Corp., 959 F.2d 212, 213-14 (11th Cir. 1992); 9A Charles Alan Wright & Arthur R. Miller, Federal Pratice and Procedure § 2538, pp. 357-59 (2d ed. 1995). I assume that I have this power, but I do not consider this an appropriate case for its exercise. The case has been tried twice already, and the plaintiff was on clear notice from my first pretrial conference with its counsel, months before the second trial began, that it had to make a responsible showing of the actual loss reasonably traceable to the breach of contract and the other violations alleged. This is not an esoteric requirement of the law. Illinois caselaw is clear: the costs of performing a contract must be netted out from revenues in order to estimate the damages from the breach. Despite clear notice from the cases, despite the common sense basis of the rule, and despite repeated warnings from me, the plaintiff made no effort to introduce such evidence. This leads me to believe that the evidence does not exist--that in fact the plaintiff suffered no quantifiable harm from the alleged breach, that its business reverses are due to other factors such as Rothberg's inexperience (he entered the credit card processing business, very shortly before the contract with Bankcard, from the garment business), his sloppy record-keeping (to which he testified), the restrictions (to which he also testified) that the banks for which he was a lead ISO placed on his soliciting of business, and the highly competitive nature of the business. As I pointed out earlier, there are losing contracts, the breach of which does not hurt and may even help the victim, and the contract with Bankcard may well have been one of them.
For the reasons explained in this opinion, I direct the clerk to enter judgment for Bankcard, as well as for the individual defendants. Should Universal appeal and the court of appeals reverse this judgment, I recommend to that court that it order a new trial with respect to contract damages because the jury's damages award was grossly excessive, given the evidence. See Fed. R. Civ. P.50(d); Network Publications, Inc. v. Ellis Graphics Corp., supra, 959 F.2d at 215.
Richard A. Posner,
Chief Circuit Judge
Dated: March 30, 1998
JUDGMENT IN A CIVIL CASE
Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
That judgment is entered in accordance with the jury verdict in favor of the defendants, Samuel Buchbinder and Paul Alperstein on the RICO counts. On defendants motion for judgment as a matter of law, judgment is entered for the defendant Bankcard America, Inc., on the plaintiff's contract claim. Bankcard's claim for breach of contract has been withdrawn. All claims are, therefore, finally resolved, and the suit is dismissed in its entirety and with prejudice.
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