90 F.4th 876
7th Cir.2024Background
- Plaintiffs Randall Ewing and Yasmany Gomez contracted with 1645 W. Farragut LLC ("Farragut") to purchase a gutted house in Chicago, relying on explicit promises that renovations would be complete by closing.
- Plaintiffs paid $117,500 in earnest money; however, unbeknownst to them, a stop work order from the City of Chicago was in place, halting renovations and precluding mortgage approval.
- Plaintiffs were unable to obtain a mortgage by the required date, sought the return of their earnest money, and Farragut refused, terminating the contract and keeping the deposit.
- Plaintiffs sued for breach of contract, common law fraud, and Illinois Consumer Fraud Act violations. The district court granted summary judgment on fraud and breach claims, and a jury awarded $905,000, including economic and emotional damages.
- Defendant Farragut appealed denial of its post-trial motions for judgment as a matter of law, a new trial, and remittitur; plaintiffs cross-appealed the district court’s denial of motions to amend the complaint to add Farragut’s principal, Erik Carrier, as a defendant.
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Farragut’s fraud caused Plaintiffs’ damages beyond earnest money (loss of house, etc.) | Farragut's misrepresentations made performance impossible and caused substantial additional harm | Plaintiffs lost house due to their own conduct (mortgage issues), not defendant fraud | Jury had sufficient basis to find for plaintiffs; damages affirmed |
| Propriety of jury instructions and evidentiary rulings | Instructions and evidence were fair and proper | Jury was given improper instructions; prejudicial evidence was admitted | No prejudicial or plain error in instructions or evidence; decision affirmed |
| Excessiveness of the damages award | Award supported by evidence of economic and emotional loss | Award grossly exceeds legitimate damages, result of passion/prejudice | Damages not excessive, within reasonable range; no remittitur warranted |
| Denial of motions to amend to add Erik Carrier as defendant | Need to add Carrier due to undercapitalization risk, and for justice | Amendment unduly late, prejudicial; post-judgment addition not proper under rules | No abuse of discretion in denying amendments, especially post-judgment |
Key Cases Cited
- Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 831 F.3d 815 (7th Cir. 2016) (standard for reviewing denial of judgment as a matter of law and sufficiency of the evidence)
- Passananti v. Cook County, 689 F.3d 655 (7th Cir. 2012) (duty to construe evidence in favor of the jury verdict)
- Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. 804 (2011) (explains loss causation in fraud claims)
- Stutzman v. CRST, Inc., 997 F.2d 291 (7th Cir. 1993) (federal standard governs review of jury instructions in diversity)
- Kapelanski v. Johnson, 390 F.3d 525 (7th Cir. 2004) (standard for when a new trial is appropriate under abuse of discretion)
- Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996) (appellate deference to trial court on damages assessments)
- Soltys v. Costello, 520 F.3d 737 (7th Cir. 2008) (deference to district court’s decisions on amending pleadings)
- Obriecht v. Raemisch, 517 F.3d 489 (7th Cir. 2008) (standards for Rule 59 motions and amendments post-judgment)