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Med㹛 Neck and Back Pain Center v. Noffsinger

March 09, 2000


Appeal from the Circuit Court of Winnebago County. No. 96--LM--392 Honorable Ronald L. Pirrello, Judge, Presiding.

The opinion of the court was delivered by: Justice Inglis

Plaintiff, Med㹛 Neck & Back Pain Center, S.C., appeals from the judgment of the circuit court of Winnebago County finding that, while defendant, Daniel Noffsinger, breached his employment contract with plaintiff, plaintiff failed to sufficiently prove the existence of damages. The trial court also originally ordered that, pursuant to the terms of the employment contract, plaintiff was entitled to attorney fees but, upon defendant's motion to reconsider, awarded attorney fees to neither party. Plaintiff appeals and defendant cross-appeals the trial court's determination on the issue of attorney fees. We affirm.

On February 23, 1995, plaintiff and defendant entered into an employment agreement. The agreement provided that, for a two-year period, plaintiff would employ defendant and compensate him, for the first three months of the term, at the greater of $3,000 per month or 10% of defendant's gross billings for chiropractic services; thereafter, defendant would receive 10% of his gross billings in compensation. The agreement further contained a liquidated damages provision which stated:

"EARLY TERMINATION. The parties hereto agree that, in the event that [defendant] terminates this Agreement prior to the completion of the Subsequent Term, [plaintiff] shall be entitled to receive from [defendant] an amount which compensates [plaintiff] for the cost of training. Upon the execution of this Agreement, [defendant] shall execute and deliver to [plaintiff] a promissory note *** in the principal amount of Fifty Thousand Dollars ($50,000). The Note shall provide that the principal amount of Fifty Thousand Dollars ($50,000) will be reduced by Two Thousand and [sic] Eighty-Three Dollars and thirty-three cents ($2,083.33) per month for each of the twenty-four (24) months of the Subsequent Term of this Agreement during which [defendant] continues to perform services for [plaintiff] under this Agreement. If this Agreement is terminated for any reason by [defendant] or [plaintiff] for cause, pursuant to section 12, hereof, the remaining outstanding balance of the Note shall become immediately due and payable. In the event that [defendant] terminates his employment with [plaintiff] after the completion of the subsequent Term, the Note shall be forgiven by [plaintiff], and the original of the Note shall be stamped 'Satisfied' and returned to [defendant]."

Additionally, the employment agreement provided that, in case of a dispute, "the prevailing party shall be reimbursed for all reasonable expenses incurred in resolving such dispute, including reasonable attorneys' fees."

On December 18, 1995, defendant resigned from plaintiff's employment. Thereafter, plaintiff filed suit against defendant alleging breach of contract and seeking to enforce the liquidated- damages provision of the employment agreement as well as seeking lost profits and training costs associated with defendant's departure. Plaintiff also sought attorney fees pursuant to the employment agreement.

The case proceeded to bench trial. Dr. David Girgenti testified that he was president and clinic director of plaintiff. He testified that the liquidated-damages clause was included to attempt to recapture the costs of training a new associate chiropractor. Girgenti testified that defendant's ability to properly complete the necessary paperwork was so lacking that he had to spend three hours a day training defendant for the first two months of defendant's employment.

Sally Johnson testified that she was the clinic administrator. She testified that Girgenti spent four hours a day training defendant for the first two or three months of defendant's employment. Johnson also testified that she tracked expenses by chiropractor and estimated that plaintiff suffered over $90,000 in lost profits as a result of defendant's departure.

Dr. James Morgano and Dr. Andrew Kong testified that they were both associate chiropractors employed by plaintiff at the same time as defendant. Each testified that he observed Girgenti giving defendant very little training during the first two months of defendant's employment. Defendant testified that he received virtually no training from Girgenti. Defendant also testified that he began treating patients as soon as he was hired and was hired because he had experience in the management of a chiropractic clinic and the proper manner in which to complete the necessary paperwork.

The trial court determined that defendant breached the employment agreement. Additionally, the trial court ruled that plaintiff failed to adequately prove the existence of damages and that the liquidated-damages provision was unenforceable as a penalty. The trial court also awarded plaintiff attorney fees. Following defendant's motion to reconsider, the trial court vacated the award of attorney fees and ordered each party to pay its own attorney fees. Plaintiff timely appeals and defendant timely cross-appeals.

Plaintiff initially contends that the trial court erred by refusing to award it damages for lost profits following defendant's resignation. Plaintiff argues that the trial court erred as a matter of law in finding that lost profits were "disfavored under Illinois law."

Preliminarily, we note that a reviewing court will not disturb the damages assessed by a trial court sitting without a jury unless its judgment was against the manifest weight of the evidence. Royal's Reconditioning Corp. v. Royal, 293 Ill. App. 3d 1019, 1022 (1997). A trial court's assessment of damages is against the manifest weight when it ignored the evidence or used the wrong measure of damages. Royal's Reconditioning, 293 Ill. App. 3d at 1022.

Here, the trial court correctly held that, in this case, lost profits were "disallowed," thus determining that lost profits would not be a component of the damages award in this case. The trial court reasoned that lost profits were "disfavored under Illinois law," while failing to recognize that there was no "Illinois law" espousing such a holding. Nevertheless, for the reasons that follow, we sustain the trial court's judgment because it has long been held that a trial court's judgment may be sustained upon any ground appearing in the record, as it is the judgment of the trial court, not the reasoning, which is on appeal to this court. Material Service Corp. v. Department of Revenue, 98 Ill. 2d 382, 387 (1983).

In any breach of contract case, the proper measure of damages is the amount that will place the non-breaching party in as satisfactory a position as it would have been had the contract been fully performed. Royal's Reconditioning, 293 Ill. App. 3d at 1022. The issue here is whether lost profits are recoverable in damages by a non-breaching employer against the breaching employee. Surprisingly, neither the parties' nor our own research has uncovered any Illinois case that speaks directly to this issue. In this situation, ...

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