Keiser-Long v. Owens
2015 IL App (4th) 140612
Ill. App. Ct.2015Background
- In 2008 Keiser-Long was injured in a car crash caused by Owens, who admitted negligence and pleaded guilty to DUI; Keiser-Long later sued for damages including lost earning capacity.
- Keiser-Long is sole shareholder and only employee of two C corporations (C-Bar Cattle Co. and C-Arc), which handle her cattle-brokering and consulting; she took no formal salary but freely transferred corporate funds and treated retained earnings as her retirement.
- After the accident she suffered pain and driving-related anxiety, stopped visiting feedlots and buying cattle as before, and presented testimony that these changes reduced business profits and her opportunity to earn (one witness estimated ~$200,000/year lost opportunity).
- At the close of evidence Owens moved for a directed verdict on lost earning capacity; the trial court granted the motion, removing that issue from the jury; the jury still returned a verdict for plaintiff on other claims.
- Plaintiff filed a timely postjudgment motion to reconsider; the trial court denied it, and she appealed, arguing the directed verdict was erroneous because lost earning capacity damages that flow from the tort are recoverable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff could present lost earning capacity evidence tied to corporate profits | Keiser-Long: lost earning capacity includes diminution of corporate profits where her labor predominates; corporate form and lack of salary do not bar recovery | Owens: plaintiff only proved corporate losses (C-Bar/C-Arc), not personal lost wages; corporations are C corps so profits don't flow to her personally | Reversed: evidence of corporate lost profits was admissible to prove plaintiff's lost earning capacity because she was sole operator whose labor predominated and there was no double-recovery risk |
| Whether Sezonov bars recovery here because plaintiff took no salary from the corporations | Keiser-Long: Sezonov addressed lost earnings/wages, not lost earning capacity; not controlling | Owens: relies on Sezonov to argue shareholder cannot recover corporate losses absent proof of personal wages | Court: distinguished Sezonov and declined to follow it to extent inconsistent; Sezonov inapposite on lost earning capacity |
| Whether corporate tax form (C corp vs S corp) prevents recovery | Keiser-Long: corporate tax classification is irrelevant to substantive loss; her role makes corporate losses effectively her losses | Owens: C corp structure means profits remain with corporation and cannot be claimed personally | Court: corporate form (C vs S) is not dispositive; relevance turns on degree of shareholder’s personal involvement and risk of double recovery |
| Whether directed verdict was appropriate under Pedrick standard | Keiser-Long: presented sufficient evidence for a reasonable jury to find lost earning capacity | Owens: evidence only showed possible corporate losses, not personal loss | Court: applying de novo review, found evidence could support a jury finding and reversed the directed verdict |
Key Cases Cited
- Pedrick v. Peoria & Eastern R.R. Co., 37 Ill. 2d 494 (defines standard for directed verdict)
- Keen v. Davis, 38 Ill. 2d 280 (no posttrial motion required after directed verdict; bench-trial rules apply)
- Sezonov v. Wagner, 274 Ill. App. 3d 511 (1995) (held shareholder may recover only earnings or wages personally lost from corporate delay—court here distinguishes as addressing lost earnings not capacity)
- Robinson v. Greeley & Hansen, 114 Ill. App. 3d 720 (recognizes lost earning capacity for self-employed and that profits from plaintiff’s personal management may be considered)
- Kritzen v. Flender Corp., 226 Ill. App. 3d 541 (states rule that plaintiff may recover all damages that naturally flow from the tort)