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Med+Plus Neck and Back Pain Center, S.C., v. Noffsinger
State: Illinois
Court: 2nd District Appellate
Docket No: 2-99-0699
Case Date: 03/09/2000

Med+Plus Neck and Back Pain Center, S.C., v. Noffsinger, No. 2-99-0699

2nd District, 9 March 2000

MED+PLUS NECK AND BACK PAIN CENTER, S.C.,

Plaintiff-Appellant and Cross-Appellee,

v.

DANIEL NOFFSINGER,

Defendant-Appellee and Cross-Appellant.

Appeal from the Circuit Court of Winnebago County.

No. 96--LM--392

Honorable Ronald L. Pirrello, Judge, Presiding.

JUSTICE INGLIS delivered the opinion of the court:

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

On February 23, 1995, plaintiff and defendant entered into an employment agreement. The agreement provided that, for atwo-year period, plaintiff would employ defendant and compensate him, for the first three months of the term, at the greaterof $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 Agreementprior to the completion of the Subsequent Term, [plaintiff] shall be entitled to receive from [defendant] an amountwhich compensates [plaintiff] for the cost of training. Upon the execution of this Agreement, [defendant] shallexecute 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 TwoThousand 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 andpayable. In the event that [defendant] terminates his employment with [plaintiff] after the completion of thesubsequent 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 allreasonable 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 defendantalleging breach of contract and seeking to enforce the liquidated- damages provision of the employment agreement as wellas seeking lost profits and training costs associated with defendant's departure. Plaintiff also sought attorney fees pursuantto the employment agreement.

The case proceeded to bench trial. Dr. David Girgenti testified that he was president and clinic director of plaintiff. Hetestified that the liquidated-damages clause was included to attempt to recapture the costs of training a new associatechiropractor. Girgenti testified that defendant's ability to properly complete the necessary paperwork was so lacking that hehad 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 trainingdefendant for the first two or three months of defendant's employment. Johnson also testified that she tracked expenses bychiropractor 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 thesame time as defendant. Each testified that he observed Girgenti giving defendant very little training during the first twomonths of defendant's employment. Defendant testified that he received virtually no training from Girgenti. Defendant alsotestified that he began treating patients as soon as he was hired and was hired because he had experience in the managementof 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 thatplaintiff failed to adequately prove the existence of damages and that the liquidated-damages provision was unenforceableas a penalty. The trial court also awarded plaintiff attorney fees. Following defendant's motion to reconsider, the trial courtvacated the award of attorney fees and ordered each party to pay its own attorney fees. Plaintiff timely appeals anddefendant timely cross-appeals.

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

Preliminarily, we note that a reviewing court will not disturb the damages assessed by a trial court sitting without a juryunless 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 orused 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 wouldnot be a component of the damages award in this case. The trial court reasoned that lost profits were "disfavored underIllinois law," while failing to recognize that there was no "Illinois law" espousing such a holding. Nevertheless, for thereasons that follow, we sustain the trial court's judgment because it has long been held that a trial court's judgment may besustained upon any ground appearing in the record, as it is the judgment of the trial court, not the reasoning, which is onappeal 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 nonbreaching party in assatisfactory a position as it would have been had the contract been fully performed. Royal's Reconditioning, 293 Ill. App. 3dat 1022. The issue here is whether lost profits are recoverable in damages by a nonbreaching employer against the breachingemployee. Surprisingly, neither the parties' nor our own research has uncovered any Illinois case that speaks directly to thisissue. In this situation, where the nonbreaching employer is seeking damages against an employee for breaching anemployment contract, the general rule is this:

"The measure of recovery is generally the extra cost of obtaining other services equivalent to those promised underthe contract but not performed by the employee. However, in some cases this will not amount to full compensation tothe employer, and additional recovery has been allowed. These additional damages must be foreseeable at the time theparties entered into the employment contract. Recovery may be had for the cost of training a replacement, forinstance, but damages will not be awarded for lost income if there is no proof that the former employee caused anysubstantial portion of the loss.
The employer's damages will be diminished by any amount which could have been avoided under the doctrine ofavoidable consequences." 22 Am. Jur. 2d Damages

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