Illinois Appellate Court Finds Trial Court Wrong in Applying the “Verdict Test”

A contract was entered into between Beckett Media LLC and OnRamp Technologies to allow Beckett to use OnRamp’s applications and websites for “inventory management and sales solution.” According to the contract, “in the event of any litigation of any controversy or dispute arising out of or related to this agreement, the prevailing party shall be entitled to an award of reasonable attorneys’ fees and costs.”

On Oct. 1, 2010, Beckett filed a lawsuit against OnRamp claiming breach of contract, unjust enrichment and violation of the Uniform Deceptive Trade Practices Act and the Consumer Fraud of Deceptive Business Practices Act.

During the trial, the parties voluntarily dismissed the claims about violation of the two deceptive practices act. Beckett filed an amended complaint for unjust enrichment, breach of contract and replevin, seeking the return of its server as well as money damages incurred by OnRamp’s refusal to return the server.

Beckett sought $290,000 for breach of contract. OnRamp filed a counterclaim stating it had performed its required duties under the contract. OnRamp charged Beckett had breached the contract by choosing not to make a final payment. As a result, OnRamp demanded $10,000.

At the trial, the jury found in favor of OnRamp in respect to the breach of contract claim but also in favor of Beckett regarding OnRamp’s counterclaim. The trial judge was then briefed on the charges of unjust enrichment and replevin. Replevin is a cause of action asking to the court to command a party to return personal property to the rightful owner or property that was taken from the rightful owner unlawfully.

Beckett requested $20,000 for the unjust enrichment claim in payments made to OnRamp for services that Beckett asserted were not rendered and $45,079.50 in the replevin claim for fees for “storage” of the server and its subsequent return. OnRamp also wanted to be declared the prevailing party.

The trial judge denied Beckett’s claims for unjust enrichment and replevin but ordered OnRamp to return the server to Beckett. OnRamp argued that it had prevailed on the substitute breach of contract claim that was the primary issue in the case as well as the unjust enrichment and replevin case.

Beckett, on the other hand, claimed that OnRamp had not prevailed in its breach of contract claim and so it was not the prevailing party. OnRamp replied that the $10,000 breach of contract countersuit was de minimus, seeking only the final payment of the contract.

However, the trial court decided not to look at the comparable damages claimed and, instead, to “look at the verdict.” As a result, the trial judge denied OnRamp’s request to be declared the winning party finding that there had been no prevailing party. OnRamp appealed.

OnRamp argued at the appellate level that the trial judge erred in applying the “verdict test” to determine who the prevailing party was when the court ought to have applied the “significant issue” test and analyze the issues at trial.

The appeals panel agreed, finding that the trial court had erred as a matter of law in examining just the verdict rather than conducting an analysis of which issues were significant based on the value, complexity and time devoted to the various claims at trial. Therefore, the decision of the trial court was reversed and the case remanded with instructions to the trial court to conduct such an analysis before coming to a conclusion as to whether there was any prevailing party in this case.

Beckett Media, LLC v. OnRamp Technologies, LLC, 2016 IL App (1^st) 150195-U.

Kreisman Law Offices has been handling business litigation, breach of contract cases, contract litigation and commercial litigation matters for individuals, families and businesses for more than 40 years in and around Chicago, Cook County and its surrounding areas, including Mount Prospect, Maywood, Bensenville, Crestwood, Palos Heights, Worth, Bridgeview, Bedford Park, Oak Park, River Grove, Elk Grove Village, Wheeling, Deerfield and Glenview, Ill.