Ivey v. Transunion Rental Screening Solutions, Inc.
186 N.E.3d 1076
Ill. App. Ct.2021Background
- Helix Strategies (founded by Roger Ivey) contracted in 2009 with TransUnion Rental Screening Solutions (TURSS) under a nonexclusive five-year marketing agreement: TURSS would build an online platform to sell Helix’s customizable residential lease forms; revenue split 65% Helix / 35% TURSS.
- The contract contained a one-year claim limitation for contract-based claims, a general limitation of consequential and lost-profit damages, and a carve-out only for willful or intentional wrongdoing; it also barred oral modification and was nonexclusive.
- Development stalled repeatedly from 2009 through 2014; TURSS never launched the Helix platform. Helix alleges it lost development time, sales opportunities, and seeks >$23 million in lost profits.
- Helix produced two experts estimating lost profits (one projecting ~$103 million over five years; another projecting ~$43–145 million over 5–10 years) based largely on market data and comparisons to the NAA lease product and website metrics.
- Trial court granted summary judgment to TURSS on breach of contract (finding Helix’s lost-profit estimates speculative under Illinois’s new-business rule), dismissed fraud/promissory-fraud claims (finding no facts showing intent to defraud, lack of reasonable reliance and proximate causation), and denied attorney’s fees; the appellate court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Helix’s lost-profit damages were too speculative under the new-business rule to survive summary judgment | Helix: expert market analyses (NAA comparisons, census and web-traffic data, industry conversion rates) provide a reasonable basis for lost-profit estimates and an exception to the new-business rule | TURSS: Helix created a novel, materially different lease product with no historical sales; expert projections rest on speculation and inappropriate comparisons | Held: Affirmed summary judgment for TURSS — damages speculative under new-business rule; Milex distinguishable because Helix’s product and platform differ materially from comparators |
| Whether Helix could at least recover out-of-pocket or nominal damages | Helix: even if lost profits speculative, it is entitled to modest out-of-pocket expenses or nominal damages | TURSS: Helix failed to prove any out-of-pocket amounts with reasonable certainty; nominal damages cannot justify proceeding to trial | Held: No recoverable out-of-pocket or nominal damages shown; summary judgment proper |
| Whether Helix plausibly pleaded promissory fraud (intent to defraud, reasonable reliance, causation) | Helix: repeated promises and assurances induced Ivey to leave employment and form Helix; TURSS misrepresented intent to build platform | TURSS: statements reflect ongoing development and delays, not an intent to defraud; contract terms (nonexclusive, no completion date, merger clause) undermine reasonable reliance | Held: Fraud claim dismissed — pleadings and record refute intent to defraud and reasonable reliance |
| Whether Helix is entitled to attorney’s fees under the contract | Helix: prevailing-party fee clause; Helix obtained some favorable rulings on duties and survived earlier motions | TURSS: Helix did not prevail on the significant issues; TURSS obtained dismissal/summary judgment on main claims | Held: No prevailing party — attorney’s fees denied |
Key Cases Cited
- Milex Products, Inc. v. Alra Laboratories, Inc., 237 Ill. App. 3d 177 (distinguishing new-business rule where market and actual sales of identical products supported lost-profit award)
- SK Hand Tool Corp. v. Dresser Industries, Inc., 284 Ill. App. 3d 417 (explaining Illinois new-business rule and need for historical data to support lost-profit estimates)
- Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 Ill. 2d 218 (holding new-business rule not absolute; lost profits may be recoverable with reasonable proof)
- Schatz v. Abbott Laboratories, Inc., 51 Ill. 2d 143 (absolute certainty not required; damages may be approximated with competent proof)
- Perma Research & Development Co. v. Singer Co., 402 F. Supp. 881 (S.D.N.Y.) (awarding lost profits for a new, patented product where defendant’s own projections provided basis for calculation)
- Parvati Corp. v. City of Oak Forest, 709 F.3d 678 (7th Cir.) (criticizing misuse of new-business rule; noting it should not be a flat prohibition)
- TAS Distributing Co. v. Cummins Engine Co., 491 F.3d 625 (7th Cir.) (discussing limits on applying comparator-based lost-profit reasoning)